Let the government contribute to good causes

Make tax deductible donations to your favourite people! Oh to be earning at the top marginal tax rate:)

Mannkal Economic Research Foundation. Contact for advice on options for donating.

Centre for Independent Studies your donation will be matched by generous supporters.

IPA.

Quadrant.

The Menzies Research Centre.

UPDATE. Donating is optional. It is also optional to claim deductions on your tax return. Feel free to donate to good causes without claiming the deduction if you object to tax deductions on principle.

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10 Responses to Let the government contribute to good causes

  1. Terry

    Tell me again why donations are tax deductible.

  2. Tim Neilson

    Tell me again why donations are tax deductible.

    To encourage people to make them.

    A tax deductible donation results in 100% of the money going to a (prima facie) good cause. If the donations weren’t tax deductible, then 47% would go to the government to be squandered in the usual fashion, and:
    (a) the punter might give the 53% to the good cause – i.e. no more good cause money than the current system; or
    (b) the punter might feel that “giving” to the tax system is good enough, and spend the rest on an overseas holiday, thus reducing the net benefit to society;
    i.e. deductibility is a psychological ploy intended to get more money directed to good causes.

    And even if every one of the punters would have given the 53% to a good cause anyway, I’d rather that the punters who worked for the money and earned it had a choice of directing the 47% to something they assessed as being worth while rather than the government getting even more to spend on NBN/NDIS/HMASub Pyne/pink batts etc.

  3. Dr Fred Lenin

    The government will have to clamp down if more people give more money to tax deductable charities ,we cant have the plebs giving away the pollies money .
    Just a question , is there any way of checking how much of donated money actually reaches its alleged target,and how much goes in “administative “ siphoning off ?
    One that really pisses me off is the “loving oarents “who breed kids to die of starvation , the money would be better spent on contreception ,preventing th kids from being conceived would e better than feeding them for life on charity. Less people ,mire food for those left.

  4. Terry

    It is not the job of the government “To encourage people to make them.”

    It is their job to tax as least as possible to provide the essentials (only).

    It is not the job of the government to pick winners. The “(prima facie) good cause”.

    Not all “good causes” are tax deductible and plenty of “dodgy causes” are very much so. Unions anyone?

    A 47% Marginal Tax Rate is beyond ridiculous. The government has absolutely no right to that money (unless every single citizen is taxed exactly the same and we ALL agree that we ALL will forego 47% of our income in favour of government spending – stupid, but fair). Watch the rate get voted lower when it isn’t someone else paying.

    Tax deductibility of donations would seem to be a poor argument for mitigation of government’s wasteful spending.

    Simply reduce tax collected to the minimum required. Leave all other resources in the hands of its producers. Then, they have 100% control over how and what they spend on, including a proportion for supporting good causes.

  5. Tim Neilson

    Terry
    #3036677, posted on June 7, 2019 at 11:59 am

    I agree with most of what you’ve written.

    I certainly agree that the tax deductible status of money given to unions needs to be looked at, since the unions’ tax-exempt status means that their DGR status is just a rort for ratcheting up tax deductibility of “donations” to Labor way over the statutory limits.

    But whatever list the government gives of good causes or not, individuals can still choose not to donate – i.e the government can’t “pick winners” in that sense merely by listing an entity as a DGR. [Except of course union fees where a closed shop is in a practical sense in operation.]

    Given the massive improbability of any Australian government voluntarily giving real tax relief any time this century, abolition of deductibility of donations seems to me not to be something that we ought to be suggesting right now. It can wait till you’ve achieved your minimum tax utopia.

  6. Rafe Champion

    Donating is optional. It is also optional to claim deductions on your tax return. Feel free to donate to good causes without claiming the deduction if you object to tax deductions on principle.

    Of course on the way to the minimum state many kinds of tax deductions will be eliminated but in terms of practical politics I think that is a zero order issue compared with a lot of other things.

  7. Terry

    Tim Neilson
    #3036694, posted on June 7, 2019 at 12:18 pm

    “Given the massive improbability of any Australian government voluntarily giving real tax relief any time this century, abolition of deductibility of donations seems to me not to be something that we ought to be suggesting right now.”

    For the record, I am not suggesting that removing tax deductibility of donations lead or be done in isolation of the necessary re-structuring of tax collection.

    If we made no changes on the basis that making those changes still would not achieve “tax utopia”, then we’d end up with the tax “system” (mess) we currently have.

  8. Terry

    Rafe Champion
    #3036817, posted on June 7, 2019 at 3:01 pm

    Thanks Rafe. Now, if you can just fix it so that the (quite substantial) tax donation/s made to the guvmint are also “optional”, I’d be more than happy to sign up.

  9. John A

    Tim Neilson #3036641, posted on June 7, 2019, at 11:26 am, trying to explain tax deductibility:

    A tax-deductible donation results in 100% of the money going to a (prima facie) good cause. If the donations weren’t tax deductible, then 47% would go to the government to be squandered in the usual fashion, and:
    (a) the punter might give the 53% to the good cause – i.e. no more good cause money than the current system

    A NON-deductible donation also goes 100% to the recipient.
    Tax deductibility only means that the ATO refunds you, the donor, a proportion of what you donated (calculated at your average tax rate), as an incentive to give to “worthy” causes.

    Others have already exploded the concept of the government picking winners/worthies.

  10. Tim Neilson

    A NON-deductible donation also goes 100% to the recipient.
    Tax deductibility only means that the ATO refunds you, the donor, a proportion of what you donated (calculated at your average tax rate), as an incentive to give to “worthy” causes.

    This is absolutely correct!

    If someone knows that an expense is non-deductible they are certain to give exactly as much as if they know it’s deductible.

    No-one cares about the difference between pre-tax and after-tax dollars!

    You KNOW it makes sense !!!!!

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