• HauntedCupcake@lemmy.world
    link
    fedilink
    English
    arrow-up
    47
    arrow-down
    8
    ·
    edit-2
    8 months ago

    The above post seemed to be saying that:

    1. Bill Gates pays less taxes as he donates to a charity

    2. Bill Gates runs that charity

    3. Bill Gates then gets to decide how that charity spends his donated money

    This then means that he can use what should have been tax to:

    1. Pay himself with the charities money, as he is an employee of the charity

    2. Lobby politicians using the charity’s money

    3. 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
      link
      fedilink
      English
      arrow-up
      27
      arrow-down
      3
      ·
      edit-2
      8 months ago

      Pay himself with the charities money, as he is an employee of the charity

      Why does Bill Gates earn nothing through the Bill and Melinda Gates Foundation?

      Lobby politicians using the charity’s money

      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. [1]

      Otherwise direct the charity to work in his best interests

      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.


      1. source ↩︎

      • HauntedCupcake@lemmy.world
        link
        fedilink
        English
        arrow-up
        6
        arrow-down
        7
        ·
        8 months ago

        Fair, in this example Bill Gates isn’t exactly the best one to pick. And the clarification on the lobbying rules is definitely a valuable bit of information, so thank you for adding that.

        I was more trying to point out that the original comment wasn’t saying that the tax break “made money”. It’s all about shuffling it around to avoid taxes.

        At the end of the day, it allows Bill Gates (or other billionaires) to spend otherwise taxable income on whatever they deem important. Whether or not you agree with how they’re spending their money is irrelevant

        • Serinus@lemmy.world
          link
          fedilink
          English
          arrow-up
          8
          ·
          8 months ago

          to spend otherwise taxable income on whatever they deem important

          Yes, that’s absolutely true, but the language hides the truth a bit. People don’t get the nuance of what “taxable income” is.

          If Bill donates a thousand dollars to charity, he saves ~$370 in taxes. That means he’s still losing $630 on the deal. The government gets to effectively triple their money by allowing you to decide where it goes.

          There may also be a limit of 60% of your AGI? I’m not sure how this works with billionaires.

    • 1rre@discuss.tchncs.de
      link
      fedilink
      English
      arrow-up
      18
      arrow-down
      2
      ·
      edit-2
      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, and 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
      link
      fedilink
      English
      arrow-up
      13
      arrow-down
      2
      ·
      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.