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It’s not really a “loophole,” it’s a standard way to give away absurd sums of money. Have you ever tried to donate billions of dollars? It’s actually extremely

It’s not really a “loophole,” it’s a standard way to give away absurd sums of money. Have you ever tried to donate billions of dollars? It’s actually extremely difficult. You have to find causes you’re passionate about/things that society needs, find the correct charities to give the money to, make sure your money actually goes towards the thing they say it will (this is difficult), and then figure out how much you can actually donate (you can’t just give N dollars to company Y. They’ve got zero experience managing that much money, and no way to scale into doing it efficiently.) What happens then is you have $100b to donate, and mostly only do it $10m at a time or less. Warren’s kids are old now. They’ve all been donating money for YEARS (it’s a mandatory part of their trust). So yeah, you receive tax benefits by transferring shares to a foundation you also control, but that money is now earmarked for charity. It doesn’t flow both ways, and the laws on this are very tight (bad actors will find a way, but what’s new?).

infecto 8d ago
Sure that is the typical way to donate your wealth but there are many other ways than giving it with control to your children. I have no judgement but doing it this way is a nice way to move money within your family. Everyone does it different and I have no judgement but you could just as easily pick a quorum of folks to do the job with a very explicit timeline. Charitable donations are quite broad in the US. So sure lots of wealthy folk don’t this way but not everyone!
- ndriscoll 8d ago
  Can you just as easily pick a quorum of folks? It seems to me that no matter what, you're going to have to choose people you know and be accused of nepotism because those are the people you can actually assess, and in the case of children, hopefully raise/influence to be on the same page as you. You could always donate it to the US government, but then it'll be used to go start some wars, so that won't work. You could put it in some weird trust where random people can democratically decide what to do with it, but all you have to do is look at the government to see how good of decisions that leads to. So truly what's the alternative?
  - infecto 8d ago
    Easy is relative but someone in his position with decades of experience working with talented individuals, yes. Nothing is perfect but I have seen other foundations structured where it’s a mixture of descendants and leaders that worked with the individuals. We are going to be picking at hairs though since this is all anecdotal and we don’t know how it will play out. Some of kids foundation work has been a bit self-serving but it’s there money to spend. It could also just as easily be that the 3 kids are different enough that requiring all three to agree prevents most of the opportunity.
mvc 8d ago
If it's so difficult, maybe they could take the easy option and, you know, properly fund the government to build the shared infrastructure on which we all rely by paying tax proportional to their wealth.
- macintux 8d ago
  https://www.investopedia.com/warren-buffett-paid-billions-to-the-irs-and-says-it-s-still-not-enough-why-it-matters-for-your-tax-bill-11950444 https://www.investopedia.com/warren-buffett-paid-billions-to...
- dsl 8d ago
  Warren Buffet made the largest single tax payment in US history last year. He doesn't play any games.
- s1artibartfast 8d ago
  You mean fund ICE and build some more concentration camps? Approximately 1% of the federal budget is infrastructure. There are huge advantages to donating to a charity that actually does something productive instead of the federal waste machine.
  - soraminazuki 7d ago
    Or maybe, just maybe, a system that doesn't create massive concentration of wealth won't try to divert people's focus by pitting people against each other and building concentration camps. Governments aren't fundamentally wasteful. In fact, an effective government is an absolute requirement for functioning healthcare, fair wages, consumer protection, and actual public safety that protects all people equally. This isn't to diminish all the good things charities have done, but charities are fundamentally band-aid solutions to a dysfunctional society. Leaving welfare at the mercy of wealthy individuals as the wealth gap keeps getting bigger and bigger is a losing strategy. It shouldn't be the state of things people should be aiming for.
    - s1artibartfast 7d ago

infecto 8d ago

Sure that is the typical way to donate your wealth but there are many other ways than giving it with control to your children. I have no judgement but doing it this way is a nice way to move money within your family. Everyone does it different and I have no judgement but you could just as easily pick a quorum of folks to do the job with a very explicit timeline. Charitable donations are quite broad in the US. So sure lots of wealthy folk don’t this way but not everyone!

ndriscoll 8d ago
Can you just as easily pick a quorum of folks? It seems to me that no matter what, you're going to have to choose people you know and be accused of nepotism because those are the people you can actually assess, and in the case of children, hopefully raise/influence to be on the same page as you. You could always donate it to the US government, but then it'll be used to go start some wars, so that won't work. You could put it in some weird trust where random people can democratically decide what to do with it, but all you have to do is look at the government to see how good of decisions that leads to. So truly what's the alternative?
- infecto 8d ago
  Easy is relative but someone in his position with decades of experience working with talented individuals, yes. Nothing is perfect but I have seen other foundations structured where it’s a mixture of descendants and leaders that worked with the individuals. We are going to be picking at hairs though since this is all anecdotal and we don’t know how it will play out. Some of kids foundation work has been a bit self-serving but it’s there money to spend. It could also just as easily be that the 3 kids are different enough that requiring all three to agree prevents most of the opportunity.

mvc 8d ago

If it's so difficult, maybe they could take the easy option and, you know, properly fund the government to build the shared infrastructure on which we all rely by paying tax proportional to their wealth.

macintux 8d ago
https://www.investopedia.com/warren-buffett-paid-billions-to-the-irs-and-says-it-s-still-not-enough-why-it-matters-for-your-tax-bill-11950444 https://www.investopedia.com/warren-buffett-paid-billions-to...
dsl 8d ago
Warren Buffet made the largest single tax payment in US history last year. He doesn't play any games.
s1artibartfast 8d ago
You mean fund ICE and build some more concentration camps? Approximately 1% of the federal budget is infrastructure. There are huge advantages to donating to a charity that actually does something productive instead of the federal waste machine.
- soraminazuki 7d ago
  Or maybe, just maybe, a system that doesn't create massive concentration of wealth won't try to divert people's focus by pitting people against each other and building concentration camps. Governments aren't fundamentally wasteful. In fact, an effective government is an absolute requirement for functioning healthcare, fair wages, consumer protection, and actual public safety that protects all people equally. This isn't to diminish all the good things charities have done, but charities are fundamentally band-aid solutions to a dysfunctional society. Leaving welfare at the mercy of wealthy individuals as the wealth gap keeps getting bigger and bigger is a losing strategy. It shouldn't be the state of things people should be aiming for.
  - s1artibartfast 7d ago