Since charitable giving reduces your taxable income, and isn't an actual tax credit, and because of the marginal tax system, giving money to charity will still leave you with less money than if you paid taxes on that income and didn't give it away. Even without a marginal tax system, the structure of the brackets in the US means there's a very small window where charitable giving and dropping down a bracket would be a net gain, so ultimately short of setting up your own foundation and other strategies of the uber-wealthy, charity is still actually charitable and not just a tax-avoidance scheme. Ignoring all that, there'd be nothing wrong with giving to charity just to avoid taxes. Charity is certainly more efficient by and large than government entitlements, and why shouldn't individuals be able to direct at least some of their forced wealth confiscation to causes they believe in?
Video is wrong. Americans pay marginal tax rates within each bracket. The richest dont pay 39 per cent on whole income.
Since charitable giving reduces your taxable income, and isn't an actual tax credit, and because of the marginal tax system, giving money to charity will still leave you with less money than if you paid taxes on that income and didn't give it away. Even without a marginal tax system, the structure of the brackets in the US means there's a very small window where charitable giving and dropping down a bracket would be a net gain, so ultimately short of setting up your own foundation and other strategies of the uber-wealthy, charity is still actually charitable and not just a tax-avoidance scheme. Ignoring all that, there'd be nothing wrong with giving to charity just to avoid taxes. Charity is certainly more efficient by and large than government entitlements, and why shouldn't individuals be able to direct at least some of their forced wealth confiscation to causes they believe in?
Wait, so how does this work with marginal tax rates? Aren't you only taxed the rate for the money you make within each bracket?
Doesn't America have a progressive tax system, so how does charity fit into that ?🤔
This is a beautiful video thank you
Nice new board you've got there! :-)
the very first thing obama did when taking office after the 2008 election, was to reduce the percentage you could claim for charitable donations.
I love how the uber rich are looked at as so "philanthropic" when it couldn't be further from the truth