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The Almighty Buck Businesses Facebook

How Mark Zuckerberg's Altruism Helps Himself (nytimes.com) 240

Posted by samzenpus from the pleasing-some-of-the-people-some-of-the-time dept.
HughPickens.com writes: Jesse Eisinger writes in the NYT that if you heard that Mark Zuckerberg donated $45 billion to charity, you are wrong. Here's what really happened: Zuckerberg did not set up a charitable foundation, which has nonprofit status. Instead Zuckerberg created an investment vehicle called a limited liability company (LLC) that can invest in for-profit companies, make political donations, and lobby for changes in the law. What's more an LLC can donate appreciated shares to charity, which will generate a deduction at fair market value of the stock without triggering any tax. "He remains completely free to do as he wishes with his money," writes Eisinger. "That's what America is all about. But as a society, we don't generally call these types of activities 'charity.'"

A charitable foundation is subject to rules and oversight. It has to allocate a certain percentage of its assets every year. The new Zuckerberg LLC won't be subject to those rules and won't have any transparency requirements. According to Eisinger what this means is that Zuckerberg has amassed one of the greatest fortunes in the world — and is likely never to pay any taxes on it. "Instead of lavishing praise on Mr. Zuckerberg for having issued a news release with a promise, this should be an occasion to mull what kind of society we want to live in," concludes Eisinger. "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."
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How Mark Zuckerberg's Altruism Helps Himself More

How Mark Zuckerberg's Altruism Helps Himself

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  • The real problem (Score:5, Insightful)

    by Anonymous Coward on Friday December 04, 2015 @04:27AM (#51055491)

    ... welcome the new Silicon Valley overlords.

    It was land, then railway, then oil, then information technology. Now, it's cloud services; there will always be a 'job creator' to take the position of overlord. The problem is the recent habit of giving them multiple tax breaks means they create fewer and fewer jobs to feed the 'trickle-down' fallacy that Reagonomics invented.

    • Re: (Score:3, Insightful)

      by ShanghaiBill ( 739463 )

      The problem is the recent habit of giving them multiple tax breaks ...

      The tax breaks are not a "problem". They are a benefit. Bill Gate's foundation has saved hundreds of thousands of lives, and may save millions in the future. Worldwide deaths from malaria have been cut in half since he statrted working on the problem ... and malaria is just one of many problems he is trying to fix. If instead, that money had gone to the government, the entire endowment would have funded two weeks of social security spending. These foundations are putting their money to far better use t

      • Re:The real problem (Score:5, Insightful)

        by Anonymous Coward on Friday December 04, 2015 @05:18AM (#51055577)

        The tax breaks are a problem, as the idea you can move capital around without any consequences.
        Deregulation has brought in a society that is as inequal as the French ancien regime. Maybe it's time for a new revolution.

        Zuckerberg, Gates and Company are nothing more than 21st century robber barons. That is what they are, and it is disgusting to hear people praise them because every once in a while they throw some breadcrumbs our way. Marie Antoinette used to do that and hear head in the end was chopped off along with a lot of other aristocrats.

        • Re: (Score:3, Insightful)

          by Applehu Akbar ( 2968043 )

          "Zuckerberg, Gates and Company are nothing more than 21st century robber barons. "

          Yes, and proudly so. Their 19th century counterparts built the industrial age. The Silicon Valley barons have built the information age.

        • Re: (Score:3, Insightful)

          by operagost ( 62405 )

          The Gates Foundation's progress against malaria was just mentioned above. I guess you didn't read it. Saving hundred of thousands of lives PER YEAR is not "breadcrumbs". Your cartoon idea of Marie Antoinette is in no way analogous to what some of these modern philanthropists are doing. It's clear that your attitude is colored by your personal opinion of these people, and not their works. A great man once said that "whoever is not against us, is with us," and you would be well advised to adopt that ideo

        • Deregulation has brought in a society that is as inequal as the French ancien regime.

          I don't know why I'm supposed to care that some rich guy has a yacht while I don't. Nothing that the complainers about "inequality" want to happen is going to get me a yacht, just take away the rich guy's while leaving nobody better off. I'd rather know that it's possible for me to have a yacht if I ever wanted one badly enough to work hard and accumulate the wealth necessary.

