Is the new Zuckerberg fake charity an estate tax avoidance scheme?
blogs.law.harvard.edu
blogs.law.harvard.edu
There's a rich guy who founded an organization, ostensibly with the hopes of doing something good with all that money that he owns. Maybe the organization doesn't go anywhere, or maybe he winds up paying less in taxes. Can't we all hope for the other side of the coin -- that he does wind up doing good for the world? Why not wait and see?
Whatever ethical questions may lie in forming a "charity" with an unknown level of veracity, there are also ethical questions in giving the money to an organization that will, without a doubt, surveil, imprison, torture, and murder.
After all, there's absolutely no chance that you are able to choose people to do thankless tasks upon which your life depends (disposing of sewage, supplying potable water, maintaining roads, ...).
Total revenue for the federal government was about $3 trillion in 2014. You don't think that the American people got at least $150 billion in value out of that?
...is today's version of "down with the capitalist dogs; long live the proletariat and glorious socialism!" of eras past.
Global capitalism taken to its extreme is an ideology that promotes a massive transfer of power to private individuals and the dismantling of the state. Libertarianism, in other words. Unfortunately, utopian ideologies have a nasty habit of becoming tyrannical dystopias when put into real-world practice.
Extreme capitalist ideology paints government as cartoonishly hopeless and inefficient, maybe even evil, run by inept bunglers that steal our money and waste it on paperclips and perks for bureaucrats. The solution, they say, is let private for-profit business take over and watch efficiency skyrocket and costs plummet. Sounds wonderful...except it's a hopelessly naive utopian fantasy (or, depending on your outlook, a scam to transfer even more power and wealth to the world's billionaires).
My own view is that unfettered capitalism taken to its logical conclusion will result in a feudal society...or violent revolution.
In other headlines[1], Chick-fil-A switches to antibiotic-free chicken!! Yay, good feelings for Chick-fil-A!! (Fine print - still serving chicken chock full of antibiotics through 2019.)
Instead of honoring people and corporations today for ostensibly, possibly, maybe doing something good in the distant future, let's hold the adoration until the time that they actually do it.
[1] http://www.cnn.com/2014/02/11/health/chick-fil-a-chicken-ant...
If you don't like Chick-fil-A, don't eat there.
If you don't like Facebook, don't use it.
If you don't like the tax code, lobby Congress or do something about it. But don't blame Zuck for being smart within the confines of the law.
But there is: antibiotic agriculture is breeding bacterial resistance, and imposing huge costs on society in the form of impending epidemics of diseases that we once thought were conquered. "I'm sorry your child is dead from staph."
Yeah good luck with that.
I want to believe but this does really look like a PR move / "power fund".
Here is what genuine sounds like:
https://www.youtube.com/watch?v=wug9n5Atk8c
Seriously, after watching that (jump to 3:30 to skip the Stanford rah rah stuff). It is hard to believe that Gates is not all-in on making the world better with this foundation.
Also, the hostility directed at Zuckerberg and Facebook is not "irrational". His company uses the banner of "providing internet access to all" to try to create a stranglehold on how the worlds poorest people get access to information.
That's basically Elliot Carver from 007:Tomorrow Never Dies. In case you haven't seen it and the general concept of a single company having such a massive amount of control over access to information doesn't tip you off: Carver is the bad guy in the movie.
Methinks you are confusing cause and effect.
He's making a big deal to get a lot of publicity out of it. With that alone it's not being done just out of the goodness of his heart.
If Mark Zuckerberg puts his wealth towards the greater good, then that's good, no matter what his reasons are. Why does he get more flack for doing this than for the Walton family giving nothing to charity?
If Mark just wanted to avoid taxes, he would've done so quietly. If he's doing it for his own ego, then that's good: it means he is incentivized to be effective in his charity.
So I don't trust them.
Zuck: Just ask
Zuck: I have over 4,000 emails, pictures, addresses, SNS
[Redacted Friend's Name]: What? How'd you manage that one?
