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Is the new Zuckerberg fake charity an estate tax avoidance scheme? (law.harvard.edu)
237 points by zdw on Dec 4, 2015 | hide | past | web | favorite | 211 comments



Man, is anyone else seriously bummed out by how cynically everyone is viewing this announcement?

There's a rich guy who founded an organization, ostensibly with the hopes of doing something good with all that money that he owns. Maybe the organization doesn't go anywhere, or maybe he winds up paying less in taxes. Can't we all hope for the other side of the coin -- that he does wind up doing good for the world? Why not wait and see?


> Why not wait and see?

In other headlines[1], Chick-fil-A switches to antibiotic-free chicken!! Yay, good feelings for Chick-fil-A!! (Fine print - still serving chicken chock full of antibiotics through 2019.)

Instead of honoring people and corporations today for ostensibly, possibly, maybe doing something good in the distant future, let's hold the adoration until the time that they actually do it.

[1] http://www.cnn.com/2014/02/11/health/chick-fil-a-chicken-ant...


There's nothing wrong with Chick-fil-A selling chicken with antibiotics, and there's nothing wrong with Mark Zuckerburg being clever about how he spends his money.

If you don't like Chick-fil-A, don't eat there.

If you don't like Facebook, don't use it.

If you don't like the tax code, lobby Congress or do something about it. But don't blame Zuck for being smart within the confines of the law.


> There's nothing wrong with Chick-fil-A selling chicken with antibiotics...

But there is: antibiotic agriculture is breeding bacterial resistance, and imposing huge costs on society in the form of impending epidemics of diseases that we once thought were conquered. "I'm sorry your child is dead from staph."


> If you don't like the tax code, lobby Congress

Yeah good luck with that.


The thing is, I think people are starting to see through Mark to his real motivations. The "baby announcement" was clearly written by a PR firm. It just doesn't feel genuine.

I want to believe but this does really look like a PR move / "power fund".

Here is what genuine sounds like:

https://www.youtube.com/watch?v=wug9n5Atk8c

Seriously, after watching that (jump to 3:30 to skip the Stanford rah rah stuff). It is hard to believe that Gates is not all-in on making the world better with this foundation.


Given all of the hostility that's constantly directed at him and Facebook, I don't blame him one bit for running everything through a PR firm. Navigating irrational mobs is part of what PR firms do.


He must have hired a bargain-basement PR firm, too. The best PR firms put out stuff that doesn't seem like it came from a PR firm.


Pretty much although don't say that here, half the links are basically advertisements wrapped in articles.


He chose to make a public statement, no one forced him to.

Also, the hostility directed at Zuckerberg and Facebook is not "irrational". His company uses the banner of "providing internet access to all" to try to create a stranglehold on how the worlds poorest people get access to information.

That's basically Elliot Carver from 007:Tomorrow Never Dies. In case you haven't seen it and the general concept of a single company having such a massive amount of control over access to information doesn't tip you off: Carver is the bad guy in the movie.


> the hostility that's constantly directed at him and Facebook

Methinks you are confusing cause and effect.


Better a 5% chance it does good than a 100% chance it's squandered on bureaucracy and inefficient solutions to problems other tax dollars went to creating.


I'm surprised this isn't a more popular opinion.

Whatever ethical questions may lie in forming a "charity" with an unknown level of veracity, there are also ethical questions in giving the money to an organization that will, without a doubt, surveil, imprison, torture, and murder.


Fallacious nonsense like this: "[Tax revenue is]squandered on bureaucracy and inefficient solutions to problems other tax dollars went to creating"

...is today's version of "down with the capitalist dogs; long live the proletariat and glorious socialism!" of eras past.

Global capitalism taken to its extreme is an ideology that promotes a massive transfer of power to private individuals and the dismantling of the state. Libertarianism, in other words. Unfortunately, utopian ideologies have a nasty habit of becoming tyrannical dystopias when put into real-world practice.

Extreme capitalist ideology paints government as cartoonishly hopeless and inefficient, maybe even evil, run by inept bunglers that steal our money and waste it on paperclips and perks for bureaucrats. The solution, they say, is let private for-profit business take over and watch efficiency skyrocket and costs plummet. Sounds wonderful...except it's a hopelessly naive utopian fantasy (or, depending on your outlook, a scam to transfer even more power and wealth to the world's billionaires).

My own view is that unfettered capitalism taken to its logical conclusion will result in a feudal society...or violent revolution.


As against unfettered socialism which actually did in the USSR.


You don't think the American people get at least 5% back in value from every tax dollar collected?

Total revenue for the federal government was about $3 trillion in 2014. You don't think that the American people got at least $150 billion in value out of that?


> a 100% chance it's squandered on bureaucracy and inefficient solutions to problems other tax dollars went to creating.

After all, there's absolutely no chance that you are able to choose people to do thankless tasks upon which your life depends (disposing of sewage, supplying potable water, maintaining roads, ...).


Um those expenditures are absolutely tiny compared to the total of government spending.


How many votes do you get toward Zuckerberg's spending?


Which is mostly social security, pensions and the military.


I think whatever good deed a person do, people like author, will be able to turn it upside down and make it look like a crime. That's just the way they like to see the world.


That's kind of the point, though: there haven't been any 'good deeds'. Two things have happened so far. One is that an entrepreneur has formed an LLC. The other is he has invited charities to begin sucking up. Both of these things happen all the time. If anything, the fact that anyone has paid him any attention is a sign of optimism, because he certainly hasn't actually done anything with this plan yet.


Of course, it's been just a couple of days, what did you expect him to achieve?


Nothing, but it sure didn't achieve "good deed" status either like your post implied.


It's convinced me that any public interest work like this should be done, if not covertly, at least out of the spotlight.

The shitty thing about this is that when Bill Gates (or presumably in the future, Mark Zuckerberg) donates money and interest to a cause, it has value beyond the cash itself.


Otherwise known as PR. Some clients need it more than others.


Yep, I don't get it. I don't have a particularly good opinion of Facebook, but I can't understand criticizing this charity scheme. Even if it is merely for tax avoidance, so what? That merely places him on the same level as everybody else. (Anybody here intentionally pay more taxes than required?)


If the latter is true, are the praise, good feels and reputation points really called for this early on?


I haven't seen any, but hypothetically speaking, those wouldn't be called for either.


Because that alternative, that we should simply "hope", or the idea that such should be valued at all irrespective of purely judging such on outcomes, is itself a symptom of a fundamentally sick system overwhelmed with feel good press releases and cynical marketing PR bullshit.

I don't generally go around saying: well at least I can "hope" that when I eat this burger it will give me sustenance rather than poisoning and killing me, because the later has a miniscule chance of happening relative to our everyday experience. Indeed, what a sad and desperate situation we would have to be in to say: "eat the burger, and just hope it doesn't kill you".

So indeed, needing to "hope" , or pointing out that we should "hope" wouldn't be a good thing. It is itself a symptom of a system whereby the necessity of suggesting that we should hope about a bullshit PR release in fact reveals that what we're talking about is prima facie a bullshit PR release, or at least must be assumed to be given our common experience.

Perhaps it is only right that we should not expect or place value on people "hoping", but suggest that we give praise to people, Mr Z or otherwise, when they actually do something, not when they put out a sappy marketing piece about "we're totally gonna do something 'cause luv".

Facebook already puts out motherhood statements regarding say, internet access to poor people, that myself and others pretty much deem thinly veiled self-serving bullshit.

So if anything, we should be grateful that not everyone is taken in by PR, and just say that if there is any basis to Mr. Z's philanthropic claims, then extraordinary claims require extraordinary evidence, and when it is forthcoming, he will be given credit.


