本文发表在 rolia.net 枫下论坛Tax credits prove flexible
Ottawa tailors them to disparate policy objectives
Arthur Drache, Financial Post; adrache@drache.com Published: Wednesday, September 06, 2006
From a tax policy point of view, one of the most flexible tools for creating donation incentives is the tax credit.
A credit system can be designed to be generous or niggardly, to "bonus" some donations or contributions and not others and to control the recipients of qualifying payments. These elements can be seen quite clearly in comparing two widely used tax credits, that for charitable donations and that for political contributions.
The charitable donation tax credit is well understood. The credit at the federal level is 16% on the first $200 and 29% on the excess. Every province and territory follows this same pattern.
The political contribution credit is quite different. On contributed amounts up to $400, the credit is $75%. From $400 to $750, the rate of the credit is 50%. When the contribution exceeds $750, the rate is 33 1/3%. But the maximum credit cannot exceed $650.
So how do you compare the two?
- The same charitable donation will trigger tax credits at both the federal and provincial level. A political contribution will trigger tax credits only at the federal level. (Some, but not all, provinces also have a political tax credit scheme, but to access the credits, separate contributions must be made to provincial political parties.)
- The charitable credit applies only when a gift is made to a "qualified donee," while the political credit applies only when the contribution is made to a registered political party.
- The political tax credit gives strong incentives to smaller donations, while the charitable credit give a bonus for larger donations. A federal political donation of $200 will generate a tax credit of $150. A charitable donation of $200 will generate combined federal/provincial tax relief of about $50. But a $2,000 federal political donation will generate tax relief of $650, while a similar donation to charity will generate combined federal/provincial tax relief of about $770.
- The political tax credit offers tax relief only up to $1,275 a year (though the electoral law allows much higher contribution levels), while there is virtually no limit on the quantum of tax relief given for charitable donations.
- Gifts in kind can trigger charitable tax credits, but such contributions cannot produce political tax credits.
- Both credits give the same dollar benefit to contributing taxpayers for identical gifts and the benefit does not depend upon the taxpayer's level of income, as is the case where there is a deduction system. In both cases, top-level gifts will produce credits that are worth the same benefit or better benefits than deductions, no matter what tax bracket the contributor is in ... unless that person has income that is so low that he or she cannot use the credits.
- The charitable credit can be transferred to a spouse, but the political credit cannot be transferred.
The point, of course, is that each credit was designed to achieve some perceived policy goal. For example, the high credit for modest political contributions was to encourage an increase in small donations, to alleviate the perception that the big donors control the political agenda. On the other hand, the two-step charitable credit was designed in part to encourage extra giving beyond the $200 threshold.
Whether either or both these design features are effective is another matter and remains a topic of some debate.
- Arthur Drache, CM, QC, is an Ottawa-based lawyer with Drache LLP and is associate counsel to Miller Thomson LLP.更多精彩文章及讨论，请光临枫下论坛 rolia.net
Ottawa tailors them to disparate policy objectives
Arthur Drache, Financial Post; adrache@drache.com Published: Wednesday, September 06, 2006
From a tax policy point of view, one of the most flexible tools for creating donation incentives is the tax credit.
A credit system can be designed to be generous or niggardly, to "bonus" some donations or contributions and not others and to control the recipients of qualifying payments. These elements can be seen quite clearly in comparing two widely used tax credits, that for charitable donations and that for political contributions.
The charitable donation tax credit is well understood. The credit at the federal level is 16% on the first $200 and 29% on the excess. Every province and territory follows this same pattern.
The political contribution credit is quite different. On contributed amounts up to $400, the credit is $75%. From $400 to $750, the rate of the credit is 50%. When the contribution exceeds $750, the rate is 33 1/3%. But the maximum credit cannot exceed $650.
So how do you compare the two?
- The same charitable donation will trigger tax credits at both the federal and provincial level. A political contribution will trigger tax credits only at the federal level. (Some, but not all, provinces also have a political tax credit scheme, but to access the credits, separate contributions must be made to provincial political parties.)
- The charitable credit applies only when a gift is made to a "qualified donee," while the political credit applies only when the contribution is made to a registered political party.
- The political tax credit gives strong incentives to smaller donations, while the charitable credit give a bonus for larger donations. A federal political donation of $200 will generate a tax credit of $150. A charitable donation of $200 will generate combined federal/provincial tax relief of about $50. But a $2,000 federal political donation will generate tax relief of $650, while a similar donation to charity will generate combined federal/provincial tax relief of about $770.
- The political tax credit offers tax relief only up to $1,275 a year (though the electoral law allows much higher contribution levels), while there is virtually no limit on the quantum of tax relief given for charitable donations.
- Gifts in kind can trigger charitable tax credits, but such contributions cannot produce political tax credits.
- Both credits give the same dollar benefit to contributing taxpayers for identical gifts and the benefit does not depend upon the taxpayer's level of income, as is the case where there is a deduction system. In both cases, top-level gifts will produce credits that are worth the same benefit or better benefits than deductions, no matter what tax bracket the contributor is in ... unless that person has income that is so low that he or she cannot use the credits.
- The charitable credit can be transferred to a spouse, but the political credit cannot be transferred.
The point, of course, is that each credit was designed to achieve some perceived policy goal. For example, the high credit for modest political contributions was to encourage an increase in small donations, to alleviate the perception that the big donors control the political agenda. On the other hand, the two-step charitable credit was designed in part to encourage extra giving beyond the $200 threshold.
Whether either or both these design features are effective is another matter and remains a topic of some debate.
- Arthur Drache, CM, QC, is an Ottawa-based lawyer with Drache LLP and is associate counsel to Miller Thomson LLP.更多精彩文章及讨论，请光临枫下论坛 rolia.net