Highly recommend the book "Dark Money" by Jane Mayer to understand the charity-to-PAC pipeline that exists in the US .01%'ers. Billionaires hate paying their taxes, so when they're forced to they divert their money into a 501(c)(3) or (4) that they're in control of, and use the 95% of non-charitable funds to do their dirty work, and the 5% of charitable funds to create academic environments that support their goals.
Musk’s $5.7B Mystery Gift Went to His Own Charity
181–190 of 343 posts
Re: Musk’s $5.7B Mystery Gift Went to His Own Charity
#182Earlier quoted context omitted.
You are mistaken, it is very possible and legal to extract money from a 501(c)(3). “If the organization engages in an excess benefit transaction with a person having substantial influence over the organization, an excise tax may be imposed on the person and any organization managers agreeing to the transaction.” https://www.irs.gov/charities-non-profits/charitable-organiz... One example would be putting staff members…
I don't think it's clear how this contradicts the comment you're replying to.
I also think expenses, even salaries don't really amount to that much of a tax avoidance when the sums are in the billions. Hotels every night of the year for your staff would still be under $1M per staff member.
I think (I don't know as i'm a UK citizen) that these are similar to trusts. It's fair to say that rich people avoid a lot of income tax when they fund these trusts, but the trusts themselves still then pay tax on income and expenditures. The main thing it allows is for wealth to remain in a family for longer periods of time with one big tax avoidance at the beginning (the recoup on income taxes)
Re: Musk’s $5.7B Mystery Gift Went to His Own Charity
#183Earlier quoted context omitted.
I saw a comment that was without irony posting how Musk is the new Trump. And I think there is so much truth to that it’s painful, but not in the way some people may think.
Only insofar that they are anti-establishment and the media uses them for ragebait, and they troll the media. Trump is a rent seeker celebrity. Elon is one of the most productive humans. They are radically different but both break people's brains because they are supposed to be pro-establishment refined elites. Instead they are uncouth and align more with the working poors and dissidents. That's the biggest sin and i…
> Elon is the most productive human
That's an impossible to prove statement. And it reeks of fanboysim all over. It makes your entire argument look very biased as well.
Re: Musk’s $5.7B Mystery Gift Went to His Own Charity
#184Earlier 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 (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,…
You are probably thinking of donor advised funds. A DAF lives in a broader 501c3 (typically setup by a financial institution) and you can put money in it for tax purposes. The money sits (and grows) while you decide where/when it will ultimately go. Crucially, with a DAF, because you took the deduction when you gave to the DAF the outflow from the DAF must go to another 501c3.
If money leaving a foundation must go to another 501c3 how does the 501c3 loop ever break? It breaks because foundations can (and do all the time) pay individuals, contractors, for-profit companies, etc.
Imagine the United Way trying to build an office. How could they possibly do that if their funds could only go to other 501c3s?
Re: Musk’s $5.7B Mystery Gift Went to His Own Charity
#185Earlier 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 (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,…
To that parent's point, < 1% has gone to charities which means the foundation is just spending money on the people that work in and own the foundation. I wouldn't need to get paid directly if I had a foundation that paid for everything I need or want.
Re: Musk’s $5.7B Mystery Gift Went to His Own Charity
#186Earlier quoted context omitted.
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.
I totally agree that there are some corrupt Charities out there and bad practices. However, I don't think that's a condemnation of the concept of Charity as a whole.
Re: Musk’s $5.7B Mystery Gift Went to His Own Charity
#187Earlier quoted context omitted.
> and these "charities" can pay out to their owners from tax-exempt gains on the back-end. I pretty certain that legally these charities can only give to causes that furthers their exempt purpose. [1] E.g. a charity claiming to be devoted to saving children's lives in Africa can only spend money on exactly that, governance costs and fundraising. The charity may be paying the owners as employees, and/or the owners may…
What's your take on these newer "economic development" 501c3's? Example: https://archgrants.org/ I've talked with the founder of Arch Grants, and I don't doubt their intentions are pure (there's others I'm more skeptical of), but either way it's difficult for me to wrap my head around the concept of a non profit that is by most metrics operating as a startup accelerator giving seed funding to for-profit businesses. *…
Not taking any equity is a pretty important distinction.
Re: Musk’s $5.7B Mystery Gift Went to His Own Charity
#188If 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.
I have a better idea. No tax exceptions for anything over 1 billion. 100% tax.
No human on this planet needs this kind of money. Even 100 million is too much already.
The money was made on the backs of the working class and they as in their elected government should be the one deciding where the money goes. If your government is corrupt then that is an entirely different issue.
Re: Musk’s $5.7B Mystery Gift Went to His Own Charity
#189The classic billionaire tax move. Donate money to your own foundation to work on things you want while getting a big tax break.
I'm not sure I see the big problem here. Our government has decided that if you want to dedicate your resources to an approved cause that it won't hinder that cause by taxing those contributed resources. We don't place limitations on who is allowed to run a charity, and the range of valid exempt purposes[0] leaves a lot of potential for those resources to be used. Just because someone is a billionaire or not shouldn'…
Just because the government is looking out for a billionaire's interests doesn't mean it is necessarily in the public interest. Governments are not flawless. This is quite possibly an area that could use improvement.
Re: Musk’s $5.7B Mystery Gift Went to His Own Charity
#190Earlier quoted context omitted.
Only insofar that they are anti-establishment and the media uses them for ragebait, and they troll the media. Trump is a rent seeker celebrity. Elon is one of the most productive humans. They are radically different but both break people's brains because they are supposed to be pro-establishment refined elites. Instead they are uncouth and align more with the working poors and dissidents. That's the biggest sin and i…
> Elon is the most productive human That's an impossible to prove statement. And it reeks of fanboysim all over. It makes your entire argument look very biased as well.
If he's not, he's certainly close. The point is he produces more than he consumes and does so at high scale. You can measure the impact of Tesla and SpaceX with the number of cars and rockets produced. Payload to orbit and so on. That would not have happened if he hadn't spent most of his time and money there for the past 20 years.
Who would you say is the most productive?