I'm seriously bummed. I don't trust Facebook and by extension, Zuckerberg.

But what do we lose by supporting this move? He's made charitable efforts at improving the world before, and making an announcement puts pressure to follow through.

And so what if it's vain? A person who does a good deed in vain... still did a good deed. It should be encouraged, including through appeals to vanity.


Don't forget about all the people that have apparently not ever done their taxes before and think that 'tax deductible' means 'discount' in some weird way.


Why feel good about this until you see real results?

Also, Occam's razor. People have a tendency to be selfish.


Your definition of Occam's razor here seems to be "my opinion makes the most sense to me therefore it is correct."


Given the favorable tax system written by people who want to hoard their wealth and when many trusts/charities are just vehicles for securing wealth for founders' families, it is hard to believe anyone acts completely altruistically.


>Also, Occam's razor. People have a tendency to be selfish.

That's not Occam's razor. People being selfish isn't a less complicated hypothesis than their being altruistic, regardless of how likely it is.


Why care at all until the results are in? All speculation is entirely baseless, and all moralizing is basically useless.


Because the lack of credibility of someone who gets his fortune from creating a severely ethically challenged corporation?

The benefit of the doubt only applies if there is no evidence either way. We're past that.

Sure, we can hope, but there is absolutely zero reason for such naivety to be the default.


Maybe because his company (like google, etc) has a history of tax avoidance ? And paying tax is the first thing we do as good citizen.

Why believe a company like this ? Or the man at his head ? ( He has absolute control over FB so any decision made is under his control/responsibility. )


No more bummed out than by the negativity from the peanut gallery about internet.org.


> Man, is anyone else seriously bummed out by how cynically everyone is viewing this announcement?

He's making a big deal to get a lot of publicity out of it. With that alone it's not being done just out of the goodness of his heart.


So what? What if Bill Gates revealed on his deathbed that he did all his charity work only for egotistical reasons? So what? Good for him, he gets the ego boost he wants, we get a better world.

If Mark Zuckerberg puts his wealth towards the greater good, then that's good, no matter what his reasons are. Why does he get more flack for doing this than for the Walton family giving nothing to charity?

If Mark just wanted to avoid taxes, he would've done so quietly. If he's doing it for his own ego, then that's good: it means he is incentivized to be effective in his charity.


Pablo Escobar donated a ton of money to the community. Should people have just praised him for that, and said that his reasons don't matter, and so what if he was donating largely to ingratiate himself into the community in order to protect himself from authorities? We can't simply ignore a person's motives.


You don't need motives to explain why Pablo Escobar was a bad person even if Bill Gates isn't. Pablo Escobar killed loads of people.


> So what?

So I don't trust them.


Because that would be a tacit approval of the severe imbalance of power between the haves and have nots. Shit's not right and you can't throw money (especially fake tax evading money) at it to make it go away.


People are weak.

They bring down others to prop themselves up.

And simplify the world because it's easier.

What would be good is if some sort of forum could filter these simplistic cliches out and push people towards a more productive point of view.


If HE hadn't already been so cynical with his charitable donations, maybe I'd be inclined to give him the benefit of the doubt, as you suggest. Donating $100 million to the Newark public school system the same week "The Social Network" was released, with nothing to show for it educationally, compels me to suspect this LLC is more about Zuck and his family than the downtrodden or whatever.


Lots of rich people have hidden their wealth in non-profits or corporations as foundations to avoid paying taxes on them.

It is called a Jackie O Trust because Jackie O was famous for making such an organization and left the money to her children as tax free income after she passed away.

Almost every rich family has such a trust in their name.

It is a good PR move because it looks like they are giving back the money, when in secret they only give away a small amount of money and keep the rest in investments to hand down to their children at a future date, etc.

http://www.bloomberg.com/news/articles/2013-09-12/how-wal-ma...

http://www.bloomberg.com/infographics/2013-09-12/how-to-pres...

It is actually using tax loopholes to avoid paying taxes to use such an organization to hide your money in it.

He did not found a charity he founded a LLC: http://www.buzzfeed.com/alexkantrowitz/not-all-of-mark-zucke...

The news media sort of reported it would be a charity but it is not. It is a Jackie O trust.

Bill Gates has his own and tried to invest $2B USD in schools: https://www.washingtonpost.com/news/answer-sheet/wp/2014/06/...

It failed miserably, test scores did not improve, despite trying to build better and high tech schools with smaller classes and personalized learning for each student. The same thinking that went to build Microsoft can't be used to solve socioeconomic problems because that requires a different type of thinking. Students have problems learning due to poverty, family issues, emotional and psychological issues, and other stuff. Spending the money on better schools does not address any of those problems.


Zuckerberg also failed in his $100 million effort to fix Newark's schools. It's funny, because people like Gates and Zuckerberg are pushing the idea of "accountability" - if teachers can't get scores to improve, we need to fire them. Yet when they fail completely to improve things, the notion of accountability suddenly disappears, end the long list of excuses comes out.


They always blame the teachers, but if the parents and guardians are not helping out with homework and support the child won't learn. If the child grows up in poverty, has emotional and psychological problems, has family issues, etc that can interfere with their learning.

Which is why teachers are against standardized testing, because it punishes them for low scores.

It is sort of like working as a programmer and having no support from management or your coworkers, being given projects that others have failed at because of how hard they are, and then being punished when it takes too long to finish or you can't get results.


Most of the educated blame seems to go towards the teacher's unions, which have always been heavily against accountability for teachers, in favor of seniority protections, so that the worst teachers can't be fired. Standardized testing, for all it's shortcomings, is equally bad for them, since it reflects on which teachers are the worst performing. Low testing scores due to poverty is a poor defense since such deviations can easily be controlled for, as is commonly done in statistics-based research.

Teacher unions constantly fighting to kill educational reform has been a recurring theme in most all reform initiatives, including Zuckerberg's.[1] There are numerous documentaries (e.g. Waiting for Superman, The Cartel, etc.) covering attempts at reform and how the one thing the unions will never allow is holding bad teachers accountable.

[1] http://www.businessinsider.com/mark-zuckerbergs-failed-100-m...


Anyone with 45bn to spare should be scrutinized and examined.


Zuck: Yeah so if you ever need info about anyone at Harvard

Zuck: Just ask

Zuck: I have over 4,000 emails, pictures, addresses, SNS

[Redacted Friend's Name]: What? How'd you manage that one?

Zuck: People just submitted it.

Zuck: I don't know why.

Zuck: They "trust me"

Zuck: Dumb fucks


How old was he when he said that? 18? I look back on some of the stuff I said when I was 18 and it was a lot worse than this, and I think I'm a pretty decent guy overall. Big difference between a kid right out of high school and a 30-year old.


Thank you for saying this. It's so easy to criticise, judge and unfairly extrapolate based on what other people seem to have said or done according to a small, out of context quote, picture, video, etc. It's incredibly unfair and hypocritical to do so.

We all need to just admit, as you've done, that we all say and do things all the time which would paint us in a very bad light if taken in the wrong context. As an obvious example, there are things that everyone says to friends that they'd never dream of saying to their boss, or parents, or their kids' teacher, or other friends for that matter.

Judging Mark Zuckerberg based on this quote is exactly like that. He's not addressing an audience, he's not giving a considered summary of his world view or philosophy. Rather he's almost certainly joking with a friend, simply saying something abrasive just to give an impression of being confident or alpha etc, the way people sometimes do when they're joking- especially young, relatively unconfident people. We've all done that at some point.

