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Zuckerberg Answers Critics of His Move To Give Away His Facebook Stock (facebook.com)
An anonymous reader writes: Mark Zuckerberg's announcement that he and his wife are giving away $45 billion worth of Facebook stock garnered a lot of praise and a fair bit of criticism. The Facebook CEO answered some of the apprehension in a post that reads in part: "By using an LLC instead of a traditional foundation, we receive no tax benefit from transferring our shares to the Chan Zuckerberg Initiative, but we gain flexibility to execute our mission more effectively. Just like everyone else, we will pay capital gains taxes when our shares are sold by the LLC."
Nothing any corporation does is altruistic.
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its his money its his right to do what he wants with it.
if he wanted to get all his money in a pile and burn it, that would be his right. I dont get why people care what others do with their own money
have you seen my sig? there are many others like it but none that are the same
From this Dec 3, NY Times article How Mark Zuckerberg’s Altruism Helps Himself:
(Why an L.L.C.?)
An L.L.C. can invest in for-profit companies (perhaps these will be characterized as societally responsible companies, but lots of companies claim the mantle of societal responsibility). An L.L.C. can make political donations. It can lobby for changes in the law.
(Why not a charitable foundation?)
... a charitable foundation is subject to rules and oversight. It has to allocate a certain percentage of its assets every year. The new Zuckerberg L.L.C. won’t be subject to those rules and won’t have any transparency requirements.
(Tax implications)
... if the L.L.C. sold stock, Mr. Zuckerberg would pay a hefty capital gains tax, particularly if Facebook stock kept climbing. 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.
All legal. Don't hate the player, hate the game... (or so I'm told)
It must have been something you assimilated. . . .
And you didn't know that feeling good is a real benefit?
we will pay capital gains taxes when our shares are sold by the LLC
He says that like its a good thing. Honestly I would argue anyone not doing everything they can within the law to optimize their tax situation is doing HARM. The government is only going to use the revenue to kill people on the other side of the world we don't need to be involved with, needlessly spy on us, our friends, and neighbors, and general interfere with the pursuit of life liberty and happiness.
Failing to to minimize your lawful tax burden does not make you some kind of patriot in my book, it makes you part of the problem.
Repeal the 17th Amendment TODAY! Also Please Read http://www.gnu.org/philosophy/right-to-read.html
It's a PR show.
It's like a broken record with you retards. We get it, you are cynical of literally everything because it's an easy way to seem smart.
Not that there isn't plenty in the world to be cynical about, but Zuckerberg is not going to make money off this and will be donating most of his wealth to charity. Shrug.
All legal. Don't hate the player, hate the game... (or so I'm told)
Fuck that--I'll sure as hell hate the player for playing the damn game.
is that this is all very likely a smokescreen for his political and lobbying activities. That's why he doesn't just run it as a real charity. Real charities aren't allowed to do the kinds of things Zuckerberg (probably) wants to do. He's going to use this as a very big stick to get things he wants. He's not doing this out of the kindness of his heart.
The only times I can think of when a Baron genuinely turned to charity are at the end of their lives when a few of them got the fear of God (and more importantly hell) in 'em.
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The LLC categorization permits the Zuckerberg Foundation to lobby as much as they want for legislation change, unlike a regular foundation (501c3). In light of Zuckerberg's FWD.US political action committee spending a fortune lying about the "need" for H1B labor, I don't trust this at all. Look, Zuckerberg STOLE the idea for FB; then he LIED to his customers about maintaining privacy; Now his PAC lies about immigration policy. I don't trust Zuckerberg for a SECOND. "Unfriend" this manipulator!!!
He is donating 99% of his stock over the course of his lifetime. He is only in his 30s right now, and with his wealth we can safely expect him to live at least into his 80s. That is at least 5 decades of donating his stock (to his new company, no less).
One other thing we can count on is that by the year 2065, his stock will be worth a lot less. Facebook is so absurdly overvalued that even pretending his stocks to be worth $45B today is laughable. Eventually the bottom will fall out, just as it did with MySpace, just as it did with AOL, just as it did with CompuServe. He does have plenty of smart financial types around him to protect him as well as possible but eventually it is going to fall like a stone.
If you don't believe it is going to fall, go ask some shareholders how facebook makes money, and how much money they think it makes. I will bet the overwhelming majority of them don't have a clue, they just know that "everyone" uses it and they assume it must be worth money as a result.
Damn_registrars has no butt-hole. Damn_registrars has no use for a butt-hole.
Yes in the sense that there is no (actual) tax advantage or legal need for moving the shares from his personal account to the LLC.
