[Zuckerberg] created a limited liability company.... An L.L.C. can invest in for-profit companies.... An L.L.C. can make political donations. It can lobby for changes in the law. He remains completely free to do as he wishes with his money.... [H]e amassed one of the greatest fortunes in the world — and is likely never to pay any taxes on it....Eisinger wants "some kind of tax on wealth," even as he recognizes that "nobody thinks our government representatives do a good job of allocating resources." We do at least have some say in what the government does... which is part of why Soros, the Kochs, and presumably Zuckerberg would like to use their wealth to influence elections. But what happens when they act directly, using their vast wealth to skew choices that would otherwise belong to the people, as Zuckerberg did in Newark? We need to be skeptical and not naively appreciative of gifts.
Maybe Mr. Zuckerberg will make wonderful decisions, ones I would personally be happy with. Maybe not. He blew his $100 million donation to the Newark school system, as Dale Russakoff detailed in her recent book, “The Prize: Who’s in Charge of America’s Schools?” Mr. Zuckerberg has said he has learned from his mistakes....
But I think I might do a good job allocating $45 billion. Maybe even better than Mr. Zuckerberg. I am self-aware enough to realize many people would disagree with my choices. Those who like how Mr. Zuckerberg is lavishing his funds might not like how the Koch brothers do so. Or George Soros....
[W]e are turning into a society of oligarchs. And I am not as excited as some to welcome the new Silicon Valley overlords.
৫ ডিসেম্বর, ২০১৫
If you're celebrating the generosity of Marc Zuckerberg, you're a hypocrite if you won't also celebrate the Koch brothers.
That's what crossed my mind as I read this NYT op-ed, "How Mark Zuckerberg’s Altruism Helps Himself," by Jesse Eisinger (of ProPublica).
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Wish I'd saved it, but I recall reading online the words of someone who freely admitted the double standard and wasn't the least bit ashamed: Soros is good because he lavishes his money on good (i.e., leftist) causes while the Koches are bad because they spend their money on bad (i.e., conservative) causes. End of that story.
[W]e are turning into a society of oligarchs.
This is an often recited trope that is complete bullshit to anyone who has actually seen the consequences of actual oligarchy. Get your uninformed ass on a plane to Buenos Aires and stay there a while.
We watch The David Koch Hour (aka Nova) every week on PBS. When the acknowledgement of his support comes on screen I always let out a rousing "Thank you, David!".
"Wish I'd saved it, but I recall reading online the words of someone who freely admitted the double standard and wasn't the least bit ashamed: Soros is good because he lavishes his money on good (i.e., leftist) causes while the Koches are bad because they spend their money on bad (i.e., conservative) causes. End of that story."
That's fine as long as you don't bitch about the Kochs for having money and using it.
"But what happens when they act directly, using their vast wealth to skew choices that would otherwise belong to the people, as Zuckerberg did in Newark?"
Depends. If it's Prog money, either 1. it has an effect, in which case the "skew" is progressive, which is good; or 2. it has no effect, but Prog money goes to Prog fellow travelers and hangers-on, hence supports the Prog racket, which is good. If it's non-Prog money, it's bad.
"We need to be skeptical and not naively appreciative of gifts." A sweet sentiment, ma'am. Pray tell, when did skepticism or non-naivete ever stop any Prog foolishness?
Ahhhh....but celebrating the Koch brothers doesn't fit the agenda.
Money means CONTROL. That is maintained whenever possible. It's real use is to keep the wealthy schmuck's money safe from Robespierre by befriending him.
The day a wealth goober makes a strings free gift, let me know. Then we can have them committed as mentally incompetent.
I am more concerned about Soros because the uses of his money seem to be concealed successfully.
Who is funding BLM?
Who is funding the "Syrian" refugees ?
Eisinger seems upset that if the LLC donates Zuckerberg's Facebook stock to charity, he'll get a charitable deduction without paying tax on the increase in the fair market value of the stock. Not quite. IRS rules state that the fair market value of capital gain property must be reduced by the capital gain that would be generated if the property were sold on the date of the contribution. So, no, he won't pay tax on the appreciation of his Facebook stock but that's because he's giving it away. That's not a bad thing.
(Let's say he sold the stock and donated the proceeds. He'd pay long term capital gains - 20% at his income level, plus the ACA surtax - but only after he claims a charitable donation deduction. A virtual wash. So?)
"[H]e amassed one of the greatest fortunes in the world — and is likely never to pay any taxes on it...."
Maybe I am unfamiliar with the LLC laws where Zuckerberg formed his, but I own several LLC's here in Wisconsin and the proceeds pass through to your personal income tax rate.