I'm 100% certain if his mother had walked into the room immediately after he'd said this and said 'Mark! Is that what you really think, that all your classmates are.. what did you call them.. dumb fucks?' he would have apologised profusely and corrected himself, clarifying that he was simply joking and said a silly thing in the heat of the moment. Like all teenagers do. Like all humans do.


On the other hand, Zuckerberg has been richly, wildly rewarded, praised and glorified every moment since then. Where do the signals that guide improvement come from in that situation?


I'd say that all of his actions since that date have been coherent; that at every turn he has dedicated a lot of energy to destroying privacy and reframing that as promoting openness.

The prototypical example of this is the FB privacy panel which, last I checked, took more than 100 separate actions to set everything private. (making it very hard and confusing to get privacy). And there's been the incidents where FB then single-handedly undid some or all of those settings without notice.

And then there's FB's participation in PRISM starting in 2009.

he's dedicated enormous energy into destroying privacy and into selling us to others.

As such... I tend to think he'd used more nuanced language now, but I absolutely believe he is a sociopath who has created a cancerous company that makes the world a materially worse place. I absolutely believe that all of his company's actions are aligned with his 18 year old's disrespect for other people.

Some part of him is obviously a good dude... but his company is a fucking travesty.


If you care about privacy enough perhaps Facebook just isn't the right social network to join?

Facebook is an advertising platform, and the best one at that. It's also a place people post intimate details of their lives for others to see.

I don't know that I find fault in their ability to use that data to better target you with ads or content.


Exactly.

Even to this day, depending on who I'm talking to, I say silly things in private - things that aren't representative of who I am or my intentions in the real world.

It's not fair to look at someones private communications and judge them on it. Especially at 18. It's no way to measure a person.


I get your point, but I can't help but think: we're talking about the importance of privacy regarding the founder and CEO of one of the most privacy invading websites ever. There's some irony there.

Not that this means anything - I completely agree with you - but there's something 'funny' about it.


Some people change, and some others don't. Please don't assume bad people all change for the best, because it's rather the exception than the rule.


I think the reason people keep quoting this is because his maturity has caused him to quit talking about it--not quit doing it. His entire success and livelihood is the product of selling peoples personal information, often in ways that they don't understand.


by that rationale everything i said last year and all the shit ive done no longer matter because im 21 now. so you know, its no longer my responsibility.

yeah, fuck that logic. you're extremely responsible at 18. moreso at 18 than at 70, if anything.


It's not that it doesn't matter or that he's not responsible for his words. It's that as adults, over time, you develop a sense of perspective as your worldview broadens, and the things you believe or the way you might phrase something might be very difference once you've spent 5 or 10 years out in the world.


Still responsible. Else no jail sentence should be more than 5 or 10 years either. Still failing logic.


No, I think that very attitude has been very consistent since then and it's clear in the way Facebook operates and profits.


While that may be true, he's directly calling people stupid for trusting him. That should give people at least some pause in being optimistic about his intentions.


Maybe you're not as decent as you think you are.


Maybe not! Entirely possible. How could I possibly know, though? I just try to focus on being kind and empathetic to people, supportive to my coworkers and employees, be mindful of how my actions affect others, and when I screw up, try to do better the next time. I don't think there's much more than that most people can do.


Wow. How many emails, pictures, addresses, SNS does he have now? And this is what made him so wealthy? Collecting personal information? Incredible.


If somebody has a pattern of behavior that is unsavory, regardless of their social standing or wealth, we tend to scrutinize that person.

The same goes true of Zuck. Remember, this is the guy who not so long ago called his users "dumb fucks". I don't think that criticizing somebody is the same as cynically writing them off. It's not like this guy is a god or something.


I posted this on a different thread. I think it is tax avoidance.

One way to look at this is that Zuckerberg just robbed the treasury of $45B. Part of that would have come in through capital gains taxes and the rest through the estate tax.

What they do with that money is up to them, not the state. It's a pretty sweeping end run around the taxation system.

Maybe we'll get lucky and he'll use the money to good end like Gates is doing. And maybe not.

This is a heck of a tax code we've got, it's trickle down on a grand scale.

reply


I don't understand. This is how the tax code works. If you give the money away to charity the Government doesn't take income tax on it. That is a law that was passed. The whole point is to get people to give money to charities because that's a good thing.


It's been argued that it gives a few incredibly wealthy people undue influence on public spending. Instead of being taxed and then spent according to the government's priorities, which is at some level accountable to the public, a few wealthy people get to decide what programs have merit and pour their money into them.


Or put another way, the people who create something worth $300B out of nothing get to decide what happens to their share of the $300B. And as a bonus, these are people with demonstrated success in their ventures, and they are given free reign to pursue their vision fully. Whereas the public sector is a mess of a dysfunctional congress, infighting, posturing, pork, global warming deniers, and discourse targeted to short attention spans and the 24 hour news cycle.

There is something very troubling about the idea that the more successful/valuable your creation becomes, the less entitled you are to invest the fruit of your success into your next idea.


Thats based on the false assumption that money comes from nothing and that we live in this perfect system where we deserve the money we earn and those that don't earn it don't deserve it.

Mark, for example, was born, lived, grew up, went to school, started a business, etc, etc in the US and benefited from all of the things the US offers. You owe a lot to your government, and subsequently the 'tax payers', than you statement seems to suggest. Also the idea that Mark deserves all of his money because he earned it is also false. There are millions of people that have worked harder to succeed in life than Mark. Mark just got lucky. I don't mean to diminish his accomplishments, but luck plays a large role with any individuals success. That is one of the founding reasons for proper wealth redistribution.


I certainly agree with progressive taxation, and that Mark owes a lot to his upbringing, and that luck plays a role. I was reacting to the claim that wealthy people have "undue influence on public spending." They should have outsized influence based on their outsized success.


I find it hard to argue that you owe anyone else in the U.S. because everyone receives similar benefits. Mark didn't receive "extra" benefits above and beyond any other U.S. citizen. In fact, the richer you are the less you benefit typically.


So then it would be just as likely that a Mark should emerge from a poor third world country, right?

When I was younger I had the naive opinion that my successes were my own doing. As I got older my opinion changed. Yes, I had something to do with it, absolutely. But a lot of it was being the right person in the right place at the right time.

There is a reason that I log in as luckydude.


I did not say his successes were his own doing. I was only commenting on the fact that it was implied he "owes" taxpayers. Sure he may owe a lot to other people, but to taxpayers in general? not so much in my opinion.


One would hope the rich receive less benefits. You don't owe it directly to the tax payers, you owe it to your country as a whole. Again money does not come from nothing(well sort of, but what it represents lol). To think money you earn is money you deserve is very entitled and inaccurate.

Mark did receive extra benefits, he came from a family that was at the very least middle class or even at the very least American. This put him at a greater advantage then most of the rest of the country/world, an advantage he never earned from hard-work. It was just luck.

How is that "fair", well its not and the world is not "fair". That's why we have taxes, with the hopes they preform some for of wealth redistribution. Sadly wealth redistribution in the US is frowned upon and often not very well done.


One would hope the rich receive less benefits. You don't owe it directly to the tax payers, you owe it to your country as a whole. Again money does not come from nothing(well sort of, but what it represents lol). To think money you earn is money you deserve is very entitled and inaccurate.

Mark did receive extra benefits, he came from a family that was at the very least middle class or even at the very least American. This put him at a greater advantage then most of the rest of the country/world, an advantage he never earned from hard-work. It was just luck.

How is that "fair", well its not and the world is not "fair". That's why we have taxes, with the hopes they preform some for of wealth redistribution. Sadly wealth redistribution in the US is frowned upon and often not very well done.


<em>And as a bonus, these are people with demonstrated success in their ventures...</em>

And no experience in medicine, famine relief, climate science or any of a hundred other areas.

