Note from Mark Zuckerberg | Hacker News Reader

Note from Mark Zuckerberg

newsroom.fb.com

275 pointseadz272 comments

Regarding:

> Everything we do at Facebook is focused on our mission to make the world more open and connected.

I often find that when I follow Facebook links, I get a login page, requiring me to create an account to see the content.

And not even for Facebook itself, I tried to look at images on Pinterest the other day, and if I followed more than one link, I'd get an overlay requiring me to login via Facebook. The site was almost unusable if I wasn't logged into Facebook.

The only other sites I've visited in a long time, that hide content unless I login, are newspaper sites.

Facebook can only really enforce privacy settings on content by authenticating you, unless the content was shared publicly. That’s pretty benign.

But I abhor requiring Facebook login to merely view non-FB sites. It’s antithetical to Facebook’s stated purpose, and I think they ought to make it a TOS violation.

Or the fact that you can no longer directly save articles from the Facebook iOS app to 3rd party read it later apps like Instapaper.

TripAdvisor does something similar, on the mobile web app you can only view the top 3 reviews and need to download their app to see the rest.

I'm sure some exec thought this would be a great idea to get more downloads, but when I'm out looking for a restaurant I'm not going to waste my time and data waiting for their 112mb (iOS) app to download. I'll just base my decision on the reviews I see or go to one of the many other review sites.

There's an option there for reading the rest of the reviews in the mobile web, but you have to select it again and again on every site you want to read the reviews from.

So, you don't need to download the app, but they make you suffer.

Oh god, TripAdvisor is so horrible now. Even on the desktop, you get shown the first 3 sentences of each review and if you click "More" you get a full-screen popup asking you to login.

At least they're not acting like they're making "a more open and connected world."

Yeah, I too fell over the double-speak in this statement. Facebook is open? I don't think so - or is there some way I can query all my data, ever, personally, and do my own data analysis on my Timeline, and my friends', and so on .. can I export this data (all of it) for use in other systems? Is this portable somewhere? Do I have to use Facebook, or can I just take my data elsewhere .. etc.

The only reason I use Facebook is the only reason I ever bothered to use Windows - because my friends insisted on using it and can't be convinced otherwise, due to their unwillingness to learn new things. It is not a technologically suitable solution to the problem of FOAF-networking, imho. Its socially accepted, only.

You can download all your data[1]. You can also use the API (as an app, not an individual, IIRC) to query whatever else is visible to you. So someone could conceivably create a competing social network and offer an “import all Facebook data” feature, modulo privacy/legal concerns.

[1]: https://www.facebook.com/help/131112897028467/

Nonsense. That thing they offer as download doesn't even have the comments I left on not my posts.

As has been noted: no, you cannot 'dump all your data'. In face Facebook goes out of its way to make sure you don't know everything they know about you .. that is the point entirely.

Try blocking all content not originated from the domain you visited, that is even more fun.

This is a proposed 3:1 stock split which would take the per-share price for Facebook down to the $30s and also give Zuck the ability to donate 2/3rds of his resulting shares without any change to his percentage control of the company.

Seems ideal if you assume he wouldn't donate his shares if he couldn't retain control.

It gives every shareholder the ability to sell 2/3 of shares without any change to their percentage control of the company.

Both of you are wrong... Let's say there are 100 shares, John owns 25 and Mark owns 75. Stock splits 3:1, there are now 300 shares, John owns 75 and Mark owns 225. 2/3 of 225 is 150, if Mark sold 2/3 of that he would not retain his percentage.

Instead what is happening is a new class of stock will be created that is valued differently and has different voting rights.

Actually, you are wrong. FB is doing a 3-1 stock split, but the newly issued shares don't have voting rights. So, in your case, Mark would own 225 shares, but only 75 of those would have voting rights, and 150 would be non-voting. Thus, he could sell the 150 non-voting shares and still retain the same percentage of voting control despite only having 1/3 of the "income" rights.

"Income" that won't be distributed as dividend until he decides so. When he needs some cash he might prefer to increase the CEO compensation package instead. Why share the profits with the rest of the owners?

A couple reasons:

1. Legally, Zuckerberg still bears fiduciary responsibility for all shareholders. If he decided to pay himself all the profits as CEO, he would get sued, and lose. 2. Almost all of Zuckerberg's wealth is tied up in his FB shares. If he starts acting in a way such that other investors don't believe he will support their interests, the value of those shares will go down. It would hurt Zuckerberg a lot more than anyone else.

He can't give himself all the profits, but he can easily raise his compensation from $5mn to $50mn without raising an eyebrow. He can also untie his wealth from fb shares while keeping control, as we have seen.

(Actually it seems the $5mn are security expenses and use of corporate planes... It seems he doesn't really get any compensation beyond the $1 salary? Poor boy...)

Well, no each shareholder would get 3 stocks for every one they have now. But each stock would represent 1/3 of the stake in the company it used to. Sorry for a purely negative comment, just wanted to clarify. If you think about it, if every shareholder could sell, make money, and retain the same percentage ownership, someone on the other end of the deal is paying something for nothing.

Er, that's not how splits work. After the 3:1 split you have described, he would still own exactly the same percentage of Facebook, and any sale would change his percentage of control. Extra ownership is not created from thin air in a split. It's exactly the same proportion of ownership as before, there are just more (quantity of) shares. Two-thirds of post-split shares is identical in value to two-thirds of pre-split shares.

To be clear I'm responding to what you've described, which is not what I understand the announcement to propose (it instead proposes a new voting class).

I admire Zuck wanting to do good for the world, and wanting to sell his FB shares in order to help others, but this still seems like a bad precedent for the financial markets in general. The shareholders are the owners of the company, and the percentage shares they own should represent the percentage influence they should have in the company. It's easy to dismiss "shareholders" as being wealthy capitalists, but in reality, the majority of shares are owned by the middle class, either directly, or indirectly through pension plans and such. The idea that a "ruling elite" can overrule the wishes of company's majority owners, and use the company's resources in any way they want, is conceptually very disturbing. In the long run, it's bound to lead to corruption, nepotism, and abuse of power.

With the erosion of the middle class i'd argue it's more the top 35% - 25% of Americans that own a meaningful number of shares. 63% of Americans don't even have $500 - $1000 on hand[1].

[1] http://www.prnewswire.com/news-releases/63-of-americans-cant...

>" should represent the percentage influence they should have in the company"

Something "should have this much value" is often that eventually leads one down the Orwellian newspeak road eventually.

As an investor I care only about returns and nothing else. If I can get a little more by giving up the influence I have over company I would gladly do that.

We must remember that pleasing wallstreet has destroyed many companies.

If you own 1% of something, you should get 1% representation in something.

> "As an investor I care only about returns and nothing else." This is the attitude that gets us slave labor, environmental damage, and stronger unions.

> but this still seems like a bad precedent for the financial markets in general.

Isn't this sort of thing really common?

http://www.investopedia.com/terms/s/share_class.asp

Whack is making an argument about "what should be", not "what is".

"setting a bad precedent" implies it's different from "what is". If it's doing what everyone else does, it's not a precedent.

This is significantly more common than it has been in the past, and Zuckerberg is part of that trend. Google like most companies in the past were not founded with a dual share structure and only split very recently.

