You hear a lot about how “the rich” are using charities to effectively reduce their tax to minimal amounts, among other methods.
On the face of it without digging, it obviously makes people angry and detest the rich. But scratching beneath the surface, I’m not quite sure how exactly they would achieve this? In order to claim the tax back from money donated, you still have to… donate money? Which would still equal more than the money claimed back from tax.
So unless they are actually doing something illegal and funneling money through a charity, claiming tax, and then using that money from the charity to fund purchases not related to the charities mission, how exactly is it benefiting the donor (financially)?
In: Economics
Often the charity is an organization they control/own and does minimal charitable work.
However, there are many ways they can use the charity to give family/friends jobs, or curry favor, award contracts for work on behalf of the organiation, or hold fancy events and take trips in the name of the non profit as part of their mission.
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