> without paying capital gains tax.
It's a funny day when you're feeling charitable, but go out of your way to avoid helping the entity that should be the ideal charitable recipient.
It's a funny day when you're feeling charitable, but go out of your way to avoid helping the entity that should be the ideal charitable recipient.
Let's say you just won the startup lottery and you've got a significant amount of now tradable stock. Some of which was early exercised and the cost basis is effectively zero. Some of which was RSUs or non-qualified options and you owe ordinary income. And that you're way over into the top tax brackets.
If your zero cost basis stock is Qualified Small Business Stock (QSBS), there's a very nice discount on federal capital gains, so you might not need to do the rest of the stuff.
Otherwise, if you donate your apprechiated zero basis stock, you get to save federal capital gains of 20% + 3.8% net investment income. Plus it offsets against your ordinary income that's 37%. So that's a 60.8% discount on being charitable for the feds. If you live in California, capital gains are regular income, so you're saving 13.3% because the capital gains go away and offsetting 13.3% on your ordinary income, so your total discount is 87.4%. In other words, your difference in cash after taxes for selling $1M of zero basis stock or donating $1M of zero basis stock is $126k.
When the government is telling you it only costs $126k to give a charity $1M, it's pretty compelling. The math used to be different, when you'd get credit for state taxes on the federal return, but that was many years ago now.
People with lots of money and power get their representatives to pass laws that reduce their taxes.
You lowering your tax rate and giving that money to charity isn't magicking more money into the world, it is just a different allocation.
The government's tax income is allocated by the masses (in theory anyway). It is fair and dispassionate.
Philanthropy / charity is picking winners and losers based on your personal whims, and for many it is about gaining social capital.
In order to improve global health or address other issues that impact countries beyond where you live, the government (even an idealized version without waste, corruption, or political games) might not be the most effective way to accomplish this.
What I find kind of interesting is that Bill Gates and Warren Buffet argue that they should be taxed more, but they don't do anything to further that goal aside from media soundbites and headlines. They could fund an incredible war chest for a lobbying apparatus who's sole purpose would be to create a more fair tax system. But no such thing happens.
It seems fortunate that some charitable funds aren't subject to that risk. They have other risks, but they seem lower.
In an imperfect world, government funding alone seems insufficiency diversified. That's too much power in one place.
This is only ever true if you assume that government tax spending is 100% efficient, with nary a fraction of a cent being wasted. I don't think that's a safe assumption.
We're doing better now than we were 50 years ago, but the Nords are light years ahead.
It's a gross comparison.
How they spend their oil resources is also quite different. :)
Or a school admin system built for 100 million dollars and crap. They even spent a lot of money trying to prevent a open source client that solved a lot of the issues they had.
Maybe in absolute money it is less than the US. But remember US also have a lot more people.
The waste, fraud, and abuse that runs rampant throughout the government tells us that the powerful often use taxpayer dollars as their own slush fund.
Sure the government does much to relieve the suffering of people around the globe; but it could do far more with substantially less.
I don't know that it's worse than any other institution? At least voters can remove the corrupt, and they are prosecuted. Are you saying these uber-wealthy and CEOs aren't just as corrupt or worse?
More often than not, corruption in government does not result in the perpetrator being prosecuted or even removed from office.
I am amazed at all the people who are so sure that corporations and/or wealthy investors are corrupt, but give big government a pass. As if the same types of people don't run both.
Its probably not so much that government gets a pass as much as government is the organization that, by virtue of being a citizen, they own and control, so when things go wrong it is their own fault, and they really don't want to accept blame for their own faults. They would have to ask "How did I manage to fuck this up?", which is a hard question for most people to ask themselves.
When it is distinctly someone else's organization it's much easier to throw pointless shade to make one feel better about their own failings.
Where do you find these people? I've never met them. It seems like everyone complains about government waste and corruption - even when it's not happening!
If we're talking specifically about the U.S. government, I suspect its decisions cause more suffering globally than they alleviate, though of course there are open philosophical questions inherent in any attempt to quantify suffering.
I think there is value to letting people allocate some percentage of their income directly to causes they are passionate about. Even if you assume the government is efficient and not bloated, and benevolent, this lets people contribute to causes without waiting for political consensus, or to smaller causes that would not be on the government's radar (yet) or ever. It's more pluralistic. It lets smaller causes bloom. It keeps me civically engaged.
On a personal note, I do take issue with the amounts spent on "defense" (which is often bombing people or threatening to directly or indirectly), and would rather help folks than bomb other folks.
Of course, you wouldn't expect them to be the ideal charity; they are explicitly not a charity. Anyone who is actually trying to be a charity should have little trouble using funds more charitably than any government in the world.
But guess what? If you give too much power to a position, people who want to abuse the power will try to get themselves there.
I wasn't upset that Obama was consolidating power because I thought Obama would abuse it. I'm upset that he consolidated power and then left it to whoever would come next, and then has the gall to be surprised that consolidating power under the Executive would undermine the power of the Legislature the moment a President who was willing to abuse said power was sworn in.
We're cooked because of the fucking team sports. Both parties have had the chance to reign in the Executive and neither has the balls to use it against their own guy
Even in qualitative terms, the "consolidation" was incorrect. Congress abdicated its responsibilities, and the Federal agencies picked up the slack. They're not controlled _centrally_, it's not like Obama was ordering agencies to write particular rules.
We now see what the central consolidated control actually looks like.
The problem with leaving everything to private charity is that only the wealthy people and churches doing the donating dictate what counts as "public good" without you and I having any say over it. We luck out when the donor has good intentions and chooses to donate to an organization doing good, and we have no say when the donor has evil intentions and chooses to donate elsewhere. Allowing a small handful of rich donors to decide what counts as a good cause is not ideal.
