The way the Department of Finance looks at the tax revenue cost of this proposal is to combine the cost of the charitable donation tax credit and the foregone capital gains tax. It adds the two together. So for $100 million in donations, whether they be cash, stock, or, under our proposal, other assets, the cost to the federal government of the charitable donation tax credit would be about $29 million.
Then the question they ask is how much capital gains tax they are foregoing if they implement these measures. We make the assumption that the cost base of a typical gift would be about 25% of the market value of the gift. On that basis, what the federal government would forego in capital gains taxes would be about $11 million.
The combination of the two, the $29 million and the $11 million, is $40 million. That is the cost to the federal treasury of the incremental giving of $100 million.
Now, with respect to the foregone capital gains tax, one thing that needs to be taken into consideration is that if the capital gains tax is not removed, the donor might just decide not to make the donation, so the federal government would not be receiving that $11 million in capital gains taxes. That's something else to take into consideration.