And let's remember that plenty of billionaires are climate change deniers, sitting at the center of dysfunctional corporate hierarchies full of infighting, posturing, and suspect expense accounts.


Honest question: do you think the world would be better off if 100% of the budget of the Bill and Melinda Gates Foundation went straight to the US Federal Government instead?

Sure, Bill Gates didn't start off with that experience. But from what I have seen of the foundation, I believe they are more effective in bettering the world, dollar for dollar, than the US Government.


The Gates Foundation's purpose is "bettering the world". The US Government's purpose is "bettering the US". With that in mind, it's not particularly suprising that the Gates Foundation would be better at your given task.


So the complaint now is that the money is going to where it's most needed rather than to the US specifically? This argument is sounding less like an argument for justice and fairness and more like simple jealousy.


"...the people who create something worth $300B out of nothing..."

This is a false statement. I applaud people who succeed in their businesses but accruation of lots of capital to a few people is not only due to them but due to the existing society around them. Infrastructure which facilitates logistics and enables a pool of workforce, stable civil society, etc. Not to talk about the economic system which makes financial transactions cheap and predictable.

If you don't like the idea of redistribution, let's think it like this: from the point of view of personal wealth, the economy is like a giant casino where the games are more complicated but most people actually win - and some people win a lot. Taxes can be thought as a fee for the right to participate in the fun and games.


Let us not forget the Internet and many of the other technologies that make Facebook possible are a product of government investment (e.g. DARPA).


> create something worth $300B out of nothing

Out of nothing? Would Zuckerburg been able to create Facebook if he was born and raised to subsistence farmers in Afghanistan, and lived his adult life in Sheberghan?

The fact is, people living in advanced nations have had huge investments made in them by their communities/nations in the form of clean water, schools, roads, rule of law and a thousand other things. Citizen's are morally obligated to pay a fair amount of tax, and because Zuckerburg has been widely successful, he should contribute much more that the average joe, even if he doesn't consume enough for it to be "fair".


I agree with that, but if successful entrepreneurs want to do charitable works themselves, I think they should have that freedom -- if not tax-free, then certainly at a much lower tax than if they were buying a fleet of private jets.


No one's saying he can't get profit and put it back into the system, as long as you _pay your taxes_. But if you're not paying your taxes, and you're resorting to the private sector, then you're really just squirreling away your wealth to do what you see is fit. We've seen how that works in 501c4s, with dark money and PACs. We've seen how that worked with Carnegie-style redistribution at the expense of working class labor. And we don't want to see that anymore. If you're going to invest the fruit of your success into a next idea, thats fine, but don't forget that real people, the public, made you that wealthy, and give back to them, the way they want it.


It's very interesting that you think the best way to give back to the public is through...government discretional spending?

A couple thought experiments:

1) If public sector spending was a good vehicle for increasing the public welfare, why don't people donate money to the USFG over other charities? Surely the Effective Altruism movement would be very interested if this were the case.

2) In 2015, the USFG spent $229 Billion on interest on all of the debts it owes, over 6% of its total budget. What makes you think paying off interest of the bad decisions of the legislative branch takes priority over any good-will private sector philanthropy, no matter how ego-fueled?


Why should Joe Schmoe earning an honest $75K/year have less say than that though?


Mark Zuckerberg isn't taking anything away from the $75k/year guy. He just has more because he created something valuable.

If you are an artist so good that your paintings are worth $1M each, should you get to have them? Or should someone walk in your door and say "whoa there, you have too much now, we're taking your paintings until you have the same amount of wealth as the $75k/year guy"?


> If you are an artist so good that your paintings are worth $1M each, should you get to have them? Or should someone walk in your door and say "whoa there, you have too much now, we're taking your paintings until you have the same amount of wealth as the $75k/year guy"?

If you paint million dollar paintings and leave them in your studio, I guarantee you the IRS will not knock on your door and say "you have too many paintings now, we're going to take them now".

If you sell those paintings, and make an INCOME, the IRS will expect you to pay INCOME TAX.

Seriously. How is the basic concept of taxes so hard to understand?


Wealth taxes exist in other countries and are proposed by some people for the US. I was speaking generally and not in reference to a specific tax regime. And besides, converting the paintings to money would be necessary before it could be used for charitable purposes anyway, so the distinction you are drawing is not very relevant.

I'm not opposed to taxes but I am opposed to the idea that taxes should equalize everyone's wealth and that all big investment should come from the government.


My point was that it's not fair that someone gets to pay a smaller tax rate just because his taxable base is larger. If anything, it should be the other way around. My original income tax vs. capital gains tax parallel was wrong though, but the premise is the same. If Joe Schmoe has managed to invest $5K in the stock market and grew it to $10K, his capital gains tax rate shouldn't be higher than Zuck's.


Zuck is paying his taxes and isn't breaking any laws with any of this. The OP submission and most of these replies really sounds like jealousy than anything else.


The comment I replied to was talking about a tax agency coming into your home/office and claiming privately created artworks because you "have too many".


Eh, the United States spends a lot of that tax money on the military. I don't have a problem with wealthy people making their own call on the guns vs. butter question.


Exactly. Would you trust Mark Zuckerberg with spending 15bn for the supposed betterment of society, or would you trust the US government?

Given that the US government wastes so much via corrupt deals, inefficiencies, insane surveillance, and absurd military spending- I would favor Zuckerberg directing the fund.


"A lot" is relative.

Wikipedia says the military is 17% of expenditures: https://en.wikipedia.org/wiki/Expenditures_in_the_United_Sta...

This may or may not constitute a lot, depending on who you are.


So, not a total expert on this, but I'm pretty sure that 17% is the DoD budget, which is (by some estimates) about half of the actual total military spending. By other estimates maybe more than half - it depends what you consider "military spending."

For example, iirc, a significant portion of NASA's budget is for military applications - spy satellites and such. Similarly, the DoD budget doesn't consider veteran's benefits owed to former soldiers, which is a large portion of the long-term obligations comprising the national debt. It also leaves out most of the national security complex (DHS, NSA, FBI), military applications in the Department of Energy, and so on.[1]

[1] https://en.wikipedia.org/wiki/Military_budget_of_the_United_...


I figured some expenses were hiding, but hadn't found enough of them yet.

I'm cobbling together some more data points here. They aren't all for the same year, but are close to recent.

  - Veterans Affairs: ~160B [0]
  - DHS: ~65B [1]
  - "non-military intelligence spending" (I assume including a solid chunk of NSA and CIA): ~55B [2]
  - FBI: ~8B [3]
  - retirement from Treasury (for service before 1984. The reference is interesting!) ~8B [4]
This tallies up to an additional $296B or 8% (for 25% total).

The Project On Government Oversight has a similar table [5] that includes some of my items, some additional items, and excludes some of mine. It reaches a $1 trillion "National Security" budget, which shakes out to about 28% of spending.

Thanks for the linking and push to keep digging! The "Military budget and total US federal spending" section of the article linked in the parent was a good jumping off point for me, as well.

[0]: https://en.wikipedia.org/wiki/United_States_Department_of_Ve... [1]: http://www.dhs.gov/sites/default/files/publications/FY_2016_... [2]: http://www.usnews.com/news/articles/2015/02/02/black-budget-... [3]: http://www.justice.gov/sites/default/files/jmd/legacy/2013/1... [4]: http://www.rand.org/pubs/research_briefs/RB3005/index1.html [5]: http://www.pogo.org/our-work/straus-military-reform-project/...

EDIT: formatting


I'm not sure why you're getting down voted for this.

