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Exactly true, however he's donating STOCK not money. So he's avoiding the taxation on the stock gains that he would have seen, which could easily have been upwa
by _lex 11y ago
Exactly true, however he's donating STOCK not money. So he's avoiding the taxation on the stock gains that he would have seen, which could easily have been upwards of 50%. Then, yes, he can be employed by and can expense costs to his foundation - so that money that he's not being taxed on is still within his control.
However, the bigger deal is that he can use that foundation to wield significant power and to distort public policy to his benefit.
- charlesdm 11y agoFoundations of course, can invest in for profit companies, whose goal it is to generate returns for the foundation. Foundation -> invests in a holding/investment company -> invests in a property company -> invests in a special purpose vehicle that owns a $100m NYC penthouse. Check. Check out Ikea; it's a non profit.
- deleted 11y ago[deleted]
- meatysnapper 11y agoFor other organizations that are split into a for-profit/non-profit, check out Planned Parenthood and the Lance Armstrong Foundation. Genius move, really.
- charlesdm 11y agoJohn Malone is a great example of how understanding taxes really well can help create significant wealth: http://www.bloomberg.com/news/articles/2014-11-03/malone-gained-double-tax-break-in-liberty-address-shift http://www.bloomberg.com/news/articles/2014-11-03/malone-gai...
- deleted 11y ago[deleted]
- mattlutze 11y agoLet's not assume the worst here and consider the intent/effect is to effect influence on public policy toward his philanthropic or otherwise closely held goals. It's possible he may not be Lex Luther, _lex.
- simonebrunozzi 11y agoMy understanding is that stock gains are (in this case) LONG TERM capital gain, and therefore only 20% [1]. [1]: https://en.wikipedia.org/wiki/Capital_gains_tax_in_the_United_States https://en.wikipedia.org/wiki/Capital_gains_tax_in_the_Unite...
- seehafer 11y agoThe number is closer to 33% as long term capital gains are taxed as income in California.
- rdl 11y agoMore. 20% (federal LTCG ) + 3.8% (medicare) + 12.3% (CA) + 1% (CA mental health surtax over $1mm/yr). 37.1% (more like 35% since you can deduct state on federal). vs. 15% and no state tax if you lived in other states before recently. or, 0% up to $10mm gains if you held a stock for 5Y and bought it before 2012.
- charlesdm 11y agoThat's 20% on stock you haven't liquidated. If you own a few hundred million in stock, that's a hefty CASH tax bill you have to pay for gains that haven't materialised.