Tuesday, May 26, 2009

Tax Ethics

If someone donates all of the proceeds from some work, say an author donates his royalties from a book or a chef donates a meal, to a worthy cause, we think it is surely a good act. Suppose the person then claims the donation on their taxes. does that make the act less worthy? Does it do moral damage? The person will reap less of a reward from the deduction, than s/he sacrificed for the cause. The cause gets not a bit less support if the person claims the donation. Yet, it does seem that personal reward of any kind undermines the good will.

This triggers a second question: would knowingly not reporting deductions you know you are entitled to be lying? If you claimed deductions you are not entitled to, that would clearly be lying; but if you choose not to claim ones, thereby intentionally providing incomplete data, how would that be different? Is it not a lie if you are harmed not benefited?