A lot is an interesting question, especially given this (https://en.wikipedia.org/wiki/List_of_countries_by_military_...) which if you sort by percentage of GDP puts the US below Russia.

Is it that surprising that the country with far and away the highest GDP has the highest military spending in real dollars?


If we're going to talk about relative military spending... https://en.wikipedia.org/wiki/List_of_countries_by_military_...


> I don't have a problem with wealthy people making their own call on the guns vs. butter question.

You can donate to military organizations that fund warfare directly?


The easy fix would be to strip the charities of their tax-free status. That does have some unintended consequences though.


Eh, but you're assuming that money to charities is always a good thing. There are a) some pretty terrible charities out there and b) some patently fake charities that are designed as money laundering schemes.

The tax code works because it was written by people who had huge amounts of wealth and were pissed that the federal government (the People of the U.S.) created an income tax.

No other developed country has such crazy laws regarding charity donations as the U.S.


So why is everyone already assuming Mark's charity is going to be one of the terrible ones? I don't see why he wouldn't give an honest shot at improving the world, as a young idealist. Maybe he won't do a great job at it, but people should reserve judgement til then.


Mark hasn't been improving the Internet so far (actually FB made it worse in numerous ways), so why do you think he has any incentive to improve the world as a whole ?


I'd say you're making the assumption that it will be used for good, when so many charities are indeed used for tax evasion (and other more nefarious purposes). When you condition these probabilities on how most charities actually operate, and on Zuckerberg's past behaviour, a high level of cynicism proves to be the rational position.


Facebook is abusive of people's personal privacy, even though it is generally an effective tool for improving people's (layperson's?) communication.

So, it's probably a better idea to approach it with a cynical perspective instead of an optimistic (naive?) one. It could turn out to not be estate-tax evasion... however it seems unlikely.


> No other developed country has such crazy laws regarding charity donations as the U.S.

Wrong. France has the "Association Loi 1901" law and it's pretty much the same thing, a money laundering scheme for most of the organizations benefiting from it - most of the time politicians using public money to finance such organizations where they put their friends and families in charge.

This kind of things has no borders.


I've wondered if the charity Claire Underwood works at in House of Cards was intended to be a commentary on this sort of thing. Claire takes a huge salary from donations by corporations, then Frank spends it. They seem to be intimately involved with San-Corp at every turn but there are lots of questions raised that never get answered. For example it's never explained why so much of the staff was rapidly cut, or why they pivoted to international work. I think they were even present in the whole Russo ordeal where the environmental initiative is replaced by natural gas after that bill fails. At the same time it is never directly implied that the CWI was an outright money laundering scheme.


Well, implicit in this discussion is also the notion that tax revenue is always a good thing. I think both assumptions are poor, but I'd sure take charity over tax revenue any day of the week.


This is not a charity in the tax sense (a 501(c) organization), it's a limited liability company. So if there are tax benefits, I don't think they come from a government policy to increase charitable spending.


I don't understand this comment - You don't have to be a charity to do charitable works, and an LLC can be a charity. Note that the Bill & Melinda Gates Foundation is a Foundation (which is not all that different from an LLC without shareholders from a tax+reporting perspective), and does lots of charitable works.


The tax treatment of a charitable foundation (as opposed to an LLC) is very different.


The article linked suggests that they are not giving any money away.


But is it really charity? Unfortunately, the charity exemption is given to many things that aren't very charitable at all, including some that are materially and intentionally bad for society (i.e. many that engage in overtly religious and/or political behavior). I'm willing to give Zuck the benefit of the doubt for being sincere and meaning well, but only time will tell if this is true charity.


The point is that you can justify lower taxes if you have private donations to charities instead of state funding.


Not a charity, it's an LLC investment vehicle.


It's an LLC, isn't it? That means that the LLC will pay capital gains tax when the stock is sold. The government gets its money either way.

The estate planning part is more complex, I'm not qualified to answer that, but even in that article the linked option basically talks about how you can get a 40% discount on the value, but the estate tax basically kicks in regardless once you transfer LLC shares to your kids.

So it's not quite as cut-and-dried as saying, "Zuckerberg just robbed the treasury of $45b"


No the loopholes is that if the LLC donates the appreciated shares to charity it will get a deduction of the fair market value. However if a tax-exempt entity (Charity) then sells the stock it does not pay capital gains.


The same is true if he donates the shares directly without going through an LLC.


But then the money doesn't get the protections and shelter as part of the LLC which may very well likely invest as a for-profit entity. In other words there are other reasons to create the LLC that aren't about avoiding taxes. And my point still stands this way there is no capital gains paid [edit] on shares donated to charities. Yes there may be taxes paid on shares donated to for-profit entities or liquidated by the LLC. There's multiple scenarios here my capital gains comments only refers to donations of shares directly to a non-taxable entity.


If any of the shares the LLC holds are donated to a public charity, there will be no tax implications for the LLC, as if Z donated the shares directly or operated a private foundation, and without any of the freedoms of the LLC.

If any of the shares the LLC holds are liquidated by the LLC or granted to for-profits, situations where the "other reasons to create the LLC" are in effect, capital gains tax WILL be owed.

The LLC is as if he held the shares personally, when it comes to capital gains.

The estate situation is very different, not cut and dry, and that's what is being discussed in this article.


They do not avoid capital gains taxes by doing this.

Also, more broadly, when you see a "sweeping end run around the taxation system", it may be instructive to consider why everyone else doesn't just do the same. Legal tax avoidance techniques are not secrets.


> why everyone else doesn't just do the same

When your upside on doing fancy tax maneuvers is several billion, you can afford IRS lawsuits. And you can afford the initial time for a lawyer to set this all up.

Average people are using Turbo Tax for yearly taxes and relying on common law to handle their estate, because that's all they can afford.


Most charitable gifts are a form of tax avoidance (and _all_ of them potentially are if a person's income is such that it makes sense to take advantage of itemized deductions). People get receipts for charitable contributions precisely so they can deduct those amounts from their taxable income. Zuckerberg's plan is of much larger scale, but the fact is that the tax code is set up to encourage charitable contributions by making them non-taxable. The tax code is set up this way, quite understandably, to encourage individuals to make charitable gifts, by creating an extra "bang-for-your-buck" for people who choose to make them.

The linked article seems to suggest that Zuckerberg is trying to take advantage of the system by gaining tax-exempt status while effectively _not_ making charitable gifts, that he is somehow trying to pass everything to the child while taking advantage of tax-exempt status of a charitable organization. I'm skeptical both that his intent is to try to do this, and that there is any scheme that could legally accomplish this.

On a different, but related, note, if I were a parent with $40Bn (or $30Bn, $20Bn, $10Bn, or even $1Bn) I would certainly avoid any plan where the bulk of my estate was to be left to my child. Having that much money is a big responsibility, and it's not something that's likely to add to a person's quality of life. Quite the contrary, it's likely a hindrance, not something I would want to saddle my child with. At most, leave them some large amount ($5M, $10M, $20M, $50M?), something basically guaranteed to make them a wealthy person who doesn't need to worry about money, but hopefully not enough to require that responsible management of their fortune be a main focus of their life. (I realize there are moral implications of having that much money for anyone who has even $10M -- perhaps even $1M -- but when the amounts get astronomical, say to hundreds of millions or more, the moral responsibility really does -- or should -- become almost overwhelming. Not a burden I'd want to put on my child.)


I've never understood that about deducting charitable donations. I've always had the principle that I shouldn't be getting anything for my charity. Otherwise, it wouldn't really be a donation to me. It would be make it conditional. I'm giving this money away, but give me some back from the taxpayers?

