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Dick Smith in a recent rant about "selfish" rich Australians made a claim that:

In the United States, the rich donated an average of 15 per cent of their income, Smith said. But in Australia it was less than 1 per cent. ''In America, I'm told that if you are wealthy and you're not known as a philanthropist, you are a social pariah.''

Is there any truth in claim above that America's rich donate an average of 15 percent and rich Australians only donate less than 1 percent?

The article is suggesting rich means earning more than $1mil per year.

  • 1
    Given the asymmetric distribution of peoples incomes I'd expect the mean to be a poor statistical tool in this case anyway. Median might be a better measure – jk. Sep 12 '11 at 8:57
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Tax stats are available here:

http://www.irs.gov/taxstats/indtaxstats/article/0,,id=134951,00.html#_pt2

I downloaded 2009 data: http://www.irs.gov/pub/irs-soi/09in21id.xls

I calculated donations as total contributions/Total income

1 to 1.5 million = 2.9%
1.5 to 2 million = 2.9%
2 to 5 million = 3.1%
5 to 10 million = 3.8%
10 million+ = 5.8%

There are 230,000+ people in these combined brackets.

So, according to the IRS, they do not. However the IRS restricts the number of donations that can be claimed, so this could be drastically under reporting. The brackets all give around the same amount, with the middle class generally giving the least.

  • 2
    This is a good first look at the question, however I can't +1 it because it, by it's own admission, doesn't really answer the question. I appreciate self-noting the likelihood of under reporting of charitable donations on tax forms though. I wish I could give you a generic +1 for skeptical foresight! – John Rhoades Sep 12 '11 at 13:10
  • @John Rhoades - It's a fair analysis, though pretty much any method of data collection could be under-reported (or even over-reported). Basically, all forms of collecting this data are going to have some sort of collection bias. Indeed part of my hope in posting this answer is that someone may have reference to quantifiable evidence for or against this bias, which should help improve the answer (I couldn't find such, but it may exist). – Russell Steen Sep 12 '11 at 16:45
  • I'm happy to accept this; although it appears to only partially answer the question; in the article I linked Dick Smith actually says he doesn't take into account unreported donations (most donations in Australia are tax deductible and are commonly reported). So I take this as a fair comparison. – going Sep 12 '11 at 22:34
  • Totally a political comment: 230,000 people in the $1M+ bracket out of 300Million people... Anytime a wealth disparity like that starts becoming lopsided like that, it does not turn out well for the society involved... – Larian LeQuella Sep 13 '11 at 1:28
  • @Larian -- mobility also matters, and the top group in the US is always in flux. The majority of people in that group were born to middle and lower class families. It's not just the single factor of disparity, it takes disparity and immobility. (Note that belief will suffice for either, facts don't matter as much). – Russell Steen Sep 13 '11 at 1:54

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