          • Exactly right! We as a society should only care that the weak are protected -- misfortune can happen on anyone -- and not that some people have yachts while others only have a crappy car. Or even that some people have yachts while majority have crappy cars, with few people in the middle who drive SUVs.

            Protect the weak and let the rich be as rich as they can.

      • Re:The real problem (Score:5, Insightful)

        by Anonymous Coward on Friday December 04, 2015 @08:45AM (#51056017)

        The problem is the recent habit of giving them multiple tax breaks ...

        The tax breaks are not a "problem". They are a benefit. Bill Gate's foundation has saved hundreds of thousands of lives, and may save millions in the future.

        This is a lie. Aside from the fact that before we started "helping" the third world there were millions of starving suffering people whereas now there are billions because the increased resources just mean less selection criteria - it is an effort to funnel money overseas - away from the people the money was taken from through bad business practices such as those of Microsoft and Facebook. Tax breaks for helping the nation that allowed them to make the money - sure that would make sense. Tax breaks for sucking the nation dry to "benefit" foreigners in a way that has good PR and actual negative consequences for everyone but those pissing away the money - no.

        • This is a lie. Aside from the fact that before we started "helping" the third world there were millions of starving suffering people whereas now there are billions because the increased resources just mean less selection criteria

          Completely wrong on this one. There are fewer famines per capita than there ever has been. Even in my lifetime, when I was a kid, they were much more prevalent.

      • Re:The real problem (Score:5, Insightful)

        by dinfinity ( 2300094 ) on Friday December 04, 2015 @09:35AM (#51056197)

        Bill Gate's foundation has saved hundreds of thousands of lives, and may save millions in the future.

        And without tax breaks this would have never happened, right?
        Yes, fuck intrinsic altruism and basic fucking humanity, we need to make everything about money and how to motivate people with it.

        • Re: (Score:2)

          by khallow ( 566160 )

          And without tax breaks this would have never happened, right?

          I can see two closely related arguments. First, charity is something you want to subsidize. Second, it allows charity money to be a lot more effective. For example, at the highest US tax bracket of 35%, money donated to charity goes about 50% further than if it were spent on a new yacht.

        • Re: (Score:2)

          by dcw3 ( 649211 )

          Yes, fuck intrinsic altruism and basic fucking humanity, we need to make everything about money and how to motivate people with it.

          You can choose to live in your dream world, or you can accept reality. Money drives the human race, and you can cry all you want, but it's not going to change.

        • And without tax breaks this would have never happened, right?

          For all the "it's not a zero-sum game!" objections we so regularly hear from apologists for the wealthy, it's pure gold to see this dramatic about-face.

      • Re:The real problem (Score:5, Insightful)

        by Austerity Empowers ( 669817 ) on Friday December 04, 2015 @09:47AM (#51056243)

        Anecdotal and cherry-picked evidence about what another rich guy has chosen to do, but does not entirely add up. If this is about private individuals being more capable of managing money than governments, why isn't Zuckerberg investing in another charity? Does he not even trust Bill Gates to run a good charity? Probably not, I sure don't. Why can't all these rich guys team up and sponsor the same charity? Why can't they sponsor one or more charities that they've vetted out as being "generally good"? Because, they want to retain control of their money for whatever reason at all.

        Bill Gates, largely retired from the CEOing business, is choosing to act, but under no obligation, nor is it clear that he alone has the bandwidth to efficiently handle $40B any more than a government would be, he does have the luxury of a pile of money that he can spend or not spend at his leisure on anything at all that suits his fancy. His efforts in education are meddling at best, destructive at worst. In my opinion he's using his fortune to cause harm. Unlike the government he has no oversight, and can do whatever he sees fit for the problem he wants to solve, even if that means breaking something that is largely working for a demographic he is not interested in, or producing educated citizens that aren't interested in working for his industry or style of company. I mean that's the thing with kids, they grow up and choose their own path. I'm not the doctor my mom and dad wanted, my son likely won't be the geek I want. We teach them a general set of things that will help them, help themselves. We don't put them on a railroad with only one destination and tell them to ride it to the end or jump off.

