6 ms·

I don't see how this is a problem. He's following the law and organizing his affairs to retain control of the money he earned. You aren't less of a citizen be

by Nrsolis 11y ago

I don't see how this is a problem. He's following the law and organizing his affairs to retain control of the money he earned. You aren't less of a citizen because you try to not pay more tax than you owe. The exemptions for certain types of income are put there because the legislature wants to promote certain activities as beneficial to the public good. Charitable Remainder Trusts are one of those things written into the law. Complain to your lawmakers if you think that's unfair. Seriously. does anyone reading this post think the government is a better steward of their income than they are? If you think so, then donate 100% of your income to the government and live on public assistance. That option is provided on the tax return you sign here in the USA.

littletimmy 11y ago
This sort of mindset only works when rich people are not the ones making laws in the first place. The law is not independent of the rich - they can influence the laws they follow. That's why it is a problem.
- vezzy-fnord 11y ago
  If that is the case, then in order to be consistent, one would have to celebrate subverting the tax laws made by the rich (even if done by one of them).
- drzaiusapelord 11y ago
  and what happens when we let the "poor" make laws? Endless welfare, unaffordable backroom union deals, massive corruption, massive taxation to move money from the uppers to the lowers, etc. Just visit Chicago or Greece to see what happens when the power shifts to the unions instead of companies. Also, 'rich' is often a placeholder for companies. Companies want to be successful. That means compromise in a million different ways as bold moves can lead to bankruptcy, boycotts, competitors coming in and taking your market share, etc. Companies have an incentive to play ball as they want to survive and be competitive. Government, on the other hand, survives by default and doesn't have to be efficient at all. The reality is that good government works when we have all players mobilized and part of the process. Its incredibly cynical to just claim the rich make laws to benefit themselves, especially considering that the US runs on a popular democracy model to the point of directly electing the highest office, which is unheard of in parliamentary democracies. The rich are vastly outnumbered. Perhaps you should consider that a lot of regular people vote in policies that are pro-business because they want jobs and wealth in their area. Not everyone can become a silicon valley hotshot or NYC finance banker. Those 'red state' policies you hate so much bring in employers, jobs, create wealth, etc. We tried communism. Turns out it didnt work. In fact it led to the deaths of 50-100m people and created autocracies, war, political persecution, poverty, and misery on a level unimaginable before. My friends here in Chicago are all looking for new jobs because a couple employers have already left and many are planning on leaving as the tax level and anti-business attitudes here are killing the economy. This is a city of 3m people with a $550b GDP and we have a junk credit rating and no one knows how to pay off these fatcat union pensions. So yeah, be careful what you wish for. When the average guy has political power, he just writes checks for his friends at the cost of the taxpayer and the local economy. Without the business owning class calling some of the shots, there's really no incentive to do anything right as you can just keep dipping into the public treasury and when that runs out just keep raising taxes per the Chicago model. Which inevitably culminates into a Detriot-like bankruptcy.
  - littletimmy 11y ago
    A transfer of wealth from the upper class to the lower class is the price we pay for civilization. No welfare to the poor means they have no incentive not to kill you.
    - Nrsolis 11y ago
      AYFKM? If you kill all the rich people and take their money, who is going to be left to organize businesses or produce the kinds of inventions that benefit society? The "next-richest" people? A society that demonizes its most successful members is a doomed one.
      - littletimmy 11y ago
        Inventions can be made through state grants (a lot of innovation is already funded by state grants like NIH). Who told you rich people finance innovation? A society that demonizes its poorest is a doomed one.
        drzaiusapelord 11y ago
        >state grants like NIH The PhD's, researchers, and managers at Federal organizations make salaries that would classy them as "rich" in this scenario. Just because something is publicly funded doesn't mean its thrifty, efficient, or "for the people." If anything, considering what we know of how governments all over the world work, its more than likely public research and programs are wasteful and corrupt compared to private equivalents.
