The Zuckerberg Tax

Hugh Pickens writes "David S. Miller writes that when Facebook goes public later this year, Mark Zuckerberg plans to exercise stock options worth $5 billion of the $28 billion that his ownership stake will be worth and since the $5 billion he will receive will be treated as salary, Zuckerberg will have a tax bill of more than $2 billion making him, quite possibly, the largest taxpayer in history. But how much income tax will Zuckerberg pay on the rest of his stock that he won't immediately sell? Nothing, nada, zilch. He can simply use his stock as collateral to borrow against his tremendous wealth and avoid all tax. That's what Lawrence J. Ellison, the chief executive of Oracle, did, reportedly borrowing more than a billion dollars against his Oracle shares to buy one of the most expensive yachts in the world. Or consider the case of Steven P. Jobs who never sold a single share of Apple after he rejoined the company in 1997, and therefore never paying a penny of tax on the over $2 billion of Apple stock he held at his death. Now Jobs' widow can sell those shares without paying any income tax on the appreciation before his death — only on the increase in value from the time of his death to the time of the sale — because our tax system is based on the concept of "realization." Individuals are not taxed until they actually sell property and realize their gains and the solution to the problem is called mark-to-market taxation. According to Miller, mark-to-market would only affect individuals who were undeniably, extraordinarily rich, only publicly traded stock would be marked to market, and a mark-to-market system of taxation on the top one-tenth of 1 percent would raise hundreds of billions of dollars of new revenue over the next 10 years."

Comments

Job Creators

[Anonymous Coward]

If he has to pay taxes, how is he going to create jobs?

Re:Job Creators

[eggstasy]

Jobs is dead, and as some would have it, God created him.

Re:Job Creators

[Squiddie]

Though, he may have thought himself to be a God, else he would have gone to a doctor sooner and he'd still be alive.

Re:Job Creators

[AmiMoJo]

He was a Buddhist (not a very good one), he has no God.

So his followers should be looking for his reincarnated self?

Re:Job Creators

[jo_ham]

How can something that doesn't exist create something?

This is going to get into a discussion about quantum mechanics, I can feel it.

Re:And for a mere $25 million

[discord5]

I will write a glowing tweet about him on twitter.

He'll probably just buy twitter if he wants that.

Re:One more issue

[caitsith01]

It becomes an Heisenbergian problem.

If Heisenberg has taught us anything, it's that all money problems can be solved by manufacturing huge quantities of crystal meth.