        He could do a lot worse, and he could abuse the system much more than he is, I won't argue that. But I'm not going to sing his praises and I would still like to see this mechanism shut off. He should realize his (unimaginably large, impossible to spend) gains, pay taxes to the country that made him successful and try to make it better with his still (unimaginably large, impossible to spend) fortune, or having paid his debt, run off to some island somewhere. If he feels the government is misguided, and it eternally is, he has the influence and connections to make changes much easier than any of us peons, and the mindshare and influence to ensure we all know what is broken. God knows they are running around like squirrels on cocaine right now, and there's an entire political party of people who seek to represent rich white guys who are clearly not being given anything like a coherent direction. Donald Trump is the best they got...Donald Born-Rich Trump, that's it. Bill Gates? He could probably tell them a thing or two about the working world, and obstacles to actual american business.

        Mostly we're reacting to the utter bullshit of it all. Zuckerberg is not giving away his money, he's sheltering it in a tax-free, obligation-free loop hole. He created a letter to his newborn daughter (unstated undertone: I'm hurting your future for the benefit of the world) that is hard to read with a straight face, that ignores the fact that he is keeping $450M of it for his family, she'll never want for anything in her life. That's fine, but let's cut the melodrama, he's not sentencing her even to middle class life in the suburbs. She's got her road paved, in whatever school she wants, with whatever lifestyle she wants. He's giving the better part of $45B to a charity that is under his control, with relatively few limitations on what he can choose to do with that money to the extent that he's effectively not giving it away at all. This is mostly politics and attention whoring.

        How many Americans write letters to their children or have articles written every time they make a contribution to their 401(k) or invest in an HSA/FSA, effectively sheltering their income from taxes while reducing a bit of control over how the funds can be spent? That's basically what he's doing, except he doesn't even have the same limitations that those structures have.

      • Re:The real problem (Score:4)

        by nine-times ( 778537 ) <nine.times@gmail.com> on Friday December 04, 2015 @11:47AM (#51056999) Homepage

        Ah, yes, this argument again. "Rich people are better at knowing what to do with money than the rest of us. Therefore, if we want to fix all of society's ills, we should try to take as much money as we can away from the poor, the middle class, and organizations with any public accountability, and concentrating all the money in the hands of a few rich people. After all, those rich people must be smart, or they never would have become rich."

        No thank you. Subsidizing the rich is stupid. Yeah, yeah, a few of the rich people are trying to do good things with their money, and a couple of those are succeeding in doing good things.

      • Long Live King Gates!

      • Re: (Score:2)

        by dwpro ( 520418 )

        They are only a benefit if the oligarchy is doing good. What would change legally it he decided just to be a dck with his money?

      • These foundations are putting their money to far better use than the government would.

        So often do I hear apologists for the wealthy make the claim that "it's not a zero-sum game!"

        I find it amusing that suddenly it looks like the upper hand is on the other foot.

      • Except he did not Zuckerberg did not setup a charitable foundation. So you can stop sucking on his balls.

    • Re:The real problem (Score:4, Insightful)

      by jellomizer ( 103300 ) on Friday December 04, 2015 @06:56AM (#51055735)

      The reverse side is that not for profit organization have too many limitations on them.
      Such as the ability to lobby. Strict rules on what to do with any money collected and what not to do.
      LLC may be an easier way to get things done.
      Heck most liberal conspiracy theories center around how corporations are the ones pulling the strings. If that is the case it would make sense that if you want to perform altruistic acts and have the power to get them to work a corporation isn't a bad idea.

      • If that is the case it would make sense that if you want to perform altruistic acts and have the power to get them to work a corporation isn't a bad idea.

        Yes, that would make sense from the standpoint of an uber-rich person who wants to perform altruistic acts. Of course, that doesn't mean that it's necessarily the best thing for the rest of us. It's sort of like how cartoon villains want to consolidate power under themselves, with the mindset of "If I ruled the world, I could fix everything!"

        At least for some of us, the idea of replacing our ruling class of greedy uber-rich assholes with a ruling class of trying-to-be-benevolent uber-rich assholes doesn'

    • The problem is the recent habit of giving them multiple tax breaks means they create fewer and fewer jobs to feed the 'trickle-down' fallacy that Reagonomics invented.

