6 ms·

Isn't there a tax deduction aspect to a lot of these donations? Anyways, 100 more Nature-level articles about climate change is not going to change the situati

by ensan 4y ago

Isn't there a tax deduction aspect to a lot of these donations? Anyways, 100 more Nature-level articles about climate change is not going to change the situation if there is no political will (or if it seesaws every 4-8 years at best).

jgalt212 4y ago
Indeed. It probably would have been much better to plant $1B worth of trees, or buy $1B of the Brazilian Rain Forest. But for similar reasons that Robert Moses loved bridges and hated tunnels, putting your name on a building at Stanford wins.
KMag 4y ago
There are some loopholes with donations, mostly regarding difficult-to-value benefits and also around donating dificult-to-value things rather than cash, stocks, and/or bonds. But, if you donate $1.1 billion to an eligible charity (and claim to have gotten nothing in return), then the US government basically pretends that you never made that money, and your tax bill goes down by roughly your marginal tax rate times the size of the donation. There are limits and caveats, but in general, it's a pretty fair treatment. I'm pretty sure big donors generally under-report the value of having their name on a building, etc. However, I believe it's nearly impossible to wind up with more money in your pocket post-tax by donating cash instead of keeping the cash. (I'm not an accountant. This isn't tax advice.) I'm not saying you in particular are claiming people are donating cash out of greed, but the way I hear some people talk about tax write-offs is very misleading. It seems many Americans believe that donating $1.1 billion in cash can result in a $1.1 billion reduction in tax owed (assuming a marginal tax rate under 100%). Presumably, someone that wealthy gets their marginal tax rate down around the long-term capital gains rate, so they're probably getting about $165 million in tax reduction in exchange for that $1.1 billion donation. (Again, I'm not an accountant. This isn't tax advice.) (Now, one could buy $1 million in art, get it appraised for $4 million, and if your marginal tax rate is under 25%, get more than $1 million knocked off your tax bill. Like I said, there are some loopholes in valuation, but not for cash and marketable securities.) That being said, it would be nice to see something where getting your name on a building or an event in your honor would come with some automatic accounting assumption that the value of the publicity is worth at least 25% of the donation. If you want the full write-off, take your name off the building.
- wolverine876 4y ago
  > But, if you donate $1.1 billion to an eligible charity (and claim to have gotten nothing in return), then the US government basically pretends that you never made that money, and your tax bill goes down by roughly your marginal tax rate times the size of the donation. There are limits and caveats, but in general, it's a pretty fair treatment. I think it's highly unfair in that it shifts decisions on social spending from the democratically made decisions of the people to a few wealthy individuals.
  - whack 4y ago
    The US government gets $0.16B less that it can control in social spending. But in return, a regulated non-profit institution gets $1.1B more in its budget. That's a pretty good tradeoff for the social good. For an alternative way of looking at things - almost any economist would tell you that it is wise to tax negative externalities and subsidize positive externalities. This is one of the most foundational insights from microeconomics. And charitable giving is the closest to an ideal positive externality that you will find. Person spends money to a cause because it makes him feel good to do so. That transaction ends up helping other 3rd parties as well. Textbook positive externality. https://www.economicshelp.org/micro-economic-essays/marketfailure/positive-externality/ https://www.economicshelp.org/micro-economic-essays/marketfa...
    - wolverine876 4y ago
      > The US government gets $0.16B less that it can control in social spending. But in return, a regulated non-profit institution gets $1.1B more in its budget. There's no reason to think the non-profit accomplishes anything or doesn't accomplish negative things. And there is an opportunity cost to the non-profit getting that money rather than, for example, schools.
      - whack 4y ago
        > There's no reason to think the non-profit accomplishes anything or doesn't accomplish negative things You could say the exact same thing about how the federal government spends its money. > And there is an opportunity cost to the non-profit getting that money rather than, for example, schools. There's also an opportunity cost to the government getting that money, rather than, for example, educational non-profits. Overall, do I think the federal government would do more good with the same amount of money? Probably. But would the federal government do more good with $0.16B, as opposed to the non-profit sector with $1.1B? I highly doubt it.
wolverine876 4y ago
> 100 more Nature-level articles about climate change is not going to change the situation if there is no political will All the political will does nothing without research. We need both.
- aww_dang 4y ago
  Getting back to the above comment, then perhaps donating to a politically influential, ivy league school makes sense.
deleted 4y ago
[deleted]
vmception 4y ago
Not necessarily The flaw with this logic is assuming the money came from their personal balance sheet this year, as opposed to growing in a tax deferred or tax exempt account for decades already Even Mackenzie Bezos’ donations are not giving her current year tax deductions (some additional ones could, its just not what she's been doing and she's been doing a lot and her methods are very common) the understanding of what ultrawealthy are doing and why is very far from reality. I think its not productive to grasp for a tax/financial ulterior motive

by ensan 4y ago

jgalt212 4y ago

Indeed. It probably would have been much better to plant $1B worth of trees, or buy $1B of the Brazilian Rain Forest. But for similar reasons that Robert Moses loved bridges and hated tunnels, putting your name on a building at Stanford wins.