That isn't to say this was never done. Bombardier for example has been tightly controlled by the same family through a dual share structure since its founding.

He already owns 60% of the voting rights while his actual holding is only in the early 20's. Nobody can oppose him, even if the vast majority of shareholders oppose this new arrangement, MZ can bulldoze it through regardless.

Buying shares gives you two things: the ability to vote in a company and the ability to sell the shares later at the market price then (in essence, a bet that the value will increase). What's the reason these should be tied together and not traded separately?

Eh, I don't really have a problem with this sort of thing. Ownership of a company can be structured in lots of different ways. I currently own 10% of an LLC, and part of the arrangement is that I have no say in how the LLC is run. I'm fine with that, because that was the deal I bought into.

Now, one could argue that this "changes the deal" for people who already own shares of FB, but a multi-class structure for FB's stock has always been the case (Zuckerburg already owns far less than 50% of the company, but has more than 50% of the voting rights). Anyone who bought into FB after its IPO should have been aware that they would never have control over the company.

The idea that a "ruling elite" can overrule the wishes of company's majority owners, and use the company's resources in any way they want, is conceptually very disturbing. In the long run, it's bound to lead to corruption, nepotism, and abuse of power.

One could also make the argument that the "teeming masses" have no idea how a company like FB should be run.

If you went strictly by percent ownership, I imagine the people who would actually control FB would be institutional investors. The usual party line around here is that the founders know better than those sorts of people, and I tend to agree with that in most cases.

It sounds like he's looking to have his cake and eat it, selling his shares while retaining control.

Investors have shown that they are willing to buy non voting shares so he will likely get what he wants.

I've always wondered what you're really getting with a non-voting share that has no dividends attached, especially from a company as big as Facebook that isn't going to get acquired.

Related: has there been any academic investigation to how investors value votes?

That's pretty strange. You'd only get liquidity unrelated to selling the shares from the company being bought or liquidated or in share buybacks. I guess it's more likely that a company of facebook's size can't really die, just sliced apart until nothing at the core remains. Some of those cuts will be profitable and some unprofitable...

> Related: has there been any academic investigation to how investors value votes?

Apparently they don't value them very highly. Goog and Googl are only about 2% apart.

With significant insider or founder control, the other voting shares don't really have much influence anyway.

Or just in a so called blue chip. What meaning does 1000 voting shares of Ford really have?

> What meaning do 1000 votes have

Then why don't we ask the same in a democracy?

Democracy doesn't have proxy voting when it's the public voting for representatives.

But that's exactly what a representative is: A delegate you entrust to vote on your behalf.

Because there are people that directly control millions of votes in companies and no similar structures in a democracy.

The number of shares is the wrong number to reason about, it's the percentage of control that is interesting. If an individual has 51% (or more) control, the comparison to a democracy is obviously nonsense.

(I used 1000 shares because it feels like a big number of shares but is still an utterly insignificant portion of Ford, which has a bit less than 4 billion shares)

So minorities should not vote?

They should do whatever they want to do. My point is that when a situation is futile, they should recognize that it is futile. A protest vote for a board member of a company strikes me as one of the more pointless ways to exercise a right to process.

Unlike a democracy, in the stock market you can pay to have your vote count for more than others'.

Isn't that how democracy generally ends up working?

Being familiar with the US form of democracy that involves lots of lobbyist money, it would seem.

Why is this comment down-voted?

In democracy, you can spend money on a PR campaign to sway many millions of votes your way.

And as another commenter noted, once a candidate is in place, lobbyists can pay to get proper legislation passed.

Finally, voting is rigged in any place where voting computers are installed, which appears to be a lot of places. Again, for the right money, you can completely change the course of an election.

You probably should. It's why I don't vote. Waste of effort.

> what you're really getting

A shot at some day finding a bigger fool than you to buy your shares for more than you paid.

Also the profit the company chooses to distribute at the end of the year...

>>a non-voting share that has no dividends attached

This sounds cynical, but you're absolutely right: that value of a share in a company which will never return capital to its shareholders is precisely zero. People find that hard to believe, but it's true. Why would the last "greater fool" pay anything for it? Work backwards from there.

Most of the daily trading in stocks these days is not from people that are long term.

Isn't the voting right attached to a stock irrelevant to almost all individual stock holders?

It (hopefully) makes them more valuable to potential buyers who do intend to own a significant portion.

The buyer of non-voting shares is betting that eventually the company will start a dividend or share-buyback program, or that there will be a subsequent buyer that will pay more than the current price.

At least in theory...

A lot of engineers will probably get non-voting shares as RSUs, especially new engineers, acquihires, and refresher grants. They're hoping that they will get more shares than if the company had to continue issuing only voting shares, because it doesn't dilute the founders' control of the company as much.

Donating his shares*

Ftfy

When one "gives away" that volume of money, what you are doing (whether you like it or not) is trading it for influence. At a minimum you are setting your funding priorities, which has rippling policy effects as people compete for your funding (see the Gates foundation). At a maximum you've just outright laundered it (see the Clinton Foundation) or converted it into an unaccountable ideological blight completely opposed to your original desires (see the Ford Foundation).

> just outright laundered it (see the Clinton Foundation)

I'm looking. Any solid proof of said illegal procedure, or just some more conspiracy theory from Alex Jones website?

http://www.nytimes.com/2015/04/24/us/cash-flowed-to-clinton-...

Pick a different example if you'd like; plenty of "foundations" exist only to let some oligarch's kids play philanthropist.

That example is of a secretary of state potentially being influenced by foreign donations, going around the usual laws against campaign contributions from foreign countries. But we're taking about Zuckerberg, who can already take foreign money all he wants.

Letting people play philanthropist is kind of the point of a philanthropic foundation.

Sure, that's the point of money. You give it to people who think can make the world a better place, and thus buy influence.

From a legal point of view he will presumably be selling his shares and donating his cash, not donating his shares.

Nope. He'll donate the shares. Charities are tax-advantaged. It's generally better[1] for them to take the shares and sell them than to sell the shares and donate the proceeds.

[1] better in the sense that more money goes to the charity and less to the government, and better in the sense than the charity can hold the shares and sell at an advantageous time.

Edit: I just remembered, I think that Bill Gates is doing it in the opposite way, by liquidating and donating cash, so there may be some legitimate cases when donating cash instead of stock is preferable.

I stand potentially corrected.

In Microsoft's case the purpose is stalling them so you can buy something that will grow.

"Donating" his shares to his own charity that he fully controls and his children will inherit. It's little more than a smart tax shelter.

It is something that rich people do to show they are a philanthropist by selling shares of their company or donating them to the charity or organization they control and their children will inherit.

It goes way back over the years to the Rockefeller family and others.

Not only is it a tax shelter, they can control what the charity or whatever does. It is a good way to avoid paying a capital gains tax by donating shares to their own charity or organization.

A pity the taxes on the shares could have been collected by the federal government and used to pay off our national debt or create some good paying jobs.

People who aren't billionaires have to pay a capital gains tax if they sell shares that have a value more than the original investment.

Not the biggest fan of Zuckerberg's philanthropy, but your government wouldn't have paid off its national debt or done much good with the taxes he'd have paid. One example (from New Jersey, maybe not directly applicable at the Federal level): https://www.google.com/search?q=mark+zuckerberg+100+million+...