Zuck: People just submitted it.
Zuck: I don't know why.
Zuck: They "trust me"
Zuck: Dumb fucks
Even to this day, depending on who I'm talking to, I say silly things in private - things that aren't representative of who I am or my intentions in the real world.
It's not fair to look at someones private communications and judge them on it. Especially at 18. It's no way to measure a person.
Not that this means anything - I completely agree with you - but there's something 'funny' about it.
We all need to just admit, as you've done, that we all say and do things all the time which would paint us in a very bad light if taken in the wrong context. As an obvious example, there are things that everyone says to friends that they'd never dream of saying to their boss, or parents, or their kids' teacher, or other friends for that matter.
Judging Mark Zuckerberg based on this quote is exactly like that. He's not addressing an audience, he's not giving a considered summary of his world view or philosophy. Rather he's almost certainly joking with a friend, simply saying something abrasive just to give an impression of being confident or alpha etc, the way people sometimes do when they're joking- especially young, relatively unconfident people. We've all done that at some point.
I'm 100% certain if his mother had walked into the room immediately after he'd said this and said 'Mark! Is that what you really think, that all your classmates are.. what did you call them.. dumb fucks?' he would have apologised profusely and corrected himself, clarifying that he was simply joking and said a silly thing in the heat of the moment. Like all teenagers do. Like all humans do.
The prototypical example of this is the FB privacy panel which, last I checked, took more than 100 separate actions to set everything private. (making it very hard and confusing to get privacy). And there's been the incidents where FB then single-handedly undid some or all of those settings without notice.
And then there's FB's participation in PRISM starting in 2009.
he's dedicated enormous energy into destroying privacy and into selling us to others.
As such... I tend to think he'd used more nuanced language now, but I absolutely believe he is a sociopath who has created a cancerous company that makes the world a materially worse place. I absolutely believe that all of his company's actions are aligned with his 18 year old's disrespect for other people.
Some part of him is obviously a good dude... but his company is a fucking travesty.
Facebook is an advertising platform, and the best one at that. It's also a place people post intimate details of their lives for others to see.
I don't know that I find fault in their ability to use that data to better target you with ads or content.
yeah, fuck that logic. you're extremely responsible at 18. moreso at 18 than at 70, if anything.
It is called a Jackie O Trust because Jackie O was famous for making such an organization and left the money to her children as tax free income after she passed away.
Almost every rich family has such a trust in their name.
It is a good PR move because it looks like they are giving back the money, when in secret they only give away a small amount of money and keep the rest in investments to hand down to their children at a future date, etc.
http://www.bloomberg.com/news/articles/2013-09-12/how-wal-ma...
http://www.bloomberg.com/infographics/2013-09-12/how-to-pres...
It is actually using tax loopholes to avoid paying taxes to use such an organization to hide your money in it.
He did not found a charity he founded a LLC: http://www.buzzfeed.com/alexkantrowitz/not-all-of-mark-zucke...
The news media sort of reported it would be a charity but it is not. It is a Jackie O trust.
Bill Gates has his own and tried to invest $2B USD in schools: https://www.washingtonpost.com/news/answer-sheet/wp/2014/06/...
It failed miserably, test scores did not improve, despite trying to build better and high tech schools with smaller classes and personalized learning for each student. The same thinking that went to build Microsoft can't be used to solve socioeconomic problems because that requires a different type of thinking. Students have problems learning due to poverty, family issues, emotional and psychological issues, and other stuff. Spending the money on better schools does not address any of those problems.
Which is why teachers are against standardized testing, because it punishes them for low scores.
It is sort of like working as a programmer and having no support from management or your coworkers, being given projects that others have failed at because of how hard they are, and then being punished when it takes too long to finish or you can't get results.
Teacher unions constantly fighting to kill educational reform has been a recurring theme in most all reform initiatives, including Zuckerberg's.[1] There are numerous documentaries (e.g. Waiting for Superman, The Cartel, etc.) covering attempts at reform and how the one thing the unions will never allow is holding bad teachers accountable.
