When a multi-billionaire puts out a press release saying that eventually they will transfer all-but-a-billion-or-so into a "charitable foundation" that they also completely control, that is not a donation, that is just moving your money from one bank account to another! And it's not even that, it's claiming that he's fixin' to get ready to do that some day.I've even seen people saying, "I feel better about using Facebook now!" Fuck you.
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.
Save your applause for when he's actually built a desalinization plant or something, rather than being one of the primary drivers of the Public-Private Surveillance Partnership.
Is it, like, a preemptive measure whether a nation in EU would like to try and sanction his corporation for the trillion of dollars of taxes evaded?
totes what i've been thinking. I'll be on board once I see what they do with this foundation, a la bill/melinda gates foundation?
See e.g. http://www.newyorker.com/news/john-cassidy/mark-zuckerberg-and-the-rise-of-philanthrocapitalism
In case anyone wants to know what he really said:
https://www.sec.gov/Archives/edgar/data/1326801/000132680115000035/form8kdec2015.htm
JWZ is correct that it is a shell game but this was not "a press release." This was an actual 8-K filing which is legally more significantly than just just saying he is going to do something. That said, he absolutely controls both ends and will donate "up to 1 bn per year." And last I checked $0.00 also counts as "up to 1 bn."
My praise for zuckerberg is limited to his $80 million donation to SF General and the $992 million he gave to Planned Parenthood. He doesn't get extra kudos for giving money to himself tax free.
He didn't give $992 million to Planned Parenthood. He gave it to some kind of meta-charity for rich people, and they gave, maybe, less than 1% of it to PP.
I would like to apply for one of those lesser crony jobs, Mr. Z.
Obviously this charity needs an MC.
You will always by my go-to crony MC, Bobo.
Haha!
<3 I like this plot! <3
"gullible, credulous pinheads" is a keeper.
Also, you will notice he mentioned "Charity or Public Advocacy" or some shit like that.
Basically, he could give all his money to a Super PAC and he would be doing what he said.
I'm trying to find out and am not having any luck yet, finding the difference between the structure of his foundation and the Bill & Melinda Gates Foundation. What's the difference?
The Bill and Melinda Gates Foundation is a 501c3, like any other nonprofit.
Jason Zentraedi gotcha thx
Bloomberg says it isn't even a charitable foundation, it's just an LLC.
To be fair this is very similar to google.org, which has under it a 501(c)(3) but is not non-profit itself. I think there are valid reasons why you might want to be for-profit and pay taxes - the ability to lobby and fund candidates is not stupid nor is the ability to capitalize and spin-off inventions into for-profit concerns. I mean, there are plenty of conservative super PACs so worst-case this is a flier on a possibly liberal one. And worst-case it's paying taxes.
Fair points. The proof will be in the pudding, I suppose. As our host said, let's see if he actually does anything with it.
It's possible that his heart's in the right place and he'll do wonderful things, but I'm just so sick of the shameless lack of critical examination that people -- and especially the so-called press, whose fucking job it is -- give to self-congratulatory press releases like this.
And Zuckerberg is a master of getting the media lapdogs to give him credit for press releases that result in absolutely no change in behavior and that later turn out to have been bald-faced lies from the start.
So, no, I'm not very confident that anything good will come of this, because he's a flat-out creep, with a terrible track record of lies that look a lot like this.
Quick media decoder ring:
- one rich dude does something: "Look how great this is."
- two rich dudes agree: "The newly elected senator from East Dakota announced..."
- two rich dudes disagree: "The nation is divided over..."
- several rich dudes disagree: "The market opened at..." or "The arial bombing campaign showed signs of..."
Arial bombing. Now there's an idea. That font needs to die...
Lack of critical examination is a plus for the press, which is business, after all. If they start to ask critical questions of the powerful they may be cut off from the flow of "news" that the powerful supply to them.
Here's a good read on google.org:
http://www.nytimes.com/2006/09/14/technology/14google.html
And the update on Chan Zuckerberg Initiative, LLC:
http://www.nytimes.com/2015/12/03/technology/zuckerbergs-philanthropy-uses-llc-for-more-control.html
Also, that is on creepy video. And I say that as a parent of 3 young kids. I would say it might even haunt the kid, but the 1% inheritance will smooth that right over.
