Saturday, January 5, 2008
Andrew Willis, a reporter with the Globe and Mail, Canada's National Newspaper, reported in an article that Canada's rich are giving away fortunes. The article honors Mr. Donald Johnson, an investment banker, philanthropist and the chief lobbyist for a change to Canada's tax laws to facilitate greater charitable gifts to nonprofits. See Canada's Rich Giving Away Fortunes. The spur for the flood of increased giving is attributed to a change in Canada's tax law that began in 1997 and culminated in further changes in 2006. Pre-1997 and the lobbying of Mr. Johnson, stock donations incurred a capital gains tax. In 1997, the tax law was changed, cutting the capital gains tax on stock donations by 50 percent. In the wake of Canada's experience with reducing the capital gains tax by 50 percent, the law again was changed in 2006 to wholly eliminate the capital gains tax on donated stock. According to the article,"gifts of stock to Canadian charities, negligible before 1997, total[ed] $3-billion in the past decade." The change in 2006 has seen a watershed of charitable donations of stock by wealthy Canadians.