It's a paradox that seems to reinforce every stereotype about greed and wealth: those with the smallest incomes donate the greatest share of their money, while the rich pinch their pennies. Among taxpayers who claim a deduction for their generosity, the proportion of money given away by low-income earners is 11 times higher than that of wealthy taxpayers. <\/p>\n
The disparity, highlighted in a Fairfax analysis of the most recent data available (2010-11) from the Tax Office, shows those who claimed tax-deductible gifts in the lowest taxable income band - less than $6001 - donated an average of 22 per cent of their incomes. By contrast, taxpayers reporting $1 million or more of taxable income donated an average of 1.8 per cent of their income. <\/p>\n
\"Some people say this proves that low-income earners are more generous than high-income earners,\" says Myles McGregor-Lowndes, director of the Centre of Philanthropy and Non-profit Studies at Queensland University of Technology. But other factors, including wealthy retirees, may be at play. <\/p>\n
\"We suspect that it's to do with high net-worth individuals who may not have any income or little income but give away substantial amounts so they don't have to pay income tax.\" <\/p>\n
Advertisement <\/p>\n
The affluent gain more from charitable deductions than low-income earners. In 2010-11, tax-deductible donations returned more than $1 billion to taxpayers, 20 per cent of which went to the wealthiest 1 per cent. <\/p>\n
If generosity were measured by who is most likely to donate - not who gives away the bigger proportion - high-income earners would be the winners. The wealthiest Australians are 10 times more likely to claim a tax-deductible gift than those who report the lowest incomes. <\/p>\n
But there are pitfalls to equating tax-deductible gifts with generosity. <\/p>\n
\"People who have tax accountants are more likely to claim deductions than those who don't,\" Professor McGregor-Lowndes says. Poorer taxpayers might not claim every $2 handed out on Red Shield Day. <\/p>\n
But tax breaks are not the end of the story. Even the richest taxpayers end up with a net loss when they give away their money. <\/p>\n
<\/p>\n
Read this article:<\/p>\n
Freedom and control are why the rich really are charitable<\/a><\/p>\n","protected":false},"excerpt":{"rendered":" It's a paradox that seems to reinforce every stereotype about greed and wealth: those with the smallest incomes donate the greatest share of their money, while the rich pinch their pennies. Among taxpayers who claim a deduction for their generosity, the proportion of money given away by low-income earners is 11 times higher than that of wealthy taxpayers. The disparity, highlighted in a Fairfax analysis of the most recent data available (2010-11) from the Tax Office, shows those who claimed tax-deductible gifts in the lowest taxable income band - less than $6001 - donated an average of 22 per cent of their incomes Continue reading