Keith Thomson is an internationally recognized financial educator, author, and consultant, specializing in estate and charitable tax planning. Many Canadians are unaware that they can choose how to redirect their involuntary philanthropy—also known as tax dollars—to support those causes and values that are important to them.
Webster's Dictionary defines a philanthropist as "a benevolent supporter of human beings and human welfare." But whom am I describing when I make reference to “an individual who potentially gives up approximately one quarter of her or his capital gains and/or up to roughly one-half of his or her income to support the general welfare of our country”?
The answer is most of us! As taxpayers, we could all be considered "involuntary philanthropists.”
Reviewing the pie chart below, here's the question to ask yourself: "given a choice, is this how I would choose to donate my money"? If the answer is "no”, you may wish to investigate how you too could redirect your involuntary philanthropy or tax dollars, to voluntary philanthropy.
Would you Donate Your Monay this Way?
Source: Department of Finance Canada. Annual Financial Report of the Government of Canada Fiscal Year 2018/2019. (For Fiscal Year Ended: March 31, 2019).
Please do not misunderstand me. I realize that taxes are absolutely necessary, and I fully appreciate the fact that were it not for the taxes we pay, Canada would certainly not be the incredible country it is today. Having said that, our government is actually a strong supporter of voluntary philanthropy. How do we know this to be true? The simple answer is that, historically, Ottawa has provided incentives to encourage activity in certain sectors of the economy.
As an example, if our government wishes to increase real estate ownership, it allows a number of tax breaks for the purchase, ownership and sale of this asset class. In much the same way, since the 1990’s in order to encourage philanthropy, the federal government has introduced into our Income Tax Act over 20 pieces of legislation to encourage giving. Many international tax experts suggest that this has created the most generous tax environment in the world to encourage individual charitable activity.
To learn more about voluntary philanthropic planning, please join Keith at our upcoming Income Tax Reduction & Estate Tax Elimination virtual presentation on Tuesday, May 18th, at 10:30 am.