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It makes sense to me. We tax companies on the money they make in excess of what they needed to spend to operate, and deciding not to make a donation would have

It makes sense to me. We tax companies on the money they make in excess of what they needed to spend to operate, and deciding not to make a donation would have no impact on their income. I would not expect it to be considered an operating expense. In personal income taxes, I have always seen the deductibility of charitable donations and (in the US) mortgage interest as being a form of social engineering -- donating to charity and home ownership are individual behaviors that the government wants to promote, so it effectively subsidizes them for most people. Businesses are generally run to maximize profit so you could assume a deduction for charitable giving would be immediately weaponized by creating a charitable arm of the company and donating most profits to yourself, or something equally repulsive.

sokoloff 3y ago
I see the deduction of mortgage interest on owner-occupied property as putting prospective owners on closer to equal footing as prospective landlords when competing for housing. (Business interest is a deductible expense.) I don’t want the net financing costs for a rented property to be significantly lower, which would serve to help a landlord outbid an owner-occupant. (Yes, there is also a social engineering component, but there’s a practical economics-based argument for it as well.)
grotorea 3y ago
I feel open source donations could be seen as an expense. They are sort of paying for the development of software they presumably find useful. It's at least a start on fixing the problem of the commons type issue of open source benefiting multiple companies so they all want the other one to pay for it. > Businesses are generally run to maximize profit so you could assume a deduction for charitable giving would be immediately weaponized by creating a charitable arm of the company and donating most profits to yourself, or something equally repulsive. Aren't there a bunch of groups like for example Mozilla which have both company and non-profit arms? And yes it could be abused, but is a scheme that just donates money to a charity that has the company owner for a CEO and does nothing but pay high salaries is already forbidden?
- sophacles 3y ago
  One way to make it an expense is to contract the one or all of the maintainers to add a feature or fix bugs.

sokoloff 3y ago

I see the deduction of mortgage interest on owner-occupied property as putting prospective owners on closer to equal footing as prospective landlords when competing for housing. (Business interest is a deductible expense.) I don’t want the net financing costs for a rented property to be significantly lower, which would serve to help a landlord outbid an owner-occupant. (Yes, there is also a social engineering component, but there’s a practical economics-based argument for it as well.)

grotorea 3y ago

I feel open source donations could be seen as an expense. They are sort of paying for the development of software they presumably find useful. It's at least a start on fixing the problem of the commons type issue of open source benefiting multiple companies so they all want the other one to pay for it. > Businesses are generally run to maximize profit so you could assume a deduction for charitable giving would be immediately weaponized by creating a charitable arm of the company and donating most profits to yourself, or something equally repulsive. Aren't there a bunch of groups like for example Mozilla which have both company and non-profit arms? And yes it could be abused, but is a scheme that just donates money to a charity that has the company owner for a CEO and does nothing but pay high salaries is already forbidden?

sophacles 3y ago
One way to make it an expense is to contract the one or all of the maintainers to add a feature or fix bugs.