Spooky23 11y ago
It's a big problem. Maybe not Zuck's application of it, but other applications of this dodge. I think he's a good guy, and that good thing he's doing exposes some of the lesser known tools used by not-so-great folks. You can easily use this sort of operation to launder money for the purposes of doing all sorts of things. Transfer your money to an LLC, get a web of LLCs or shelf corporations and "sell" valuable services between them. If you're a scumbag, in addition to saving on taxes, you can avoid accountability for nasty practices. Slumlords are a great example... many control swaths of cities and use anonymity to hide that fact. So they can do stuff like rig the "prevailing rent" in a area to extract higher public assistance reimbursements, discriminate against people, buy off politicians by giving them sweetheart deals on real estate, etc. If you're a not so philantrophic rich dude, you can also do shady Koch-brothers style political bribery or establish a presence in South Dakota to exploit loopholes that will leave your family without any tax obligation for several generations. If you're real clever, you use the shady political stuff to create more loopholes for yourself.
phillmv 11y ago
>If you think so, then donate 100% of your income to the government and live on public assistance. I've always found these arguments to be poor attempts at a reductio ad absurdum. While some people do take vows of poverty, by and large this is not what's meant by advocates of public institutions. The thing is that there is a large body of services and capital investments that are most efficiently - for both economic and political reasons - conducted by accountable, democratic institutions. The canonical example are roads and firemen but also education and public transit and healthcare and some kinds of housing. We can debate over the legitimacy of particular governance mechanisms (NIMBYs in the Bay!) or political actors in given jurisdictions (State senators in NY!) but by and large in North America people have some sort of say in outcomes that affect them. The problem is precisely that by >following the law and organizing his affairs to retain control of the money he earned his gift is a considerably less selfless act. It's one thing to "eradicate malaria". It's another completely to "try to make the world resemble what Chan Zuckerberg want". You're allowed to do this with your own money, of course. But it's considerably less altruistic of you. If you were anywhere at all already suspicious of his intentions given the product his company has developed, the idea that he will be dedicating billions of dollars towards his own (political) agenda is not exactly heartwarming.
- vezzy-fnord 11y ago
  The thing is that there is a large body of services and capital investments that are most efficiently - for both economic and political reasons - conducted by accountable, democratic institutions. The canonical example are roads and firemen but also education and public transit and healthcare and some kinds of housing. Extremely debatable. That said, public education is such an evident failure that it's doing you a disservice to list it. Alternatives like Sudbury schools tend to be privately or cooperatively owned institutions. (Also, most firefighters are volunteers, who need not be publicly funded.)
  - grhino 11y ago
    Do volunteer firefighters provide their own equipment as well? I could believe that most firefighters are volunteer. I would be surprised to hear that most firefighting was volunteer.
outside1234 11y ago
Its not a problem. But its not a charity act either, which is how he has portrayed it. Its a PR act around charity but really a vehicle to exercise power in both private and charitable arenas. Again that's fine, but call a spade a spade. It plays into the overall narrative on Mark as being slimy and doubletalking about everything.
blocktuw 11y ago
The trope that minimizing your taxes is good and should be encouraged is tired and political. The reasoning that one isn't breaking any rules is like saying it's ok to take the entire bowl of Halloween candy because there aren't any rules against it. It is against the spirit of taxes which pool resources for the greater good of everyone. Everybody has to pay taxes. Some people have the means to avoid paying a fair amount and retain even a higher percentage of their income. The poor pay many direct and indirect taxes which equals a higher percentage of their income than rich.[1] Not saying that the world needs to be fair for everybody, but it's disingenuous to take advantage of public services and resources and say it isn't your responsibility to pay for them in an equitable way. Warrent Buffet understands this and wants it changed. [2] And no meaningful tax reform law has any chance of passing due to gridlock in Congress. People like Zuckerberg are flaunting this fact and daring somebody to close loopholes. [1] http://www.itep.org/whopays/full_report.php http://www.itep.org/whopays/full_report.php [2] http://fee.org/freeman/5-warren-buffetts-federal-tax-rate-is-less-than-his-secretarys/ http://fee.org/freeman/5-warren-buffetts-federal-tax-rate-is...
