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So the practical outcome of that is it keeps more tax money out of the hands of the American public?
by thundergolfer 7y ago
So the practical outcome of that is it keeps more tax money out of the hands of the American public?
- chrischen 7y agoWell he could also not donate it and still keep it out of the hands of the American public?
- thundergolfer 7y agoI think if he doesn't donate it can get taxed as capital gains.
- gnicholas 7y agoOnly if/when he sells.
- gnicholas 7y agoFrom a tax perspective, yes there would be more tax revenue if he gave $1B all this year. But probably the amount was chosen partly because he is doing it in a tax-efficient way. That is, if he gave it all this year, he probably would have given much less. This is a dynamic system, so changing one parameter would cause other parameters to be changed as well.
- djannzjkzxn 7y agoIf he kept the shares until he died, his heirs would have gotten stepped-up basis so there would have been no capital gains anyway.
- gnicholas 7y agoNo capital gains, but yes estate tax (at 40%). Of course, a savvy parent would put pre-IPO stock into a trust, using up some portion of the $5-10 million exemption amount (it's up in the air because some of the Trump tax cuts are not permanent). Millions of dollars in pre-IPO valuation stock turns into tens or hundreds of millions by the time you die. And there are more nuanced (and/or aggressive) strategies that can yield greater results — or at least that's what I remember from my trust and estate law class.
- tripzilch 7y agoDoesn't the tax money go to the current American government first?