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

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

#261

Post by yamtaddle »

yamtaddle wrote: post #142
ceejayoz wrote: post #23

Earlier quoted context omitted.

Donating $5.7B to save an absolute max (37% tax bracket; he's probably much lower with most income via capital gains) of about $2.1B in taxes doesn't make financial sense, unless you've got a plan to siphon off at least $3.6B tax-free out of the charity. Why do people think a $1B donation saves $1B in tax?

> Why do people think a $1B donation saves $1B in tax? A distressingly large slice of eligible voters don't even understand how marginal tax rates work. Which is, like, the absolute minimum to have any clue whatsoever how US income taxes are applied, what tax bills will actually do if they become law, and so on. I'd be surprised if understanding of how deductions work is any more widespread. [EDIT] Not a great source…

Can't edit anymore: not mad about the downvotes, but I also don't understand them, at all. What about this rubbed people the wrong way? The answer to the question is that lots and lots of people don't understand how income taxes work, even a little. So many that one may expect to regularly encounter such people. I'll grant the results are from the social science side of things, which HN doesn't much care for, but that's just... where the answers to that question happen to come from.

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

#262

Post by 93po »

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…

There is no world in which a billionaire can donate billions of dollars and come ahead financially. The only reason to do this is the legitimate intention to use that money for reasons that aren't self serving. Conversations about "hiring his kids" and treating it like a slush fund are ridiculous. If he had a dozen kids each getting the maximum allowed salary (~$300k) for 30 years, that's still only 1.8% of the total contribution.

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

#263

Post by 93po »

jonfw wrote: post #194
solumunus wrote: post #156

Earlier quoted context omitted.

How on earth is this a tax avoidance scheme? Complete nonsense. Sure, he doesn't pay tax on that money, he also loses that money. This is not a net gain for Musk personally. He can't directly send money from the charity to himself, to him personally the money is more or less gone. This is less greedy then simply paying tax on the money and spending it.

If I gave you complete control over a billion dollars in a "charity", don't you think (if you were so inclined) you would be able to find plenty of ways to spend that money in a way that would benefit you? I.E.- I might buy a house, and then have my charity buy a huge amount of land around it as an investment, to effectively turn my 1 acre homesite into a 100 acre estate Maybe I'd have my charity teach at-risk childr…

All of that combined for the rest of Musk's life wouldn't even get close to 1% of his total contribution.

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

#264

Post by 93po »

coliveira wrote: post #5

What a big "gift". It is obvious he need ways to avoid paying taxes after selling so many shares of Tesla.

Avoiding paying taxes by spending even more money that he can no longer use for himself? There is no way to financially come out ahead by donating to charity.

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

#265

Post by s1artibartfast »

c22 wrote: post #254
s1artibartfast wrote: post #246

Earlier quoted context omitted.

Roth IRAs aren't supposed to benefit anyone else. That's not why they exist

They're also not meant to hold billions of dollars (the annual contribution limit is like $6000). Yet somehow this happens [0]. [0]: http://www.propublica.org/article/lord-of-the-roths-how-tech...

yeah, I'm aware of that. They are designed with no cap, but clearly this type of growth was not expected.

Seems like it is an easy fix if it is determined to be a problem worth fixing. Just add a IRA cap at something like 50 million before you have to withdraw.

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

#266

Post by 93po »

ulrashida wrote: post #233
blisterpeanuts wrote: post #225

Earlier quoted context omitted.

Bill and Melinda Gates Foundation would also be "my charity", would it not? Or are you distinguishing between foundations and direct recipients of charitable donations?

You're correct, it would be. However, when the Gates' donations are disclosed they tend to say "$xB was given to the Gates Foundation" while Musk's was apparently "donated to a charity". (Note: I do not follow this topic regularly, this conclusion was based on some basic searches.) To dig a bit deeper, it could be argued that the contributions and outcomes of the Gates' foundation are relatively well known at this po…

> while Musk's was apparently "donated to a charity".

Musk made no public announcement about this and declined to comment when asked about it. He wasn't trying to score social media points by suggesting he was about to cure cancer. This became public knowledge when he was legally required to report it to the SEC.

Gates on the other hand loudly announces all of his contributions.

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

#267

Post by 93po »

micromacrofoot wrote: post #81
kodyo wrote: post #11

Wait until they hear about what Bill Gates does these days.

Most people who are angry about one are angry about the other too, everyone knows it's a tax avoidance scheme

This makes no sense. Tell us how Musk comes out ahead financially in this situation.

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

#269

Post by 93po »

richbell wrote: post #237
hot_iron_dust wrote: post #197

Its interesting how Elon Musk became a target of large media outlets' attacks since he de-facto entered US and world politics. The way he entered it is novel and technological. Fascinating to see how this story unfolds further.

That's his preferred narrative. The truth is that Elon Musk has been subject to negative attention for years because of market manipulation[0], abhorrent labour practices and safety record[1], and obsession with inserting himself into the limelight via poor behaviour[2] or over-promising things he can't deliver[3][4] — to name a few reasons why he's viewed unfavorably. [0] https://www.sec.gov/news/press-release/2018-…

Where's the equal or louder negative attention for billionaires who profit off death and destruction? That use actual slave labor for their projects that result in tens of thousands of deaths? That wreck the environment without consequence? That promote harm and violence to disadvantaged groups? That exploit child labor?

The issue is clearly not that Musk says dumb shit on Twitter and missed a deadline for his pickup truck. The issue is that society has a rage boner against him and people like you are perpetuating it while missing the wealth inequality forest for the Elon trees.

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

#270

Post by 93po »

fredgrott wrote: post #35

Not a real brilliant long-term move. Why? Tesla's premise is that they can balance not having large revenues in manufacturing for a period of time to build out the EV industry as Tesla's major revenue is in fact carbon tax credits. The problem is the competition is far greater in resources than Elon has guessed and that will tend to blind-side soon. Or in short words, Elon is spending stuff he no longer in the future…

> Tesla's major revenue is in fact carbon tax credits

Why are you outright lying and spreading misinformation? It's very easy to search online and see that their sale of carbon credits is, at most, a few percent of their total revenue over the past 5 years. I actually did the math and it was 2.4%

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