- refurb 11y ago
  Would you argue that taking advantage of your 401k deduction is unfair to everyone else? How about the mortgage interest tax deduction? Deduction for child care? I'm just curious where you draw the line.
  - DanBC 11y ago
    Tax planning is fine. Tax evasion is illegal. The grey area of tax avoidance - misusing tax laws in ways that were not intended - is not illegal, but not fine. A variety of bizarre corporate structures and dodges are used and the only purpose they serve is to shuffle tax away from government. There's no reason Starbucks has its own coffee bean roasting company that sells its beans at huge price to the Starbucks coffee shops. The only reason it's been structured like that is to funnel tax away from governments where the shops are to the tax haven where the coffee roasting company is. When a London business, selling products in London, to people in London, buys Google ads from the Google London office, paying for those ads from their London bank account to Google's London bank account in GBP the only reason someone in Ireland rubber stamps the paperwork is so Google can -quite legally- avoid tax. These are scumbag moves and they create a lot of hostility.
rmc 11y ago
> Seriously. does anyone reading this post think the government is a better steward of their income than they are? If you think so, then donate 100% of your income to the government and live on public assistance. That option is provided on the tax return you sign here in the USA. Nonsense. I can support the idea of a democratic welfare state, and be opposed to the rich avoiding taxes, without having to give up all my money.
- whatok 11y ago
  Quickly brought to mind: https://en.wikipedia.org/wiki/Skin_in_the_game_(phrase) https://en.wikipedia.org/wiki/Skin_in_the_game_(phrase)
newjersey 11y ago
> Seriously. does anyone reading this post think the government is a better steward of their income than they are? If you think so, then donate 100% of your income to the government and live on public assistance. That option is provided on the tax return you sign here in the USA. I suspect there might be a strawman in here somewhere. Yes, it is OK to do everything you can to try to limit the money you have to pay in taxes. However, so much wealth concentrated among so few people is not very desirable. (I understand that the American public disagrees with me on this.) I think progressive income taxes and estate taxes are very important. I don't think I am arguing for anything outrageous. I guess a nice sound bite/tl;dr would be to say "I want to cap the income tax at half of total income, regardless of how high the income is". I just wish that people with money understood that their efforts to lower taxes for themselves to absurdly low rates is detrimental to stability. I wish they thought beyond this quarter's tax bill.
wpietri 11y ago
> You aren't less of a citizen because you try to not pay more tax than you owe. That is true for some values of "citizen" and "owe", but not others. If you're using the strict definitions of the laws, it's technically true. If by citizen you mean something like, "participant in a community of place" and by "owe" you mean "should fairly pay" then it's also true. But when you mix those, it can easily be false. Being a citizen in that sense is about full participation in the community, and paying is part of that. This matters because of your next mistake: > The exemptions for certain types of income are put there because the legislature wants to promote certain activities as beneficial to the public good. This is manifestly not how laws get made in the US. Many studies indicate that US legislators are much more sensitive to the concerns of the rich than they are to anybody else. And abstract conceptions of "the public good" don't vote, so they're definitely not sensitive to those. > If you think so, then donate 100% of your income to the government and live on public assistance. This is just fatuous. You're arguing with a particularly dumb straw man here. Tax policy is about finding fair ways to pay for collective action and to shape society over the long term. Believing that should work well is not equivalent to your absurd belief that anybody advocating for reasonable tax policy is in favor of the world's dumbest communism.