I meant all the billionares do this to avoid paying taxes. I assume they are the 1% that own half the wealth.

You haven't been paying attention to Mark Zuckerberg's past philanthropic initiatives if you think that this is just a tax scheme. He wants to have an impact on the world.

I'm sure he does but that doesn't mean he is not setting up a tax shelter for his children and himself. If you think otherwise then you may have sipped a little too much kool aid.

> If you think otherwise then you may have sipped a little too much kool aid.

I know a few critics of Mark Zuckerberg who would be very happy if all he did was sit on his money. They fear what he will do, not if.

Fear what? I would see him as more Bill Gates than Ernst Stavro Blofeld.

The second half of this piece states the fear pretty well: https://medium.com/@anildash/how-to-look-at-the-chan-zuckerb...

I fear that he will waste his money e.g. providing facebook to the world out of "charity". Gee thanks!

> He wants to have an impact on the world.

Every founder of a billion-dollar company wants to have an impact on the world. The question is whether the impact he wants to have is something that needs (or deserves) preferential tax treatment, as well as the massive public praise he received for this act of 'philanthropy'.

It is true that the wealthy commonly use foundations that they control in order to advance initiatives that also financially benefit themselves or for-profit companies they own. In itself, this isn't necessarily a bad thing, but it's almost definitionally true that Zuckerberg is using the foundation structure for the tax benefits.

>The question is whether the impact he wants to have is something that needs (or deserves) preferential tax treatment.

Which is itself really a question about whether the government should be able to spend that money how it likes, or whether the zuckster should be able to spend it how he likes. Has the American government really earned your trust in its competence in managing money?

Is "managed to amass a fortune" adequate qualification for ANYONE to decide which social good gets funded and which one does not?

But Zuckerberg doesn't decide "which social good gets funded and which one does not." Things will or will not get funded independently of Zuckerberg's decision to fund or not fund additional things. He decides where to spend his own money. Does he need a qualification for that?

Perhaps not adequate, but a hell of a lot less inadequate than "got a job in the government bureaucracy" or even worse, "got elected by the voting public".

Sad that every time this guy is discussing giving away literally BILLIONS of dollars to causes that are not even tangentially related to Facebook people on here are whining that it is some kind of personal enrichment tax dodge.

I really don't even feel like reading these posts on this site anymore since they are filled with passive aggressive jealousy at people having a massively larger real world impact than anyone else commenting here.

If this story had the words Facebook and Zuck replaced with Tesla and Elon there would be a much different tone.

> discussing giving away literally BILLIONS of dollars to causes that are not even tangentially related to Facebook

Except he hasn't, yet. He's allocated billions to a corporation he owns, with the goal of, someday, spending those billions towards purposes that may or may not ultimately serve Facebook's very long term interests.

Give me a break.

Directly from the post:

> Right now, there are amazing scientists, educators and doctors around the world doing incredible work. We want to help them make a bigger difference today, not 30 or 40 years down the road.

Unless Facebook is trying to become the next Theranos complaining about a guy who is placing billions on the table for upcoming medical related treatments in no way related to Facebook sounds like whining more because you don't like the person doing it vs. the act itself.

>I really don't even feel like reading these posts on this site anymore since they are filled with passive aggressive jealousy

I'll take that over unadulterated fawning over tech celebrities.

I mean, so did Ghengis. He didn't call his rape + pillage a charity, though. It just so happens Mark is conquering by forcing the world to depend on him by rewriting "the internet" to mean "facebook".

> I mean, so did Ghengis. He didn't call his rape + pillage a charity, though. It just so happens Mark is conquering by forcing the world to depend on him by rewriting "the internet" to mean "facebook".

Are you seriously comparing MZ pledging to spend millions on fighting disease and poverty around the world to the (actual) rape, murder and conquest of thousands of people?

> Are you seriously comparing MZ pledging to spend millions on fighting disease and poverty around the world to the (actual) rape, murder and conquest of thousands of people?

I'm seriously suggesting that wanting to have an impact on the world doesn't imply anything positive.

So sorry for the downvote. Shitty mobile experience.

Could you please post a link to where either Chan or Zuckerberg have described CZI as a charity? Because as far as I can tell they never have. Because it's very intentionally not a charity.

I'm sort of surprised by the level of cynicism the HN crowd has. Call me naive, I'd like to believe that he's trying to do something good with his money without letting shareholders steer FB into a typical wall street short-term balance sheet game.

Reminds me of https://medium.com/conquering-corporate-america/mark-zuckerb...

I think HN is VERY cynical and negative. The first reaction everyone has here is doubt and question. I mean it's good to doubt and question but that shouldn't be the only outcome you should have towards each and everything.

Another example is there were threads for GOOG and AAPL missing their Q1 targets but I don't see one for FB for crushing their earnings. Or may be there is one but it's not upvoted that well which just proves the point even more.

This is one of the things which is driving me away from HN. But I would be missing out on lot of technical and industry knowledge if I stop reading HN.

is he donating his shares to a trust that he controls?

This isn't an uncommon practice. Zillow's founders did the same split.

Not uncommon, and if you have a visionary founder/CEO, investors are generally quite amenable to the idea.

This was true from day 1, he IPO'd a multi-billion dollar company while still retaining majority control. He's been gaming the system every step of the way.

He's been winning the game every step of the way by not letting go of something he held from the start.

Yeah, you do that by keeping a corporation private. Like Elon Musk. Instead he made his corporation public, while keeping it effectively private, and he's doing it yet again.

Here is the thing: this allows someone like Zuckerberg to separate his control/power within the company he founded, from his wealth. I can easily imagine him being in a position where he truly has more wealth than he wishes to keep for himself (I cannot imagine any way in which I could spend 35.7 billion USD on myself, hell 0.1% of that seems far beyond enough for life to me, never mind the 1% he intends to keep), and yet would not give 0.01% of his say in how Facebook is run for anything in the world. So, this gives three alternatives:

1) He keeps all his stock, retains control, can't spend the money and can't donate it. The money serves to "keep the score" but his goal is to keep control of Facebook. His interest is still to run Facebook according to his ideas of how it should be run. He is not particularly aligned with stockholders who just wish to make money from FB, because, as we have established, he doesn't care about his FB stock's being worth any more in cash directly (unless there is a risk of it collapsing by 99%, but that is an extreme scenario). He cares only in so much as it allows him to exert more power through Facebook in the direction of whichever "historical legacy" goals he has.

2) He gradually sells FB stock as is, slowly cedes control of his company to other investors. Donates the 35.7 billion over time.

3) The company accepts this split. Zuckerberg still keeps control of the company and still runs it according to his wishes without caring directly about personal financial gain, just as in case 1. He is now able to donate (or use) the money as in 2, but faster.

So, if you accept that he is sincere in that he doesn't want to accumulate more money in his person but use it for charitable giving (and again, there is no reason to believe he wants get richer, there is little you can buy for yourself with 35.7 billion that 357 million won't get you), then the best alternative for everyone is #3. Facebook will be run just the same as if he couldn't sell his shares, yet the money will be used for charity.

p.s. Whether charity at scale should or should not be tax deductible is another matter, and there are arguments either way, but that is sort of independent of the analysis above.

I feel its my responsibility to save the world, kill every disease that exists, cure world hunger. What a load of toss!