KMag 4y ago

There are some loopholes with donations, mostly regarding difficult-to-value benefits and also around donating dificult-to-value things rather than cash, stocks, and/or bonds. But, if you donate $1.1 billion to an eligible charity (and claim to have gotten nothing in return), then the US government basically pretends that you never made that money, and your tax bill goes down by roughly your marginal tax rate times the size of the donation. There are limits and caveats, but in general, it's a pretty fair treatment. I'm pretty sure big donors generally under-report the value of having their name on a building, etc. However, I believe it's nearly impossible to wind up with more money in your pocket post-tax by donating cash instead of keeping the cash. (I'm not an accountant. This isn't tax advice.) I'm not saying you in particular are claiming people are donating cash out of greed, but the way I hear some people talk about tax write-offs is very misleading. It seems many Americans believe that donating $1.1 billion in cash can result in a $1.1 billion reduction in tax owed (assuming a marginal tax rate under 100%). Presumably, someone that wealthy gets their marginal tax rate down around the long-term capital gains rate, so they're probably getting about $165 million in tax reduction in exchange for that $1.1 billion donation. (Again, I'm not an accountant. This isn't tax advice.) (Now, one could buy $1 million in art, get it appraised for $4 million, and if your marginal tax rate is under 25%, get more than $1 million knocked off your tax bill. Like I said, there are some loopholes in valuation, but not for cash and marketable securities.) That being said, it would be nice to see something where getting your name on a building or an event in your honor would come with some automatic accounting assumption that the value of the publicity is worth at least 25% of the donation. If you want the full write-off, take your name off the building.

wolverine876 4y ago
> But, if you donate $1.1 billion to an eligible charity (and claim to have gotten nothing in return), then the US government basically pretends that you never made that money, and your tax bill goes down by roughly your marginal tax rate times the size of the donation. There are limits and caveats, but in general, it's a pretty fair treatment. I think it's highly unfair in that it shifts decisions on social spending from the democratically made decisions of the people to a few wealthy individuals.
- whack 4y ago
  The US government gets $0.16B less that it can control in social spending. But in return, a regulated non-profit institution gets $1.1B more in its budget. That's a pretty good tradeoff for the social good. For an alternative way of looking at things - almost any economist would tell you that it is wise to tax negative externalities and subsidize positive externalities. This is one of the most foundational insights from microeconomics. And charitable giving is the closest to an ideal positive externality that you will find. Person spends money to a cause because it makes him feel good to do so. That transaction ends up helping other 3rd parties as well. Textbook positive externality. https://www.economicshelp.org/micro-economic-essays/marketfailure/positive-externality/ https://www.economicshelp.org/micro-economic-essays/marketfa...
  - wolverine876 4y ago
    > The US government gets $0.16B less that it can control in social spending. But in return, a regulated non-profit institution gets $1.1B more in its budget. There's no reason to think the non-profit accomplishes anything or doesn't accomplish negative things. And there is an opportunity cost to the non-profit getting that money rather than, for example, schools.
    - whack 4y ago
      > There's no reason to think the non-profit accomplishes anything or doesn't accomplish negative things You could say the exact same thing about how the federal government spends its money. > And there is an opportunity cost to the non-profit getting that money rather than, for example, schools. There's also an opportunity cost to the government getting that money, rather than, for example, educational non-profits. Overall, do I think the federal government would do more good with the same amount of money? Probably. But would the federal government do more good with $0.16B, as opposed to the non-profit sector with $1.1B? I highly doubt it.

wolverine876 4y ago

> 100 more Nature-level articles about climate change is not going to change the situation if there is no political will All the political will does nothing without research. We need both.

aww_dang 4y ago
Getting back to the above comment, then perhaps donating to a politically influential, ivy league school makes sense.

deleted 4y ago

[deleted]

vmception 4y ago

Not necessarily The flaw with this logic is assuming the money came from their personal balance sheet this year, as opposed to growing in a tax deferred or tax exempt account for decades already Even Mackenzie Bezos’ donations are not giving her current year tax deductions (some additional ones could, its just not what she's been doing and she's been doing a lot and her methods are very common) the understanding of what ultrawealthy are doing and why is very far from reality. I think its not productive to grasp for a tax/financial ulterior motive