[1] http://www.businessinsider.com/mark-zuckerbergs-failed-100-m...
The same goes true of Zuck. Remember, this is the guy who not so long ago called his users "dumb fucks". I don't think that criticizing somebody is the same as cynically writing them off. It's not like this guy is a god or something.
Also, Occam's razor. People have a tendency to be selfish.
That's not Occam's razor. People being selfish isn't a less complicated hypothesis than their being altruistic, regardless of how likely it is.
The shitty thing about this is that when Bill Gates (or presumably in the future, Mark Zuckerberg) donates money and interest to a cause, it has value beyond the cash itself.
The benefit of the doubt only applies if there is no evidence either way. We're past that.
Sure, we can hope, but there is absolutely zero reason for such naivety to be the default.
But what do we lose by supporting this move? He's made charitable efforts at improving the world before, and making an announcement puts pressure to follow through.
And so what if it's vain? A person who does a good deed in vain... still did a good deed. It should be encouraged, including through appeals to vanity.
I don't generally go around saying: well at least I can "hope" that when I eat this burger it will give me sustenance rather than poisoning and killing me, because the later has a miniscule chance of happening relative to our everyday experience. Indeed, what a sad and desperate situation we would have to be in to say: "eat the burger, and just hope it doesn't kill you".
So indeed, needing to "hope" , or pointing out that we should "hope" wouldn't be a good thing. It is itself a symptom of a system whereby the necessity of suggesting that we should hope about a bullshit PR release in fact reveals that what we're talking about is prima facie a bullshit PR release, or at least must be assumed to be given our common experience.
Perhaps it is only right that we should not expect or place value on people "hoping", but suggest that we give praise to people, Mr Z or otherwise, when they actually do something, not when they put out a sappy marketing piece about "we're totally gonna do something 'cause luv".
Facebook already puts out motherhood statements regarding say, internet access to poor people, that myself and others pretty much deem thinly veiled self-serving bullshit.
So if anything, we should be grateful that not everyone is taken in by PR, and just say that if there is any basis to Mr. Z's philanthropic claims, then extraordinary claims require extraordinary evidence, and when it is forthcoming, he will be given credit.
They bring down others to prop themselves up.
And simplify the world because it's easier.
What would be good is if some sort of forum could filter these simplistic cliches out and push people towards a more productive point of view.
Why believe a company like this ? Or the man at his head ? ( He has absolute control over FB so any decision made is under his control/responsibility. )
One way to look at this is that Zuckerberg just robbed the treasury of $45B. Part of that would have come in through capital gains taxes and the rest through the estate tax.
What they do with that money is up to them, not the state. It's a pretty sweeping end run around the taxation system.
Maybe we'll get lucky and he'll use the money to good end like Gates is doing. And maybe not.
This is a heck of a tax code we've got, it's trickle down on a grand scale.
reply
The tax code works because it was written by people who had huge amounts of wealth and were pissed that the federal government (the People of the U.S.) created an income tax.
No other developed country has such crazy laws regarding charity donations as the U.S.
So, it's probably a better idea to approach it with a cynical perspective instead of an optimistic (naive?) one. It could turn out to not be estate-tax evasion... however it seems unlikely.
Wrong. France has the "Association Loi 1901" law and it's pretty much the same thing, a money laundering scheme for most of the organizations benefiting from it - most of the time politicians using public money to finance such organizations where they put their friends and families in charge.
This kind of things has no borders.
You can donate to military organizations that fund warfare directly?
Given that the US government wastes so much via corrupt deals, inefficiencies, insane surveillance, and absurd military spending- I would favor Zuckerberg directing the fund.
Wikipedia says the military is 17% of expenditures: https://en.wikipedia.org/wiki/Expenditures_in_the_United_Sta...
This may or may not constitute a lot, depending on who you are.