Something always stinks when you read these 'notes' from Zuckerberg. They all follow the same pattern, 'Im trying to save the world..... So here is a market update stating why I made these changes to improve my position, cause I'm saving the world.'

At least Bill Gates has humility and articulates the real world problems he is trying to solve. Gates works on his charity only, he is not the CEO of Microsoft and philanthropist.

Maybe you mega corps might want to start paying legitimate tax in foreign countries before you start telling us how you are saving the world, pffff.

> Everything we do at Facebook is focused on our mission to make the world more open and connected.

Call me cynical but to me, Facebook's mission is to get the whole planet to create a Facebook account and track them so they can be served ads.

Yeah, exactly, lies as always. Coupled with the comment below about having to login.

Another corporate bs from that guy, moving right along.

Though I do recommend watching 'The Social Network' (2010) movie, probably the best thing he has to do with (even though indirectly).

One could argue that this is just a byproduct of the actual goals. If everyone is more open, then "being open should be the norm", which means that you don't care that you get targeted ads, in fact you love that advertisers can show you all the cool stuff you "care" about.

Is my reading correct? - He is selling his dividend bearing shares, but without losing voting rights?

Via http://newsroom.fb.com/news/2016/04/q1-earnings-note/ :

> For each outstanding Class A and Class B share held by our stockholders, Facebook intends to issue two new Class C shares as a one-time stock dividend. The Class C shares will have the same economic rights as the existing Class A and Class B shares. The primary difference is that the Class C shares are non-voting.

Functionally, it sounds sort of like a split to allow Zuckerberg to sell off part of his holdings without losing control of the company?

Exactly what Larry Page and Sergey Brin did with GOOG and GOOGL.

There already was B class stock with super-voting powers before the GOOG/GOOGL split, so unless Facebook had that too, then not exactly like it.

The way he puts it sounds mucho more amiable, but yes. I also read it that way.

Its part of their mission "to make the world more open and connected".

The difference between Silicon Valley and other locales trying to reproduce it has generally not been money. The difference has been smart money. The people who hold the purse strings (founder/CEOs, angels, early-stage investors) have been savvy about what it takes to build and scale a startup.

The problem is that there's always a limited money of smart money available to deploy at any given time.

The question is then, how do you structure a deal to give unsophisticated investors (aka dumb money) returns, which they want, without giving them control, which would ruin the party.

Zuckerberg actually led the way here in 2009 when he got Russian billionaire Yuri Milner to invest $200M in Facebook at a $10B valuation. Everyone thought Milner was crazy then. But he went laughing all the way to the bank.

This is another step in that direction, which deserves our applause.

This is a 3 for 1 stock split in that for each share of FB that you own, you will receive 2 shares of the new FB share class that do not have voting rights.

If you don't want to own the non-voting rights shares, sell them and buy the regular ones. You will lose a little bit due to the difference in price and the commissions (there may also be tax implications).

It is similar to what Google did last year and what Under Armour did a few weeks ago. Here's what Google and Under Armour are priced at end of day today:

GOOGL (has voting rights) at 721.46, GOOG at 705.84

UA (has voting rights) at 44.80, UA.C 42.16

I like Facebook, and I'm happy to see a gazillionaire get into philanthropy this young, but when I see goals like "cure all diseases by the end of this century" it does make me wonder whether the Foundation might be too disconnected from reality to get good world-changing value for its money.

I see striking similarities between Zuckerberg and the Bill and Melinda Gates Foundation which managed to entirely rid India of polio (!!). I'm not sure that it's totally disconnected from reality.

A specific disease in a specific country is a bit more concrete than "all diseases" worldwide.

> Gates Foundation which managed to entirely rid India of polio (!!)

Uhm, that's completely inaccurate, where are you getting such data?

The Gates foundation only got started in 2000, and it isn't clear when they started getting involved in polio vaccination programs. You may give them credit for helping towards the end of the project, but vaccination against polio was started by the Indian taxpayers (Universal Immunization Program) in 1978 and reached about 50% coverage of all infants born in India (including millions of refugees/migrants from Tibet, Pakistan, Bangladesh, Nepal and Sri Lanka) by 1984. The programs immunized hundreds of millions of children well before 2000.

[1] http://www.mohfw.nic.in/WriteReadData/l892s/Immunization_UIP...

[2] https://en.wikipedia.org/wiki/Pulse_Polio

[3] http://www.ncbi.nlm.nih.gov/pmc/articles/PMC4078488/

Giving all of the credit to Bill&Melinda seems like something Hollywood would do.

https://en.wikipedia.org/wiki/White_savior_narrative_in_film

When Google did this I had to pay capital-gain tax on all the "new" shares I got. About a year later the german tax department changed their view and I got that back. It sill was very annoying.

I will try to believe Mark about making the world a better place when he builds a world that is not about ads and mining our data.

I'm surprised with how many comments here are focusing on Zuck and not the market play for Facebook.

I've worked at large companies that claim to be innovative. More often than not, short-term demands made by Wall Street guide business decisions in increasingly poor ways (reducing employee benefits, stymieing R&D, etc.)

This announcement obviously helps Zuckerberg personally, but it does also provide a signal to the market for Facebook's direction.

>More often than not, short-term demands made by Wall Street guide business decisions in increasingly poor ways

Do you have any evidence that this occurs "more often than not"? I look around America, and the world, and see a ton of successful public companies. Hundreds. Thousands even. Some of them have been around for over a century.

What you're saying is exactly the type of thing someone would say as they try to wrest control from other owners; that everything will fall apart if they're not in charge. Silicon Valley likes to paint this picture of the "genius founder", but it's rarely the case in reality. If Zuck was abducted by aliens tomorrow, Facebook would live on.

I'm kinda torn on this. On one hand it's noble and nice to see a rich guy who's interested in things like this as opposed to kickin it on his yacht with models all the time. On the other hand, I hate saying this but the use of the word "responsibility" with regards to "cure all diseases" reeks of egotism and a guy who's kinda living on a different planet. "Haha, only I can remedy what you mere mortals stand no hope of ever doing!" I realize I'm being hyperbolic about it...I really shouldn't criticize I guess.

No I agree with you, I found that "cure all diseases" thing hopelessly naive and ridiculous. He's gonna need to get a little more focused than that if he really wants to effect changes...maybe pick a couple specific diseases that have big impacts (cancer, malaria, cholera) and start there.

> noble and nice

The noble and nice stuff is PR.

I'm not saying Zuckerberg is evil, but that is exactly the point, we don't know anything about him, except that he has an enormous amount of capital, and thus influence. PR gets him even more power. And I think that power is something to be scared off.

"More open and connected" = more money when you lower your guard and give us access to personal data that we sell for millions of dollars to corporate interests.

Considering that this announcement was paired with very strong earnings, it seems highly likely that they'll give him what he wants.

He has voting control of the company. Literally everyone but him can vote against it and it will still pass.

Good point. Though I suspect others will go along as well.

But if shareholders are against this move, the prices would have reflected it. They are up 9%, so they agree atleast in short term, or we have enough people who are buying with these terms.

> To maintain our focus on this mission, we have always been a founder-led company.

...

