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

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."

Comments

The real problem

[Anonymous Coward]

... 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:The real problem

[Anonymous Coward]

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:The real problem

[Anonymous Coward]

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.

Re:The real problem

[dinfinity]

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:The real problem

[Austerity Empowers]

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.

I would just like to shout out...

[Simulant]

....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.