As a result of his donations to charity, Dick Smith didn’t have to pay any tax. Instead he donated $1m to ATO anyway.
What do you think about this? Is the $1m better donated to a charity organisation?
Also, how is this compared to Gerry Harvey’s keeping of the $22m jobkeeper money?
It's always better to form a complete thought first and add some context before hitting send 🙄
Waste of space!
That's how the tax system is setup, nothing stopping you doing the same :P
It could be worse, it could be like the US!
Where a person (say "Bill Gates") "donates" half his personal fortune to a "charity" (for a tax write off). That "charity" happens to be called "Bill & Melinda Gates Foundation" in which Bill Gates has full discretion of funds, which is setup to be essentially be a venture capital "charity" with exorbitant "fees" to the "board" ;)
ie. pay yourself $100 billion, "donate" $50 billion to your charity to avoid all taxes, then rinse repeat next year :P
Interesting! Thanks for the example.
you're three quarters of the way there. except for the part of stopping you from doing the same :)
you need to be endorsed by the tax man as a 'deductible gift recipient' which is a separate thing from being a charity (under the purview of the charities and not-for-profits lady) to be able to do the tax write off bit.
That makes no sense. The board has to pay tax on compensation they receive.
It is pretty silly to think Bill is giving away billions as a tax dodge.
No, you are right, he MUST be a pure philanthropist, there's nothing in it for him at all ;)
He already has basically unlimited money and would have a lot more if he wanted.
@Aureus: So why not donate it to different charities? Why does it all go to his Foundation exclusively?!?
Oh, that's right, nothing in it for him personally ;)
@7ekn00: You would have to ask him. I would guess because it allows him to focus the money on projects that he thinks is valuable and maybe the ego thing of having your name on the organization.
@Aureus: You can make that decision by the charities you give money too … there is only one reason to give it to your own charity ;)
@7ekn00: How about you explain how you think Bill Gates is using his foundation as a tax dodge.
ie. pay yourself $100 billion, "donate" $50 billion to your charity to avoid all taxes, then rinse repeat next year :P
This makes no sense.
@Aureus: It's no difference to Clinton Foundation, Rockerfeller Foundation, Open Society Foundation (George Soros) , etc etc
They all do it to keep the appearance of "Philanthropy" all while actually using them for tax havens …
It's not hard to find and read the "Pandora Papers":
https://www.google.com/search?q=Pandora+Papers&rlz=1C1CHBF_e…
Gates uses Alpha Consulting Limited and Trident Trust Company Limited ;)
@7ekn00: More vague statements.
I know rich people dodge taxes. Explain how Bill Gates's $60 billion of donations has yielded him > $60 billion profit, without anyone noticing.
@Aureus: Better described by the OECD document on tax evasion:
https://www.oecd.org/tax/exchange-of-tax-information/4223203…
@Aureus: I can make it even more simple for you if that is what you need!
Here is a hit piece on Musks Foundation, but it applies to all 501(c)(3) foundations (like the ones listed above):
https://qz.com/1911485/elon-musks-charity-donations-use-phil…
The donor gets all the immediate tax benefits and concessions while maintaining control on where the foundations money goes:
- hire a yatch for the foundation directors (which are also the donors) to travel to a potential project in the Bahamas - no problems
- hire a private jet to a business conference in Morocco - no problems
- etc
@7ekn00: The article you linked still doesn't explain it.
Fidelity Charitable, now the wealthiest nonprofit in the US, calls this the “easiest and most tax-advantageous” way to give to charity.
The benefit to billionaires is clear: Money donated to such funds delivers immediate tax breaks by reducing taxable income and assets, especially in years with large windfall profits or major life events (like an IPO or divorce). But unlike family foundations, which must distribute a certain share of their assets each year, no time requirements exist for donor-advised funds. Their money can be held for 100 years (or more). Funds that donate the money to nonprofits, even partisan political ones (501(c)(4)s under the tax code), can be anonymous gifts without any affiliation with the donor itself.
_
hire a yatch for the directors
That isn't at all what your linked article is talking about. You don't donate $60 billion so you can get tax free private jet travel if you can sufficiently justify it.
@Aureus: If you say so, your the know it all expert …
So you don't give $60 billion to yourself to get immediate tax benefits and appear to be the world biggest philanthropist, all the while still maintaining 100% control of that $60 billion …
OK, if you say so (but it does explain why it doesn't go to other actual charities) ;)
@7ekn00: You are the one making the claim. If you can't back up your claim, maybe you are incorrect. No need to dig.
