Voluntary 'donations' to debt relief - Financial Post

Perhaps it?s the left-wing company I keep, but I sometimes hear this refrain from friends: I wouldn?t mind paying more taxes.

Just to be clear, I would mind paying more. And maybe it?s my defence of that position, or quite possibly the fact I don?t think George W. Bush is the devil but just another president who couldn?t stop spending, that keeps costing me friends on Facebook.

But I have a solutions for my friends ? and enemies. If you want to pay more taxes, do it. Please! It?s permitted, and some of your fellow citizens have beaten you to it.

As debate swirls in my hometown of Toronto over whether to close libraries to deal with a municipal budget shortfall, I can?t help wondering why all the people quoted as saying they are willing to pay more don?t just kick some more money into the kitty. Maybe what they really mean is that they want all of us to pay more taxes.

But guess what? The city of Toronto stands ready waiting for your cheque.

Justine Kintanar, communications and marketing consultant with the city?s finance and administration division, laughed when I called to see if anybody in Toronto actually pays extra taxes.

She wasn?t quite sure how someone would go about it and looked it up for me. Ms. Kintanar noted 30 people gave their $60 personal vehicle tax refund back to the city this year. (I donated mine to the Marr household.)

?If a taxpayer explicitly states that they wish to pay extra money to the city, this is not deemed to be taxes, but rather a donation.

?Payments such as these are deposited into an account for donations,? she explained in a email, noting Toronto takes great pains to make sure individuals or companies have not just overpaid by accident.

At the provincial level they are far more organized and have a line item on tax returns for Ontario residents that allows for refunds to go to the Ontario Opportunities Fund.

?The fund allows Ontario residents to reduce the provincial deficit and debt by making monetary contributions. Contributions to the fund are considered gifts to the Crown,? to quote the government.

Your donation will get you a charitable receipt but obviously no one is doing it for the tax break considering the donation would cost you more than you?d benefit from the tax credit.

?I don?t know anybody who has ever done it,? says Jamie Golombek, managing director of tax and estate planning with CIBC Private Wealth Management, who has been in the industry 20 years.

But the Ontario Ministry of Revenue says 29,754 people have made a donation to the government since the fund was created in 1997 for a total of $2,043,235.54. Another 226 residents have made a separate donation to reduce the debt for a total of $214,752.21.

Give Ontario some credit, it?s the only province or territory that gives its citizens the option on their tax return to kick in some cash from their refund.

The federal government also accepts donations to the Crown and will provide a tax receipt. Ottawa couldn?t provided details on who is being taken advantage of ? oops, I mean taking advantage of the opportunity.

Part of me wonders what would happen if you made a donation and the Canada Revenue Agency reassessed you later on. If you suddenly owe money, can you get your donation back?

Gregory Thomas, of the Canadian Federation of Taxpayers, questions how the federal government would compare to any charitable organization when it comes to administrative costs.

?We don?t hear a lot of that here ourselves,? says Mr. Thomas of voluntarily paying more taxes. ?It?s a really goofy thing to do. Of all the places for charity, the government of Canada.?

Hey, the Americans have been accepting donations since 1961. They?re patriots down there. Close to US$3-million was contributed in fiscal 2009, although the Internal Revenue Service makes it easier by taking credit cards.

America?s national debt is just over US$14.3-trillion. Voluntary contributions will have to increase if the United States is to eventually pay down its debt and get its AAA rating back.

Or perhaps they?ll have to go another way because the truth is while a few people might yap about being willing to pay more taxes, it is a pretty short list when it comes time to pay.

Financial Post

gmarr@nationalpost.com

Source: http://www.financialpost.com/Voluntary+donations+debt+relief/5228876/story.html

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