Zuckerberg's mistake was outsourcing to Government. Not much different from Joe/Jane citizen outsourcing to Government their
..retirement
..medical care
..safety
..kid's education.
How's that Social Security and Afraudable Care Act working out for ya?
That's fine as long as you don't bitch about the Kochs for having money and using it.
Wrong! You MUST speak out about misues of funds for EEEEVIL sources. The only solution is to confiscate it and send it to the PURE and RIGHT and MORAL activities like the baby killers of Planned Parenthood.
It is not just about who has money, but who controls it.
Murphy's Golden Rule
Oh I see now. Offset gains with charitable donations. But I thought that only went so far. I guess this is why I am not an accountant.
Derbyshire (podcast) points out that the gift is a scam. It's a for-profit corporation. Zuckerberg strives to become a new George Soros.
Some Koch Donations:
Medical & Cancer Research
A prostate cancer survivor, Mr. Koch has donated $100 million as prime contributor for the David H. Koch Institute for Integrative Cancer Research at MIT. Other pledges and contributions for medical and cancer research includes:
$150 million to Memorial Sloan-Kettering Cancer Center to help build a state-of-the-art outpatient medical facility. The gift is the center’s largest gift in its history
$100 million to NewYork-Presbyterian Hospital to help build the David H. Koch Center, a new ambulatory care center, plus $28 million to other research causes
$20 million to Johns Hopkins University for the David H. Koch Cancer Research Center
$66.7 million to support cancer research at the Memorial Sloan-Kettering Cancer Center in New York City
$26.5 million to the M.D. Anderson Cancer Center in Houston for the David H. Koch Center for Applied Research of Genitourinary Cancers and other causes
$26.2 million to The Hospital for Special Surgery in New York City for the 'Building on Success' campaign and other causes
$10 million to Jaffe Food Allergy Institute at the Mount Sinai Medical Center to create the David H. and Julia Koch Research Program in Food Allergy Therapeutics
In 2011, Mr. Koch received the Humanitarian of the Year award from the American Apparel and Footwear Association for his long-standing support of organizations working to find a cure for prostate cancer. The awards gala raised more than $1.1 million for the Prostate Cancer Foundation. In 2007, he was honored with the Double Helix Medal for Corporate Leadership from Cold Spring Harbor Laboratory for supporting research that, “improves the health of people everywhere.”
Education & Science
Mr. Koch supports science-related projects including funding the long-running PBS documentary series, “Nova,” and a science and technology center at Deerfield Academy in Massachusetts.
A $35 million pledge to the Smithsonian’s National Museum of Natural History will renovate the dinosaur hall, which will be named after him. Once renovated, the hall will showcase the museum's unrivaled collection of 46 million fossils, including one of the largest and most complete T. rex specimens in the world. His $15 million gift to the museum created the David H. Koch Hall of Human Origins that opened in 2010. The 15,000-square-foot exhibit helps answer the question, “What does it mean to be human?“
Other education and science-related support includes:
The Koch Biology Building and the David H. Koch School of Chemical Engineering Practice at MIT
A $20 million gift to the American Museum of Natural History, establishing the David H. Koch Dinosaur Wing
The Bill of Rights Institute, which educates students and teachers about our nation's Founding principles, including national sponsor of the 2009-2010 high school essay contest, “Being an American“
Arts & Culture
The Metropolitan Museum of Art’s new, completely redesigned David H. Koch Plaza opened to the public in September 2014 following a major two-year reconstruction effort. Mr. Koch’s $65 million gift to the museum helped create a beautiful outdoor setting with new fountains, landscaping and improved access, all designed with sustainability in mind.
Gifts from the David H. Koch Charitable Foundation have benefited the American Ballet Theater. In 2008, his foundation gave $100 million for the preservation and renovation of the State Theater of New York at Lincoln Center, which is now known as the David H. Koch Theater.
Which is the evil one?
Harry Reid spent much of his on-air time demonizing the Kochs. Yet when a left leaning billionaire's political contributions were pointed out to him he went bonkers. As noted above THOSE were OK because they went to the "right" (and by that I mean left) causes.
Of course the Republicans could have, but won't, similarly do the same to the left mega donors.
A level playing field is an almost impossible dream at this point.
I have no problem with people using their money as they see fit. And they should make use of the law to keep as much of their money as possible.
What grinds my gears is all the preening and how Zuckerberg pimped his newborn to promote a Facebook PR strategy.
