Mark Zuckerberg’s Philanthropy Uses L.L.C. For More Control • Hacker News Board

Re: Mark Zuckerberg’s Philanthropy Uses L.L.C. For More Control

#101

Post by Chathamization » Thu, Dec 03, 2015, 5:19 PM UTC

mikeash wrote: post #47

I don't think I've seen a single positive statement about Zuckerberg's foundation. It would have been 100% fully within his right to simply keep it all, or blow his fortune on snorting Fabergé eggs, or buying classic cars and crashing them. Instead, he's giving almost all of it away. He's choosing to retain control over how it's given away? Well so what! It's still way better than keeping it all. I am no fan of Faceb…

Well, he claims that at some point in his life he's going to give 99% to an LLC he controls, and that the LLC will donate some of that money (it's uncertain to who or for what), invest some of that money (again, uncertain as to where), and use some for political lobbying (uncertain as to what cause). He's also had a bad track record when it comes to some of his donations (see the Newark schools).

So yeah, he might do great things with it, or he might not. We don't have much to go by, other than the fact that he's made a big announcement before he's actually willing to tell us what he's doing, which points to this being a vanity project more than anything.

Even if he does great things with it (which we have no way of knowing at the moment), it doesn't mean that he's above criticism. Some politicians will have massive turkey give-aways to boost their popularity; organized crime leaders are often known for their generosity in their communities. In the world we live in, it's worth taking a look at the person as a whole as well as what their motivations are, rather than just praising any gifts while ignoring ulterior motives.

Re: Mark Zuckerberg’s Philanthropy Uses L.L.C. For More Control

#102

Post by Chathamization » Thu, Dec 03, 2015, 5:25 PM UTC

cerebrum wrote: post #98

mikeash wrote: post #47

I don't think I've seen a single positive statement about Zuckerberg's foundation. It would have been 100% fully within his right to simply keep it all, or blow his fortune on snorting Fabergé eggs, or buying classic cars and crashing them. Instead, he's giving almost all of it away. He's choosing to retain control over how it's given away? Well so what! It's still way better than keeping it all. I am no fan of Faceb…

> "Meanwhile, how much are the commenters themselves giving away? Oh, somewhat less than 99%? Yeah." Dude I've met lots of people who don't make much money and still donate from the little they have. They might be giving only 10% but if you already have difficulties making ends meet this is a lot. So no, I don't buy into some billionaire putting his money into a LLC to evade the tax and claiming to do something good.…

Yep. And plenty of people who have donated lot of free time towards making the world a better place in unglamorous ways, even when they were struggling with many other responsibilities.

There's a huge difference between someone who's always spent their life working for others, and someone who has ignored others for most of their life, but then throws money in that direction after they've made so much that they realize what they really want to spend their excess billions on is buying popularity.

Re: Mark Zuckerberg’s Philanthropy Uses L.L.C. For More Control

#103

Post by jstalin » Thu, Dec 03, 2015, 5:26 PM UTC

amalag wrote: post #39

jayess wrote: post #12

Earlier quoted context omitted.

As far as I understand, he wouldn't avoid estate taxes. Whoever dies last would still own the LLC as an asset and the estate is taxed on the value of that asset. With their combined estate tax exemption, about $10.5 million, any value over that would be taxed at 40%. Unless he remains true to his word and he expects to spend it all before he dies. The only "avoidance" of taxes happening here is during the initial tra…

I don't want to be totally negative on Zuckerburg. Maybe he will do good with the money. However: An estate would not be taxed on the value of the LLC, the same way one he is not taxed on the value of his stock. It is taxed when sold. If he assigns family members as owners there would not be additional taxes when he passes away if the LLC's money continues to grow. >11. Limited Liability Company (LLC) and Family Limi…

That's not true. The estate would be taxed at 40% for any value of the LLC over about $10.5 million (today's estate-tax exemption).

Family LLCs can work for reducing the estate tax if you transfer ownership interests during your lifetime at a reduced valuation, owing to the fact that the membership interests are not marketable, giving them a lower value than the market value of whatever the LLC holds.

The only way you avoid the estate tax is if you transfer an asset to an irrevocable trust or your family members before the asset gains significant value. If you own, directly or indirectly, an asset that has significant value, it is taxed at death.

Re: Mark Zuckerberg’s Philanthropy Uses L.L.C. For More Control

#104

Post by 6stringmerc » Thu, Dec 03, 2015, 5:42 PM UTC

mikeash wrote: post #47

I don't think I've seen a single positive statement about Zuckerberg's foundation. It would have been 100% fully within his right to simply keep it all, or blow his fortune on snorting Fabergé eggs, or buying classic cars and crashing them. Instead, he's giving almost all of it away. He's choosing to retain control over how it's given away? Well so what! It's still way better than keeping it all. I am no fan of Faceb…

Economic models indicate that the most wealthy people in the United States do not spend proportional to their means, and those in the lowest income brackets tend to spend at their means or beyond. Thus, large quantities of capital pooling with a small portion of the population is extremely damaging to the overall health of the US capitalistic system. There's a larger argument to be had that he probably should frivolously spend it all or randomly bequeath large sums of money to poverty stricken individuals or families at random, that is, if he wanted to actually help the economy.

For now, the 'Institute' is simply being vague about wanting to "do good" in the world, which, if you ask any well-meaning college student or pot smoking hippie, would be a pretty basic premise, but equally ineffective without a step-by-step plan. Might be asking too much on that last point, but look at it this way: A guy stands on top of a soapbox and says he's going to change the world for better, and if nobody in the audience scoffs and asks "How" then is it really a bold statement?

