

Facebook chief faces tax bill of $1.5bn - tilt
http://www.ft.com/cms/s/2/6dbffbce-4e8b-11e1-ada2-00144feabdc0.html#axzz1lQlRsbel

======
dfield
The NYT article ([http://www.nytimes.com/2012/02/04/business/zuckerbergs-
big-t...](http://www.nytimes.com/2012/02/04/business/zuckerbergs-big-tax-bill-
may-benefit-facebook.html?scp=3&sq=tax&st=cse)) made a more interesting point:

"The taxes Mr. Zuckerberg and other Facebook shareholders pay on exercised
stock options will translate into a big tax benefit for the company. The
I.R.S. allows companies to take a mirror deduction for the employees’ option
compensation. Facebook anticipates that the deduction will eliminate the tax
bill on its $1 billion in 2011 profits, according to its regulatory filings.
The company also expects the break to generate as much as $500 million in
additional deductions, which can be used for refunds for 2009 and 2010 and for
reductions in future years. Facebook declined to comment further on Mr.
Zuckerberg’s tax plans."

“Due to the stock option loophole, Facebook may not pay any corporate income
taxes on its profits for a generation,” said Senator Carl Levin, a Michigan
Democrat who has proposed changing the policy. “When profitable corporations
can use the stock option tax deduction to pay zero corporate income taxes for
years on end, average taxpayers are forced to pick up the tax burden,” he
said. “It isn’t right, and we can’t afford it.”

------
Cushman
Socio-economic considerations aside, there's something subtly absurd about
this situation— I think it's captured especially in the last line of the
article:

 _Politicians in Sacramento, California’s state capital, are arguing over how
to spend the tax windfall expected from Facebook’s IPO._

While conversely, NYT article noted that Warren Buffet paid under $7 million
in taxes last year.

Personally, I'm of the opinion that taxing the flow of money doesn't make a
lot of sense on the face of it. Taxing the static accumulation of money seems
like it provides a more sensible set of incentives. Of course, I'm just a guy.

------
tokenadult
Reported earlier (by a few hours) in the Wall Street Journal

[http://blogs.wsj.com/wealth/2012/02/03/mark-
zuckerbergs-2-bi...](http://blogs.wsj.com/wealth/2012/02/03/mark-
zuckerbergs-2-billion-tax-bill/)

with a different estimated tax bill, submitted to HN yesterday.

<http://news.ycombinator.com/item?id=3550074>

For either story, the underlying primary source is the registration statement
for Facebook's initial public offering of stock.

------
aChrisSmith
Am I missing the story here? Man makes billions in income and has to pay
billions in taxes?

