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The proper way is a social contract: you set up a charity, get tax breaks, and in return, you're required to spend a certain percentage on charitable causes. Z
by rm_-rf_slash 11y ago
The proper way is a social contract: you set up a charity, get tax breaks, and in return, you're required to spend a certain percentage on charitable causes.
Zuckerburg's pledge aside, if he were to do nothing with his new LLC, he would face no tax penalties and would essentially be moving money from one place to the other with nobody benefiting in any tangible way.
The reason people are upset is because the last 30 years have amounted in an enormous transfer of wealth from the poor and middle class to the very rich. All that wealth - everybody's wealth - was created by the labor of people long dead, all the way down to the first humans to develop agriculture. A staple of any society has been the need to tax wealth creation so public goods can be provided, from national security to a functioning court system.
By dodging taxes (which is what happens when you make a "charity" that isn't structurally obliged to make donations) you are circumventing the social contract and depriving the public of a portion of the profits derived from being a part of that society.
Creating Facebook or any other large company with a big workforce is no excuse to not pay taxes. Those people use roads, water, courts, and require protection from the police and military. That causes additional strain on the system and has to be paid for somehow.
I don't care how he spends his money, but establishing an LLC as a charity is a poor form of philanthropy.
- lgas 11y agoThe proper way is: However he wants. It's his money.
- res0nat0r 11y agoIn addition to that Zuck already dispels the meme that he isn't paying taxes in his post, the LLC will be paying taxes just like everyone else. All of the complaints really are just proxy reasons to complain about Facebook and the guy who founded it. If Warren Buffett did this exact thing last month none of these articles would have been written.
- andzt 11y agoFirst, he's not moving money currently. He's pledged to move a tangible asset to a new entity. Second, if you had read his latest comment or understood how a LLC functions and taxes apply, you would know that the LLC will have to pay taxes on the sale of those assets. Third, any profit the LLC makes from investments in for-profit organizations will also be taxed. In a previous comment I made on charities and trusts, he would be more likely to be avoiding taxes if he did create a charitable remainder trust for his kid. There's an immediate tax benefit, you get to use the yearly distribution any way you see fit, and there's no guarantee the money will ever see a charitable cause.
- dnautics 11y agoCan you please define "social contract"? Because you could also argue that part of the "social contract" is that cops get qualified immunity when they shoot you for any amount of suspicion. it's the price you pay for an orderly society
- patio11 11y agoYou are welcome to continue using the 1985 era FaceBook-created-by-the-labor-of-people-long-dead. It's free. No ads either. For the longer version of this comment, see PG's essay titled Wealth. http://paulgraham.com/wealth.html http://paulgraham.com/wealth.html
- jstalin 11y agoHe's not dodging taxes. Why do people keep repeating this completely false claim?
- Albright 11y ago> All that wealth - everybody's wealth - was created by the labor of people long dead, all the way down to the first humans to develop agriculture. As long as you're making this sort of argument, why stop at agriculture? Or humans, for that matter?