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After seeing problems with the Red Cross response local storm relief (example: 40% of available emergency vehicles used for press conferences), reporter Laura Sullivan decided to look into what happened in Haiti, where the American Red Cross collected a whopping $500 million in donations.
Her report is damning. The largest proportion of these were to go into housing. The Red Cross built...wait for it...six houses. In one area where the Red Cross promised to spend $24 million, and even printed a brochure exclaiming over all that they accomplished, the local residents are unaware of any Red Cross activity.
Meanwhile the Red Cross refuses to provide more than a very high level overview of their projects. No financial figures are provided that would allow one to figure out how much of that $500 million was actually spent on relief, and where the rest of it went.
Original Submission
(Score: 2) by Dunbal on Sunday June 07 2015, @12:09PM
That's because you're looking at it backwards.
What if you have to pay $1 million dollars in taxes because you made so much money. You can pay $1 million to the government and get nothing but the knowledge that you did your civic duty, or you can pay $1 million (or whatever the maximum deductible amount is according to local laws) to a tax deductible charity and still be without $1 million but now you are able to milk the shit out of the fact that you're such a nice, kind, charitable organization. It's good PR. The charity gives you something extra for the same money.
(Score: 3, Insightful) by maxwell demon on Sunday June 07 2015, @12:37PM
You are not subtracting the amount from the taxes, you are subtracting it from the taxable income. So if your tax is 40%, and you spend $1 million to a charity, your taxable income decreases by that $1 million, and therefore your tax decreases by 40% of those $1 million, or $400,000. In other words, you still have $600,000 less than you would have had if you just had taxed that money.
The Tao of math: The numbers you can count are not the real numbers.
(Score: 3, Insightful) by TheRaven on Sunday June 07 2015, @04:30PM
sudo mod me up
(Score: 2) by isostatic on Sunday June 07 2015, @05:41PM
Now this is where it makes sense, but if you can't liquidate at that level it's not clearly not worth that, so surely that would be fraud
(Score: 2) by Joe Desertrat on Sunday June 07 2015, @05:43PM
Now this is where it makes sense, but if you can't liquidate at that level it's not clearly not worth that, so surely that would be fraud
That is why they are working so hard to dismantle the ability of the IRS to investigate fraud.
(Score: 5, Interesting) by TLA on Sunday June 07 2015, @02:59PM
life gets interesting if you donate your tax bill to a charity that YOU OWN. Even more so if you don't declare it.
THIS is how philanthropic tax dodges work. Ask Bill Gates. He pays his tax contribution to the Bill & Melinda Gates Foundation, THEN claims a salary off it. He's double dipping right there, AND avoiding a huge chunk of tax liability. He's not the only one.
It's a piece of piss to register a charity. Even easier to assume another name for the sole purpose of drawing a salary. Hell, your "charity" doesn't even have to do any actual work, just sit there and accept donations, and pay salaries to any and all who are willing to pay a 10% service fee so they don't have to pay the Treasury instead (plus it gets you a "Member of the Board for X Charity" on your CV), and I can tell you it doesn't matter who you are, even if you're on the lowest tax bracket that's still a fucking great deal.
The best part about it is, IT'S COMPLETELY LEGAL.
Excuse me, I think I need to reboot my horse. - NCommander
(Score: 1) by Soybean on Monday June 08 2015, @12:06AM
THIS is how philanthropic tax dodges work. Ask Bill Gates. He pays his tax contribution to the Bill & Melinda Gates Foundation, THEN claims a salary off it. He's double dipping right there, AND avoiding a huge chunk of tax liability.
How does that work? You seem to think that salaries don't have income tax. In fact, when you are your own employer, salaries are double-taxed because there is an employer side FICA tax [accountingcoach.com] that regular employees never see.
So, your theory is that Bill Gates is taking capital gains, which has a maximum tax rate of 20% and 'donating' that to a charity which then pays it back to him with an effective tax rate of well over 30% as a tax dodge?
Puhlease.
(Score: 2) by TLA on Monday June 08 2015, @05:35AM
30% of a 40% tax dodge. Let's run the numbers. Keep it simple.
Gross from job: $10million
Tax liability: $4million (assume high tax band rate of 40%)
Donate that to your charity.
Draw 4 million salary, minus 10% "servicing": that's 3.6million taxable income.
40% of THAT is 1.44million.
I just cut your net tax liability by 64%, in one go. Rinse and repeat, for further 64% net reduction in liability each go round until you drop into the low bracket. YOU'RE WELCOME.
Excuse me, I think I need to reboot my horse. - NCommander
(Score: 0) by Anonymous Coward on Monday June 08 2015, @02:27PM
> Tax liability: $4million (assume high tax band rate of 40%)
> Donate that to your charity.
WTH? You've obviously never made a charitable donation in your life.
If you donate $4M out of $10M that does not cut your tax by $4M, it cuts your taxable income by $4M.
You still owe 40% on the remaining $6M.
Where did you come up with this bullshit theory anyway?
(Score: 2) by isostatic on Tuesday June 09 2015, @02:40AM
> WTH? You've obviously never made a charitable donation in your life.
Quite, but it looks like a common belief.
Lets run the numbers from the muppet you replied to
>> 30% of a 40% tax dodge. Let's run the numbers. Keep it simple.
>> Gross from job: $10million
>> Tax liability: $4million (assume high tax band rate of 40%)
>> Donate that to your charity.
So that reduces taxable income to $6m, leaving a tax bill of $2.4m
>> Draw 4 million salary, minus 10% "servicing": that's 3.6million taxable income.
WTF is "Servicing"?
>> 40% of THAT is 1.44million.
OK, so tax of 2.4 + 1.44 = $3.84m
>> I just cut your net tax liability by 64%, in one go. Rinse and repeat, for further 64% net reduction in liability each go round until you drop into the low bracket. YOU'RE WELCOME.
No, you cut it by 5%, made up of this unexplained "servicing" thing.
Now I can accept there are tax dodges, things like lending yourself money, writing down asset values, etc which means rich people pay a fraction of the tax (as a percentage, still way more in actual dollar-value) than the rest of us, or that you could get untaxed benefits (e.g. donate $4m to charity, get free use of a $80m charity jet or something), but the simple act of donating to charity doesn't save you money.