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Though unlikely the case here, family foundations should always be looked at as a likely source of corruption. You cannot bribe me directly - that would be cau

Though unlikely the case here, family foundations should always be looked at as a likely source of corruption. You cannot bribe me directly - that would be caught. However you can donate money to my family foundation and my kids (or spouse) will draw a large salary from it while doing almost nothing and they do some good for the world so it looks like a charity. Of course the kids/spouse will support me in various ways that all rich kids will. Again, probably not what is happening here, but every time you hear of a family foundation you should ask who they are using it to corruption in some form. Even when it doesn't seem to be you should still look.

aetherson 8d ago
Even very large salaries are probably not a very significant amount of wealth for these people. I think this is a case where "all large numbers look the same." If Warren just directly gave his money to his three children equally, and paid 40% inheritance tax on that money, and then the children each just used 1% of that wealth per year, then they'd each get: 144000000000 * 0.6 / 3 / 100 = $288 million each year. No foundation pays its CEO 10% of that much money. I think we may have to accept that in fact this is a way to give money to charitable causes, not just horde it.
- bluGill 8d ago
  In this case yes. However that is not the case for all charities and so you need to look.
- paleotrope 8d ago
  I wonder if they could even unwind the fortune to pay 40% in cash.
  - aetherson 7d ago
    I believe they wouldn't have to because of the stepped-up-basis, but my point is that even if somehow they were paying the full 40%, it's still an inconceivably large amount of money.
mcdonje 7d ago
Even if that kind of corruption isn't there, these charities are still a net negative for society. Why do the super rich rail against taxes but then donate all of their money to family foundations? There are multiple reasons. Pull on that thread.
aswegs8 5d ago
It's more of a way to secure the fortune. You can't "secure" the personalities of all your offspring. If one of them gets out of line it could have disastrous consequences. Keeping it in a controlled institution boxes them in.

aetherson 8d ago

Even very large salaries are probably not a very significant amount of wealth for these people. I think this is a case where "all large numbers look the same." If Warren just directly gave his money to his three children equally, and paid 40% inheritance tax on that money, and then the children each just used 1% of that wealth per year, then they'd each get: 144000000000 * 0.6 / 3 / 100 = $288 million each year. No foundation pays its CEO 10% of that much money. I think we may have to accept that in fact this is a way to give money to charitable causes, not just horde it.

bluGill 8d ago
In this case yes. However that is not the case for all charities and so you need to look.
paleotrope 8d ago
I wonder if they could even unwind the fortune to pay 40% in cash.
- aetherson 7d ago
  I believe they wouldn't have to because of the stepped-up-basis, but my point is that even if somehow they were paying the full 40%, it's still an inconceivably large amount of money.

mcdonje 7d ago

Even if that kind of corruption isn't there, these charities are still a net negative for society. Why do the super rich rail against taxes but then donate all of their money to family foundations? There are multiple reasons. Pull on that thread.

aswegs8 5d ago

It's more of a way to secure the fortune. You can't "secure" the personalities of all your offspring. If one of them gets out of line it could have disastrous consequences. Keeping it in a controlled institution boxes them in.