4 ms·

Because rich folk have the means to figure out loopholes to get around that. The old "i'm a philanthropist! (and totally not doing it for the tax breaks)" nonse

by slater 3y ago

Because rich folk have the means to figure out loopholes to get around that. The old "i'm a philanthropist! (and totally not doing it for the tax breaks)" nonsense, along with the whole "and that's why Warren Buffett pays less taxes than his secretary!"

lotsofpulp 3y ago
>along with the whole "and that's why Warren Buffett pays less taxes than his secretary!" This is incorrect. The claim was always pays a lower tax rate (federal), because the tax rate for capital gains is less than earned income.
pjscott 3y ago
> The old "i'm a philanthropist! (and totally not doing it for the tax breaks)" nonsense, How does this work? Suppose that someone donates $1 million to charity. They don't pay income tax on that money -- but they no longer have the money. I suppose that they could try to get clever about it by making a "buy yachts for our donors" charity, but that's explicitly illegal under the 501(c)(3) requirements.
- renlo 3y ago
  often they'll loan out pieces of art to museums, so they get the tax benefit and they get to keep the art pieces. I'm not sure how many of them are giving cash away to non-profits they don't have some controlling interest in (seems it would be rare but maybe I'm wrong)
  - pjscott 3y ago
    You're somewhat misremembering a real thing. It's possible to profit by donating a piece of art to a museum and claiming its value to be much greater than what you'd get on the open market. This is tax fraud, though, and the IRS will probably notice.
- dragonwriter 3y ago
  Big donors do effectively direct the agenda of charities, and while direct “buy yachts for out donors” things are usually hard to get away with, there are lot of other ways for charities to be used for donor personal benefit, e.g., as a vehicle for social influence operations, political (as long as it isn’t too nakedly and specifically centered on a specific election) and commercial propaganda, and other things rich people would spend money on to benefit themselves and the businesses from which they derive income with or without a tax break for doing it.
freedomben 3y ago
It never makes sense to do it for the tax breaks. unless your income tax rate was 101%, then the reduction in your taxes is always less than the donation, meaning it's always a net loss to you. Remember, donations lower the total taxable income, not the total amount paid, so it's effectively like you never earned the money you donated.

by slater 3y ago

lotsofpulp 3y ago

>along with the whole "and that's why Warren Buffett pays less taxes than his secretary!" This is incorrect. The claim was always pays a lower tax rate (federal), because the tax rate for capital gains is less than earned income.

pjscott 3y ago

> The old "i'm a philanthropist! (and totally not doing it for the tax breaks)" nonsense, How does this work? Suppose that someone donates $1 million to charity. They don't pay income tax on that money -- but they no longer have the money. I suppose that they could try to get clever about it by making a "buy yachts for our donors" charity, but that's explicitly illegal under the 501(c)(3) requirements.

renlo 3y ago
often they'll loan out pieces of art to museums, so they get the tax benefit and they get to keep the art pieces. I'm not sure how many of them are giving cash away to non-profits they don't have some controlling interest in (seems it would be rare but maybe I'm wrong)
- pjscott 3y ago
  You're somewhat misremembering a real thing. It's possible to profit by donating a piece of art to a museum and claiming its value to be much greater than what you'd get on the open market. This is tax fraud, though, and the IRS will probably notice.
dragonwriter 3y ago
Big donors do effectively direct the agenda of charities, and while direct “buy yachts for out donors” things are usually hard to get away with, there are lot of other ways for charities to be used for donor personal benefit, e.g., as a vehicle for social influence operations, political (as long as it isn’t too nakedly and specifically centered on a specific election) and commercial propaganda, and other things rich people would spend money on to benefit themselves and the businesses from which they derive income with or without a tax break for doing it.

freedomben 3y ago

It never makes sense to do it for the tax breaks. unless your income tax rate was 101%, then the reduction in your taxes is always less than the donation, meaning it's always a net loss to you. Remember, donations lower the total taxable income, not the total amount paid, so it's effectively like you never earned the money you donated.