> Today, Facebook’s board of directors is announcing a proposal to create a new class of stock that will allow us to achieve both goals. I’ll be able to keep founder control of Facebook so we can continue to build for the long term, and Priscilla and I will be able to give our money to fund important work sooner

This letter sounds like he is preparing to step down as CEO in the next 5 years. Any bets?

He'll maintain "founder control" but doesn't say he'll remain as CEO

Interesting that he's going to start giving away shares now. Makes me wonder if he doesn't see much more financial upside to FB, at least at current price levels.

If there's a lot more value to to accrue to his FB stock (even on a time-discounted basis), wouldn't he want to rationally wait for the future value of those shares to materialize to have maximum impact?

Alternatively he could just think that the value to society of funding the right causes (in his mind) is just that much greater than the time-discounted future value.

Or the foundation he donates the stock to can hold onto (most of) the stock. Meanwhile he gets to do the tax free transfer now, before Congress can get around to limiting the size of the tax free transfer you can do or anything else that might impact his plans.

I wonder if before they announced the 99% plan they didn't realize the implications and after they started implementing it, the case of founder ownership came up and they needed to scramble to make a plan - hence the post.

No good deed goes unpunished and all of that.

Nothing he does is short-sighted. I believe it was even mentioned in the original announcement that they were working on a plan to enable doing this while maintaining ownership.

His hubris will be his downfall.

That's what the lawyers are for.

You get some tech nerds getting excited about something, "government doesn't matter". And don't realize they have encroached on something where the government does matter, deeply.

I've seen this a lot. So although they aren't invited to every meeting, the lawyers see the press releases and quickly amend the implementation strategy.

So essentially a golden share? If I were an equity holder I would be pretty annoyed by this news

If you were an equity holder you could vote against the proposal... but of course it wouldn't matter because he already has the majority of votes. So you could be annoyed, but you shouldn't be surprised that he wants to keep control forever.

OT, but ...

I'm bothered by how HN mods come down like a hammer on clickbaity titles ("The one thing that can ensure a safe future"), but when it's some official tech company/founder announcement, they're fine with extremely vague submission titles that force you to click on it for any hint on what it's about.

He's 'donating' his money to the non-profit that was created last year. It sounds noble, but I believe one of the other motives is that he will be able to keep his money in the family for generations.

He will be able to get around the death tax and pretty much any other taxes that could take away his fortune. Pretty much every billionaire has done this.

It's not even a non-profit so that he's able to lobby the government.

This is just another scam by the rich to not pay taxes, total BS. That this is legal in U.S is total beyond belief. Its worse the the Panamanian shell corporations.

Charitable contributions are tax deductible in the majority of countries not just the US. FWIW.

IKEA is a good example of this in Europe.

AFAICT there won't be any charitable contributions by Zuck the human, possibly by Zuck&Chan the company.

Zuck & Chan the company is a wholly owned LLC which means that from a financial perspective there isn't really any difference.

> death tax

I'm guessing you vote Republican? Trust funds and charitable organizations are a time honored way for the superrich for avoiding the estate tax, regardless of political leanings but "death tax" is a kind of a charged language.

Besides, they are still young, they may also actually want to do something positive with the money, not just offload it to protect it from the government. Unless you think he's about to kick the bucket soon?

I vote Bernie but I'm against estate taxes. I'm for capita gains being taxed as normal income and so many other things (I'm an in-theory fan of FairTax.org), but strongly against estate taxes.

Why are you against estate tax?

Maybe his kids are thick?

You didn't ask me but still: because it's relatively easy to avoid (via the aforementioned trust funds and charities,) and the cutoff is kind of arbitrary. Improving income and capital gains taxation would be fairer for everyone.

Seriously, why? Doesn't estate taxes only apply to large large large estates, and wouldn't apply to the majority of homeowners in America?

$5,450,000 for 2016

https://www.irs.gov/Businesses/Small-Businesses-%26-Self-Emp...

But note that a married couple gets twice that, so a married couple can give nearly $11 million to their children completely tax free (PLUS children get a step up in basis on any capital assets that are inherited). Only a teeny, teeny percentage of estates meet that threshold.

That's federal. In NJ, the line is $675k. It's different in other states, obviously.

To reply to the people below as to why @themartorana might be against estate taxes: if the tax system does its job properly, death shouldn't be a taxable event. Treating capital gains as normal income, closing shitty loopholes etc - people are paying their fair share that way. Taxing at death would be double dipping. Instead, it's used as a way to claw back failed capital gains tax and it's an awful way to do it (making people sell property, etc)

No, it just means that after your death your descendants don't benefit unfairly. Instead, the money that would be used to set a trust fund baby for life is redistributed among all people.

In a free society, you can give your property to whomever you like.

How do "all people" have any right to the fruits of your labor, especially a superior right than your own children?

That's your definition of a "free society", as is "fruits of your labor". You know, I might say that societies with our concept of property, where a state monopoly on violence guarantees rights, and where wealth is largely the product of appropriation of people's productivity based on those state-sanctioned property concepts, is very far from a free society.

> very far from a free society

Agree with you there.

> wealth is largely the product of appropriation of people's productivity

???

In a market economy, wealth accrues to those who solve people's problems the best.

It is only through business-government collusion that you skew the market toward cronies and incumbents.

> state monopoly on violence guarantees rights

In theory. But it doesn't really work that way. Hence, the estate tax.

No, wealth does not accrue to "those who solve people's problems the best".

For example, let's consider what I do, cancer research. In my field, lots of scientists and doctors work very hard to develop new therapies for treating cancer. At the end of the day, this results in a product that is covered by a patent, a form of property.

This property is owned by some very rich people who have never lifted a finger to do any cancer research or solve any problems; all they have done is own things. In this case, because of the specific form of property, they are able to make hundreds of billions in profits without having done any work other than the contribution of some capital. That is, literally, property ownership is the only contribution these people make to drug development, yet they accrue essentially all of the resulting wealth.

The extent of this accrual is a product of the specific forms of property that exist and how much they allow this sort of appropriation.

Every form of property is the product of government - property as we know it cannot exist without government help. For a practical example, until 2013 it was possible to own genes via patents, and about 20% of the human genome was under patent. There were companies that were entirely built on the fact that they owned certain human genes, e.g. Myriad Genetics, which made hundreds of millions of dollars off this. Then the Supreme Court decided this was NOT a form of property, and suddenly this possibility of accrual vanished.

This applies to everything we might think of as property - patents, trademarks, land titles, etc., they exist because of legal force guaranteed by the government.

Some of these property forms are extremely arbitrary measures that seem almost designed to produce wealth transfer (for example, granting mineral rights) to certain individuals.

I'm not going to argue for the continued existence of patents or intellectual property.

In the case of cancer research, you sold your time to your employer for a fixed amount of money (maybe you had equity, but it doesn't sound like it). That was the end of the transaction for you. The investor took a risk and was rewarded for it, all within the current system, which is not a free society.

When you spend money on a consumer good, you're going to choose the product that works best for you, given your budget. For the same money, you will not choose a product you deem to be inferior. Thus, you reward the maker of that product with your dollars because they solve the problem better than the maker of the inferior product.

As for "appropriation of productivity," if you're alluding to the workers vs capitalists struggle from Marx, then I can't help you. I will simply point out that nobody in a free society is compelled to work for another. Thus, all salaries / wages / employment agreements are entered into voluntarily. There is no appropriation: each voluntary employee knows the terms of employment and agrees to them.