The control we have is to not use the products of people we think are making too much money and using it the wrong way. Once they have the money, it's theirs.
what pete said @ 848, but also, Facebook already paid corporate taxes, and the remainder became the basis for the stock appreciation. What the guy isn't paying is capital gains, because... he isn't 'gaining'
Some commenters here are waking up to the noxiousness of our current gift and estate tax regime--a tax that is elective but confiscatory if paid. Warren Buffett talks up the estate tax, but he has planned not to pay it. The Federal government will reap (dare I say "garner"?) zero from his billions when he goes--the dough is headed for the Bill and Melinda Gates Foundation. A better estate tax system would have a relatively low, flat rate (20%) and no deductions or exemptions. Then Uncle Sam would get 20% of the Buffett billions, and Bill and Melinda can play with the other 80%. A low, flat rate makes it not worthwhile to play games to avoid the tax.
Mr. Soros just purchased 1 million shares of Peabody Coal after his buddy BHO has driven the company to near bankruptcy.
That dweeb Zuckerburg promises his paper fortune to charity but that boast assumes the market cap of Facebook will stay at its current inflated level. The world will tire of Facebook and its value will disappear. Its all egotistical boasting. He's a one trick pony.
"That dweeb Zuckerburg promises his paper fortune to charity..."
To "charity"? Really?
A Koch (not sure which one) bought all the big telescopes used by the group which runs the big star party I go to every Spring (our Spring, their Fall) in Australia. That party is specifically to provide an opportunity for northern hemisphere observers to observe the southern sky, but the Aussies who run it do public outreach all year with the scopes. Great group who couldn't do what they do without that generous donation.
Ford, Carnegie, Rockefeller, MacArthur all left a substantial portion of their estate to the kind of people who despised them during their lifetimes. If it weren't for the foundations of these greedy capitalists, many left wing intellectuals wouldn't have enough to buy their next latte.
"Mr. Soros just purchased 1 million shares of Peabody Coal after his buddy BHO has driven the company to near bankruptcy."
This meshes well with my theory (unproven until he leaves office) that Obama bought gun manufacturer stock before inauguration.
I can come up with no other explanation for his wildly successful gun sales record.
I read somewhere that the Gates Foundation supplied sufficient funds and expertise to cure river blindness in Africa. That's no small thing. It used to afflict hundreds of thousands of people. I make note of the fact that Kwame Nkrumah. an African leader who had considerable vogue among black intellectuals in his day, devoted 25% of Ghana's budget to erecting monuments to himself and, so far as I know, did nothing to eradicate river blindness. Perhaps now that Ta Nahesi Coates has a MacArthur Grant he will have sufficient leisure to ponder upon how various third world governments, especially the Marxist ones, misappropriate their resources and create deeper hell holes.
"That dweeb Zuckerburg promises his paper fortune to charity..."
To "charity"? Really?
I'm not as savvy at understanding these arrangements as some claim to be, but if he creates a foundation as per how Bill Gates did with his money (who, after all, was the inspiration/impetus for these reorganizing acts with The Giving Pledge), then we should be honest and wait to see if he does the same amount of good with it as most would agree that Gates has done.
As for taxing wealth, the more feasible proposal for equalizing campaign financial influence was to match small donor contributions. You could start with a very lopsided match (of say, 6 to 1) for really small contributions, and then work your way to less lopsided and eventually negligible matches once you get up to the amounts that you could figure an average voter/taxpayer would be likely or able to contribute.
But at least it makes sense to reconcile that what we "gain" in tax cuts we seem to make up for with expectations of graft and donor contributions to simply get the government to do a damn thing. Only by that point it greatly favors the wealthy.
Thanks for helping to create such a great system.
So, no, he won't pay tax on the appreciation of his Facebook stock but that's because he's giving it away..
He's not giving them away, but merely assigning them to an LLC which he controls. It doesn't trigger a taxable event where he would need to recognize the gain or loss in the shares. Only if the LLC sells the shares would he need to recognize a gain/loss.
The Chicago way of giving
I agree.
Amadeus 48 said...
Some commenters here are waking up to the noxiousness of our current gift and estate tax regime--a tax that is elective but confiscatory if paid. Warren Buffett talks up the estate tax, but he has planned not to pay it. The Federal government will reap (dare I say "garner"?) zero from his billions when he goes--the dough is headed for the Bill and Melinda Gates Foundation. A better estate tax system would have a relatively low, flat rate (20%) and no deductions or exemptions. Then Uncle Sam would get 20% of the Buffett billions, and Bill and Melinda can play with the other 80%. A low, flat rate makes it not worthwhile to play games to avoid the tax.
