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If there’s a legal way for a billionaire to avoid paying tax, of course they’re going to do it. The problem is how can you protect honest charities and prevent

If there’s a legal way for a billionaire to avoid paying tax, of course they’re going to do it. The problem is how can you protect honest charities and prevent these shenanigans?

piotrkaminski 3y ago
I'm no billionaire, but if there's a legal way for me to avoid paying a tax, of course I'm going to do it. Why should billionaires be held to a different standard? Tighten up the laws for everyone instead.
- ants_everywhere 3y ago
  It's easier for billionaires to bribe politicians to write the tax laws in their favor. So rectifying that means, among other things, being aware of ways in which billionaires can hide their taxes that aren't available to ordinary people.
jkmcf 3y ago
The problem is how can you protect honest charities and prevent these shenanigans? Taxes and penalties if the money isn't being used for philanthropic activities? And not just being moved around to other shelters/friends/etc...
- acdha 3y ago
  I think that would very quickly become a rat’s nest of proving that something isn’t truly philanthropic. It seems a lot easier to say gifts aren’t tax deductible and raise taxes enough that important social services aren’t expected to be funded by largesse.
edncy33 3y ago
I dont think anything can be done about billionaires. I mean Pareto wrote his Circulation of Elites 100 years ago. No one has been able to present a different mpdel that doesnt collapse. Failure of Wikileaks/Arab Spring/no one being held responsible for 2008 gfc/endless wars all are evidence Pareto was right. Lot of energy is being wasted on a mathematical imposability. There are no ecosystems where Nature has got rid off Predators.
burkaman 3y ago
That is a difficult problem in general, but in this specific case it's easy because Elon's charity has not been operating legally, as the article says. We could start by just enforcing the existing laws.
Gustomaximus 3y ago
By taxing charity? Wouldn't most genuine charities be a dollar in and a dollar out type situation, and any unused income/funds that year should be fairly minimal. The large endowment funds that have billions like Harvard ($50bn) probably have massive excess but at that point I'd have no problem taxing them if they are not spending the excess. There be some some scenarios where charities get large donation right at FY end and need some rollover function to push funds to the next year's spend before being taxed, or they have to make payment schedules for multiyear projects they are 'saving' for but generally it seems to make sense that charities are taxed. Other scenarios not considered that would make this a bad thing?
- freddie_mercury 3y ago
  No, charities keep reserves, they own assets, etc. Doctors Without Borders annual report says they have $400 million in net assets.
- Tostino 3y ago
  I think there can be some middle ground. Someone I have followed on YouTube for years has done yearly donation drives for a homeless youth shelter around Christmas. They raised maybe 10k a year for a few years. Last time, they decided to go through the effort to setup an endowment for the charity, and raised a couple hundred grand. That charity now no longer has to look for donations during Christmas to provide presents to the kids and meals to families on hard times. I think that's a great thing. I wouldn't want that to go away. I absolutely want tax shelters for billionaires to go away.
lotsofpulp 3y ago
> The problem is how can you protect honest charities and prevent these shenanigans? Get rid of tax deductions.

If there’s a legal way for a billionaire to avoid paying tax, of course they’re going to do it. The problem is how can you protect honest charities and prevent these shenanigans?

piotrkaminski 3y ago

I'm no billionaire, but if there's a legal way for me to avoid paying a tax, of course I'm going to do it. Why should billionaires be held to a different standard? Tighten up the laws for everyone instead.

ants_everywhere 3y ago
It's easier for billionaires to bribe politicians to write the tax laws in their favor. So rectifying that means, among other things, being aware of ways in which billionaires can hide their taxes that aren't available to ordinary people.

jkmcf 3y ago

The problem is how can you protect honest charities and prevent these shenanigans? Taxes and penalties if the money isn't being used for philanthropic activities? And not just being moved around to other shelters/friends/etc...

acdha 3y ago
I think that would very quickly become a rat’s nest of proving that something isn’t truly philanthropic. It seems a lot easier to say gifts aren’t tax deductible and raise taxes enough that important social services aren’t expected to be funded by largesse.

edncy33 3y ago

I dont think anything can be done about billionaires. I mean Pareto wrote his Circulation of Elites 100 years ago. No one has been able to present a different mpdel that doesnt collapse. Failure of Wikileaks/Arab Spring/no one being held responsible for 2008 gfc/endless wars all are evidence Pareto was right. Lot of energy is being wasted on a mathematical imposability. There are no ecosystems where Nature has got rid off Predators.

burkaman 3y ago

That is a difficult problem in general, but in this specific case it's easy because Elon's charity has not been operating legally, as the article says. We could start by just enforcing the existing laws.

Gustomaximus 3y ago

By taxing charity? Wouldn't most genuine charities be a dollar in and a dollar out type situation, and any unused income/funds that year should be fairly minimal. The large endowment funds that have billions like Harvard ($50bn) probably have massive excess but at that point I'd have no problem taxing them if they are not spending the excess. There be some some scenarios where charities get large donation right at FY end and need some rollover function to push funds to the next year's spend before being taxed, or they have to make payment schedules for multiyear projects they are 'saving' for but generally it seems to make sense that charities are taxed. Other scenarios not considered that would make this a bad thing?

freddie_mercury 3y ago
No, charities keep reserves, they own assets, etc. Doctors Without Borders annual report says they have $400 million in net assets.
Tostino 3y ago
I think there can be some middle ground. Someone I have followed on YouTube for years has done yearly donation drives for a homeless youth shelter around Christmas. They raised maybe 10k a year for a few years. Last time, they decided to go through the effort to setup an endowment for the charity, and raised a couple hundred grand. That charity now no longer has to look for donations during Christmas to provide presents to the kids and meals to families on hard times. I think that's a great thing. I wouldn't want that to go away. I absolutely want tax shelters for billionaires to go away.

lotsofpulp 3y ago

> The problem is how can you protect honest charities and prevent these shenanigans? Get rid of tax deductions.