You're rich, now what?

[Sheriff Gonna Getcha]

Originally Posted by John Hasbrouck

they get back 75-80% of instead of paying 45% tax then it is a image tax shelter-still a tax shelter

I'm not trying be obnoxious, but I don't think the above statement is accurate.

Let's say I have $10,000,000 of taxable money and I'd normally have to pay $3,000,000 for Federal income tax - so I'm left with $7,000,0000. I opt to give $500,000 to charity - leaving me with $6,500,000. I get back $400,000 (which is a very high estimate since you don't get back 80%). So, I'm left with $6,900,000. Even if you assumed I get back 80% of what you donate, I'm still out $100,000.

So I don't see how it's any kind of tax shelter, or cheating the system in the name of altruism, to give the money if I'm still out $100,000 more than I would have been without the contribution.

The only way it would be a tax shelter is if I got a tax deducation in excess of 100% of the amount I contributed.