A lot is an interesting question, especially given this (https://en.wikipedia.org/wiki/List_of_countries_by_military_...) which if you sort by percentage of GDP puts the US below Russia.
Is it that surprising that the country with far and away the highest GDP has the highest military spending in real dollars?
For example, iirc, a significant portion of NASA's budget is for military applications - spy satellites and such. Similarly, the DoD budget doesn't consider veteran's benefits owed to former soldiers, which is a large portion of the long-term obligations comprising the national debt. It also leaves out most of the national security complex (DHS, NSA, FBI), military applications in the Department of Energy, and so on.[1]
[1] https://en.wikipedia.org/wiki/Military_budget_of_the_United_...
I'm cobbling together some more data points here. They aren't all for the same year, but are close to recent.
- Veterans Affairs: ~160B [0]
- DHS: ~65B [1]
- "non-military intelligence spending" (I assume including a solid chunk of NSA and CIA): ~55B [2]
- FBI: ~8B [3]
- retirement from Treasury (for service before 1984. The reference is interesting!) ~8B [4]
The Project On Government Oversight has a similar table [5] that includes some of my items, some additional items, and excludes some of mine. It reaches a $1 trillion "National Security" budget, which shakes out to about 28% of spending.
Thanks for the linking and push to keep digging! The "Military budget and total US federal spending" section of the article linked in the parent was a good jumping off point for me, as well.
[0]: https://en.wikipedia.org/wiki/United_States_Department_of_Ve... [1]: http://www.dhs.gov/sites/default/files/publications/FY_2016_... [2]: http://www.usnews.com/news/articles/2015/02/02/black-budget-... [3]: http://www.justice.gov/sites/default/files/jmd/legacy/2013/1... [4]: http://www.rand.org/pubs/research_briefs/RB3005/index1.html [5]: http://www.pogo.org/our-work/straus-military-reform-project/...
EDIT: formatting
There is something very troubling about the idea that the more successful/valuable your creation becomes, the less entitled you are to invest the fruit of your success into your next idea.
If you are an artist so good that your paintings are worth $1M each, should you get to have them? Or should someone walk in your door and say "whoa there, you have too much now, we're taking your paintings until you have the same amount of wealth as the $75k/year guy"?
If you paint million dollar paintings and leave them in your studio, I guarantee you the IRS will not knock on your door and say "you have too many paintings now, we're going to take them now".
If you sell those paintings, and make an INCOME, the IRS will expect you to pay INCOME TAX.
Seriously. How is the basic concept of taxes so hard to understand?
I'm not opposed to taxes but I am opposed to the idea that taxes should equalize everyone's wealth and that all big investment should come from the government.
A couple thought experiments:
1) If public sector spending was a good vehicle for increasing the public welfare, why don't people donate money to the USFG over other charities? Surely the Effective Altruism movement would be very interested if this were the case.
2) In 2015, the USFG spent $229 Billion on interest on all of the debts it owes, over 6% of its total budget. What makes you think paying off interest of the bad decisions of the legislative branch takes priority over any good-will private sector philanthropy, no matter how ego-fueled?
And no experience in medicine, famine relief, climate science or any of a hundred other areas.
And let's remember that plenty of billionaires are climate change deniers, sitting at the center of dysfunctional corporate hierarchies full of infighting, posturing, and suspect expense accounts.
Sure, Bill Gates didn't start off with that experience. But from what I have seen of the foundation, I believe they are more effective in bettering the world, dollar for dollar, than the US Government.
Mark, for example, was born, lived, grew up, went to school, started a business, etc, etc in the US and benefited from all of the things the US offers. You owe a lot to your government, and subsequently the 'tax payers', than you statement seems to suggest. Also the idea that Mark deserves all of his money because he earned it is also false. There are millions of people that have worked harder to succeed in life than Mark. Mark just got lucky. I don't mean to diminish his accomplishments, but luck plays a large role with any individuals success. That is one of the founding reasons for proper wealth redistribution.
