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Do not donate to me (2013) (blog.futtta.be)
93 points by paulintrognon 24 days ago | hide | past | web | favorite | 60 comments

He's Belgian. Belgian taxes are awful. If you want to accept 'donations' for software, you have to be self-employed. This comes with a boatload of hassle, including paying national insurance contributions of 20%. (which are calculated based on your income from three years ago). And given that the man has a day job, he'd also be looking at a 50% tax rate for these donations. So a 100eur donation would net about 40eur and a bunch of paperwork.

Not worth the hassle unless we'rw talking at least thousands a year.

At the highest level of taxes (>38 080€), in Belgium 100€ would result in a net of:

- ~37€ if the self-employment is not subject to VAT (less than 25.000€ per year as self-employed)

- ~30.7€ if subject to VAT

(100€ / 1.21) [VAT] * (1 - 0.21) [Social contributions] * (1 - 0.53) [Federal tax 50% + local tax 50% * 6%]

Good news: social contributions are 20.5% for 2019, not 21% :-)

This looks like a total failure of the tax system.

Can't he just sell overpriced buttons/stickers/tshirts (or even virtual goods) instead, to circumvent this?

That's pretty much the same. Any money you get has to come through a company, so either you're an employee either you have your own company (even you're alone in it).

Same reason I have I not collected any OS bounties. Not worth the hassle for a meager $100.

I'd maybe look into it at $1000+, but most bounties aren't really anything close to making it worth your while if you have a job.

This is one of the few situations where cryptocurrencies come in handy.

Money laundering?

It's tax evasion, not money laundering. The two are quite different things.

Tax evasion: You get some money. (Legally or not; the tax system doesn't care.) You are supposed to pay taxes on it but don't want to. You find a way not to, e.g. by hiding the income from the tax authorities.

Money laundering: You get some money by illegal means (theft, blackmail, whatever). You want to be able to use the money without having the authorities notice it, get suspicious about where it came from, and discover your crime. You find a way to pass the money from place to place so that by the time you actually do anything that might be noticed, it's difficult or impossible to trace it back to anything illegal.

[EDITED to add:] Also different from both: tax _avoidance_. You get some money. You don't want to pay taxes on it. It turns out that the law actually allows you not to, and you take advantage of that. But this feature of the law is unintended, or blatantly unfair, or clearly the way it is because of someone lobbying on behalf of people in situations like yours.

Yes, and usually when someone launders money the goal is _to_ pay tax on it. That way it looks like legitimate income.

Tax avoidance doesn't have to be unintended or unfair. You can avoid income tax in the UK for example by investing in official schemes like SEIS. Or in this case he could accept crypto but forward it to charity and argue the money was not his but customer charity donations.

Yes, perhaps I should have said something like "looks unintended or unfair". Usually something only gets called "tax avoidance" when it has something loophole-y about it.

I suspect your second suggestion would actually get classified as tax _evasion_, though.

No, tax evasion.

And if you are unlucky (Belgian IT salaries aren't that great compared to the rest of Western Europe) you gets bumped a tax class, possibly making those donations a net loss.

This loss concept is just a myth: the new tax rate only applies to the amount above X.

If you're at the edge of the 45% rate, the extra 100€ will be taxed at 50%, but the amount you earned previously will not be impacted and still be taxed as before.

Being a software engineer in Flanders (the Belgian region the article author is from) I can tell you that this is a misconception.

Our taxes in Belgium are high, the salaries for engineers are well above average. In pratice, it's possible to end up in different tax 'scales', but they'll not end up in a net loss.

I'm also hugely in favour of the system here. Health care is a non-issue. I need prescription glasses (dioptry -8.5) and I pay nothing for those.

Yearly dentist appointment? about 20 euro you end up paying after the 'mutualiteit' pays you back. Similar for doctors appointments or hospital appointments.

Being married with a Mexican (family living in the US) I can tell you that I hugely prefer our system over the US or Mexican system.

This seems like a very fair policy if the developer doesn’t need the money, as in this example. However, as a user, I hope that setting up a recurring donation keeps the project going and provides motivation to its author.

This particular trend -- not only not asking for contributions, but openly denying them (often in advance, and when none were ever offered) for a better cause -- is a rising tendency across virtually all of Western society. Watch any challenge with a monetary prize and invariably they'll turn the sad music on and demand that the contestants regale a tale about the old grandma in the old country, or the kid's club they want to donate to, etc (obviously not the hot tub they really plan on buying, or the better SUV). If a kid has a lemonade stand they can't just want to buy a WOW membership, they have to promise that it is for some good cause. Etc.

Honest giving is great, but undermining the value of work to do so isn't always constructive. In this case presumably the hypothetical people who would have given him cash are also in a good place financially.

Your analysis is good but there is one element you're missing: chargebacks. People who accept a lot of donations get hit with chargebacks from time to time and they can be so difficult to deal with that they actually cost the recipient money.

This is a common complaint among people who take donations for a living, such as Twitch streamers. If you ask any streamer, they will tell you they prefer Twitch "bits" over any one-off donation specifically because bits are non-refundable.

