The $10M figure is incorrect because donating a $20M painting doesn't save you $20M in taxes, it only allows you to deduct $20M from your income, and even that amount is capped. The actual amount of taxes you save is roughly $20M * your marginal rate. There's also the $10M you spent to acquire the painting, which eats into the savings.
That said the general premise is valid. The loophole comes from the fact that when you donate something, you don't have to pay capital gains on it, yet you can deduct the full value from your returns[1].
[1] "If you donate long-term appreciated assets like bonds, stocks or real estate to charity, you generally don’t have to pay capital gains, and you can take an income tax deduction for the full fair-market value." https://www.fidelitycharitable.org/guidance/charitable-tax-s...
I'm not sure if I see your point. The SALT deduction is completely separate from the deduction for charitable contributions.
Maybe before the cap, you could argue that the true combined marginal rate was lower than 50% since the deduction for the state income tax would offset some of the federal tax, but a $10k deduction doesn't matter much to someone who's making enough to be in the top income brackets.
Because your taxable income is $20 million less after the donation, and the top marginal tax rate (if you're rich enough to be playing this kind of game) is 37%.
The waters get a bit muddier with the capital gains tax you might be paying on the original sale, but presumably with the right accountant you're still saving some millions, whether 3 or 8 or 10.
One person buys the painting at the auction, but then hundreds of others can deduct the tax if they already had a painting they purchased at a much lower value.