      Problem? The less jobs there are, the lower the wages will get, and the less the remaining employees can do to defend themselves against abuse. That's wonderful for the aristocracy, at least until the whole mess collapses, and since when have serfs mattered?

      As the summary says:

      "He remains completely free to do as he wishes with his money," wr

    • Your mention of Reagan indicates that you think this is a "conservative" issue.

      Ever heard of the Tides Foundation? Go look it up. It's a money laundering fund for progressives.

      Stop believing the rhetoric of the ruling class.

  • Inheritance Tax (Score:5, Informative)

    by mentil ( 1748130 ) on Friday December 04, 2015 @04:38AM (#51055509)

    I imagine this move allows ownership of the LLC to be transferred to his children without invoking an inheritance tax. However, I suspect he intends to create something like the Bill & Melinda Gates Foundation; it's enough money it could be distributed to numerous semi-autonomous sub-organizations to figure out how to spend, and be directed towards thousands of different projects, many of which would fall outside the scope of a normal charity. For example, how many charities directly engage in R&D? At most they'd funnel money towards companies already doing desired research, but if none currently exists? It could do things like what Google X does.

    Making shady donations to charity for tax writeoff purposes is nothing new. I remember in the late 90s Microsoft donated large amounts of software to charity, and used its retail value (which they are able to arbitrarily set!) to calculate the value of their charitable donation. Of course since it's an infinite good it costs them near nothing.

    • it does not, not without invoking very significant taxes. you can't just pass money tax free on at that level. an LLC cannot sell shares and say, buy an election, without paying tax. And the LLC cannot just hire a family member and give them teh money tax free. Nor can you set up the LLC with 0 assets, give it to your child when it is worthless, and then give it shares (those shares are then taxed as a gift). The only way to possibly avoid the taxes (and it only barely works in states with no income tax

  • Par for the course (Score:4, Insightful)

    by Crashmarik ( 635988 ) on Friday December 04, 2015 @04:52AM (#51055543)

    You don't think the 1.5 billion dollar Clinton foundation exists to be charitable ? Or the Howard Hughes Medical institute was anything more than a way to keep control of the money all the while reducing the effective tax rate ?

    One of the best things we could ever do for the country is simplify and rationalize the tax code, so it wouldn't be worth it to risk dodging it, and it was obviously fair to all involved. The 1986 tax reform act was a great step in that direction. It is a crying shame we haven't done more.

  • Interesting. I took advantage of the same thing (Score:5, Interesting)

    by Solandri ( 704621 ) on Friday December 04, 2015 @05:10AM (#51055561)
    I donated some shares to a non-profit last year. Normally when you donate, you get a tax deduction for the value of your donation. Contrary to what the NYTimes article says, this isn't a bonus. It merely zeros out the donation from your income. That is, for tax purposes it's like you redirected the donation straight from your income source to the non-profit, and it never passed through your hands. If you didn't get the deduction, you'd be paying taxes on money you gave away.

    However, in the case of my shares, they'd appreciated in value considerably since I received them. I helped set up a non-profit charity, and billed them $400 for my services. They didn't have the cash, so paid me in shares instead. 15 years later those shares were worth $16k. I wasn't really interested in the money, so I donated them back to the charity. When doing my taxes this year, I ran across this tax peculiarity. I never sold the shares so I never received $16k in income, and so didn't have a capital gains tax liability on $15.6k. Yet by donating the shares I got a deduction as if I did have a capital gains tax liability.

    That seemed wrong, so I asked two different CPAs about it.
    • If I had sold the shares to the charity at market value, then donated the $16k back to the charity, the deduction for the donation would've zeroed out my capital gains tax liability on the $16k I received as payment. (Actually not exactly since my income tax rate and capital gains tax rate are different, but the idea is that the donation money comes from my higest-tax rate income.)
    • If I donated the shares directly to the charity, I got the deduction even though I incurred no capital gains liability.

    The net result is the same in both cases - I get no money, charity pays no money, charity gets all the shares. But the tax implications are very different.

    When I explained it like that, they scratched their heads for a bit, one hit the books and researched it a bit, and both came back to me with the same answer. Yeah it's weird and seems wrong, but that's the way it works.

