My question for Santo Santoro

“Minister, you said that you’ve given your $6000 gains to charity. Do you intend to claim a tax deduction for this gift? If so, aren’t you effectively pocketing 45% of the profits?”

Update: Question answered, in a manner of speaking. Aussie Bob points out that the recipient of the gift was a right-wing lobby group, which doesn’t appear to have tax-exempt status.

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5 Responses to My question for Santo Santoro

  1. BJE says:

    Andrew, reportedly the money was not given to a registered charity so there is no entitlement to a deduction. Whether that deters a claim for deduction or not is another matter…

  2. Truth Speaker says:

    Andrew,

    Sen the Hon Santo Santoro has already said on the record that he will not be claiming any deduction to ensure that he has no benefit from the sale.

  3. gringo says:

    My followup would be:
    “Was claiming that the donation was to a charity, when it was actually to a Christian lobby group, disingenuous, or was this another one of the Minister’s famous ‘oversights’?”

    More on Santo’s ‘charity’ here: http://www.abc.net.au/pm/content/2007/s1870882.htm

  4. Grumpy old economist says:

    I’m still trying to work out the logic of your initial proposal. Say he held the shares for less than one year. Then the $6,000 capital gain gets added to his taxable income and he is liable for 0.465*$6,000 tax (let’s not forget the medicare levy). if he donates the $6,000 to a charity then that reduces his taxable income back to its initial level and offsets his higher tax bill. His gain is precisely zero.

    If he held the asset for more than a year, only half the capital gain is taxed, and so he would gain something by donating the proceeds to charity. but if he is not claiming a tax deduction, then he is out by 0.465*$3,000.

  5. Grumpy old economist says:

    Actually, he is more out of pocket than that as he is taxed on the nominal capital gain, part of which merely compensated him for the rise in the price level while he held the asset.

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