3 ms·

Err, I hate to be the one to break it to you but those billionaires pledging to donate their wealth? It's just a tax dodge. They're moving their money into foun

by ebbv 10y ago

Err, I hate to be the one to break it to you but those billionaires pledging to donate their wealth? It's just a tax dodge. They're moving their money into foundations before we pass stronger tax laws than we have at the moment. And it allows their families to continue to live off of (via salaries for running the foundations) the wealth for generations to come. Which is not to say they don't do some good work with it, the Bill and Melinda Gates foundation has done some great work fighting malaria and bringing fresh water to poor communities. But these same foundations also do a lot of other work, like furthering charter schools which benefits wealthy families to the detriment of poor communities here in the US.

Klathmon 10y ago
Personally I'd rather give billionaires more reasons donate their money than less. If setting up a foundation that actually helps a ton of people means that their families can get a fraction of that money back, that's fine with me... Unless you are implying that they are getting more money back through the salaries than they are in donating. In which case i'd love to see a source.
- drawkbox 10y ago
  Similar reason that CEOs take the $1 salary, purely stock growth mixed with lower taxes and more under the radar to lower their taxable income [1] Most rich people that are mega wealthy pay minimal tax by taking loans against their foundations/trusts. As you know there are no taxes on loans but a percentage, that may or may not just go right back to them. They essentially use the trusts/loans and the fact that they are essentially zero risk to take out other loans that get interest rates below inflation, sometimes very minimal interest[2]. That is essentially free money. Should the interest rates ever adjust if not fixed they can buy outright quickly. The same thing happens with trusts/foundations. They have this hoarded money sitting there as a base they can leverage. Yes it is nice some will go to others when they pass but ultimately they would not do this if they could not use this leverage advantage. It is essentially a hack on lowering or even completely removing any taxable income as long as you have it. [1] http://www.cnbc.com/id/46236916 http://www.cnbc.com/id/46236916 [2] http://www.wsj.com/articles/SB10001424127887323527004579079162826690296 http://www.wsj.com/articles/SB100014241278873235270045790791...

by ebbv 10y ago

Klathmon 10y ago

Personally I'd rather give billionaires more reasons donate their money than less. If setting up a foundation that actually helps a ton of people means that their families can get a fraction of that money back, that's fine with me... Unless you are implying that they are getting more money back through the salaries than they are in donating. In which case i'd love to see a source.

drawkbox 10y ago
Similar reason that CEOs take the $1 salary, purely stock growth mixed with lower taxes and more under the radar to lower their taxable income [1] Most rich people that are mega wealthy pay minimal tax by taking loans against their foundations/trusts. As you know there are no taxes on loans but a percentage, that may or may not just go right back to them. They essentially use the trusts/loans and the fact that they are essentially zero risk to take out other loans that get interest rates below inflation, sometimes very minimal interest[2]. That is essentially free money. Should the interest rates ever adjust if not fixed they can buy outright quickly. The same thing happens with trusts/foundations. They have this hoarded money sitting there as a base they can leverage. Yes it is nice some will go to others when they pass but ultimately they would not do this if they could not use this leverage advantage. It is essentially a hack on lowering or even completely removing any taxable income as long as you have it. [1] http://www.cnbc.com/id/46236916 http://www.cnbc.com/id/46236916 [2] http://www.wsj.com/articles/SB10001424127887323527004579079162826690296 http://www.wsj.com/articles/SB100014241278873235270045790791...