Unfortunately, there are people out there who go around donating and then doing a chargeback just to troll streamers they don't like. It's a really frustrating element of the system which happens to be set up to prefer the customer over the vendor in all disputes, making it ripe for abuse.

It seems like any dispute involving a donation should pretty much be lost by default. It’s not as if anyone delivers an inappropriate product for a donation...

What if someone steals my credit card and "donates" $1000 to a nazi political party?

Chargebacks are for disputes, not fraud. Provided the merchant did not incur liability by doing something immensely stupid and insecure, the bank is on the hook. If the perpetrator is caught, they will pay restitution to the bank.

That's completely wrong. Chargebacks are _primarily_ for fraud. And any merchant that accepts credit cards over the phone or Internet ("card not present") is liable for fraud, not the bank.

> Provided the merchant did not incur liability by doing something immensely stupid and insecure, the bank is on the hook. If the perpetrator is caught, they will pay restitution to the bank.

Source? As someone who helps support an online credit card gateway, in my experience it is the merchant who has to shoulder the cost (plus an extra penalty fee) of the transaction. Perhaps there are different chargeback policies for card present transactions for physical products, but for online (and therefore card not present) transactions for digital products, I have always seen the merchant have to cover the cost of the chargeback (plus fee). There's a process for disputing the chargeback, saying the customer absolutely made the purchase and got what they were asking for, but almost every time the card would side with the customer, because there was no physical product.

This is one of the reasons when card companies pushed for chip cards, merchants pushed back for chip and pin like cards used in Europe -- to cut down on fraud, which they end up paying for. The only system I've seen where the cost of a chargeback is on the bank instead of the merchant is if the merchant has setup 3D-Secure/Verified by Visa with their products, giving the banks and card companies the opportunity to have an extra login for making the purchase. However, those verify pages are made by the bank, not the credit card company, and are widely unreliable. I tried to set it up for our payment gateway, only to find that some of the banks had completely broken systems for it, leaving customers at an error page instead of buying the product.

I hate the MasterCard verify page.

It took me giving up buying several products over the last year and complaining to the bank every time before I eventually had the correct key to that puzzle.

The details it asks for are not much better than random. Stuff like mixing your residential address and postal address, using a neighboring postcode, including random stuff like a building number or weird artifacts like " , ,".

How anyone is expected to figure out the frankenstein address that MasterCard want's by themselves is beyond me.

> The only system I've seen where the cost of a chargeback is on the bank instead of the merchant is if the merchant has setup 3D-Secure/Verified by Visa...

Verified By Visa is a nightmare, and was killing conversion rates by up to 60%. [1] I'm not sure if it's still the case, but when it first came out Amazon refused to integrate it.

[1] https://econsultancy.com/verified-by-visa-a-conversion-rate-...

Yes, that was definitely also part of the calculation. We expected clients would not use it, because every extra step destroys conversation rates, but we wanted to at least provide the option.

... But even providing the option was a non-starter, because of how many different banks had completely broken systems. We ended up ditching the feature entirely.

Chargebacks also occur for fraud. It's the merchant's responsibility to detect fraud, not the bank (though banks usually do their own screening too). Worth remembering that if your fraud rate goes above 1%, you can be blacklisted for life by Visa & MC. [1] [2]

You can avoid chargebacks by pro-actively refunding any transactions that look suspicious. And if a real customer asks for a refund, you should always give it to them since they can chargeback anyway. But if it's a stolen credit card that got through, the first you'll hear about it is when you get the chargeback from the real cardholder's bank.

Side note: back in the days of shareware, a few of the 'cracking' groups didn't do any cracking at all. They just used stolen credit cards to buy the software and post the licence codes online - no technical talent involved. I'm looking at you, Team OXiDE....

[1] https://www.braintreepayments.com/blog/changes-to-visa-charg...

[2] https://chargeback.com/visa-chargeback-monitoring-program/

You would think so, but that's not the case. The problem is that people who receive donations don't have any special status with the payment processor. They are treated like any other vendor, so chargebacks are handled the same way.

Often donation payments are used to validate stolen credit cards.

But why should the donee pay (in the form of penalties) for that?

to encourage merchants to do so minimal checks on the credit cards (like implementing 3d secure for example).

Does the streamer get hit by fees or something with chargebacks?

Yes. $15-30 per chargeback independent of whether you win or lose. So even if you “win” a dispute over a $5 charge, you’re $10 in the hole.

Accepting money isn't "free", and usually incurs a non-trivial overhead. If it's someones hobby it's easier to just not accept money and focus on the actual hobby.

Some kid getting pocket money from a lemonade stand is significantly different to accepting recurring donations as an adult. Dealing with either setting up some sort of non-profit, managing tax in your country, accepting international currencies or supporting largely unethical/hostile US based financial institutions like Paypal, it can be a rabbit hole that some just can't be bothered with.

It's also just really weird to critisise people for wanting their users to donate to worthy causes.