by Nrsolis 11y ago

littletimmy 11y ago

This sort of mindset only works when rich people are not the ones making laws in the first place. The law is not independent of the rich - they can influence the laws they follow. That's why it is a problem.

vezzy-fnord 11y ago
If that is the case, then in order to be consistent, one would have to celebrate subverting the tax laws made by the rich (even if done by one of them).
drzaiusapelord 11y ago
and what happens when we let the "poor" make laws? Endless welfare, unaffordable backroom union deals, massive corruption, massive taxation to move money from the uppers to the lowers, etc. Just visit Chicago or Greece to see what happens when the power shifts to the unions instead of companies. Also, 'rich' is often a placeholder for companies. Companies want to be successful. That means compromise in a million different ways as bold moves can lead to bankruptcy, boycotts, competitors coming in and taking your market share, etc. Companies have an incentive to play ball as they want to survive and be competitive. Government, on the other hand, survives by default and doesn't have to be efficient at all. The reality is that good government works when we have all players mobilized and part of the process. Its incredibly cynical to just claim the rich make laws to benefit themselves, especially considering that the US runs on a popular democracy model to the point of directly electing the highest office, which is unheard of in parliamentary democracies. The rich are vastly outnumbered. Perhaps you should consider that a lot of regular people vote in policies that are pro-business because they want jobs and wealth in their area. Not everyone can become a silicon valley hotshot or NYC finance banker. Those 'red state' policies you hate so much bring in employers, jobs, create wealth, etc. We tried communism. Turns out it didnt work. In fact it led to the deaths of 50-100m people and created autocracies, war, political persecution, poverty, and misery on a level unimaginable before. My friends here in Chicago are all looking for new jobs because a couple employers have already left and many are planning on leaving as the tax level and anti-business attitudes here are killing the economy. This is a city of 3m people with a $550b GDP and we have a junk credit rating and no one knows how to pay off these fatcat union pensions. So yeah, be careful what you wish for. When the average guy has political power, he just writes checks for his friends at the cost of the taxpayer and the local economy. Without the business owning class calling some of the shots, there's really no incentive to do anything right as you can just keep dipping into the public treasury and when that runs out just keep raising taxes per the Chicago model. Which inevitably culminates into a Detriot-like bankruptcy.
- littletimmy 11y ago
  A transfer of wealth from the upper class to the lower class is the price we pay for civilization. No welfare to the poor means they have no incentive not to kill you.
  - Nrsolis 11y ago
    AYFKM? If you kill all the rich people and take their money, who is going to be left to organize businesses or produce the kinds of inventions that benefit society? The "next-richest" people? A society that demonizes its most successful members is a doomed one.
    - littletimmy 11y ago
      Inventions can be made through state grants (a lot of innovation is already funded by state grants like NIH). Who told you rich people finance innovation? A society that demonizes its poorest is a doomed one.
      - drzaiusapelord 11y ago
        >state grants like NIH The PhD's, researchers, and managers at Federal organizations make salaries that would classy them as "rich" in this scenario. Just because something is publicly funded doesn't mean its thrifty, efficient, or "for the people." If anything, considering what we know of how governments all over the world work, its more than likely public research and programs are wasteful and corrupt compared to private equivalents.

Spooky23 11y ago

It's a big problem. Maybe not Zuck's application of it, but other applications of this dodge. I think he's a good guy, and that good thing he's doing exposes some of the lesser known tools used by not-so-great folks. You can easily use this sort of operation to launder money for the purposes of doing all sorts of things. Transfer your money to an LLC, get a web of LLCs or shelf corporations and "sell" valuable services between them. If you're a scumbag, in addition to saving on taxes, you can avoid accountability for nasty practices. Slumlords are a great example... many control swaths of cities and use anonymity to hide that fact. So they can do stuff like rig the "prevailing rent" in a area to extract higher public assistance reimbursements, discriminate against people, buy off politicians by giving them sweetheart deals on real estate, etc. If you're a not so philantrophic rich dude, you can also do shady Koch-brothers style political bribery or establish a presence in South Dakota to exploit loopholes that will leave your family without any tax obligation for several generations. If you're real clever, you use the shady political stuff to create more loopholes for yourself.

phillmv 11y ago

>If you think so, then donate 100% of your income to the government and live on public assistance. I've always found these arguments to be poor attempts at a reductio ad absurdum. While some people do take vows of poverty, by and large this is not what's meant by advocates of public institutions. The thing is that there is a large body of services and capital investments that are most efficiently - for both economic and political reasons - conducted by accountable, democratic institutions. The canonical example are roads and firemen but also education and public transit and healthcare and some kinds of housing. We can debate over the legitimacy of particular governance mechanisms (NIMBYs in the Bay!) or political actors in given jurisdictions (State senators in NY!) but by and large in North America people have some sort of say in outcomes that affect them. The problem is precisely that by >following the law and organizing his affairs to retain control of the money he earned his gift is a considerably less selfless act. It's one thing to "eradicate malaria". It's another completely to "try to make the world resemble what Chan Zuckerberg want". You're allowed to do this with your own money, of course. But it's considerably less altruistic of you. If you were anywhere at all already suspicious of his intentions given the product his company has developed, the idea that he will be dedicating billions of dollars towards his own (political) agenda is not exactly heartwarming.

vezzy-fnord 11y ago
The thing is that there is a large body of services and capital investments that are most efficiently - for both economic and political reasons - conducted by accountable, democratic institutions. The canonical example are roads and firemen but also education and public transit and healthcare and some kinds of housing. Extremely debatable. That said, public education is such an evident failure that it's doing you a disservice to list it. Alternatives like Sudbury schools tend to be privately or cooperatively owned institutions. (Also, most firefighters are volunteers, who need not be publicly funded.)
- grhino 11y ago
  Do volunteer firefighters provide their own equipment as well? I could believe that most firefighters are volunteer. I would be surprised to hear that most firefighting was volunteer.