> I will simply point out that nobody in a free society is compelled to work for another.

Ah, the plaintive cry of the college Libertarian. Of course people in our society are compelled to work for another; you cannot live without eating. You may not be compelled to work for a specific employer, but you are compelled to work, and in an economy where there is massive unemployment and wealth inequality, employees and employers are not on the same bargaining terms.

Let's put it this way: someone comes to you and says, "I have your wife in a secret location. Go and murder my boss, or you'll never see her again." You might accept this contract and we might call it "voluntary" since you agreed to the terms, but that's hardly a fair characterization of the situation. Power differentials matter, and they absolutely produce compulsion.

>You might accept this contract and we might call it "voluntary" since you agreed to the terms, but that's hardly a fair characterization of the situation. Power differentials matter, and they absolutely produce compulsion.

But noo, you enter into a contract voluntarily, it's not exploitation because you can leave your employer. Agh! Marx got it right on the money 150 years ago. It's incredible how the obvious escapes these misty eyed libertarians.

>In a market economy, wealth accrues to those who solve people's problems the best.

That is simply it true, and it baffles the mind how some people obtusely insist on that bunch of wishful baloney, pardon my bluntness.

So a capital holder/landowner simply buys stock/rents out a flat, and by essentially doing nothing but owning stuff he gets to earn a large amount of money while people actually doing stuff are rewarded as lowly as the market can squeeze them. How does this fit with your worldview of "money goes to those who work harder"?

"In a market economy, wealth accrues to those who solve people's problems the best."

By passing large sums of money from generation to generation, you end up with a class this won't apply to. It'll be the family of some relative long since past who once upon a time, solved some problem the best.

Is this actually a problem?

Why should I care if someone else inherited family money and doesn't have to work?

Inherited wealth must be invested continually to defend against inflation. That investment will continue to power the market economy, even if the holders of the wealth are not entrepreneurs.

>Inherited wealth must be invested continually to defend against inflation. That investment will continue to power the market economy, even if the holders of the wealth are not entrepreneurs.

This assumes that wealth is being invested correctly, and that money acts in some sort of neutral fashion, automatically flowing where it is most needed. In fact, money just shores up wherever there is some sort of place for it to grow.

It turns out that it is much easier for concentrated wealth to use games and tricks of the economic, financial, political system to make money grow than it is to actually invest it in high-risk areas that might provide stronger growth.

The more diffuse wealth is, the less this will be an issue.

>Is this actually a problem?

Yes. Every dollar in the pocket of a trust fund baby is a dollar missing from an underfunded public school, a homeless relief program, a cancer research center, a library...

In the US, you can give your property to whomever you like... and they have to pay taxes on it as income.

I'm not sure why your children should be exempt from paying taxes on the gift of an estate. Call it "death tax" if you want, but really the lack of an estate tax is tax break privilege for the wealthy. The estate tax is simply a decision of what the income tax will be on income in the form of an gifted estate.

Except the estate tax is often a much, much larger percentage than normal income tax.

That is typically not true in the US (2015). In the US there is an exemption on estate tax up to $5.43 Million and the transferred wealth above that amount is 40%. Compared to the highest regular income tax bracket is 39.6% and that is on the income above $464,850. So, it is essentially an income tax on the transfer -- except typically much much less. For example, an estate of $5.44 Million would be $4,000 (on the excess $10,000). Or an effective tax rate of 0.074% not 74% or 7.4% but 0.074%.

Edit: So, yes, if you are transferring 500 Million or 50 Million then you will get close to the 40% tax (slightly higher than the regular 39.6% tax), but if you are transferring 5 Million or below there will be no tax.

The giver is generally on the hook for gift taxes and it is calculated similarly to the estate tax.

That the giver pays is not really a super important distinction, the money is coming from the same place either way, but procedurally it's the giver that has to do the paperwork.

You can, but the transaction gets taxed .)

Anyways, you're appropriating the word free for describing your personal political agenda.

> you're appropriating the word free for describing your personal political agenda

This is a political topic.

Also why I would advocate elimination of income tax ;-)

You and you alone have the right to the fruits of your labour. Once you are dead you are not gonna benefit from it anymore, so your children do not have any more claim to it than anyone in the country. Therefore it should be redistributed back to all people.

Do you think your children should have more rights than other people?

There's nothing unfair about your descendants (or other heirs) acquiring your belongings once you pass away (assuming proper tax was already paid on said belongings).

Death tax is a form of double taxation and many people are forced to sell their inherited family home. That sounds unfair to me.

If we had a consumption tax (FairTax) then you couldn't skirt paying your share when you spend it. Sales tax is incredibly efficient.

It's also regressive.

the fairtax organization has proposed a "prebate" to mitigate regressiveness.

https://fairtax.org/about/how-fairtax-works-slideshow

That seems like a reasonable effort. Thanks.

They've proposed that, but as far as I can tell it's less of a serious proposal and more an instance of an "overcoming objections" sales tactic. I don't see how a flat sales tax can achieve revenue-neutrality (itself a major selling point of FairTax) while also offering a large enough "prebate" to avoid being enormously regressive in practice. Considering the misleading nature of a bunch of other FairTax claims [1], I pretty much consider distrust to be the only tenable default position with respect to anything else they say.

[1] http://www.factcheck.org/2007/05/unspinning-the-fairtax/

Even if people pay full capital gains, that doesn't prevent the existence of a multi-generation estate. And those kind of estates are the whole point of the estate tax.

If a tax directly taxed holdings on an ongoing basis (a wealth tax, or much better, a land value tax), I could see an argument for doing away with an estate tax, but only then. (And I'd say not even then)

Land value taxes are called property taxes.

Not quite. property tax includes the value of the buildings. Land value tax is different: https://en.wikipedia.org/wiki/Land_value_tax

What's inherently wrong with a multi-generation estate? What's wrong with me wanting to pass on wealth to my kids and grandkids without this already-taxed money to be double-dipped by the government? If I want to work so hard that I can leave significant money for my descendants, why should the government get to tax that money twice? That seems incredibly unfair to me.

Look at it as a regular income event. You were taxed when you got that money from whoever gave it to you and now your kids are being taxed when they get the money. Your kids aren't you. Money isn't a taxed-once thing, it's taxed every time it changes hands. Death is an event at which money changes hands (from you to your kids), and is taxed appropriately.

Anyway multi-generation estates are very well tested as being bad for society over time. Just look up monarchies.

Then why not tax everyone when they pass money/assets onto their kids? Why is there an arbitrary ~$5.1 million cutoff?

(Not that I have anywhere near that much money, but it's the principle)

Taxing everyone would be the "correct" solution, but it's more pragmatic/politically expedient to allow a $5mil exemption.

There's always a cutoff just due to practicality. If you give a friend $5 probably neither of you filed taxes for that. If you give a friend $10m, well, the IRS will probably notice that one.

(in the case of a gift tax the cutoff is $14k and yes it applies to your children, see: https://www.irs.gov/Businesses/Small-Businesses-&-Self-Emplo... )

If you want to work so hard that you can leave significant money for your employees, the government taxes that twice: once when it goes to the business, and once when it goes to the employees. Why are children different?