    • Except he gave it to himself (Score:2, Interesting)

      by Anonymous Coward

      " you'd be paying taxes on money you gave away."

      The point here is, that he didn't give it away, its in a company that he controls, so really he just gave it to himself.

      • It's a pass-through corporation, so any charity work that is done by the company is going to be an awful lot like him doing the work directly. I'm not sure why everyone is hung up on the tax structure of a billionaire's charitable doings - judge him by what he does instead.

        • I'm not sure why everyone is hung up on the tax structure of a billionaire's charitable doings - judge him by what he does instead.

          This is everything that needs to be said on the topic.

        • Re: (Score:2, Insightful)

          by Archangel Michael ( 180766 )

          I'm not sure why everyone is hung up on the tax structure of a billionaire's charitable doings

          Because of taxes, and government and such, people feel entitled to his money. Therefore when the money stays out of government's hands, people get upset, because they don't control another person's money (directly or indirectly via tax/spend policies).

          There is a very subtle evil here, that most people are unwilling to address. People are greedy, but when they spend other people's money, they don't feel they are greedy.

          • I just want to know when the critics here thought that a charitable contribution was ever going to be taxed? If he gave the whole sum to the Gates Foundation, we would never see a dime. In fact, keeping it in an LLC will at least mean that some taxes could happen in the unlikely event that the LLC ever makes a profit.

    • Re: Interesting. I took advantage of the same thin (Score:4, Insightful)

      by WarJolt ( 990309 ) on Friday December 04, 2015 @07:41AM (#51055831)

      This is how crony capitalism works. Perverse incentives in the tax code are exploited, so that rich insiders can avoid paying fair shares in taxes. Not saying I agree with significantly increasing taxes on the rich, but it does make it harder to break past that glass ceiling if you don't know how to strategize around unnecessarily complex tax laws which actually impose unnecessarily economic costs of their own in the grand scheme of things.

      I mean some people's tax rates are just criminally low even after deducting charitable contributions from their income.

      • No, this is how Taxes work. The rich can always avoid taxes, and the middle class always gets nailed by them. I call it for what it is. All taxes are regressive. Those that can avoid them will always avoid them, and search for ways to avoid them. This is not evil unto itself.

        What is evil is the tacit belief that YOU (WarJolt) are somehow entitled, via taxation, to other people's money, and have the right to direct that money into government for it to waste as it sees fit, rather than spent as the person who

    • That seemed wrong, so I asked two different CPAs about it.

      Must be nice to have so much income, you actually have to do this. Meanwhile, in the real US...

    • I am puzzled about how shares in a "non-profit charity" can have a value of $16k. Non-profits cannot pay dividends to shareholders, so why do the shares have value? Perhaps there is some indirect benefit to owning shares? This sounds sketchy to me.
      • I simplified the situation to keep my post short. Someone wanted to donate a substantial piece of real estate to the charity. The charity wasn't sure what to do with it, and their lawyer advised them to set up a LLC to hold it while they decided. They asked me to set up the LLC ($400 was my filing expenses). I'm not sure how they translated my $400 in expenses to the number of shares they gave me, but their CPA came up with a certain percentage of shares in my name, and that's what I got. I'd been mean

        • Absent a sale (i.e. if I had actually owned direct shares of the charity), I believe the valuation of shares is determined by a balance sheet of assets vs liabilities.

          So what you are saying is that you owned shares in the LLC and NOT the charity? This seems to make your whole posting off-topic

          Also, the shares in the charity don't have value because even if the charity is disbanded and its assets sold, it cannot distribute any of those funds to you as a shareholder.

          • This peculiarity in tax code is triggered by the donation of appreciated shares to a non-profit, without incurring a capital gains tax liability by selling the shares prior to donation. Whether the shares were of the charity or not is irrelevant. I merely presented it that way to reduce the number of actors in a situation which is already pretty complex, and to highlight how there was no net difference in the two scenarios I bulleted.