AND! it's not even actual money. He said he'd donate SHARES.
nothing wrong with donating shares; it is pretty standard to avoid capital gains. you donate $1MM in shares that the charity immediately sells, they have $1MM cash; you sell first and then donate cash, there's a taxable event.
> nothing wrong with donating shares; it is pretty standard to avoid capital gains.
One might say that's exactly what's wrong with it.
The capital gains rate is already very low in the USA, 15%, and I'll assume a founder will pay 15% on the full sale amount due to a negligible cost basis. So if they sell $1B in stock, they'll get $850M in cash; then they can donate it and get a tax credit based on that $850M.
If they donate the shares, they won't pay any tax and they'll still get a credit—but based on the full $1B amount. I'm sure that's really convenient if you have $1B and need to reduce your tax bill, but that doesn't make it good public policy. (I'm not saying it's not, but doesn't it seem a bit odd to give them a tax deduction when we didn't charge them any tax in the first place? Especially when not everyone agrees that large donation credits are a good idea in the first place, as jwz notes below.)
The capital gains rate on $1B is 20%, plus 3.8% net investment income tax; and Mr. Z lives in California, so add another 13.3% for state income tax, for a total of 37.1%; which is a little bit more than 15%.
It would probably make more sense for donating stock to just be a tax credit of the cost basis, and you don't have to recognize the appreciation as income; but the current system is nice for handling cases where you don't know the cost basis: you could do a lot of research to find the cost basis so you can sell it and report it correctly, or you could just donate it and take the current value as a credit. Anyway, a lot of stuff in our tax system doesn't actually make sense, so if it's there, use it!
When your only defense of your position is, "Well, but, it's legal!" you have lost the argument. You also might be a sociopath.
This is a good point:
Krämer sort of said it, but no, in fact, it's not. Some of that money is tax that belongs to the state.
As Utah Phillips said, we need some Robin Hood bandits to balance out the philanthropists.
A Robin Hood bandit gives away privately what he steals publicly, whereas a philanthropist ...
It's okay. It's his money to invest any which way he wants to.... If he wishes to invest in humanitarian causes and keep a handle on it - more power to him. We have seen how unprofessionally managed non-profits have frittered away good money. My point of view!
And if the press push about this event had been, "BREAKING: Zuckerberg has $45B and intends to do with it whatever he damned well pleases", then your comment would be relevant. But it wasn't.
FWIW the MSM appears to be less credulous than you would make them out to be:
http://www.nytimes.com/2015/12/04/business/dealbook/how-mark-zuckerbergs-altruism-helps-himself.html
The headline is "How Mark Zuckerberg’s Altruism Helps Himself." That hardly seems to be patting him on the back. I mean, the first sentence of the article is:
"Mark Zuckerberg did not donate $45 billion to charity. You may have heard that, but that was wrong."
and ends the way you'd probably end this article:
"The point is that we are turning into a society of oligarchs. And I am not as excited as some to welcome the new Silicon Valley overlords."
Then today it's still in the paper:
http://www.nytimes.com/2015/12/04/technology/zuckerberg-explains-the-details-of-his-philanthropy.html
That he has to defend himself against "immediate skepticism" in the NYT means at least some MSM are doing a reasonable job calling BS on his so-called charity.
We have seen how unprofessionally managed non-profits have frittered away good money
Like the $100 million dollars he directed to New Jersey schools based on his idea of what schools and teachers needed, which wound up being an utter waste in terms of actually improving student performance? That kind of "unprofessionally managed"?
From: http://blogs.law.harvard.edu/philg/2015/12/03/is-the-new-zuckerberg-fake-charity-an-estate-tax-avoidance-scheme/
"Philip Greenspun's Weblog: Is the new Zuckerberg fake charity an estate tax avoidance scheme?"
The better PR move would be to quietly do good stuff with the money, then build up good will for past accomplishments. And make sure one of those "good stuff" items is donating to fix the role of money in politics so you can credibly say you're not trying to build an oligarchy.