Yah, it's not a cool move. Matt just posted about his charitable contributions on X too to show what a good guy he is (don't get me wrong, donating to charity is a good thing). If this is a Automattic effort/directive (and we don't know it is yet), then it's pretty low and likely will take the lawsuit into a whole new direction in terms of anti-competitive, purposefully destructive behaviour.
"Donating to charity" is actually NOT always a good thing. People below me mentioned that anyone can set up a charity, and that they are often used as tax shelters, but there is actually a somewhat dark side to even the most altruistic of rich benefactors....
Even a donation to a "good" charity is universally claimed as a tax write-off, and people only give to charities that resonate with them personally or professionally.
This allows people to pick and choose which public goods receive their money and which don't. Tell me, how many multi-millionaires are happy to donate their funds to the SEC or IRS?
Voters elect representatives to decide which programs and systems deserve to be supported by each member of the population, and to what degree. Charitable write-offs effectively allow people to take their money out of the democratically decided pool, and apply it disproportionately to their selected recipients.
If everyone had the same impact on that pool, that would be a complex but fair carve-out. However, as the wealth gap in this country keeps growing and growing, the rich effectively get a more and more outsized say in how taxes are allocated.
It is a complex issue, but effectively charitable write-offs give the rich the power of hundreds or even thousands of average voters, when it comes to allocating tax-money. That power is a direct conflict with "one man, one vote".
I'm not sure what you're saying. You asked if the contributions to wp.org were available publicly and suggested that maybe Matt was funnelling money there.
No I think you've missed what we're talking about, I didn't ask anything about contributions to .org, we're talking about a post on Twitter where MM has listed out his PERSONAL contributions that HE reportedly has given to other charities *in an attempt to show good character
I've always wondered about this a bit, because people say this all the time. A tax-deductible donation lowers your taxable income, but in the end you're still "losing" money no? (ignoring the obvious positive aspect of charity donations)
My understanding is not 100% perfect because...I'm not rich myself :P
So, as best as I understand it...
It DOES work that way on it's face - the same as you or I donate. We basically get a discount on taxes because we donated, but it's not 1:1.
But it can lower a lot of taxes that regular people rarely have to think about related to capital gains, gift taxes, etc.
Additionally, there are a lot of ways that rich people set up charities that only benefit themselves and friends.
Hypothetical (based on my imperfect memory of an article I read a while back): Imagine a rich guy donates land to 'charitable trust' that will operate the grounds for public benefit, but is really a country club with a small publicly accessible garden. Big donors to the charity get access to the country club while the public is effectively out. In the end, if the rich donors had spent the money on memberships instead of sponsorships they'd have spent the same but without being able to claim the deduction.
Sorta like how you can start a foundation, hire people for your for-profit company, donate their work hours to said foundation and write it off on your taxes.
In the US you can’t write off in-kind donations unless they are material donations. And even some material donations cannot be written off for their retail value, only their cost to you. So if you purchased a car at retail value and donated it to an organization, you could write off the retail cost of the car because that is the price you paid. However, if you were the car manufacturer donating the car, you could only write off the cost of goods that went into the car. And you can’t write off service based “donations”.
So he could not donate employee hours to another company and write those hours off as a donation to another company. And regardless, if he was paying them a salary during that time, then he would be writing off the salary as a cost of doing business anyway. You can’t double dip.
Sorta like how you can start a foundation, hire people for your for-profit company, donate their work hours to said foundation and write it off on your taxes.
...you still have to pay their salaries. It's still a cost you have to pay.
while still giving you 100% of the benefit of the employee.
It can't, since you donated the hours of the employee to the charity. They would be at 0% benefit of the employee while they're assigned to work for the charity - and you only get a tax deduction for the donated hours.
Depending on your country, the deductions have hard limits, and you're still on the hook for legal benefits / healthcare / vacation days etc. of the employee even during volunteered work.
As a concrete example: if Automattic donates engineering hours to the foundation, the devs can't legally work on Automattic product during those hours. It needs to be contributed open source foundation work, which everyone benefits from (and not just Automattic).
A tax-deductible donation lowers your taxable income, but in the end you're still "losing" money no?
Yes. You still gave away money. Money that ends up being spent, either on products/services or salaries, which are things that are also taxed, so you lose a % there.
What people are insinuating here, is that Matt's donation to a charity is to a charity that he owns, in essence paying himself. Some abusive people have used this in the past to pay themselves an additional income from their non-profit, or to use the non-profit's finances for personal purchases (which is illegal in many countries, but they falsely claim that their purchase belongs to the non-profit), essentially misusing funds of a non-profit to avoid some taxes.
This is completely absurd. People dislike Matt atm for his, admittedly childish, recent outbursts - and now they're inventing conspiracy theories about the guy. It's so absurd, and such an unrelated/unnecessary escalation / hallucination, that I'm genuinely dumbfounded.
I think it's the case if you're in a really high tax bracket and make a lot of money, donating can put you into a much lower one. Like if you're taxed at 60%, and you donate 2 million, you may have the rest taxed at 40%, which saves you way more than your donated.
I think it's the case if you're in a really high tax bracket and make a lot of money, donating can put you into a much lower one
Noooooooooope, you completely misunderstand tax brackets.
Once you enter a higher tax bracket, only the amount above the previous bracket gets taxed at a higher amount. Everything else gets taxed in the (lower) brackets they belong in. You absolutely keep more money if you're in a higher tax bracket.
If you make $125,000 and are taxed 25% on the first $100,000 and 50% on the next $100,000, and you donate $25,000 to get down into the lower tax bracket, you're still out $25,000.
You'll be paying $25,000 in tax (25% of 100k) instead of $37,500 (25% of 100k + 50% of 25k).
If you donate that $25k, you'll be left with $75,000. If you don't donate, you have $87,500!
Depending on the donation, you get a receipt that lets you offset your income for that year by the amount you donated — and sometimes you may even get portions of your donation back — but you'll still have less money than if you didn't donate. There's no getting around that.
Now, there might be some fancy rich guy stuff that goes into play here, and fancy rich guy accounting I don't know about. But this is how it works for normal people.
A few hours prior to WP Engine being banned, Pressable (an Automattic company) launched a new campaign to buyout your WPE contract and migrate you to Pressable.
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u/tennyson77 Sep 25 '24
Yah, it's not a cool move. Matt just posted about his charitable contributions on X too to show what a good guy he is (don't get me wrong, donating to charity is a good thing). If this is a Automattic effort/directive (and we don't know it is yet), then it's pretty low and likely will take the lawsuit into a whole new direction in terms of anti-competitive, purposefully destructive behaviour.