I might sound like a sucker, but that's just always been my thought on it. My mother once said something to me like that as a kid and I've applied it donating.


You never end up with a net plus by giving to charity; you are always giving away money. This is because the amount of tax you avoid is always less than what you gift. For example, you may gift $100, which ends up reducing your tax bill by, say, $30. If charitable gifts weren't tax-deductible the equivalent would have been paying $30 in taxes and having $70 left over to give to charity (for same $100 loss). The tax-advantaged status gives charitable gifts an extra bang-for-your-buck by giving you same net result (total outgo of $100) while allowing you to direct all $100 to the charity of your choice.

Also, notice that you're not somehow "getting something back" from other taxpayers in this scenario. You're just lowering your tax bill.


[deleted]


But the money still goes to charity. Essentially person A is just indirectly donating to their pet charity using political capital. As long as the charity is legit, I don't see the problem.


Right, there is no problem, this is not controversial. The linked article that started this thread is suggesting that somehow Zuckerberg plans to get this tax-advantaged treatment by making gifts to an organization that is not actually charitable. That would be a problem, but I would suggest that the linked article is mistaken in saying that this is what Zuckerberg is doing.


The reasons are mainly historical, but the non-profit lobby (consisting of charities, 501c3 non-profit organizations, churches and university endowments) holds so much power, that stripping them of tax-sheltered status would be a third rail for any politician running for office.

The historical reasons assume that many everyday community efforts (feeding the hungry, sheltering the homeless, abused women and children, planting trees, sheltering stray animals) is better done (and financed) at community level by community efforts rather than by central government and sending money to Washington D.C.


> People get receipts for charitable contributions precisely so they can deduct those amounts from their taxable income.

I don't understand how this is considered tax avoidance? It's not like you get more money this way, you just get to give slightly more to charity than you might otherwise, which is the point of the deduction.


It's tax avoidance because if you hadn't gifted that $100 to charity then your taxable income would have been $100 higher and you would have paid higher taxes. You "avoided" paying tax on the amount that you gifted to charity.


By that definition, taking a lower-paying job is "tax avoidance" in exactly the same way.


Not really. Taking a lower-paying job not only avoids taxes, it lowers your income (both pre-tax and after-tax).

With charitable giving you can avoid taxes but still retain exactly the same after-tax income (assuming that you were going to gift to charity regardless of whether you got deduction or not). That is, you can gift $100 to charity, deduct the gift, and so avoid (say) $30 in tax. In this case the gift to charity effectively results in you having $100 less than before. Or, for same net result to you (minus $100), you could gift (after-tax) dollars to charity, say $70, and pay the $30 in taxes that you avoided in previous scenario. Only in second case you ended up giving only $70 to charity, because $30 goes to government. In first case you gave all of the $100 outlay to charity, avoided the $30 tax.


This, obviously, does not make sense. The entire $45billion would not have been given over to taxes.



Well as long as he doesn't use half of it to start a bunch of wars in the middle east, we'll probably end up ahead of what would have happened if it would have gone to taxes. As you said, if Gates' leadership is followed, I think we'll end up wayyyy ahead of what would happen if it goes to taxes (especially if you consider that ironically enough many of the people that actually need the help might get it - like poor in other countries benefiting from malaria cures, vs whatever domestic interests would do with the money here)


"What they do with that money is up to them, not the state. "

That's how property works, you know.

Hopefully this represents a step away from compulsory taxation as a society.


How the heck would a modern society function without some sort of compulsory taxation?


There are a lot of questions wrapped up in yours :)

Briefly: if you pare Government back to core functions, you don't need much money. In New Zealand, we (meaning the Libertarianz) estimated it at around $2,500 / working adult / year. That (back at the turn of the 21st century) would get you courts, police, Parliament, defense, embassies and the glue to run it all.

Then you need a way of raising the money. Probably, most working people can afford $2,500 per year to keep civilisation running, especially if they're not paying any other taxes. Maybe a poll tax? Seems reasonable that those paying also do the voting. Could simply solicit donations, or maybe run a lottery.

But no: you couldn't run a socialist country that way. Which is sort of the point :)


"The only solution to the current tax system is to make more rules, so it's more convoluted than ever." — every politician.

No, what we need is to trim down the fat that your liberal arts degree decide to fluff in there for the sake of your ego.


Well, it is proportionally less money for the things that are funded the most by the government.


You can't rob the treasury of USD ... The US government creates USD when it spends.


Greenspun would read the worst into whatever Zuckerberg did here, as seen by him starting the post criticizing the timing of Zuckerberg's marriage.

Why not assume the best? Zuckerberg said he planned to give away 99% of his wealth to help other people. That's a good thing. Why criticize him now? If he ends up not doing it, criticize him then. If all he was doing was trying to avoid some estate taxes, he could have done that without any announcement at all, certainly drawing less scrutiny.

Scrutiny is important here, because the IRS could disallow the application of the LLC estate planning loophole here just by saying so. The 40% discount for non-management shares is an accounting judgement, not a law, and not one the IRS need accept if it believes the sole purpose is to evade taxes.


He didn't say he would give away 99% of his wealth. He said he would use 99% of their Facebook shares to fund their agenda. And he said they would do that with 99% of his shares over their lifetime... if they were 'giving away 99% of their wealth' they could just do that today. As it happens, they can still realize significant returns from those funds in the meantime, and probably end up richer than when they started.

The pattern of manipulative billionaires sheltering their legacies like this is not new; see Rockefeller, Carnegie, Ford, Gates, etc.


What the fuck? You don't even make an argument with this comment. You just bashed the rich.


Zuckerberg is not accountable at the ballot box the same way politicians are.

If it is tax avoidance then, as a commenter above pointed out, he's robbing the treasury of billions of dollars that should be spent by government.

Some of us don't have the luxury of avoiding taxes and some of us deem it highly unethical when people do.


He's not "robbing" the government unless what he's doing is illegal. He's responding to tax incentives that encourage rich people to use their money for non-profit activities. Tax incentives that the government chose to create.


I wonder how many wealthy people are reading all of this criticism of Zuckerberg and are thinking to themselves: "On second thought, I'll just buy another boat." Remember how cool it was when Larry Ellison spent $500 million on that Hawaii island?


Generally speaking I'd say it's far healthier world when we don't think we're all dependent on billionaires to make the world a better place. Also far healthier world when billionaires don't actually believe they're responsible for illuminating the world's path to salvation.

IMO the criticism is warranted, and there is a clear path Zuckerberg could take to quash all of the bad publicity. While he may be surprised people are calling him out, I say good for them. Why let anyone pull wool over your eyes voluntarily?


There are two sides to every transaction.

Someone who owned fairly illiquid Hawaiian land now has $500,000,000. Perhaps they would do something with it.


If it were are tax avoidance scheme, Mr.Zukerberg would have been well served if it was all kept silent from public. For all his flaws, Mr.Zukerberg seems to be a guy who cares, and he will have my benefit of doubt until proven other wise. The vitriolic reaction to his announcement is uncalled for.


You're mixing the meanings of tax avoidance and tax evasion.

Zukerberg is not breaking the law, he's legally structuring his finances to avoid capital gains. The fact that these gaping loopholes in the tax code is combination of incompetence and corruption.


More generally I've never understood why charity is tax free. When I or others to give money to charity that is great and I support that. But why do so many expect they can take from the governments pocket when funding a cause they believe in? Dont get me wrong, I understand 'the logic' to encourage charitable giving this is a net positive.