I am failing to see where - salaries are write-offs, and sales tax, which doesn't necessarily apply to all situations, are a tax on the buyer, not the recipient...

What am I missing?

Well, not in the US. The money paid to employees is tax-deductible to the business, so it's only taxed once (the employee pays taxes on the money paid to them, but the business doesn't.)

Except that you can write off salaries.

Wealth tends to translate into power. Multi-generation wealth transfer translates into dynasties. Dynasties are the antithesis of democracy.

Hence, multi-generation estates are anti-democratic.

Of course there is nuance in the extent of the effect. Some inter-generational wealth transfers are fine. Multi-generation estates wouldn't be a problem if everybody had them. And so on. But the core of an important argument against multi-generation estates is very plain. (Other arguments can and have been made as well, of course, including fairness arguments - I didn't work for my inheritance, for example.)

Is that why there are so many laws to prevent the accumulation of wealth in the US?....

Why is a land value tax much better than a wealth tax?

A wealth tax is inherently limited; for example, you can't tax 100% of wealth-- that would be pure confiscation.

However, a land value tax can scale up to 100%, because you're taxing rent, and not wealth that is bought/created by any individual.

An estate that has its rent taxed 100% will eventually dissolve, unless it's constantly generating new value aside from rent (which is in general not the case).

This seems like an interesting idea but, every time I read about a land value tax (LVT), the description is very high-level and leaves me with more questions than it answers:

  - How do you measure the basic value of the land?
    Is is it the amount of rent collected minus 
    maintenance-and-improvement expenses?  Does
    this mean it is impossible to turn a profit
    as a landlord?

  - Is the tax also applied to land that is not 
    rented?  Is it harder to assess the value of
    that land?

  - Does this system discourage conservation by
    incentivizing everyone to sell their unused
    land to someone who is going to develop it?

  - A common type of investment in today's no-LVT
    world:  I buy an undeveloped plot of land that
    noone would pay anything to live on in a town
    just outside of Worcester, MA.  I spend $100k
    building a house on the premises, and then I
    proceed to rent out that house for $1k per month.

    Under an LVT system, do I still have any reason
    to buy that land and build a house on it?  How
    much money can I make?

Thank you for your time.

I agree that a lot of the questions it raises need to answered (in practice, LVT has run into issues because of poor practices by the assessors office).

To answer your questions to the best of my abilities:

  - A landlord should be able to make a profit because the building itself would 
    not be taxed. The only kind of landlord would which not see a profit is the 
    kind that rents out land use, but does not actually develop or perform 
    maintenance.

  - Land that nobody wants wouldn't get taxed. (A few square feet of land in 
    Alaska, for instance) But if there's any demand to own the land, it would have
    a rental value.

  - It highly discourages sprawl, so it's good for conservation in that
    sense. However, I recognize that greenlands near city centers need special
    consideration. For instance, the Muir Redwoods in Marin absolutely would have
    needed intervention to be saved; the LVT would have been an incentive to
    develop so close to SF.

  - In a LVT system, undeveloped land would always sell for $0. The tax on the
    land is equal to the return on the land itself. So in the current system,
    you pay $100k for the land, $100k on the house, get taxed $2k/yr in
    property taxes, get taxed on the rental income, etc.

    In a LVT system, the land would be free, but would be taxed at $5k a year.
    (Assuming 5% rate of return). You're not going to get $5k for that land unless
    you do something with it, so you absolutely have the incentive to build a
    $100k house and rent it out for $1k per month.

    But let's say that the land was worth $500k instead of $100k. Now the LVT
    would be $25k a year; you'd have an incentive to build much more than a
    $100k house; you'd want to develop it even more to generate even more
    return. This is how the LVT aligns the incentives for land use better
    than the current system (where property tax on improvements leads
    as a discentive to develop, and encourages restrict zoning laws).

I think the valuation of the land is the hard part, but active markets and self-valuation may have secrets to accurate and convenient pricing. I think it merits more research on this field, at any rate.

For comparison. There is no death / estate tax here in Canada.

That's not entirely accurate: the CRA requires "deemed disposition" on all your assets at the time of death.

Basically your estate has to pay up all pending taxes / capital gains as if it sold all its property at the time of death.

But held cash assets belonging to the estate and passed onto children/spouse are not taxed.

You have a fundamental misunderstanding of the super rich if you think that hard currency represents any significant fraction of their assets, late in life.

It's only a concern for the middle class, and there are other rules that cover them.

Right, the estate just pays the taxes it would have paid if the person had been alive. That seems more fair.

What is a "fair share"?

Ok, I expended sweat and tears and made $X, and obviously I should be able to benefit from my labors in my life. Too much tax denies me that, but too little is unfair as I used the resources of "the commons".

But receivers of inheritance did not earn any of it. It's not obvious that 100% estate tax is unfair.

No, the point of estate tax is to prevent generational inheritance, not to re-coupe failed cap gains.

The purpose is to prevent a class of non-working super rich that live for generations off of the estate.

So you can be rich and have lots of fancy toys and swim in pools of money while you're alive, but once you die that's it. Your children benefit by starting with a (very large) head start relative to their peers, but they shouldn't necessarily be set-for-life. It's economically bad to have a vast pile of money sitting in one place for a long time, you want to get that back into circulation. And success should be earned, not granted at birth.

The only alternative would be something like actively taxing net worths that exceed some amount, which is less palpable.

And of course practically speaking, death is a great thing to tax, because one of the problems with taxation is that it can be distortionary - when you tax something, people tend to do less of it. That's obviously not a problem with estate taxes.

Plenty other discussion about the lengths people go to avoid the estate tax, so I think it is distortionary

That head start can extend into adulthood of you let them live rent free in a house you own, use your vacation house, etc.

Hell, if your forty year old son hasn't been able to mooch at least a couple million off of you tax free, you're just not doing it right.

No, the point of estate tax is to prevent generational inheritance, not to re-coupe failed cap gains.

Yet a lot of countries with low inequity don't have them. Canada, Sweden, etc.

Sweden used to have it.

I know this is not contradicting what you said, it's complementing.

Canada doesn't have an estate tax, but it has something largely equivalent: http://www.investopedia.com/articles/retirement/08/estate-pl...

Sweden only very recently (2005) repealed its inheritance tax after centuries of having one. So the current inequity levels in sweden occurred under inheritance tax. Prior to 2005 the inheritance tax rate in sweden was 60%, higher than the estate tax in the US. And vastly more people hit the tax in sweden as the exemption was a mere $8600 USD.

So if anything Sweden is evidence that a stiff estate/inheritance tax helps prevent inequity. We'll see if that changes.

Regardless of its purpose, it is extremely unfair, at least from a purely pragmatic perspective. The money was earned, and the government has no right to take it away just because you die.

would you describe it as being more or less unfair then being born into poverty?

Apples and oranges.

Pragmatically when you are dead you own nothing. Who inherit what you owned is arbitrary (childs? cousins? community? state?)

No, it isn't taken away. The person that owned it is dead.

If you decided to give it to your children or whatever, it'll get taxed just like if you tried to give them that much money before you died. If in your will you decide to give it to a non-profit charity instead, it's not taxed.

You aren't taxed for dying. The person who died isn't taxed at all. It's the people that are still alive that are now receiving money that are taxed.