outside1234 11y ago

Its not a problem. But its not a charity act either, which is how he has portrayed it. Its a PR act around charity but really a vehicle to exercise power in both private and charitable arenas. Again that's fine, but call a spade a spade. It plays into the overall narrative on Mark as being slimy and doubletalking about everything.

blocktuw 11y ago

The trope that minimizing your taxes is good and should be encouraged is tired and political. The reasoning that one isn't breaking any rules is like saying it's ok to take the entire bowl of Halloween candy because there aren't any rules against it. It is against the spirit of taxes which pool resources for the greater good of everyone. Everybody has to pay taxes. Some people have the means to avoid paying a fair amount and retain even a higher percentage of their income. The poor pay many direct and indirect taxes which equals a higher percentage of their income than rich.[1] Not saying that the world needs to be fair for everybody, but it's disingenuous to take advantage of public services and resources and say it isn't your responsibility to pay for them in an equitable way. Warrent Buffet understands this and wants it changed. [2] And no meaningful tax reform law has any chance of passing due to gridlock in Congress. People like Zuckerberg are flaunting this fact and daring somebody to close loopholes. [1] http://www.itep.org/whopays/full_report.php http://www.itep.org/whopays/full_report.php [2] http://fee.org/freeman/5-warren-buffetts-federal-tax-rate-is-less-than-his-secretarys/ http://fee.org/freeman/5-warren-buffetts-federal-tax-rate-is...

refurb 11y ago
Would you argue that taking advantage of your 401k deduction is unfair to everyone else? How about the mortgage interest tax deduction? Deduction for child care? I'm just curious where you draw the line.
- DanBC 11y ago
  Tax planning is fine. Tax evasion is illegal. The grey area of tax avoidance - misusing tax laws in ways that were not intended - is not illegal, but not fine. A variety of bizarre corporate structures and dodges are used and the only purpose they serve is to shuffle tax away from government. There's no reason Starbucks has its own coffee bean roasting company that sells its beans at huge price to the Starbucks coffee shops. The only reason it's been structured like that is to funnel tax away from governments where the shops are to the tax haven where the coffee roasting company is. When a London business, selling products in London, to people in London, buys Google ads from the Google London office, paying for those ads from their London bank account to Google's London bank account in GBP the only reason someone in Ireland rubber stamps the paperwork is so Google can -quite legally- avoid tax. These are scumbag moves and they create a lot of hostility.

rmc 11y ago

whatok 11y ago
Quickly brought to mind: https://en.wikipedia.org/wiki/Skin_in_the_game_(phrase) https://en.wikipedia.org/wiki/Skin_in_the_game_(phrase)

newjersey 11y ago

> Seriously. does anyone reading this post think the government is a better steward of their income than they are? If you think so, then donate 100% of your income to the government and live on public assistance. That option is provided on the tax return you sign here in the USA. I suspect there might be a strawman in here somewhere. Yes, it is OK to do everything you can to try to limit the money you have to pay in taxes. However, so much wealth concentrated among so few people is not very desirable. (I understand that the American public disagrees with me on this.) I think progressive income taxes and estate taxes are very important. I don't think I am arguing for anything outrageous. I guess a nice sound bite/tl;dr would be to say "I want to cap the income tax at half of total income, regardless of how high the income is". I just wish that people with money understood that their efforts to lower taxes for themselves to absurdly low rates is detrimental to stability. I wish they thought beyond this quarter's tax bill.

wpietri 11y ago

> You aren't less of a citizen because you try to not pay more tax than you owe. That is true for some values of "citizen" and "owe", but not others. If you're using the strict definitions of the laws, it's technically true. If by citizen you mean something like, "participant in a community of place" and by "owe" you mean "should fairly pay" then it's also true. But when you mix those, it can easily be false. Being a citizen in that sense is about full participation in the community, and paying is part of that. This matters because of your next mistake: > The exemptions for certain types of income are put there because the legislature wants to promote certain activities as beneficial to the public good. This is manifestly not how laws get made in the US. Many studies indicate that US legislators are much more sensitive to the concerns of the rich than they are to anybody else. And abstract conceptions of "the public good" don't vote, so they're definitely not sensitive to those. > If you think so, then donate 100% of your income to the government and live on public assistance. This is just fatuous. You're arguing with a particularly dumb straw man here. Tax policy is about finding fair ways to pay for collective action and to shape society over the long term. Believing that should work well is not equivalent to your absurd belief that anybody advocating for reasonable tax policy is in favor of the world's dumbest communism.