Tax Treatment of Charitable Contributions in a Personal Income Tax: Lessons from Theory and Canadian Experience

A hundred years after tax concessions for charitable contributions were introduced as part of the personal income taxes that many countries enacted during the First World War, these countries continue to debate the appropriate level and structure of tax concessions for charitable gifts. This chapter considers the tax treatment of charitable contributions in a personal income tax, reviewing and evaluating alternative rationales for tax recognition of charitable gifts as well as the implications of these rationales for the form that tax recognition should take, and examining recent Canadian experience in light of these rationales.