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December 29, 2008

British Treasury to Consider Tax Scheme to Benefit Charity

The British treasury is considering a tax scheme created by a Nobel Prize-winning economist that encourages wealthy people to donate an extra $7.28-billion dollars to charity, reports the Financial Times.

The plan, devised by Sir James Mirrlees and written with Renu Mehta, founder of the Fortune Forum, a networking organization for the very rich, pushes for a 50 percent tax break on donations toward the millennium development goals established by the United Nations. The cost of the tax break would be matched by the government’s overseas-aid budget, thereby doubling the amount directed toward donations. Donors would be able to say which development sector their money will support.

The plan hopes to boost donations from the extremely wealthy, who only donate on average 0.8 per cent of their income to charity, compared with 3 percent donated by the poorest fifth.

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