If someone doesn't want pay, or donations, then don't ask for it. Don't put a donate/buy button and it seems like the problem is solved. I mean this is a bit strange: it's hard enough getting people to pay for great projects when the makers clearly need it and ask for it, so I am surprised by the need to proactively reject it as if unsolicited donations are piling in their bank account.

However there is nothing weird with discussing this, and that claim is exactly the sort of "moral" short circuit that I find so unpleasant about the whole thing. I would wager few if any people have donated to a charity in lieu for this case. But by announcing such a moral standing they've undermined anyone else who does accept or even request compensation for their creations: Do they have an adequately bad situation to justify such a request?

"Accepting money isn't "free", and usually incurs a non-trivial overhead."

Is that really true? What if I say I only accept checks, or certified checks even.

Wouldn't depositing such checks be trivial?

Yes, you do have to pay taxes on the money (which in countries other than the United States can be very simple), but apart from that the other things you list such as setting up a non-profit, accepting international currencies, or dealing with corporations like Paypal are all optional.

> Wouldn't depositing such checks be trivial?

It would be, yes. But getting an appreciable number of people to donate via check instead of PayPal/Stripe would be highly nontrivial :)

> Wouldn't depositing such checks be trivial?

In Belgium? No, not really, nobody uses checks and I'm fairly certain that for most banks it will cost quite a bit of money to deposit.

Is that a "trend" when greed has been held up as a vice for thousands of years, with ideas like "if you want to be perfect, sell your possessions and give to the poor, and you will have treasure in heaven" ?

And of course, there are plenty of people like parents and employers who find it convenient to perpetuate these notions at times.

I don't have ads on my personal blog because I want to give my readers a pleasant experience, not one with ads all over the page, AVG compliance popups and cookie notice bars.

I "lose" about 10 euro per month in ad revenue but I have a good job, I don't care about 10 euro.


Characterizing people wanting to contribute to the basic living conditions of people so pejoratively as 'unfortunate' and a 'continuation of the "white man's burden" ideology' is an extremely bad faith view of those who choose to do so.

I may be misremembering (and the situation is a bit different now, lending credence to the idea that I'm misremembering), but I think Bram Moolenaar used to request that people donate to the children of Uganda and send a post card to him. For people who would like that donation, I think that would be awesome: make the donation and send an email saying that you did it. This should provide the motivation you are looking for. Rather than a notification that money when into their bank account, it's a notification that it went into a bank account that they value higher.

Here’s an example from what he’d send you if you sponsored vim a while ago:

> Thank you very much for your contribution towards the development of Vim! This will motivate me to spend more time on improving Vim. The money will be used to help needy children in Kibaale, Uganda.

> However, as a user, I hope that setting up a recurring donation keeps the project going and provides motivation to its author.

Which is yet another reason to not want donations, since you're basically describing employment, turning their casual hobby into an obligation.

I think the parent might have meant something slightly different - that by donating, they are showing the author that their work has actual value to other people, and that motivates them to continue.

That's my take, anyway: a social rather than fiscal incentive.

The developer could ask people to tell him/her when they donate (on the developer's behalf) to a charity the developer suggests. This would have the same effect as showing the developer that her/his work has value.

The author explicitly said it is not motivated by money for this project.

When you have money, you may like the power it gives you to make incentives so people do what you like. However, in some rare cases, someone doesn't need your money and prefers doing thing how himself likes. If you don't like that, that's your problem and not the one of the people refusing your money.

When I look a different Patreon accounts of people I know, where I have a rough understanding of their dayjob and life situation I often wonder about the sums.

The sums listed are often too high to be ignored, but too little to call it a job, even jut part-time. Few hours a month.

Me that would put in a strange situation. I would get the feeling of having to return some work for that, which takes the fun out of some projects, but doesn't pay the bills. (especially if I add time for accounting, declaring axes on it etc.)

Of course my view dosn't transfer to others and I understand that many people have a need for a more diverse income sources and eve low recurring (monthly) Patreon payments are planable, giving some base line, but I understand the author's point.

> declare the axes

Forrest shivers in fear

Somewhere I lost a t, it seems

Why not accept donations then redistribute them to those causes?

Also I recommend https://www.givewell.org

A number of reasons. First, you may end-up paying some middle-man twice. Second, you may have to declare any donations as income and be taxed for them (more paperwork for you). Third, in order to reclaim the tax you paid for the donations, you will probably have to distribute them to charities within your (already rich) country.

And having accepted the donation, some confused doners will think you owe them something. I think it's important to entirely remove that possible misunderstanding.

I wonder if there is a thing like Patreon, but the money goes directly to foundations you choose.

If there's enough need for it to gain any traction, things like Patreon will just add it as an option.

This only works if the developer will be donating to open source already and not caring about deducting it on taxes, but they could say “donate to charity in my name and let me know how much” and then they donate that much less.

This stinks but also looks like a startup opportunity. Add a badge to your website to take donations via DonateMoney.com, which provides appropriate tax paperwork services in many jurisdictions, shows donors where their money goes (taxes, etc), and provides an option to revert donations if the total donates doesn't meet a convenience threshold within a specifed time range (3-12 months).

Needs 2013 tag.

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