Cause Marketing

Anup Malani and M. Todd Henderson , two professors at the University of Chicago Law School, proposed in the March 10, 2008 issue of Forbes magazine that individuals be allowed tax deductions for the donations made when they buy products that generate a donation to a charitable cause. Here’s what they say: “We think the tax law should be changed to equalize the deduction shareholders get for corporate and personal contribution. Individuals should also be allowed to deduct donations embedded in consumer products. Firms are increasingly doing good because shareholders and consumers want them to, and taxes should not favor one form of doing good over another.” Why? “Consumer charity is inefficient under our present tax code. If you pay $15 for a pound of fair-trade coffee instead of $10 for regular coffee, you can’t claim a deduction for the $5 difference. The additional cost is a nondeductible donation. Let me be perfectly upfront and say that I owe both these lawyers a wet, sloppy kiss. ...