            There are times when strict accuracy and adherence to details is nece

    • Re: (Score:2)

      by dwye ( 1127395 )

      All that happened is that you didn't bother with the step of converting your shares to cash before donating them, and the charity didn't have to convert the money donated back into the original stock, with stock brokers taking at cut on either end. Congratulations, there are some stockbrokers' children going to bed hungry, tonight, by your actions :-)

  • Chan Zuckerberg LLC (Score:4, Interesting)

    by Anonymous Coward on Friday December 04, 2015 @05:25AM (#51055583)

    There have been high net worth people in my family who have left their money and assets to various people , universities, and entities - WITH instructions on what was to be said with said inheritance. The wishes were never followed through. Even with the intervention of the living people it was basically impossible to have the money and assets used as instructed. The lesson is to give your money or assets while you are living. Enjoy what you have and share it. Because if you think it will do XYand Z when you are gone, you are only kidding yourself. So what the Gates, the Buffets, the Zuckerberg's are doing is the responsible thing. They all realize that that kind of money is beyond their needs, and having such a large amount of money can accomplish great things that otherwise could not be accomplished. I look forward to seeing what they do in the future.

    • > There have been high net worth people in my family who have left their money and assets to various people , universities, and entities - WITH instructions on what was to be said with said inheritance.

      Did they put it in a trust, or did they just give them a check with "I'd like you to use it for $x?" If the former, then you need a better laywer, if the latter, then of course, that's not enforceable.

  • Both he and his wife will be paying tax: Zuckerberg defends his new philanthropic initiative [bbc.co.uk].

    What's that you say? The NYT reporting sensationalist untruths? Where did I leave my monocle...

    • Re:He's paying capital gains tax (Score:4, Insightful)

      by segedunum ( 883035 ) on Friday December 04, 2015 @08:15AM (#51055913)
      He gets to 'invest' with it in whatever he chooses, so he will be making more than he will ever lose in some token gesture. Kind of like how Bill Gates has become the richest person in the world again.......somehow. Plus, if he gets the LLC to donate appreciated stocks then there is no capital gains tax. These things are accounting dodges and fraud vehicles, plain and simple.
      • Since he is the owner of the LLC he can have it invest, research, pay, etc as allowed by the laws of the LLC. He does not get a have the LLC to give him money back. If the does that it would be the LLC paying him and we would have to pay income taxes on it.
        What it does allow him to do is decide to research any pet project he has an interest in and not have to pay the capital gains tax.
        This is not something like the Clinton Foundation which is setup as a slush fund for Bill Hillary and Chelsea.

        • If the does that it would be the LLC paying him and we would have to pay income taxes on it.

          Oh dear. He through his LLC invests in companies who give him expenses and allow him the use of their 'facilities' amongst other dodges, so the whole operation effectively becomes one great big laundering operation. It's also a place to park his wealth for the future out of the gaze of scrutiny. This whole gift culture becomes self-supporting. This was set up by accountants.

          This is not something like the Clinton Foundation which is setup as a slush fund for Bill Hillary and Chelsea.

          I'm afraid you haven't the slightest idea and are just performing mental gymnastics here.

      • Learn how taxes on income/profit in an LLC work. They flow through to the owners as personal income - meaning, Zuckerberg has to pay income tax on any profits his LLC earns. It's not an accounting dodge or fraud vehicle at all. Educate yourself [irs.gov]. In actuality, a trust is a MUCH better vehicle for deferring taxes, especially a "non profit" trust where it can earn lots of profits, and as long as it gives away 90% of those earnings (meaning - it only keeps 10%), the retained profits are tax free. Oh, and m
    • Wrong ass-hole.

      "If the L.L.C. donated to a charity, he would get a deduction just like anyone else. That’s a nice little bonus. But the L.L.C. probably won’t do that because it can do better. The savvier move, Professor Fleischer explained, would be to have the L.L.C. donate the appreciated shares to charity, which would generate a deduction at fair market value of the stock without triggering any tax." http://mobile.nytimes.com/2015... [nytimes.com]

      You can stop dick sucking Zuckerberg.

  • Heh, Are People Just Getting It? (Score:4, Insightful)

    by segedunum ( 883035 ) on Friday December 04, 2015 @08:08AM (#51055895)
    These foundations are one great big tax avoidance, fraud and wealth parking vehicle. Nothing whatsoever to do with charity or philanthropy at all which is merely a cover. After all, when you say the word charity you get the brainless idiots coming out to do your defending for you. It was amusing to see the bum shuffling from various anonymous cowards on the Gates Foundation article.
  • When someone does anything remotely good, we should compare that person against perfection, (and we get to define perfection too, whoppee) and carp on any deficiency from the ideal case. (Example: Remember, that natural food peddling yoga evangelist Mrs XYZ? She drives an SUV so yoga and natural foods are bad for you).

