Money can’t buy you love Zuck…
To be fair, if I was going to be trying to do the most good in the world, I’d be creating a worker co-operative and not a charity. They’re not all they’re cracked up to be.
First thing I thought when I saw the headline of the donation was “He’ll just have donated it to himself somehow.” and lo and behold I was right.
No, that’s not really right. An irrevocable trust can’t spend the money on jewel-crusted Lamborghinis, or even on college tuition for his child. Of course, even if he donated 99%, the other percent is still $450M, which will buy whatever his heart desires.
No matter how restrictive the terms of the trust are, he has just created a guaranteed job for his daughter for life. I kind of hope she grows up to be an evil genius and spends the money on death rays and giant magnets.
As usual, JWZ’s take is spot on:
This is just how billionaires launder money. It buys you good press and also gives you great opportunities to hand out million-a-year management salaries and board positions to your lesser cronies.
I’d be far more impressed if he started paying some fucking tax, and left it to the people who run countries to figure out how to spend it on all the mundane shit - like road maintenance, and wages for teachers at all the average schools, and public librarys, and water supply - that’s vital to keeping things running.
Instead what we get is a massive gift to himself, and half-arsed interference in unnecessary projects that make him feel better about himself. Yay?
Surely it should go for giant crabs instead of magnets? You can’t mount death rays on magnets.
No no, the magnets are for dragging the ISS to your secret base on the moon.
You had me up until ‘left it to the people who run countries to figure out how to spend it’
Have you seen who’s in charge lately? They’re part of the problem!
But how is she supposed to invade Trump’s underground mountain-base from the moon? You need the giant crabs to carry the death rays to the target.
John Cassidy for the New Yorker:
. . .
[A]ll of this charitable giving comes at a
cost to the taxpayer and, arguably, to the broader democratic process.
If Zuckerberg and Chan were to cash in their Facebook stock, rather than
setting it aside for charity, they would have to pay capital-gains tax
on the proceeds, money that could be used to fund government programs.
If they willed their wealth to their descendants, then sizable estate
taxes would become due on their deaths. By making charitable donations
in the form of stock, they, and their heirs, will escape both of these
That’s not all. As Robert Wood, a tax lawyer and contributor to Forbes.com, pointed out on Tuesday:
“This generosity is also incredibly tax efficient.” Under the federal
tax code, Zuckerberg and Chan will receive credits equal to the market
value of their Facebook stock on the day they donate it to a new
charitable organization they are setting up. In subsequent years, they
will be able to roll over some of these credits to shelter income that
they haven’t earned yet, such as Zuckerberg’s salary from Facebook and
dividend payments generated by the stock he still owns. (Right now,
Facebook doesn’t pay any dividends.) While such deductions are capped,
the sums involved can still be large.
. . .
I’m thinking of all the dedicated civil servants in charge of actually getting shit done, not the kindergarten for grownups that passes as the legislature in most countries these days.
i need to RTFA but i remember hearing “LLC” at the end of the entity they set up for this. so it’s not a 501c3…? does this mean the LLC will eventually pay taxes when liquidating the shares? i’m probably being naive, since i agree this is just advance estate planning for Zuck & Co.
p.s. glad to see some sanity here, the comments on the arstechnica article were really sad. as JWZ said these idiots bought it hook, line and sinker. our society continues to unwind.
An LLC is definitely not a 501c3. No relation.
Easy fix, just put in a comma. Left it to the people, who run countries. Sigh, if only.
This is what is really going on here. Like I said in another thread before this one popped up, this isn’t Zuckerburg giving money away, this is all of us collectively saying, “Hey, let’s let Mark Zuckerburg tell us what we ought to devote our resources to.” Because when his foundation spends money and people have to do work, he’s not the one who’ll be doing the work. Such deference to the rich.
And all of that is not to mention that if he did just plain give away $45B that would be less of a hardship for him than it would be for you or I to give change to someone we pass on the street. If you give away any amount and you still have more then $100M left over, then you haven’t given away the fact that your rich as fuck.
yes i understand that, what i am trying to ask is how forming an LLC avoids taxes if it is in fact not a charitable organization.
edit: ok, from TFA:
"Marcus Baram pointed out that philanthropic L.L.C.s are increasingly
common. So long as they are devoted to charitable works and owned by a
family foundation, they can obtain tax-exempt status:
did not realize this… ugh.
Oh yeah, I LOVED working with the bureaucrats on the healthcare/medicaid side. They’re awesome people
Problem is, it’s the political appointees that are in charge of what’s done with the money (and fuck you Scott Walker and Dennis Smith. Seriously, fuck you for keeping resources away from our elderly, blind, and disabled populations and the people who care for them)
It is tricky. Limited liability for owners. Tax pluses.
@joeblough I think you’re right that tax liability results generally when gain is recognized from an asset exchange or sale, e.g., liquidation of interest in an LLC.
There’s a fiduciary duty for the licensed professionals and others who steward assets to avoid recognizing gain through careful planning.
The professional firms charged with administering assets may be sued for failing to avoid taxes or for negligently causing a drop in market value.