12/5/15, 9:27 AM "
Warren Buffer made his first fortune selling life insurance policies to pay the death tax. At present there is a lifetime limit of $5mm per person for $10mm per married couple in estate tax exempt giving. Beyond that its either the estate tax or a gift tax at 40%. As for gifting to a foundation, unless your heirs are running it and drawing salaries from it gifting to a foundation almost all of your fortune doesn't benefit your heirs. The estate tax is simply a progressive instrument to inflict punishment for success. Better to eliminate it and simply tax the heirs on gains realized but not tax and income earned but not taxed.
Hitting the five million mark while huge is more common that people would think: consider an alternative Ann Althouse universe where she is a law professor at UC Irvine, drawing a decent salary, frugally has built up a very respectable 401k, had bought a home in Newport Beach way back when that is now worth millions and purchased a million dollar whole life policy way back when as a forced savings scheme to borrow against in her old age and she already would be past the exemption.
It's called pluralism, and we need it. At least when this is done by private individuals, there is George Soros and there are the Koch brothers, and they do different things. When government does it, it does one thing and if it's the wrong thing we're stuck with it. Let a hundred flowers bloom.
I can't figure out if the author is pissed because Zuckerberg donated $100 million to a needy school district instead of spreading the wealth around, as it was to that needy area, in which case makes the author a racist. It also makes Zuckerberg look stupid because Oprah also learned the hard way and no one pays attention. Then there's the grandaddy of all this, the Kansas City, MO debacle.
[Zuckerberg] created a limited liability company.... An L.L.C. can invest in for-profit companies.... An L.L.C. can make political donations. It can lobby for changes in the law. He remains completely free to do as he wishes with his money.... [H]e amassed one of the greatest fortunes in the world — and is likely never to pay any taxes on it...."
What the fool who wrote the opinion piece doesn't state is that Zuckerberg can't use the LLC for personal expenses without triggering a serious tax problem. So he isn't completely free to do so as he wishes with the money. The law and the IRS are not that generous.
As I was heading into work one morning last week and they announced this story on Scott Shannon's morning radio program, some young ding bat chimed in that it's "wrong that Zuckerberg has so much money while there are people earning minimum wage." It was pointed out to the dingbat that Zuckerberg created a product that became wildly successful. The ding bat response was "yeah but still..." and went on to complain about the money wasted on Newark.
I didn't realize his donation to Newark schools was wasted. Not surprised. But how is that Zuckerberg's fault?
We don't need a wealth tax. We do need to end "nonprofit" status. We need to eliminate the charitable deduction for income, estate and gift taxes. If not eliminate, at least cap them at something like $1 million. But it would be much simpler to just eliminate them altogether.
The nonprofit sector has grown enormous, far larger than makes sense. Why should Harvard's $36 billion endowment be tax free? In no way does that tax subsidy promote the general welfare. Why should Harvard's alumni get still more charitable deductions for giving to the school? How much is enough?
Everybody belongs in the tax tent--schools, hospitals, churches, museums, everybody. If everyone is in the tent, eliminating the 0% rate for nonprofits, then tax rates can be lowered for everyone else.
After he made his bones in WWII cataloging the property of doomed Hungarian Jews for the Nazis, Soros made his fortune immiserating nations by shorting their currencies. And Liberals suck at his teats like a litter of puppies.
Buffett's making a killing off off of the Keyston XL denial -- his rolling stock carries the petroleum that would otherwise flow through the pipeline. He has stated explicitly that he's only in the wind turbine business because of the tax credits. And liberals hang on his every word like an Oprah audience when it comes to tax policy
Koch Bros. supported gay marriage and marijuana legalization before Barry Soetoro and Ma Barker even thought about "evolving". And liberals go...oh, wait, they go all McCarthy on them.
We need to be skeptical and not naively appreciative of gifts.
It's amazing how much clearer everything becomes if you focus on accomplishments rather than contributions.
Mega-donations, assuming Mr. Zuckerberg makes good on his pledge, are explicit acknowledgments that the money should be plowed back into society.
Bullshit. They are at most tacit acknowledgements.
They are tacit acknowledgments that no one could ever possibly spend $45 billion on himself or his family, and that the money isn’t really “his,” in a fundamental sense.
Bullshit. They are not even tacit acknowledgements.
Historically one of the strengths of Western Civ has been that it had multiple, often competing, centers of power. In the modern era, these centers have been: government, religion, and private wealth.
The result has been an unintended yet real system of checks and balances as each, in attempting to extend its power and influence, is countered and checked.
Whereas bundling all authority in government, umm, well, that does has a name, doesn't it?
https://en.wikipedia.org/wiki/Fasces
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