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Charities (and Donations) Shouldn't be Tax Exempt

Updated: Feb 23

Why should ALL taxpayers be forced to support charities?

by Ram ben Ze'ev (Conservative Values)

Often we hear about the various good works that charities endeavour, supported by claims that whatever it is that they do is done 'free' or 'without cost'.

Every charity exists through the financial support of its benefactors.

But a great deal of that 'support' is provided as a means of avoiding tax. In other words, many people make donations with the primary reason being the ability to claim a tax deduction and thereby reduce the tax being paid by the person making the donation.

People will often say they prefer donating to a 'worthy' cause rather than paying the money to the government. In fact, I am regularly contacted by charities that use the prospect of claiming a deduction as a justification for supporting their work.

But what really happens here?

Well, first of all, registered charities are exempt from tax on their income. This means that the donations they receive are not taxed as income. On the other side of the transaction, the person making a donation is able to reduce their tax liability equal to the amount of the donation. And where state, local or other taxes (e.g., VAT) is payable on the purchase of goods and services, the charity will be exempted.

The government never stops spending. In fact, the lack of capital or financial reserves (i.e. money) will not prevent government spending. The government will issue bonds, borrow money or simply create it out of thin air to continue spending, which ultimately, increases the tax burden for everyone.

Of course, the underlying problem is out-of-control government spending. But taxpayers have shown very little interest in pulling in the reins of reckless government spending. That said, in a perfect world, government spending would be constrained and charities and benefactors would not place unsolicited tax burdens on the rest of us.

Exempting charities from tax and allowing the supporters of registered charities to reduce their tax liability merely by supporting their chosen charity increases the tax burden for every taxpayer. So, whether you like it or not, whether you know it or not, all taxpayers are supporting every registered charity without your express consent.

I don't object to anyone supporting a charity or any number of charities of their choosing. I support many charities, but not because of a tax deduction that may or may not be available to me; I do not claim any deduction for any charitable donations. I do object to my increased tax burden because of your decision to support a charity.

Therefore, I am calling for the abolition of tax-exempt status for all registered charities and for the cancellation of any provision in law for tax credits or a reduction of tax liability on the basis of a donation made to a registered charity.

If you want to support a charity, then, but all means do so, but don't make me pay for it.


Bill White (Ram ben Ze'ev) is CEO of WireNews and Executive Director of Hebrew Synagogue


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