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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

#71

Post by IncRnd »

kgwxd wrote: post #49
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...

Minus the press release.

Here is Bill Gate's Press Release for 2022.

"With the support and guidance of our board, we plan to increase our spending from nearly $6 billion per year today to $9 billion per year by 2026. To help make this spending increase possible, I am transferring $20 billion to the foundation’s endowment this month." Jul 13, 2022 [1]

[1] https://twitter.com/BillGates/status/1547235386560155648

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

#72

Post by 300bps »

kgwxd wrote: post #49
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...

Minus the press release.

Since DaniloDias is shadowbanned and he worded his response in a suboptimal way, I thought I'd paraphrase his response:

Gates and Zuckerberg publish plenty of press releases about their charitable giving:

https://countercurrents.org/2020/09/zuckerberg-wants-to-chan...

https://www.gatesfoundation.org/ideas/media-center/press-rel...

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

#73

Post by SanjayMehta »

ilrwbwrkhv wrote: post #70

Of course it did. Just how SBF's gifts went towards his own friends and family. Why do people expect anything else I don't understand.

Comparing SBF and Musk does not seem right. For all his faults, Musk has actually created real products.

SBF on the other hand seems to have been really good at raising money. Much like Elizabeth Holmes.

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

#74

Post by ClumsyPilot »

ceejayoz wrote: post #23
beckingz wrote: post #7

The classic billionaire tax move. Donate money to your own foundation to work on things you want while getting a big tax break.

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?

That money doesnt dissapear - it is still avaliable for lobbying, hiring staff and doing many other things.

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

#75

Post by s1artibartfast »

brookst wrote: post #51
onlyrealcuzzo wrote: post #24

Earlier quoted context omitted.

How does the tax break work? Don't you still have to pay income and/or capital gains tax on everything that goes into the fund minus a pretty small amount?

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.

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

#76

Post by onion2k »

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…

A quarter of Americans don't have a 401k, and most of those who do aren't maxing it out. If you're doing all of the things you've listed you're not really a "regular" anything any more. You're rich. Which is fine, but you should really recognize the fact.

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

#77

Post by m3kw9 »

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.

Correct, after you give billions to a charity the incentive is to extract that by the owners. It suck, but humans are assholes when you dangle large sums of money money infront of them. The route is administrative fees.

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

#78

Post by mattalex »

c22 wrote: post #40
brookst wrote: post #32

Earlier quoted context omitted.

All true and a perfectly valid model. But also try: If I were incredibly wealthy and obsessed with running the score up, I’d see any taxes or other loss of wealth as a threat to my ego. If my tax accountants came to me and said I could have a greater net worth by founding a charity optimized for my personal benefit, I’d happily shuffle money there rather than paying taxes. I think that’s also a valid model. I don’t h…

I think he's probably optimizing for both. Don't hate the player, hate the game.

Just that in this case the players are so powerful they can use their wealth to define the rules themselves.

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

#79

Post by rvz »

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...

Yes. Billionaires do this all the time and many of the Musk rent-free brigade on HN are realising and admitting that this isn't the 'gotcha' many of them had hoped for.

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

#80

Post by SamBam »

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…

> 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 twist the spending to pretend it is in line with the purpose, but I don't think they can literally give the owners the tax-exempt gains.

1. https://www.irs.gov/charities-non-profits/charitable-organiz...

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