When I was younger I had the naive opinion that my successes were my own doing. As I got older my opinion changed. Yes, I had something to do with it, absolutely. But a lot of it was being the right person in the right place at the right time.
There is a reason that I log in as luckydude.
Mark did receive extra benefits, he came from a family that was at the very least middle class or even at the very least American. This put him at a greater advantage then most of the rest of the country/world, an advantage he never earned from hard-work. It was just luck.
How is that "fair", well its not and the world is not "fair". That's why we have taxes, with the hopes they preform some for of wealth redistribution. Sadly wealth redistribution in the US is frowned upon and often not very well done.
Mark did receive extra benefits, he came from a family that was at the very least middle class or even at the very least American. This put him at a greater advantage then most of the rest of the country/world, an advantage he never earned from hard-work. It was just luck.
How is that "fair", well its not and the world is not "fair". That's why we have taxes, with the hopes they preform some for of wealth redistribution. Sadly wealth redistribution in the US is frowned upon and often not very well done.
Out of nothing? Would Zuckerburg been able to create Facebook if he was born and raised to subsistence farmers in Afghanistan, and lived his adult life in Sheberghan?
The fact is, people living in advanced nations have had huge investments made in them by their communities/nations in the form of clean water, schools, roads, rule of law and a thousand other things. Citizen's are morally obligated to pay a fair amount of tax, and because Zuckerburg has been widely successful, he should contribute much more that the average joe, even if he doesn't consume enough for it to be "fair".
This is a false statement. I applaud people who succeed in their businesses but accruation of lots of capital to a few people is not only due to them but due to the existing society around them. Infrastructure which facilitates logistics and enables a pool of workforce, stable civil society, etc. Not to talk about the economic system which makes financial transactions cheap and predictable.
If you don't like the idea of redistribution, let's think it like this: from the point of view of personal wealth, the economy is like a giant casino where the games are more complicated but most people actually win - and some people win a lot. Taxes can be thought as a fee for the right to participate in the fun and games.
The linked article seems to suggest that Zuckerberg is trying to take advantage of the system by gaining tax-exempt status while effectively _not_ making charitable gifts, that he is somehow trying to pass everything to the child while taking advantage of tax-exempt status of a charitable organization. I'm skeptical both that his intent is to try to do this, and that there is any scheme that could legally accomplish this.
On a different, but related, note, if I were a parent with $40Bn (or $30Bn, $20Bn, $10Bn, or even $1Bn) I would certainly avoid any plan where the bulk of my estate was to be left to my child. Having that much money is a big responsibility, and it's not something that's likely to add to a person's quality of life. Quite the contrary, it's likely a hindrance, not something I would want to saddle my child with. At most, leave them some large amount ($5M, $10M, $20M, $50M?), something basically guaranteed to make them a wealthy person who doesn't need to worry about money, but hopefully not enough to require that responsible management of their fortune be a main focus of their life. (I realize there are moral implications of having that much money for anyone who has even $10M -- perhaps even $1M -- but when the amounts get astronomical, say to hundreds of millions or more, the moral responsibility really does -- or should -- become almost overwhelming. Not a burden I'd want to put on my child.)
I might sound like a sucker, but that's just always been my thought on it. My mother once said something to me like that as a kid and I've applied it donating.
Also, notice that you're not somehow "getting something back" from other taxpayers in this scenario. You're just lowering your tax bill.
The historical reasons assume that many everyday community efforts (feeding the hungry, sheltering the homeless, abused women and children, planting trees, sheltering stray animals) is better done (and financed) at community level by community efforts rather than by central government and sending money to Washington D.C.
I don't understand how this is considered tax avoidance? It's not like you get more money this way, you just get to give slightly more to charity than you might otherwise, which is the point of the deduction.