In my home country charities are often abused by business and individuals. Given increasing sophistication and selfishness of individuals non-profits and charities should be taxed like any other organisation. Ideally real charities would have very low tax rates anyway. They typically distribute income to causes creating expenses against income, basically turning them into very low margin and subsequently low tax business. And those that abuse this structure or hoard income can pay tax like any other business. Little bit controversial I know but I find this tax-free relationship is taken as 'its the way it is' without further thought.


The simple reason, at least in democracies, is that voters want charities to be tax free. If they did not care, you can be damned sure tax-free status would be dropped.

I don't think there is any more complex moral reasoning than this.

I for one would never vote for a party advocating taxing donations. As to what constitutes a charity ... well that is another debate [0]

[0] http://mentalfloss.com/article/18575/ikea-worlds-largest-cha...


You're not the only one: http://www.economist.com/node/21556570


A couple of reasons:

It's better for society if the rich give money to medical research and the like rather than buying yachts and jets so why not encourage it.

If they taxed donations you could achieve the same effect tax wise by say Facebook spending money directly on medical research - $1bn blown on reseach is $1bn less taxable profit. But it's messy that way. The present system's cleaner.


There's no way to know; only time will tell. He either genuinely wants to maximize his charitable contribution to the world, or he just wants to avoid capital gains and estate taxes, and the smart choice of action (that which he has taken) is the same in either case.


I don't think Zuckerberg is trying to avoid estate tax but even if he is and if he's doing it legally, this is something we should complain to the Congress for writing bad tax code.


At issue here is _not_ whether this one instance (Zuck) is a tax coward or a much needed 21st century philanthropist. Instead this is about whether our tax-code can raise tax rates on business-owning millionaires and billionaires to arbitrarily high levels and capture the desired revenue.

Economic historians have documented this type of tax avoidance in previous era of high taxes. When an executive was taxed 90% of his income, his salary was greatly decreased and instead got 2-weeks time on the company's (pre-tax) yacht.

These type of "global charities" are very disturbing at this moment when it is becoming clear that tax rate will need to be increased substantially in the future to pay for our growing deficit. Which means it will become increasingly desirable to be employed or make deals with one of these shell corporations (zero tax), while all the boring but actually essential things like construction will face huge tax burdens.

Ultimately, the big fear is that it will become completely rational to spend more effort trying to game the IRS then it will to do IRL value-add. (see Michael Lewis's piece on Greece in the run-up to '08 to see what this looks like)


It would be pretty strange to tell the IRS that he's discounting the transfers 40% after publicly stating "we receive no tax benefit from transferring our shares."

If you believe in the government's ability to allocate money, you should probably believe in its ability to collect it, too.


Estate tax avoidance scheme? They've got about 60 years before they hit estate tax and giving away 99% of your money is a crap avoidance scheme.


Somehow from what I know of Mark Zuckerberg, he's not exactly looking to sit on all those billions. The motives the article is imputing to him are wrong.


Okay, so now I'd like someone honest to read this whole thread and tell me with a straight face that Hacker News is "full of libertarians", as I read here from time to time.

I mean, there's someone here who doesn't understand why some people try to lower their tax bill by "taking from the government's pocket", and it goes completely unnoticed.

I can't be the only one to find this hilarious?


There probably is a sneaky aspect to all this, but having seen the benefits of private philanthropy up close (to whit: Gates Foundation providing otherwise unaffordable HIV medication in southern Africa) I'd be slow to dismiss outright. It's not ideal, but for the people to whom this matters it makes not a jot of difference.


If it is, good on him. Estate tax is just tax on something that has already been taxed.


The money you use to buy stuff also (usually) pays consumption taxes. Yet that money was income that you've already paid income tax on. Should consumption taxes be abolished?


If it were possible, yes. It is actually a big problem, specially on countries that heavily depend on it (such as Brazil), since the poor can't escape it and it affects them badly. The poor are the ones who pay more taxes proportionally because of that, in Brazil[1], whereas whoever owns a business (small or big) can usually avoid some taxes.

[1] http://noticias.r7.com/record-news/video/populacao-de-baixa-...


Foundation or LLC, when Mark dies only 1% of his wealth will be passed to his kids...If this is not Generosity i don't know which is


> The letter to our daughter works pretty well as comedy, e.g., “Medicine has only been a real science…” (emphasis added).

I'm not sure what the author is trying to say here. He cut out important context. The "..." was "for less than 100 years". While one might quibble with the exact number, Zuckerberg was reasonably in the ballpark.

> It also works pretty well as a dictionary example of “optimism”, with Zuckerberg imagining that a $1 billion annual budget is going to move the needle (NIH spent $31 billion in 2010, according to Wikipedia, and the drug companies keep telling us that they are spending some of their Irish dough on research)

The Gates Foundation spends about $4 billion a year, spread over many different kinds of initiatives. Their health spending is "only" about $1 billion a year, and they move the needle there. I see no reason the Zuckerbergs can't move the needle at $1 billion per year as long as they don't spend in too many disparate areas.

Here's an article from NPR that explains why it can be more effective to do charity and activism through an LLC instead of through a non-profit foundation: http://www.npr.org/2015/12/03/458276386/facebook-founder-to-...

Some excerpts:

    "A foundation itself is not allowed to do what the
    Internal Revenue Code defines as lobbying," he says.
    "If you're trying to achieve a social end through
    advocacy, you're going to find yourself very
    constrained, whereas if you're just paying it out of
    your own pocket if you're a company or an LLC, there
    are really no constraints at all, at least imposed
    by the tax code."

    In a public letter to their newborn daughter, Chan
    and Zuckerberg said about their philanthropic goals,
    "We must participate in policy and advocacy to shape
    debates."
and

    Mollie Cullinane, who runs a law firm that
    specializes in philanthropic giving, says creating
    an LLC instead of a nonprofit looks like a move by
    Chan and Zuckerberg "to get more deeply involved in
    advocacy and promotion of certain causes that other
    charities and foundations can't speak out about as
    loudly."
and

    But beyond politics, there are other ways an LLC
    will give the couple philanthropic flexibility.

    "There's a whole new area opening up, so-called
    impact investing, where you invest in a for-profit
    organization that has a social mission," Brest says.

    So the couple might invest in clean energy
    companies, for example, and could make money off
    those investments. Foundations can do some of that.
    But, Brest says, "you are freer from any
    restrictions if you simply do it through a private
    company."


Someone in the comments section of the blog links to an interesting article w.r.t. your first point:

http://www.nature.com/news/registered-clinical-trials-make-p...

The snark in the original article makes the author sound like a total idiot.

But let's not get in the way of HN's Two Minutes Hate?


Has there ever been a multi-billionaire/millionaire that did the same thing?


[flagged]


We detached this subthread from https://news.ycombinator.com/item?id=10674462 and marked it off-topic.

This is the sort of reflexive hit-meme that people trot out at every opportunity, but it adds no information and leads to no insightful discussion. It's merely a way of being uncharitable, and like most predictable things, is utterly tedious, which means it shouldn't be here.

Those of you who disagree are invited to imagine the world repeating the most misconstruable thing you said when you were 19.


Just because he was an idiot while in college doesn't mean he can't change and do something good.


He was not an idiot, he was smart and manipulative. That's rather the opposite of an idiot. Assuming that he stopped being manipulative now that he's rich would be rather the stupid thing to consider. He's rich now because behaving this way has worked well for him.


>...an idiot while in college...

But "Young people are just smarter" -Mark Zuckerberg [1]

[1]http://venturebeat.com/2007/03/26/start-up-advice-for-entrep...


It's more than saying or doing something stupid. It is peek into a fundamental character trait of that person.


Good point. Why is anyone in prison? We should just let them all run free because we have optimism and faith in their ability to self-reform.


