TAX PLANNING

In America, there are two tax systems: one for the informed and one for the uninformed. Both systems are legal.

Learned Hand
U.S. Supreme Court Justice
1924

Why do America’s most wealthy people place a significant amount of their wealth in charitable trusts and foundations? The simple answer is because the alternative is to place it or more in taxes. Both taxes and charitable funding provide for our social capital. Our social capital is the money to be spent on social programs that support all of us as a society such as roads, schools and the welfare of the disabled among a long list. All of us pay for those things either involuntarily- through taxes- or voluntarily, through charitable funding instead of paying taxes. You will not be recognized as a taxpayer who pays his taxes in time, but your name could be placed on a book shelf in a public library, or a hospital could be named after you as a philanthropist. You cannot control how your taxes are spent, but you can direct your charitable funds.