Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Musk’s $5.7B Mystery Gift Went to His Own Charity

bloomberg.com

Post reply on HN
Print view View original

131–140 of 343 posts

Re: Musk’s $5.7B Mystery Gift Went to His Own Charity

#131

Post by kennend3 »

s1artibartfast wrote: post #75
brookst wrote: post #51

Earlier quoted context omitted.

Let’s say I make $100 at an effective income tax rate of 35%. I pay $35 in taxes and keep $65. Now say I make the same $100 but I give $20 to a qualifying nonprofit. I have $80 left, on which I pay 35% ($28), leaving me with $52. I have $13 less than I would have without the contribution. But if I own the nonprofit, funds under my control go from $65 to $72.

The important distinction is that you cant spend those non-profit funds the same way you could cash in your pocket. It is under your control, but you can't use it to buy a Hawaiian island vacation home.

Sure you can:

Here's a nice 6 million dollar house bought by a charity:

https://nymag.com/intelligencer/2022/04/black-lives-matter-6...

And a nicer 8 million dollar house bought by the same charity (all cash, must be nice)

https://www.washingtonexaminer.com/restoring-america/fairnes...

you see stories like this in the news fairly often, this is just two recent examples.

Re: Musk’s $5.7B Mystery Gift Went to His Own Charity

#132

Post by yellowstuff »

Someone1234 wrote: post #50
c22 wrote: post #8

If I had money to donate I'd donate it to the charity I thought would be most effective at helping the cause I cared most about. If I had enough money to create my own charity it would be focused on the cause I cared most about. My giant ego and hubris would make it hard for me to come to the conclusion that a charity I created wasn't the most effective at its goals, even if that didn't happen to be the case.

Billionaire's 501(c)(3)s aren't charities in the typical sense. They're tax-exempt piles of money that are controlled exclusively by billionaire and their families (in this case Musk and his brother). The Musk Foundation in particular has donated less than 1% of the "charities" assets (most donations less than $500K, most years less than $1M) and these "charities" can pay out to their owners from tax-exempt gains on…

You have just enough information about foundations to completely misunderstand them.

It's true that a major reason for the popularity of foundations is legal tax avoidance: you can donate to a foundation in a year when you have lots of income, get the tax benefit in that year, and not have to make a charitable donation in the same year. The foundations is allowed to sit on most of the money for a long time. However, crucially, when the money leaves the foundation it must go to an approved charity. There have been some high-profile abuses of foundations, but that's simply illegal, the same way it would be illegal to not make a donation in the first place and claim a tax exemption.

Re: Musk’s $5.7B Mystery Gift Went to His Own Charity

#133

Post by snowwrestler »

misiti3780 wrote: post #47
codeulike wrote: post #39

So in the same way that Bill Gates donates to his own foundation? https://www.cnbc.com/2022/07/13/bill-gates-donates-20-billio...

and Zuckerberg, and everyone else with a shitload of money

Zuckerberg did not set up a charity, in part to preserve its freedom to spend however it wants. The Chan Zuckerberg Initiative is an LLC.

Re: Musk’s $5.7B Mystery Gift Went to His Own Charity

#134

Post by bane »

Someone1234 wrote: post #50
c22 wrote: post #8

If I had money to donate I'd donate it to the charity I thought would be most effective at helping the cause I cared most about. If I had enough money to create my own charity it would be focused on the cause I cared most about. My giant ego and hubris would make it hard for me to come to the conclusion that a charity I created wasn't the most effective at its goals, even if that didn't happen to be the case.

Billionaire's 501(c)(3)s aren't charities in the typical sense. They're tax-exempt piles of money that are controlled exclusively by billionaire and their families (in this case Musk and his brother). The Musk Foundation in particular has donated less than 1% of the "charities" assets (most donations less than $500K, most years less than $1M) and these "charities" can pay out to their owners from tax-exempt gains on…

Right, I first learned about this when being forced to watch some of the "Housewives of ..." shows by my wife. I couldn't figure out why all these objectively terrible people all had their own personal charities (many of the episodes revolve around the social group of the show going to each other's charity events).

