Is an effective means of tax evasion?
2006-09-11 22:57:26 · 7 answers · asked by Anonymous in Social Science ➔ Economics
Do people realize that when millionaires and billionaires pay taxes, it gets wasted by stupid politicians.
Did you know that when you donate money, it is also tax deductible. Does that make you a tax evader?
2006-09-12 07:10:02 · answer #1 · answered by Zak 5 · 1⤊ 0⤋
You couldn't possibly know what was a person's motivation unless you've "walked a mile in their shoes" so it's unfair to refer to it as 'so-called "philanthropy"'. When you do that, you imply that the donation was somehow lacking. And, anyways, philanthropy is ineffective as tax avoidance.
Making a charitable donation earns tax deductions. The deduction means that tax is not paid on the donated money. The pre-tax amount is still lost to the donor. So there is no financial benefit.
The rules vary in different jurisdictions, for different circumstances, but let's assume that my tax rate is 40% and that I'm permitted to deduct 100% of a donation. Then my $100 donation has earned me the right to not pay tax on that $100 which I have just given away. So the donation saves me $40 but I'm still short $60.
In my view, philanthropy is a useful way to "vote" for worthy causes by giving money to them directly. The $40 is lost to government because the organization got it.
The philanthropy of the Gates Foundation and the Google Foundation it has some interesting additional benefits to the causes they support. For example, it brings some very smart, highly-skilled, and well-connected people to look at these problems. Also, hopefully, it may inspire ordinary middle-class people like us to also be generous and help those around us. It inspired Warren Buffet to donate a large portion of his wealth because he respected the Gateses ability. Remember that there are hundreds of millions of us, whose donations could amount to a heck of a lot more than Warren Buffet's or Bill & Melinda Gates's donations.
2006-09-12 08:52:33 · answer #2 · answered by george_klima 3 · 2⤊ 0⤋
As far as tax evasion helps children with cancer and treats people with AIDS and eliminates poverty in few parts of the world, it can still be referred to as Philanthropy
2006-09-12 06:10:32 · answer #3 · answered by daffythecoolestduck 2 · 2⤊ 0⤋
Would you rather they just kept their money? Too many millionaires and above did not work for their money they inherited those massive amounts or married someone who had the money. They pay no income taxes because they have no income. The least they can do is give the money to charities who will give to people who need the money or service that they provide.
2006-09-12 06:10:27 · answer #4 · answered by Anonymous · 1⤊ 0⤋
Yes of course people realise that. Well, anybody who understands tax laws. But so what? Would you rather Bill Gates kept his billions all to himself instead of using it to help others?
2006-09-12 06:09:28 · answer #5 · answered by Jackie J 4 · 1⤊ 0⤋
Some do realize it & some don't.
Just as some rich are philantrophic for genuine concern while others for tax 'relief', Y>J>A>!
2006-09-12 07:12:28 · answer #6 · answered by Anonymous · 0⤊ 0⤋
Absolutely, it's called a write off.
2006-09-12 06:04:57 · answer #7 · answered by Desi 7 · 0⤊ 1⤋