With charitable giving you can avoid taxes but still retain exactly the same after-tax income (assuming that you were going to gift to charity regardless of whether you got deduction or not). That is, you can gift $100 to charity, deduct the gift, and so avoid (say) $30 in tax. In this case the gift to charity effectively results in you having $100 less than before. Or, for same net result to you (minus $100), you could gift (after-tax) dollars to charity, say $70, and pay the $30 in taxes that you avoided in previous scenario. Only in second case you ended up giving only $70 to charity, because $30 goes to government. In first case you gave all of the $100 outlay to charity, avoided the $30 tax.
The estate planning part is more complex, I'm not qualified to answer that, but even in that article the linked option basically talks about how you can get a 40% discount on the value, but the estate tax basically kicks in regardless once you transfer LLC shares to your kids.
So it's not quite as cut-and-dried as saying, "Zuckerberg just robbed the treasury of $45b"
If any of the shares the LLC holds are liquidated by the LLC or granted to for-profits, situations where the "other reasons to create the LLC" are in effect, capital gains tax WILL be owed.
The LLC is as if he held the shares personally, when it comes to capital gains.
The estate situation is very different, not cut and dry, and that's what is being discussed in this article.
http://www.nytimes.com/2015/12/04/business/dealbook/how-mark...
Also, more broadly, when you see a "sweeping end run around the taxation system", it may be instructive to consider why everyone else doesn't just do the same. Legal tax avoidance techniques are not secrets.
When your upside on doing fancy tax maneuvers is several billion, you can afford IRS lawsuits. And you can afford the initial time for a lawyer to set this all up.
Average people are using Turbo Tax for yearly taxes and relying on common law to handle their estate, because that's all they can afford.
That's how property works, you know.
Hopefully this represents a step away from compulsory taxation as a society.
Briefly: if you pare Government back to core functions, you don't need much money. In New Zealand, we (meaning the Libertarianz) estimated it at around $2,500 / working adult / year. That (back at the turn of the 21st century) would get you courts, police, Parliament, defense, embassies and the glue to run it all.
Then you need a way of raising the money. Probably, most working people can afford $2,500 per year to keep civilisation running, especially if they're not paying any other taxes. Maybe a poll tax? Seems reasonable that those paying also do the voting. Could simply solicit donations, or maybe run a lottery.
But no: you couldn't run a socialist country that way. Which is sort of the point :)
No, what we need is to trim down the fat that your liberal arts degree decide to fluff in there for the sake of your ego.
Why not assume the best? Zuckerberg said he planned to give away 99% of his wealth to help other people. That's a good thing. Why criticize him now? If he ends up not doing it, criticize him then. If all he was doing was trying to avoid some estate taxes, he could have done that without any announcement at all, certainly drawing less scrutiny.
Scrutiny is important here, because the IRS could disallow the application of the LLC estate planning loophole here just by saying so. The 40% discount for non-management shares is an accounting judgement, not a law, and not one the IRS need accept if it believes the sole purpose is to evade taxes.
The pattern of manipulative billionaires sheltering their legacies like this is not new; see Rockefeller, Carnegie, Ford, Gates, etc.
If it is tax avoidance then, as a commenter above pointed out, he's robbing the treasury of billions of dollars that should be spent by government.
Some of us don't have the luxury of avoiding taxes and some of us deem it highly unethical when people do.
Someone who owned fairly illiquid Hawaiian land now has $500,000,000. Perhaps they would do something with it.
IMO the criticism is warranted, and there is a clear path Zuckerberg could take to quash all of the bad publicity. While he may be surprised people are calling him out, I say good for them. Why let anyone pull wool over your eyes voluntarily?
Zukerberg is not breaking the law, he's legally structuring his finances to avoid capital gains. The fact that these gaping loopholes in the tax code is combination of incompetence and corruption.