The question is not about a proper punishment for a crime, the question is whether a person still can do a good thing after he previously fucked up. People bring his previous silly actions as if it proves he can't do anything good. It simply doesn't.


Someday his children will read this, along with his "letter". announcing the LLC.

They "trust me"

How can anyone claim that it would be common and understandable for anyone of his age at the time, attending Harvard, to accept all this personal information and then say such a thing?

"...so if you ever need info about anyone at Harvard".

That sounds just a tad anti-social for the founder of a "social network".

And then, of the students who would say something like this upon receiving people's personal life information, how many would you trust later as adults _with all your personal information_? Too late. Already done.

Apparently wealth changes everything. Zuckerberg is now transformed. Trustworthy and benevolent. Or it does not matter; it is irrelevant. Or it matters, but what can we do; what choice do we have?

Maybe believing one of the above makes all those who submit their personal information through his website a little more comfortable.

Cognitive dissonance.


A letter apologizing for his wrongs, announcing that Facebook will no longer collect personal information and that it will exist for users not advertisers, as well as promising to refrain from ever using the word "hacker" again to refer to himself or anyone at Facebook.

"Move fast and break things." Privacy: broken.

Won't fix. Sorry.


Facebook is not, nor has ever been a charity for its users benefit - anyone presuming you can operate a business (or a successful anything) with no cash flow is deluding themselves, advertising is a free and easy way to get cash flow.

The users freely give their personal information to Facebook for the benefits they obtain from it, its well disclosed what Facebook is going to do with that information, and Facebook gives you a modicum of control over how that information is presented to the general public.

I don't know what more people expect.


no, next question.


> The letter is a significant addition to the literature of comparative American victimhood: “Can we truly empower everyone — women, children, underrepresented minorities, immigrants and the unconnected?”

Expect FWD.us and similar outfits to be showered with cash.


$45 billion dollars for me. $0 for the US government. Why did they give me this tax avoidance loophole? Same reasons those "dumb fucks" gave me all their personal information, I guess. It's good to be King.


Wait a second. Mark did not steal his money. It is his money. Hence, he does what he likes with it. If you believe the estate tax department should have his money, let them set up a Facebook project. What is stopping them from creating similar value? Are they really waiting until someone else does it, to leech from him?


That is one truly crazy argument.

You seem to be suggesting there should be no taxes. After all, "it's your money" Quite how government then functions is beyond me, but I'm sure there's some libertarian argument I'm missing here.

I am sure you will disagree though, seeing as you think taxes are "leeching" people's money. I suppose on ethical grounds you don't take advantage of any government services of any kind.


> That is one truly crazy argument.

> You seem to be suggesting there should be no taxes.

I can't stand that our culture is so quick to pin anarchic notions to mental illness.

It's not 'crazy,' it's a totally legitimate worldview, backed by some awesome and smart people throughout history.


Political verbiage is no match to executable technology. If you don't like something, write source code that will make a difference, and if you can't, you lose. That is why the libertarian argument will always win.


Poe's law at work.


You believe the government had no hand in the success Facebook has had?


Causality is something that you prove in repeatable experiments. Where are the repeatable experiments backing your claim?


> Mark did not steal his money

If theft is defined solely by law, then you are correct.

> creating similar value

Facebook does not create value, it merely captures it. I suspect you subscribe to a simplistic economic ideology that does not even recognize the existence of a create vs capture distinction.


> Facebook does not create value, it merely captures it

Do you really mean that literally?

It is a service which some (not all) people do enjoy using, and which connects people in ways they weren't previously connected allowing for new opportunities, and therefore represents value to those people which did not exist before they had access to the service. It has therefore created value for humans in the aggregate, that is an undeniable and objective fact. One person or another's individual opinion of its value in their lives, or the value it ought to have or not have in others' lives, in no way changes this fact.

I don't know what exactly what you mean by the create/capture distinction, and I'd be really interested to hear you elaborate on this point and define those terms.

But at least according to my somewhat-plain-English interpretation of those words, Facebook pretty demonstrably does both. It creates value by providing a service, and captures value (a great deal more, probably, monetarily, if that's even measurable) from the information generated by people (always voluntarily, because they want to: the key fact to keep in mind) using that service. No?


"create value" has to be weighed against the alternative if it weren't there. Very little of value that Facebook does would be missing from the world if Facebook didn't exist. Alternative ways of networking and sharing information would and do exist and Facebook's version isn't adding real value. 99% of the valuable things about Facebook are the user-generated content, not Facebook itself. Facebook's work is primarily curation via how they run their feed algorithm, and they do a generally shitty job at that in terms of value to the users.


Ok. Why are political opinions useless and immaterial? One, because technology always overrules them. What are you going to do against executable technology? Some more political verbiage? Two, because almost nobody is willing to risk their lives and die for that kind of opinions. Ultimately, it will always be the few who do, who will end up running the show. Voting does not count, simply because voting is not valid proof-of-work.


> Facebook does not create value, it merely captures it.

That is not up to any of us to decide. In the meanwhile, the world population has voted with its feet on exactly that subject.

Technology is a meritocracy. Seriously, nobody cares about the ideological manifest of the one or the other communist party. It is technology that runs the world and not any unproductive, imbecile political opinion. Furthermore, technology overrules politics. Time after time, with new technology we bring the political idiots to their knees, and we shall keep doing so.


> Technology is a meritocracy.

You can keep telling yourself that, or you can drop your naive ideology and look at how the world actually works.


He's created one of the largest and most pervasive surveillance systems on Earth--this is where the fortune comes from.


the reason you have no right to say this is that most FB communication and interaction simply wouldn't have happened off of facebook. That's how great it is. People keep in touch with friends, acquaintances turn into friends, who never would have. So I have very little sympathy for your point of view, since the benefits outweigh the fact that all this is (probably) surveilled.

It's not overt either. FB doesn't butt into your social life, you can say whatever you want to each other. you don't have to feel like someone is watching. Do you feel like you're in NK when you're on FB? I sure don't.


Do you feel like you're in NK when you're on FB? I sure don't.

That's kinda the key to effective surveillance: if the target doesn't feel the need to change their behavior, the data collected will be much more useful.

Have you ever seen the sort of targeted advertising dashboards FB has?


Oh man, am I pissed when FB learns something from my current Googling subjects and advertises me this creepily specific stuff. I always report it and ask to hide it, it's super offensive that it would do that. I try to keep FB use restricted to an incognito window for this reason and this doesn't often happen.

But this wasn't what we were talking about, I thought surveillance meant that the conversations you have on FB might be less anonymous than having them in real life - that's what it means to me. Except that the consquences are the same: none. la-de-da.

to turn it right around: "If the target doesn't feel the need to change their behavior, are you really restricting his/her freedom in any way?" Plus, it's not "need to change their behavior". Participating on FB is new behavior.

it's like having a chatty new friend, but who is gossipy. You know what you're getting into when you're talking with them, could still be worth it, and for billions of people including me, it is. I'm much more concerned with what FB shows my friends (i.e. my privacy settings) than some nebulous phantom objection to the fact that it's not all encrypted in a way that is end-to-end between clients, hiding the traffic even from facebook, generating dummy traffic with friends you're not actually talking to etc.

That would be the actual answer to the "surveillance" objection, and I guarantee you that even on this technical forum, the previous paragraph is the first time you even heard of this off-the-wall idea that nobody is suggesting. Stopping FB surveillance is just a non-issue.


https://www.iqt.org/

The rabbit hole goes a long way down from there.

And to answer your question... yes, the government just sits around waiting to leech off of people. Its what they do. Otherwise it would be called a business, not a government.


your argument is seriously that state revenue services should stop collecting taxes and do a startup instead..?




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