It turns out it's a common, but legal, "scam". Take in funds from fundraisers, give away a little, then pay yourself a ridiculous salary for running the organization with the rest of the money. You can also have the charity "buy" things for future fundraisers like trips on private jets, or fundraising events in the Bahamas, etc.

I have no idea how it has stayed even remotely legal other than it seems a great many people above a certain wealth level all seem to be involved in it.

Re: Musk’s $5.7B Mystery Gift Went to His Own Charity

#135

Post by dmix »

blisterpeanuts wrote: post #115
jasonlfunk wrote: post #96

Instead of giving directly to charities like St. Judes - he funds his foundation which gives to charities like St. Judes. When you give away $5B, wouldn't it be irresponsible to not give it to a foundation? And if you have your own foundation, wouldn't it be dumb to not give it to your own foundation? This seems like a nothing story; except that it's in vogue to hate Musk right now.

Quoted post unavailable.

Is Bill Gates still shorting Tesla?

Re: Musk’s $5.7B Mystery Gift Went to His Own Charity

#136

Post by pastor_bob »

andreygrehov wrote: post #30

Regular mortals maximize their 401k contributions, use Backdoor Roth IRA, FSA, optimize for long-term capital gains, etc. Is this all legal? Absolutely. The point is - nobody likes paying taxes - people try to minimize whatever it takes. Billionaires do the same. Instead of opening Flexible Spending Account, they start a charity. Instead of using Roth IRA loophole, they start off-shore corporations. Basically, they d…

>Regular mortals maximize their 401k contributions, use Backdoor Roth IRA, FSA, optimize for long-term capital gains, etc.

The only thing I would consider to be 'tax avoidance' in there is the Backdoor Roth, which is only used by a small subset of Americans because the majority don't make enough to need it. And even then the Backdoor Roth is a loophole/oversight that Congress is too cowardly to close.

The rest all serve different purposes, primarily to make necessary aspects of life (Retirement, Healthcare, etc) more affordable in our unaffordable country.

Re: Musk’s $5.7B Mystery Gift Went to His Own Charity

#138

Post by boringg »

Bilal_io wrote: post #92
badrequest wrote: post #58

Earlier quoted context omitted.

> Billionaire's 501(c)(3)s aren't charities in the typical sense. They're tax-exempt piles of money that are controlled exclusively by billionaire and their families Ah, so basically the exact same as every other billionaire family's charity.

What's your point? Pointing out other billionaires doesn't make the billionaire we're discussing less horrible. Most billionaires are horrible in my opinion. This is due to the idea that you cannot get that rich without exploiting people, taking money from government (while simultaneously talking against people receiving help), and this charity scheme is yet another loophole that needs to be closed.

While you may love/hate certain classes of people it would probably be helpful for you to refresh how economies work and, not just modern day economies, all economies. There will always be some level of exploitation in every single type of government/economy and there will always be government there to support interest of its people.

You might finesse your argument to the fact that you deem the level of exploitation and gains accrued to "billionaires" is too great for your tastes and that there needs to be a better balance struck.

If not it just reads as thoughtless criticism without understanding how are human systems work.

Re: Musk’s $5.7B Mystery Gift Went to His Own Charity

#139

Post by snowwrestler »

ClumsyPilot wrote: post #82
chollida1 wrote: post #25

Earlier quoted context omitted.

You're by definitions giving it away. It does nothing to preserve your own wealth even if it goes to a charity you control. It's no longer your wealth and unless you want to do something illegal its not coming back to you and can't benefit you.

> It's no longer your wealth and unless you want to do something illegal its not coming back to you and can't benefit you. This is peak naivity - you are totally wrong. Exanple one - charity can make political donations. Example two - can hire lobbyists. Example three - it can buy voting shares in companies you want to control. Example four - it can hire your family members or friends and pay them salaries.

Charities (501c3) cannot make political donations or even endorse candidates. The Sierra Club lost their 501c3 status over this.

Re: Musk’s $5.7B Mystery Gift Went to His Own Charity

#140

Post by nailer »

moonchrome wrote: post #48
wsc981 wrote: post #9

Earlier quoted context omitted.

Every ultra-wealthy person has a charity for this purpose, right? Clintons, Bill Gates, etc...

Gates foundation actually does charitable work from what I can tell ?

Yep so do Musk and Zuck's charities.
Post reply on HN