this post was submitted on 13 Mar 2024
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I consider Gates to be "better" than most billionaires, but, I recognize that he's still a billionaire, and as such, his philanthropic endeavors are as much about him having wealth and maintaining his wealth as they are about him being a "good person".
Let me explain: it's a tax write off. Basically, billionaires often donate to charity, not because they're particularly giving, but because it reduces their taxes. They basically take the money they would otherwise pay in tax, and instead pay it to a charity that then does whatever they do with it.
By establishing a charity for himself, he can personally pay his charity the money that would otherwise go to tax, then as the charity, dictate where those funds are spent. Instead of giving the money to someone else to do with as they will, he basically pays himself, so he can dictate what happens with his money.
In turn, he pays little to no taxes, and only has to ensure the money circles around his charity somehow. That may be in the form of paying himself (or others) as a function of running the charity, or sending the money to places and people who he believes can benefit from it (or indirectly, benefit him).
It becomes a large circle jerk of money that otherwise would have gone to the government for taxes.
EDIT: before this gets any worse: he's not making money with tax write-offs. That's literally impossible. The point is to control where your money goes. Here's an example. In situation A, bill, the individual, wants a thing to happen.... Say, it's research into a new form of energy. So Bill takes $1000 from his gross income and pays someone to research that thing to make it a reality. At the end of the year, bill gets a knock on the door, it's the tax man, looking for his cut off the $1000 bill earned. His cut is 30% or $300. Now let's move to situation B. Bill wants the thing to happen, but Bill owns a charity. So Bill donates the money to his charity and gets a tax write off for it in the form of a receipt that he can submit later. As a representative of the charity, bill then pays that $1000 to people to make the thing. At the end of the year, the tax man comes calling for his $300 of bills income. Instead, bill hands the tax collector the receipt for the charitable donation he made with the $1000 of income. The tax man accepts it and leaves with nothing.
The charity is a tax shelter so that bill has more money available to spend on the things he wants to have happen. So more of his money can go towards those things without being taxed.
I hope that clears it up a bit. Jesus, there's a lot of people here that don't understand tax write-offs. There's more that simply don't understand me, or have literacy issues, and assume far too much about what I'm saying here. Yikes.
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.
The 0.37 you get back is the tax you paid on the income. The exercise is more about controlling where your money goes and what it goes to.
Instead of giving the money to the government, who you may not agree with, you're giving it to a cause that either directly or indirectly can benefit you, whether that cause is a direct benefit in the form of helping with a problem that is causing you trouble, or simply as a good PR move.
You spend money to get there, but now often than not you're getting a benefit from the transaction.
Billionaires and their mentality and interests are fairly well known, for the most part. Bill is a co-chair of the foundation and likely recieves many benefits from holding that position, including a salary. He can also, as chair, influence who is hired, providing stable employment for people who are in his favor, while also getting a massive boost to his public image, all while paying himself a salary. He can also direct the funds that would normally go to the government as tax, who may spend it on things he doesn't want to happen, and redirect those funds to something he would like to see happen, such as R&D into technologies (which is a nontrivial part of what the foundation funds).
For Bill, the charitable foundation is a win all the way around, except to his billion dollar bank account, which I'm certain is providing plenty of income on its own.
Quite literally he's taking money out of the hands of the government and making sure money is being funneled into things that he thinks should happen. It looks very selfless on the surface but gates is a business man, this is just his most recent endeavor.