It ends up being net zero. They’re only writing off the money you donated. They still have to count the money you donated towards their overall revenue, increasing their tax bill, but then they pass the donation on, allowing them to write it off, reducing their overall revenue (and thus their tax bill) to what it would have been if you hadn’t donated.
Comment on Don't we all hate this
FrostyTheDoo@lemmy.world 19 hours agoBut isn’t it true that whatever they don’t pay in taxes via writeoffs, they get to keep and use however they want? They might choose not to give themselves a bigger bonus with those savings on taxes, but…I do doubt it for some reason
qaeta@lemmy.ca 19 hours ago
MacNCheezus@lemmy.today 19 hours ago
If they donate money out of their own profits, they CAN write that off. Which of course, confusingly, is also money you gave them, except it’s money you gave them in order to buy their products, not for the purpose of having them donate it.
chiliedogg@lemmy.world 16 hours ago
Write-offs are deductions from income, not reductions in taxes owed. They only get to deduct the taxes they would have paid if they had kept the donations.
Let’s imagine their annual income was $10,000,000. Their nominal tax rate would have them owing $2,100,000.
If they received a $100,000 in donations, that would make their income 10,100,000. But with the donations they could write off the 100 grand, reducing their tax bill by $21,000, for a total of $2,100,000.
Either way, they pay the same in taxes with or without the donations.