In my home country charities are often abused by business and individuals. Given increasing sophistication and selfishness of individuals non-profits and charities should be taxed like any other organisation. Ideally real charities would have very low tax rates anyway. They typically distribute income to causes creating expenses against income, basically turning them into very low margin and subsequently low tax business. And those that abuse this structure or hoard income can pay tax like any other business. Little bit controversial I know but I find this tax-free relationship is taken as 'its the way it is' without further thought.
I don't think there is any more complex moral reasoning than this.
I for one would never vote for a party advocating taxing donations. As to what constitutes a charity ... well that is another debate [0]
[0] http://mentalfloss.com/article/18575/ikea-worlds-largest-cha...
It's better for society if the rich give money to medical research and the like rather than buying yachts and jets so why not encourage it.
If they taxed donations you could achieve the same effect tax wise by say Facebook spending money directly on medical research - $1bn blown on reseach is $1bn less taxable profit. But it's messy that way. The present system's cleaner.
Economic historians have documented this type of tax avoidance in previous era of high taxes. When an executive was taxed 90% of his income, his salary was greatly decreased and instead got 2-weeks time on the company's (pre-tax) yacht.
These type of "global charities" are very disturbing at this moment when it is becoming clear that tax rate will need to be increased substantially in the future to pay for our growing deficit. Which means it will become increasingly desirable to be employed or make deals with one of these shell corporations (zero tax), while all the boring but actually essential things like construction will face huge tax burdens.
Ultimately, the big fear is that it will become completely rational to spend more effort trying to game the IRS then it will to do IRL value-add. (see Michael Lewis's piece on Greece in the run-up to '08 to see what this looks like)
If you believe in the government's ability to allocate money, you should probably believe in its ability to collect it, too.
I mean, there's someone here who doesn't understand why some people try to lower their tax bill by "taking from the government's pocket", and it goes completely unnoticed.
I can't be the only one to find this hilarious?
I'm not sure what the author is trying to say here. He cut out important context. The "..." was "for less than 100 years". While one might quibble with the exact number, Zuckerberg was reasonably in the ballpark.
> It also works pretty well as a dictionary example of “optimism”, with Zuckerberg imagining that a $1 billion annual budget is going to move the needle (NIH spent $31 billion in 2010, according to Wikipedia, and the drug companies keep telling us that they are spending some of their Irish dough on research)
The Gates Foundation spends about $4 billion a year, spread over many different kinds of initiatives. Their health spending is "only" about $1 billion a year, and they move the needle there. I see no reason the Zuckerbergs can't move the needle at $1 billion per year as long as they don't spend in too many disparate areas.
Here's an article from NPR that explains why it can be more effective to do charity and activism through an LLC instead of through a non-profit foundation: http://www.npr.org/2015/12/03/458276386/facebook-founder-to-...
Some excerpts:
"A foundation itself is not allowed to do what the
Internal Revenue Code defines as lobbying," he says.
"If you're trying to achieve a social end through
advocacy, you're going to find yourself very
constrained, whereas if you're just paying it out of
your own pocket if you're a company or an LLC, there
are really no constraints at all, at least imposed
by the tax code."
In a public letter to their newborn daughter, Chan
and Zuckerberg said about their philanthropic goals,
"We must participate in policy and advocacy to shape
debates."
Mollie Cullinane, who runs a law firm that
specializes in philanthropic giving, says creating
an LLC instead of a nonprofit looks like a move by
Chan and Zuckerberg "to get more deeply involved in
advocacy and promotion of certain causes that other
charities and foundations can't speak out about as
loudly."
But beyond politics, there are other ways an LLC
will give the couple philanthropic flexibility.
"There's a whole new area opening up, so-called
impact investing, where you invest in a for-profit
organization that has a social mission," Brest says.
So the couple might invest in clean energy
companies, for example, and could make money off
those investments. Foundations can do some of that.
But, Brest says, "you are freer from any
restrictions if you simply do it through a private
company."http://www.nature.com/news/registered-clinical-trials-make-p...
The snark in the original article makes the author sound like a total idiot.
But let's not get in the way of HN's Two Minutes Hate?
