None of that makes sense with how taxes actually work. For every $1 donated to charity, the maximum you’re getting back is 0.37 from the tax deduction. That’s assuming you’re in the max tax bracket. The higher your tax bracket, the cheaper it is to give to charity, but it’s never better than keeping the money yourself.
There are games that can be played with charitable donations, but cash to a foundation is not really the way. The real games are played around with hard to value assets like art/jewelry where massively inflated values and weird lease terms can lead to some really questionable outcomes. For example “loaning” art to a museum and writing off the “rent” after having it appraised for some insane value.
Kiosade@lemmy.ca 8 months ago
I’m convinced no one on Lemmy or Reddit know what a tax break actually is or that YOU DON’T MAKE MONEY FROM THEM!
HauntedCupcake@lemmy.world 8 months ago
The above post seemed to be saying that:
This then means that he can use what should have been tax to: 4. Pay himself with the charities money, as he is an employee of the charity 5. Lobby politicians using the charity’s money 6. Otherwise direct the charity to work in his best interests
Which part are you disagreeing with? I guess he doesn’t “make money” in the strictest sense, but it sure seems like he’s exploiting the system to keep more of it
Serinus@lemmy.world 8 months ago
Why does Bill Gates earn nothing through the Bill and Melinda Gates Foundation?
A 501©(3) organization is subject to heightened restrictions on lobbying activities, A 501©(3) organization may engage in some lobbying, but too much lobbying activity risks loss of tax-exempt status. Lobbying may not constitute a “substantial part” of the activities of the 501©(3) organization. ^source
I guess you can argue that eliminating malaria is in his best interests, but it’s pretty reaching. I guess nobody should do anything good if it might indirectly benefit themselves.
1rre@discuss.tchncs.de 8 months ago
Issue is if he’s paying himself with the charity’s money he’d have to pay tax on that, and if he wrote that off with a donation and paid himself again then it’d reset the loop - there’s no loophole there, literally, as it’d be an endless closed loop of transferring money.
Given the best interests of the US government are destabilising other countries and supporting unfair healthcare companies, given what is known about Bill Gates’ charity spending I think a higher proportion actually goes to the betterment of society than would if it went to the US government
roscoe@lemmy.dbzer0.com 8 months ago
The part where he “gets to keep more of it.”
$1 in charitable contributions does not lower your tax burden by $1, and certainly not more than $1.
If that dollar would have been taxed as capital gains, assuming 20% capital gains and 3.8% NII tax, it saves 23.8 cents meaning the $1 donation costs 76.2 cents.
If that dollar would have been taxed as normal income, assuming a marginal tax rate of 37%, it saves 37 cents meaning the $1 donation costs 63 cents.
(These two examples are not intended to be an exhaustive list.)
Charitable contributions cost money, just not as much money as they would if there wasn’t a tax deduction.
Blackmist@feddit.uk 8 months ago
I’ve come to the same conclusion. Every time there’s a corporation or billionaire either scrapping something or giving something away, then it’s “for the tax breaks”.