@7ekn00: @7ekn00 well the simple answer is that the foundation does frequently provide grants to other non-profits.
There's no doubt a lot of stooge foundations and perhaps the bill and Melinda gates foundation does provide Bill gates with ivory back scratchers, but it's also generally pretty well regarded by the effective altruism movement.
Its more experimental than what effective altruists tend to advocate for but it seems to be genuinely targeting some pretty serious issues.
It faces the inescapable issue that in order to spend money effectively you need to find effective charities/initiatives. Thry could blow through their money much more quickly but it wouldn't achieve much. There's a ton of trash charities and trash ideas.
@Aureus: I did see an explanation of how the grift works earlier this year, I'll try and find it for you.
And for a guy who supposedly gives away most of his fortune it's funny how his worth keeps going up every year. :)
I think the reason for the Bill Gates charity donations not tax evasion, and rather retaining more control if where the funds are spent, as it is very unlikely anyone would even be able or want to spend 1 billion dollars a year on themselves and their family, considering you wouldn't even have time to use most of what you bought so it would be a huge waste of money, and probably also a huge environmental concern due to all the waste generated by the unused stuff.
So if the some of the money will be used for the benefit other people, the "best" way would be to donate it to a charity which is under your own control, so you maximize the amount of money you control and get to choose how the funds are spent. These funds could be directed in "selfish" ways, such as finding cures for diseases which family members have contracted or at high risk of contracting. Not to mention the public relations benefit of doing things this way.
It could be worse, it could be like the US!
Obviously you haven't heard of the Minderoo Foundation
That’s not how charitable deductions work at all.
As a result of his donations to charity, Dick Smith didn’t have to pay any tax.
Thats how it works…. If you too donate all your profits away, you don't have to pay tax either!
Instead he donated $1m to ATO anyway.
Which is also a donation for next year :)
As per the original article from the Australian it was a conscience payment into consolidated revenue, don't think it will count to his tax next year.
Where does Dick Smith make his money these days anyway?
Onlyfans
Temptin
He sells Dick pics
Gerry for PM!
you realise when you pay the donations instead of "tax" you are literally worse off from a cash perspective?
For the sake of the below, assume profit equals cash.
Let's say you have 100k of taxable profit and pay 30% tax, that would be 30k. You finish with 70k of cash
If you had 100k of taxable profit and made then make a 50k donation, you'd pay 30% tax of 50k (100k - 50k), which would be 15K. So you would finish with 35k of cash (100k-50k-15k).
Donations have harmless kickbacks.
Like being invited to the yearly dinner, getting a $7 paper certificate, a tacky plaque and being admired by other donors.
And photos, don't forget the photos.
Donations rule!
Jerry all these big companies, they write off everything
You don't even know what a write-off is.
Sometimes when you don't understand shit, it's best you don't stick your head into that barrel of shit.
Keep out of news.com next time
what a dick
I donate to the ATO every year !!!
'Donate' implies choice. :)
You can choose not to earn more than ~$20k and donate nothing.
Well that's one very limited choice. What if I chose to earn more than 20K, can I still choose not to pay taxation?
That's what I thought.
@EightImmortals: You can't haven't it both ways. Not unless you use some sort of tax avoidance scheme anyway.
He is a legend.
His goal is to giveaway what he personally earned. He never expected to make soo much money. However, was fortunate enough to make allot.
While making sure his family is looked after. Donating to charities and fauna projects. I guess he wants to put some back to the Australian ppl by giving to the ato.
He has given enough opportunities to the Australian ppl and business to keep ppl employed, yet that failed. If everyone listened to him and bought one product from the businesses he promoted, we might be just a little better off.
Now the Chinese, Americans, French etc have taken over.
👍 Agree / disagree 👎 ?
In Australia,
there are very clear laws about what you can and cannot do in a charity.
It's VERY unlikely that you could get away with funnelling money back to yourself or hire a helicopter of luxury yacht to attend a meeting.
Source- was chairman of a charity for 5 years.
During that time NONE of us took a cent in payments.
The other end of the stick is USA where the most egregious corruption occurs. I think it was one of the Koch brothers who funded a foundation in his name then used it to lobby for changes in the law that made him hundreds of millions…
Yes, it is better to donate.
Donations (money) go exactly where the donor wants it to go.
Tax (money) go to those the regime of the day decides to benefit.
Fundamental.
???