Re: Mark Zuckerberg’s Philanthropy Uses L.L.C. For More Control

#105

Post by [deleted] » Thu, Dec 03, 2015, 5:49 PM UTC

sharkweek wrote: post #66

mikeash wrote: post #47

I don't think I've seen a single positive statement about Zuckerberg's foundation. It would have been 100% fully within his right to simply keep it all, or blow his fortune on snorting Fabergé eggs, or buying classic cars and crashing them. Instead, he's giving almost all of it away. He's choosing to retain control over how it's given away? Well so what! It's still way better than keeping it all. I am no fan of Faceb…

I think Chan and Zuckerberg will do incredible things with this money, but I also appreciate the cynicism of ultra-rich philanthropy. We as a society will be reliant on "hoping the kings are just with their gold" as they make decisions based on their personal preferences. This is undemocratic and should be under perpetual scrutiny. I likely agree with what Chan and Zuckerberg will be doing with this money, but what a…

[deleted]

Re: Mark Zuckerberg’s Philanthropy Uses L.L.C. For More Control

#106

Post by ceras » Thu, Dec 03, 2015, 5:56 PM UTC

DanielBMarkham wrote: post #22

I don't know Mark and can't comment on his essay or this article. I can, however, note that on at least 3 different occasions in the last year or so I've read a heartfelt essay on somebody making sacrifices for the common good -- only to later realize they were just setting up a tax dodge. I do not think these things are mutually exclusive. You can both work for the common good while trying to legally avoid paying ta…

If you're trying to do as much good as possible for the world, and you don't think government taxes are used for much good, taking advantage of legal tax write-offs is really important to achieve your goal.

Re: Mark Zuckerberg’s Philanthropy Uses L.L.C. For More Control

#107

Post by harryh » Thu, Dec 03, 2015, 6:00 PM UTC

DanBC wrote: post #57

refurb wrote: post #48

Earlier quoted context omitted.

Would you argue that taking advantage of your 401k deduction is unfair to everyone else? How about the mortgage interest tax deduction? Deduction for child care? I'm just curious where you draw the line.

Tax planning is fine. Tax evasion is illegal. The grey area of tax avoidance - misusing tax laws in ways that were not intended - is not illegal, but not fine. A variety of bizarre corporate structures and dodges are used and the only purpose they serve is to shuffle tax away from government. There's no reason Starbucks has its own coffee bean roasting company that sells its beans at huge price to the Starbucks coffe…

Someone in Ireland rubber stamps the paperwork so that Google can avoid paying US taxes on that London based transaction. Not British taxes.

Re: Mark Zuckerberg’s Philanthropy Uses L.L.C. For More Control

#108

Post by JoeAltmaier » Thu, Dec 03, 2015, 6:02 PM UTC

DanielBMarkham wrote: post #22

I don't know Mark and can't comment on his essay or this article. I can, however, note that on at least 3 different occasions in the last year or so I've read a heartfelt essay on somebody making sacrifices for the common good -- only to later realize they were just setting up a tax dodge. I do not think these things are mutually exclusive. You can both work for the common good while trying to legally avoid paying ta…

Folks donating to the common good are well advised to do it in a way that minimizes taxes. They go together; no conflict at all.

Re: Mark Zuckerberg’s Philanthropy Uses L.L.C. For More Control

#109

Post by mikeash » Thu, Dec 03, 2015, 6:06 PM UTC

Chathamization wrote: post #101

mikeash wrote: post #47

I don't think I've seen a single positive statement about Zuckerberg's foundation. It would have been 100% fully within his right to simply keep it all, or blow his fortune on snorting Fabergé eggs, or buying classic cars and crashing them. Instead, he's giving almost all of it away. He's choosing to retain control over how it's given away? Well so what! It's still way better than keeping it all. I am no fan of Faceb…

Well, he claims that at some point in his life he's going to give 99% to an LLC he controls, and that the LLC will donate some of that money (it's uncertain to who or for what), invest some of that money (again, uncertain as to where), and use some for political lobbying (uncertain as to what cause). He's also had a bad track record when it comes to some of his donations (see the Newark schools). So yeah, he might do…

I'm not saying he'll do great things, or that we should praise him. I just don't understand criticizing him because he's not doing it just right. Not because he's doing something bad, but merely because he's not doing something good enough.

If and when he does something bad, go wild with the criticism. But making your "charitable foundation" an LLC does not qualify, nor does any of the other stuff I've seen criticized so far.

Re: Mark Zuckerberg’s Philanthropy Uses L.L.C. For More Control

#110

Post by littletimmy » Thu, Dec 03, 2015, 6:47 PM UTC

drzaiusapelord wrote: post #38

littletimmy wrote: post #18

Earlier quoted context omitted.

This sort of mindset only works when rich people are not the ones making laws in the first place. The law is not independent of the rich - they can influence the laws they follow. That's why it is a problem.

and what happens when we let the "poor" make laws? Endless welfare, unaffordable backroom union deals, massive corruption, massive taxation to move money from the uppers to the lowers, etc. Just visit Chicago or Greece to see what happens when the power shifts to the unions instead of companies. Also, 'rich' is often a placeholder for companies. Companies want to be successful. That means compromise in a million diff…

A transfer of wealth from the upper class to the lower class is the price we pay for civilization. No welfare to the poor means they have no incentive not to kill you.