[1] http://noticias.r7.com/record-news/video/populacao-de-baixa-...
"Move fast and break things." Privacy: broken.
Won't fix. Sorry.
The users freely give their personal information to Facebook for the benefits they obtain from it, its well disclosed what Facebook is going to do with that information, and Facebook gives you a modicum of control over how that information is presented to the general public.
I don't know what more people expect.
Expect FWD.us and similar outfits to be showered with cash.
If theft is defined solely by law, then you are correct.
> creating similar value
Facebook does not create value, it merely captures it. I suspect you subscribe to a simplistic economic ideology that does not even recognize the existence of a create vs capture distinction.
That is not up to any of us to decide. In the meanwhile, the world population has voted with its feet on exactly that subject.
Technology is a meritocracy. Seriously, nobody cares about the ideological manifest of the one or the other communist party. It is technology that runs the world and not any unproductive, imbecile political opinion. Furthermore, technology overrules politics. Time after time, with new technology we bring the political idiots to their knees, and we shall keep doing so.
You can keep telling yourself that, or you can drop your naive ideology and look at how the world actually works.
Do you really mean that literally?
It is a service which some (not all) people do enjoy using, and which connects people in ways they weren't previously connected allowing for new opportunities, and therefore represents value to those people which did not exist before they had access to the service. It has therefore created value for humans in the aggregate, that is an undeniable and objective fact. One person or another's individual opinion of its value in their lives, or the value it ought to have or not have in others' lives, in no way changes this fact.
I don't know what exactly what you mean by the create/capture distinction, and I'd be really interested to hear you elaborate on this point and define those terms.
But at least according to my somewhat-plain-English interpretation of those words, Facebook pretty demonstrably does both. It creates value by providing a service, and captures value (a great deal more, probably, monetarily, if that's even measurable) from the information generated by people (always voluntarily, because they want to: the key fact to keep in mind) using that service. No?
You seem to be suggesting there should be no taxes. After all, "it's your money" Quite how government then functions is beyond me, but I'm sure there's some libertarian argument I'm missing here.
I am sure you will disagree though, seeing as you think taxes are "leeching" people's money. I suppose on ethical grounds you don't take advantage of any government services of any kind.
> You seem to be suggesting there should be no taxes.
I can't stand that our culture is so quick to pin anarchic notions to mental illness.
It's not 'crazy,' it's a totally legitimate worldview, backed by some awesome and smart people throughout history.
It's not overt either. FB doesn't butt into your social life, you can say whatever you want to each other. you don't have to feel like someone is watching. Do you feel like you're in NK when you're on FB? I sure don't.
That's kinda the key to effective surveillance: if the target doesn't feel the need to change their behavior, the data collected will be much more useful.
Have you ever seen the sort of targeted advertising dashboards FB has?
But this wasn't what we were talking about, I thought surveillance meant that the conversations you have on FB might be less anonymous than having them in real life - that's what it means to me. Except that the consquences are the same: none. la-de-da.
to turn it right around: "If the target doesn't feel the need to change their behavior, are you really restricting his/her freedom in any way?" Plus, it's not "need to change their behavior". Participating on FB is new behavior.
it's like having a chatty new friend, but who is gossipy. You know what you're getting into when you're talking with them, could still be worth it, and for billions of people including me, it is. I'm much more concerned with what FB shows my friends (i.e. my privacy settings) than some nebulous phantom objection to the fact that it's not all encrypted in a way that is end-to-end between clients, hiding the traffic even from facebook, generating dummy traffic with friends you're not actually talking to etc.
That would be the actual answer to the "surveillance" objection, and I guarantee you that even on this technical forum, the previous paragraph is the first time you even heard of this off-the-wall idea that nobody is suggesting. Stopping FB surveillance is just a non-issue.
The rabbit hole goes a long way down from there.
And to answer your question... yes, the government just sits around waiting to leech off of people. Its what they do. Otherwise it would be called a business, not a government.