No in the sense that without the LLC and PR hoopla selling a large amount of stock by the Founder/CEO/Majority share holder would shake investor confidence wipe out the valuation of FB stock pretty quickly. Since Zuck already did is 'one-time-huge-sale' at the IPO where he sold $1b of stock he has more than enough personal cash for anything he could reasonably claim as the reason for selling a large percentage of his remaining shares.
With the intermediary vehicle in place there is a blanket reason for divestiture and he can have a standing sell order of $10-100M worth of shares sold on a monthly basis. Then when the LLC sells the stock (however quickly) it is understood that the LLC needs $$ for operating and investments not as a lack of confidence in his own company.
What the AC said was a bit overblown, but, then again, so was your response... as was your snarky (and not at all clever) retort to ShanghaiBill.
The AC's point wasn't that something like MS releasing source code is entirely altruistic; their point was that, if there's any hint of self-interest, assholes looking to assert their own moral high-ground by pointing out flaws in others will jump all over that self-interest. ShanghaiBill's point was that, yeah, self-interest may exist, but that doesn't mean that the act itself lacks any altruism, or that it can't still be beneficial to everyone, overall.
ShanghaiBill also wasn't saying that people shouldn't criticize anything, or even that people shouldn't criticize good deeds -- I don't even know how you came to that conclusion (unless you just like to set up painfully obvious strawmen). Pretty clearly, he was saying that there is such a thing as constructive criticism, and criticism that doesn't benefit anyone (aside from, maybe, the critic). Those that choose the latter, as you have, are generally just looking to stir shit in an effort to see how high on the douchebag scale they can ascend.
By the way, the AC was correct about those attempting to prove themselves holier-than-thou: they're always on the lookout for any misstep by anyone. Such criticism is easy (and lazy) since nobody is perfect, and, if you buy into that type of criticism, ultimately cannibalistic. There will, after all, always be someone waiting to catch you in such a misstep, and someone waiting to catch them, and so-on.
"Is not a sentence" is not a sentence. Well damn.
It's now so onerous to run an organization the IRS considers a "real" charity that lots of big money that actually cares about accomplishing something, will soon be taking similar steps.
It is not *onerous* to run a legal non-profit (e.g., "real" charity). The provisions in the law Mr. Z. probably doesn't like about legal charities is that they aren't allowed to *hoard* money and must spend most of their annual income on charitable pursuits every year (a $1B will throw off a bunch of imputed income at a minimum that will need to be distributed). If you want to *hoard* your money or not spend all of it on charitable pursuits, you might consider the legal provisions *onerous* and want an LLC.
In contrast, the Bill and Melinda Gates Foundation is an actual legal charity. What Mr. Z is doing is similar to a trust (e.g., the kind of legal structure that directs how your inheritance is distributed after you die). There's no requirement that a trust spend the money charitably (you may have heard of trials and tribulations of many trustfund babies) and there is no requirement to disclose how it is distributed.
I'll give Mr. Z the benefit of the doubt. Maybe he doesn't want a non-profit because he has no idea what charitable cause to spend his money on yet (he had so much luck with NJ schools donation) and doesn't want to be forced to spend the money right away until his has time to figure it out. On the other hand he could have just said that, so maybe he has an ulterior motive.
FWIW, as I recall being forced to distribute the imputed income annually was an issue with Warren Buffet donating his money to the B&M Gates foundation. He conditioned his donation on Mr Gates stepping down from MSFT and operating his foundation full time rather than leave it to foundation employees (and likely be pissed away).
Even if Zuck truly only kept 1% of this $45,000,000,000 sum, that leaves him still with $450,000,000. The average /. in the USA probably would only have to give away about $800 to $2,500 per year to be counted as giving away 1% of their annual income. How long would it take for that donation to even equal the 1% that Zuck is keeping for himself? And is Zuck really sacrificing anything by only keeping $450,000,000? It's not like he's going to have to give up steak for hot dogs here. And let's not forget about how he has accrued this amount of assets and what kind of slashing-and-burning went on before it and will likely go on after it as he still retains all control. I don't understand why I'm supposed to be all giddy with glee because he made an otherwise empty promise, and regardless of whether he makes good on it or not we will have limited visibility on anyway. 99% PR, 1% action.
Money that cares about accomplishing something can bloody well pay its taxes for it, whether someone thinks its cause is just or not. The whole concept of tax exemption is just asking for tax evasion, which in turn will of course result in regulation. The same goes for religious exemptions.
Forget magic. Any technology distinguishable from divine power is insufficiently advanced.