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She donated all of her share ($150m) to charity to boot.
by dmoy 9y ago
She donated all of her share ($150m) to charity to boot.
- Denzel 9y agoFor an extra $30MM in tax write-offs... because clearly she stands to make more taxable income than the $150MM in stock she donated: https://news.ycombinator.com/item?id=10844592 https://news.ycombinator.com/item?id=10844592.
- dantiberian 9y agoI don't quite understand the idea of tax dodging a smaller tax bill by donating a larger amount of money? She had $150mm in stock, and donated it all, avoiding a tax bill of $30mm? If she had paid the tax bill, she would have had net $120mm, but after donating it, she had net $0mm? There must be something I'm missing here. I've seen these kinds of schemes discussed before, but don't understand how they would work.
- Denzel 9y agoTL;DR It looks like she donated $150MM when in actuality she only donated $37.5MM Can you imagine the optics of an active board member, of a multi-billion dollar company, profiting from said company -- she's on the board of -- buying the company she runs? Good grief that reeks. She understood she couldn't take that money in good conscience. So, she got out in front of the optics for a small fee by "donating to charity." (I mean look at the comments here applauding her for donating her shares.) When you donate $150MM in stock, not only do you dodge the $30MM capital-gains tax (at a 20% tax rate), you receive a tax write-off for the full market value of the stock when you donated: $150MM in this case. Which means, in any year, she can take $150MM in income taxed at say 55%, and pay $0 in taxes on it. Much better than the $82.5MM she'd originally owe. And it makes tax planning a lot easier -- you don't have to worry about timing. All in all: $120MM net - $82.5MM write-off = $37.5MM total cost to her for shares she didn't even want -- for good reason. Understand that I don't care. But I would've been more impressed if she had donated those shares to her employees...
- nine_k 9y agoIsn't it how tax incentives work? Effectively she donated a bunch of money to a charity instead of the federal tax fund. Hopefully the charity is more efficient!
- sleepychu 9y agoIt really ought not to be though. I get that the reality is that it is but it irks me greatly that we don't simply tax more heavily and have a social system which works to solve the types of problems that charities aim to solve. Then if you wanted to do "charity work" you'd just work for the government.
- nine_k 9y agoI think it does not work for the same reason Soviet-style government-planned economy does not work. The incentives of private persons and of government officials are unreconcilably different.
- saiya-jin 9y agohate to break it to you, but charities generally consume at least 95% of the budget on organizational management and bureaucracy, and actual help to needy is the remaining <5%. there might be some run more efficiently, but that's the industry average. not even going into details of chaos of said charities during some proper disaster, where they all swarm at said place, uncoordinated, ineffective in costs and human rescue efforts. state is a poor manager of given budget, but sincerely doubt it's as ineffective as this (plus it helps mostly locally so taxes affect taxpayers more directly)
- dragonwriter 9y ago> Which means, in any year, she can take $150MM in income taxed at say 55%, and pay $0 in taxes on it. 55% is greater than the maximum combined federal and state marginal income tax rate on normal income, and no one making that much does it as normal (mainly, labor) rather than long-term capital gains (which pays lower rates) income in the first place, because no one pays that kind of money for labor, you only make it by capital returns, so, no, she can't even in principal, and even if the tax rates were such that she could in principal, she still wouldn't be likely to be able to in practice.
- mongmong 9y agoI don't get this. So you're saying she made more money by donating AND getting a tax refund as opposed to not donating?
- Denzel 9y agoNo, I'm saying the cost to her was $37.5MM, not $150MM. For shares that she couldn't accept in good conscience anyways. Note: She was an active Google board member when they bought her company. That's not how boards are supposed to work generally.
- rdslw 9y agoSo yeah, she got 30m tax reduction and spent 150m. net "loss": 120m. and you consider it bad because she could have chosen paying those 30m taxes and keeping the rest (instead of donating it) ?
- Denzel 9y agoI don't think there was any value judgment in my comments at all. The net "loss" to her was $37.5MM for shares she couldn't even use in good conscience in the first place (think team morale, public optics, etc.) She was an active Google board member when they bought her company. That doesn't exactly look good to the public or to the team.
- celim307 9y agoI don't think you know how tax write offs work... https://youtu.be/XEL65gywwHQ https://youtu.be/XEL65gywwHQ
- Denzel 9y agoYup, $150MM tax write-off. My mistake, I was in a rush.
- oh_sigh 9y agoThat's nice, but let's be honest: She is a billionaire, and will continue to make hundreds of millions, if not billions of dollars during her future tenure at Google. A person of average means donating $500 may be a bigger personal sacrifice than Greene donating $150M.
- gcheong 9y agoThat may be true in terms of personal sacrifice but not in impact.
- Sohcahtoa82 9y agoAre you seriously trying to brush off and dismiss a $150m charity donation?
- obmelvin 9y agooh_sigh, oh, sigh.
- oh_sigh 9y agoPerhaps you can guess the meaning behind my username here.
- Gustomaximus 9y agoI dont know why this is being down-voted. While what she did is great, it is a true point in terms of personal sacrifice. I saw an interview with Bill Gates where he said much the same thing to a comment about his generosity. He pointed out he doesn't sacrifice a single item/experience he wants in life giving away what he does. And a ordinary person that gives a few hundred gives up more than him in terms of what it costs them. Its a valid point as long as it doesn't take away from the fact the other is also generous.
- ingenuous2 9y agoTrue, but how many humans are able to take that perspective? If history has taught me anything, it's that our desires don't end when they are satisfied.