[jedberg]

Most countries don't let you deduct your donations from your taxes. It's hard to compare levels of giving across nations because of this.

A lot of people only donate to reduce their tax bill.

Also, because we don't have a social safety net in the US, a lot of people donate to make up for that, which is certainly noble, but would be far less necessary if we had a stronger social safety net that more evenly distributed that wealth giveaway.

[ComputerGuru]

With very few (and even then, extremely capped) exceptions, the US absolutely does not let you deduct donations from your taxes. You’re allowed to deduct your donations from your pre-tax income, which is equivalent to being able to deduct some percentage (typically less than 30%) of your donations from your actual tax burden.

It’s not being pedantic; this changes the calculus altogether. Deducting from your taxes means you can say “oh well, I have to pay $1M in taxes, I might as well just use that money to make a donation to a charity of my choice and gain some PR instead,” whereas deducting your taxable income means “instead of parting with $1M in tax, I would need to part with $5M in charity to zero out my tax burden,” which is a very different decision and still largely a philanthropic one at some level or the other.

[jedberg]

This is a fair point, most people don't understand how tax deductions work.

But yes, I meant your pre-tax income, as all deductions work. Credits apply to taxes directly, deductions always mean pre-tax income.

[refurb]

A lot of people only donate to reduce their tax bill.

That makes no sense. If I get to deduct a donation, then when I donate $1000, it really only costs me $700. But it still costs me $700.

I would have more money if I never donated.

[jedberg]

A lot of people don't understand how tax deductions work, and assume that they get the full value. Also, as noted below, it has a PR benefit while also giving you a 30% "discount".

[thinkharderdev]

I'm not sure that's the case at all. And even if they did assume that they got the full value, they would be quickly corrected of that belief when they actually filed their taxes.

[jedberg]

Having volunteered to help people fill out their taxes, I think you vastly overestimate people's abilities to understand complex math. Most people just don't understand how deductions or graduated tax brackets work, even after having it explained to them.

Also, it's hidden. If you used TurboTax for example, you put all your numbers in and get a number out. All you've heard is "donations are deductible" but there really is no obvious connection to putting in your donations and seeing how much it saves you.

[triceratops]

> A lot of people only donate to reduce their tax bill.

It's still money gone from your pocket. It doesn't save you money overall.

[dfxm12]

It's not about saving money. As this thread shows, charity is akin to a good PR move. Paying taxes is seen as neutral, at best. If you're "spending" either way, you might as well get something for it.

[triceratops]

It's better than spending the money on yachts or luxury goods, which is the other way people signal status. I'm a big fan of conspicuous philanthropy over conspicuous consumption.

[newen]

Debatable considering that donating art works (whose valuations can be, let's say, subjective) for tax purposes is a fairly well known way to reduce your tax burden.

[Cerealkiller050]

This is a good point.

Unsure if that index referenced, or any other studies/reports on this subject, account for this in terms WHY the donation happened or motive.

It does include willingness to help a stranger and volunteerism too, and those are ranked top 3 as well and doesn't reduce tax bills.