Once upon a time I proposed what I call "Transcendence Ratio", a ratio between selfish capitalism and philanthropy.
I don't believe it if someone makes it 80% !!!
What about tax exemption? How many percent may he get for the rest of his wealth?The world has watched with admiration as Warren Buffett, the legendary investor, has made his fortune over the years. Now they can watch the second richest person in the world join forces with the richest to give it away.
This weekend Mr Buffett pledged to give 85 per cent of his estimated $44bn fortune to charity, mainly to the Bill and Melinda Gates Foundation created by the founder of Microfsoft.
Say that he has a $100 billion net-worth, which is all assumed as capital gain. $80 billion is given away, and the rest $20 billion to be allocated to estate planning.
Without a donation tax-deduction, if the $20 billion in the form of shares, there are 33% capital gain, so the next of kin only get $13.4 billion upon his death. However, there is another 25% gift tax, the final take-away is $10.05 billion.
So thanks to donation tax-deduction, that can keep the net $20 billions.
Another story, without donation. The $100 billion capital-gain net-worth will be taxed 33% capital gain and 25% gift tax, netting take-away of $50.25 billion.
With donation, just say only $40 billion (40%), The final take-away is $60 billion. Still worth it...
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Related: Generous Celebs
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