    When someone does anything really bad, we compare that person against the worst possible example and praise the "better" stuff. (Example: Remember that jerk Mr ABC who stole petty cash fr

  • Bekow is an exert from “Ending Philanthropy as We Know It [wsj.com]”, Wall Street Journal.

    ... the purposes of the company are clearly philanthropic, to advance “human potential” and promote “equality,” rather than earn money for its owners. However, it will not just make grants to nonprofits, as foundations typically do. The Chan Zuckerberg Initiative will also own stakes in for-profit businesses in fields like education and health care, which its owners believe will help achieve t

  • I would just like to shout out... (Score:5, Insightful)

    by Simulant ( 528590 ) on Friday December 04, 2015 @09:23AM (#51056151) Journal
    ....a "big "fuck you" to the American mainstream media who spun this in that prick's favor all week.

    We'd probably all be better off with no news at all than this click bait bullshit system we've ended up with.
  • LLC is a legal status (literally, Limited Liability Company), not a tax status. an LLC can be a partnership or an S-Corp. If its a partnership, all the profits & losses go to the owners of the LLC. If its an S-Corp, the S-Corp pays taxes on the profits and the owners pays taxes on any profits distributed to the owners. The only "tax dodge" at work here is that Zuckerberg transferred his facebook shares to the LLC for no compensation. No matter what something might be valued at, you have to transfer
    • Good point! Since when are LLC's automatically tax exempt? Can they be exempted at all?

      Besides, who cares how he structures it so long as it does charitable work? Even if he only gives enough away to zero out his personal tax burden, he's just cutting out the government middleman and directly providing public services.

  • Analysis Available on Snopes (Score:5, Informative)

    by PantherShade ( 986953 ) on Friday December 04, 2015 @09:31AM (#51056173)
    The Snopes website did an analysis of the tax implications and control issues. They also elicited additional comments from a Facebook representative. http://www.snopes.com/2015/12/... [snopes.com]

  • When you compare the fiscal antics of Wall Street hedge fund bros like Martin Shkreli with those of Mark Zuckerberg, et.al., I'll take the fiscal antics of Silicon Valley billionaires anytime.

  • They flow through to the owner. So if the LLC makes investments and earns income - that income flows through to Zuckerberg and he pays taxes on them. In fact, a trust is a BETTER tax deferral vehicle as it's a separate entity, and most who set up trusts use the assets of the trust (homes, cars, etc.) without paying for them OR paying taxes on the profits earned by the trust. And if the trust earns profit, as long as it gives away 90% of the profit (meaning, it keeps 10%) it does so tax-free.

    No, an LLC is

    • Actually you are:

      1. L.L.C. can donate to a charity and get a deduction 2. L.L.C. can donate appreciated shares to charity, which would generate a deduction at fair market value of the stock without triggering any tax. http://mobile.nytimes.com/2015... [nytimes.com]

      Fuck off you ass-hole.
      • The donation you get is the same as a personal donation level, and is capped at a maximum of 50% of your AGI. With a charitable trust (or non-profit) you get 100% reduction of taxes by spending 90% of your income. With personal or LLCs, if you spent 50% of your income on charitable giving, you end up paying full taxes on the other 50% - and 2/3rds taxes on the first 50% (you only get 1 dollar tax credit for every 3 dollars donated). Perhaps you need to educate yourself first, might help with your anger i

  • How is this different from Andrew Carnegie? He gave from his personal assets and set up an off the books company to manage his donation whims. Some of those donations were to for-profit companies, some to existing trusts and some were to individuals on the basis that they would set up a trust. Unfortunately Carnegie did not have the benefit of the current LLC process, so a percentage of all those that were deemed investments ended up in the coffers of the federal government, where most of it would go on por

  • " if you heard that Mark Zuckerberg donated $45 billion to charity, you are wrong."

    Really? Even if I didn't believe it, just by hearing it, I'm wrong?

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