It is problematic even with good intentions.
People don't have time, expertise or usually even the motive to systematically examine ROI. They or someone they know has a 'good cause' and they support it. For example, endowments at their alma mater - likely a school for wealthy kids, new buildings for the hospital (that serves wealthy people), new research in diseases that are problems for the wealthy, etc.
They can't know without talking to people who have experience with poverty, for example, and those aren't the people coming to dinner tonight.
The thing about public goods is that people tend to agree pretty closely about what they are. The wealthiest person in the world benefits from, e.g. clean air just as much as you do. You should be a lot more worried about wealthy folks who don't donate to charity and just spend the money on big luxury yachts and the like, because these folks are essentially free-riding on everyone else.
Is there some data that shows that?
> The wealthiest person in the world benefits from, e.g. clean air just as much as you do.
We can find public goods in common for many groups, but that's actually a bad example. Wealthy people care about clean air in their neighborhood; pollution is therefore concentrated in poor areas. They don't site the new incerator (or drug treatment facility) on the Upper East Side of Manhatten.
Many needs are specific to poverty. For example, wealthy people are not subject to malaria; they are no illiterate; they don't need toilets or labor rights; they can afford college for their kids regardless of tuition; they have unlimited access to safe, fresh, healthy food. They don't need more available and less expensive health care, so they donate to cancer research and high-tech therapy and not to the medical clinic in the poor neighborhood.
I also agree that wealthy folks spending their wealth on luxury yachts while the public suffers is also something to worry about. Who knew? Gargantuan wealth inequalities are mostly downside for everyone but the wealthy!
Of course not. It's quite literally just the people. If you cannot trust the people with your charitable donations, but still wish to donate to a person, then you're going to have to narrow that down to the specific person you can trust (i.e. your friends). There is no in-between.
Another, much larger aspect of government, especially democratic, is people getting together and doing things as a community that can't be done individually.
People getting together and doing things as a community does not require a government. We can and should do that of our own free will. That's not to say governments aren't needed. But labeling them as "people getting together and doing things as a community" ignores their ability to enforce their laws, including the sanctioned use of violence or the threat of violence to coerce people into obeying or to punish them.
That may be true, but government (at least a democratic one) is just people getting together and doing things, so if you already have one you can save the effort of the community trying to organize a second community on top of the community they already have for no good reason.
> But labeling them as "people getting together and doing things as a community" ignores their ability to enforce their laws, including the sanctioned use of violence or the threat of violence to coerce people into obeying or to punish them.
That literally tells of people getting together and doing things. These are not magical powers. They are simply community action. I suppose it highlights that people getting together and doing things isn't all sunshine and rainbows, despite your apparent dream for a world where there is only happiness, but such is reality.
I expect the aversion is that those who wish to donate to charity only want their friends, not entire communities, to benefit. The "trouble" with a community at large is that everyone is able to participate, whether you like them or not. That's not to say that a community cannot see a charitable benefit indirectly, but the key point is that they want to keep the primary benefit away from strangers.
The government is the only one with a legal monopoly on violence; it redistributes resources in the society and it's not run by incorruptible angels but by fallible human beings - human beings who were put there thanks to investments of millions of dollars.
It's a recipe for disaster.
Government is a recipe for disaster? Democratic government has worked for centuries without disaster.
> it's not run by incorruptible angels but by fallible human beings - human beings who were put there thanks to investments of millions of dollars.
Yes, that is the trick of every human endeavor, the great ones and the failures. It depends on you and me - let's make it happen.
That may be logical, but it doesn't happen. I've had unpaid parking tickets for long periods and nobody showed up at all, much less with guns. Where do you live that they jail you for it, much less go out and find you? Your local government must be very well-funded to have resources for that, not to mention having a fascist attitude - how popular is that with constituents?
> People getting together and doing things as a community does not require a government.
It depends - many times it is the most or only effective way. It has decision-making mechanisms - including elected representatives, hearings, experts - and executive mechanisms including employees, equipment, contract managers, processes, institutional information such as maps of infrastructure, and loads of experience. Imagine some neighbors in NYC trying to put in just a new streetlight.
> But labeling them as "people getting together and doing things as a community" ignores their ability to enforce their laws, including the sanctioned use of violence or the threat of violence to coerce people into obeying or to punish them.
It doesn't ignore it, but your prior comment repeats the Internet trope that that's what goverment is - a coercive mechanism with guns. That's only one narrow aspect - the great majority of what government does, and how society works, has nothing to do with that. It's for the outlaws, not for the great majority.
If it is authoritarian, perhaps, but even that is still a matter of a group of people. Most seem to believe that government should be democratic. You may not find yourself in a democratic state, but that would only continue to contribute to what makes the day funny. Perhaps you didn't read the entire thread and are posting this without understanding the full context under which it is taking place?
But, again, that government is the very people we're talking about, at least as far as a democracy goes. Although even in the case of an authoritarian government, the individual authority is only as strong as the people are willing to go along with recognizing it, so it is not really that much different. No magic here, just people.
It's nothing to be proud of.
What you can be proud of is in REDUCING dictatorship, by removing power in centralised entities and giving it back to the individuals.
It is not - that would be some theoretical pure democracy, also called 'mob rule'. Democracy, as the word is actually used, requires universal human rights which protect the minority. For example, freedom of speech means the majority can't control the minority's speech, whether they like it or not.
Democracy also includes separation of powers, usually between legislature, executive, and judicial, which prevents the concentration of power.
> It's nothing to be proud of.
It's only something to be proud of if we make it that way.
Supporting government programs at the same time as you insist money could be better used elsewhere (at charities) is somewhat amusing.