How is any of this unfair? Your children didn't do anything to earn that money. Why should they get it at all?

That's not true. Families build wealth together. My children don't do my work, but they work with mom to keep the house in order while I do. It's a family effort. Without the support of my wife and children, I would not be able to produce nearly as much as I do (note: I'm not wealthy, I just happen to value the money I make).

If your children provide you support, great! You have that advantage vs. people that don't have children or that have children that are, let's say, a drain on their time.

Your children still did not earn income, you did. And you got a tax break for that as well in the form of dependents. You are asking to double-dip here, which is unfair.

If you think that's double dipping, then you have a sad view of the world. Here's some news - when you actually earn a decent income, child tax credits do very little to offset taxable income, especially when you are a business owner.

And single people have no child tax credits at all, what's your point?

>It's economically bad to have a vast pile of money sitting in one place for a long time, you want to get that back into circulation.

Although I agree with your point overall this point specific point is flawed unless someone is literally storing physical cash in large volumes.

If I have a big bag of assets that is passed from generation to generation it is not sitting in one place or in any way out of circulation. Businesses do their thing regardless of whether a family member or someone else owns them. Real estate portfolios are similarly unaffected by who happens to own it. Even money sitting in a bank account is not actually just sitting there.

> Taxing at death would be double dipping.

This is one of the more common anti-estate tax arguement but I dont see it. At the end of the day the government will raise a pool of tax dollars. They can tax you more while you're alive, or tax you less while alive + estate tax when you die. If you look at it like this, estate taxes actually allow you to pay less tax over your lifetime. So to not have estate tax, one could argue people are paying too much tax during their lifetime.

If you look at it like this, estate taxes actually allow you to pay less tax over your lifetime.

Sorry, I chuckled a little bit.

If you think the gov't putting a new tax in place reduces taxes in other places, I'd point you to the size of gov't over the past 100 years.

You want to read Alexis de Tocqueville's comments on early American inheritance law; it's always been structured to try to prevent the accumulated heritable wealth and power that built the European aristocracies, and the estate tax is simply one tool in that toolbox.

@hype7 is correct. To others in the thread, I don't mind Canada's system - basically, tax the income from (the potential) full liquidation of assets. In many cases, everything needs to be liquidated before an estate is divided anyway. Income gained would be taxed anyway. That said, I don't live in Canada so I don't know the finer points.

To those speaking of multi-generational wealth, I'll bypass the "it's bad" argument and point greatly towards the "1/10 of 1 percent" that have gained something like 90% of all newly created wealth in the past couple decades (and the innumerable ways they can keep that wealth from the estate tax) as evidence of it being a failed policy, again only hurting those somewhere in the middle.

Taxing at death would be double dipping.

Not really the point. In general, money is taxed when it changes hands. Payroll taxes, income taxes, sales taxes, etc. Taxing on death is just taxing money that is transferred from the decedent to their heirs. It's not a matter of how many times you "dip": the same money has likely been taxed quite a few times for different reasons before it ended up in that person's estate anyway.

Estate taxes are a problem, but only because inheritances aren't treated as normal income for the recipients. Death shouldn't be a taxable event...but receiving income (even as a result of someone else's death) should be. If there is a desire to allow some level of ubtaxed inheritance, then instead of exempting estates below a certain size, we ought to exempt a certain amount of inheritance income per recipient.

Once you get a lot of money it's a lot easier to keep it and let it grow and grow. Estate taxes keep this from going on for generations like it did in the past.

I agree on the point, especially with how easy those taxes are to avoid but I'm calling out the divisive dog whistle language.

Also, while it would be great if the tax system was reformed, in the short term it wouldn't be too bad if the existing taxes weren't avoided.

As some one who is strongly for estate taxes, I propose we call them "aristocracy-prevention taxes." Accumulation of wealth solely based on inheritance is a shitty way to run a society.

What should the asset cutoff for estate taxes be then? I'm going to guess it's more than what you make.

I'm totally fine with it being much, much lower than the assets I'll have when I die. I plan to leave the vast majority of my assets to charity, and even if I didn't, I wouldn't WANT to leave a lot of money to my children. I've met a number of people who grew up with large trust funds, and in every case I think the kids were worse off for it.

> "death tax" is a kind of a charged language.

"Estate tax" is equally charged language, even if you aren't superrich and affluent.

"Tax" is charged language in my book.

One phrase is what the US Congress uses to describe the actual, existing tax [0], the other is a phrase created by opponents of the tax in the 1940s [1]. Only one of these words looks charged to me.

[0] https://www.law.cornell.edu/uscode/text/26/subtitle-B/chapte...

[1] http://www.npr.org/sections/thetwo-way/2010/12/16/132031116/...

Can you elaborate?

The thing is, his stated goal is to keep 1% of his money in the family for the next generation. Right now that 1% is 357 million. Estate tax is 40%. He has a single child as of now. So, that child will inherit 214 million dollars. She could probably live her entire life of the interest in that money, make her own (smaller) charitable contributions and still give her own single child the same amount (adjusted for inflation and accounting for the estate tax). So I don't believe donating 99% of his money and ensuring the prosperity of his family for generations are mutually exclusive to Zuckerberg. His philanthropy does not conflict with his own self-interest. Also, like Gates, Rockefeller, Carnegie, Stanford, etc, he has a lot of fame and renown to gain from doing good in his own name and during his lifetime.

Now, don't get me wrong, income inequality is a real problem and the fact that some world-scale social programs now seem to depend entirely on the wishes of a few men versus popular administration is in many ways troubling (in others, well, Bill Gates has potentially done more against AIDS in the third world than most democratic governments...). But Occam's Razor applies and although I imagine tax incentives pay a part on how and when billionaires donate (that's why they are called incentives...), I don't default to thinking that Zuckerberg is twirling his mustache over this, laughing maniacally and saying "this is how I shall defraud the IRS!". But let's see, in due time, what happens. So far the Gates foundation seems legit, for example, and there goes another mustache twirling villain of the tech world...

Income inequality is nothing compared to the enormous wealth (and thus power) inequality that is present here and it doesn't diminish when Zuckerberg donates his shares to the LLC.

Why would he laugh maniacally about getting to keep his money, it's legal, not fraud, and of course he wants the power/influence wealth gives him/his family.

>> his stated goal is to keep 1% of his money in the family for the next generation. Right now that 1% is 357 million

1% likely won't be anywhere near 357 million after another 10 years, let alone in 50+ years. Evaluations of wealth based on assets and stocks almost never wind up trading for that amount of cash. You are worth what you can liquidate today, not what market "experts" think your portfolio could be worth in some theoretical perfect scenario.

I agree that I wouldn't count on the exact dollar figure to stay constant. However, I believe Bill Gates is successfully divesting himself from Microsoft to fund his charity? I guess Facebook is a lot shakier and volatile than Microsoft?

Yes but I'd assume it means the child will have a trust of at least 357M which isn't bad. I don't have any problem with the 0.01% having tremendous wealth as long as 1) it is out in the open (at least clear enough that the IRS can see all its activities) and 2) distributions from the fund get taxed as income for the recipient

I am making this concession with the assumption that we will drastically increase marginal income tax on income over a certain amount (my proposal is 100 * 2000 * federal minimum wage per hour which at $15 is $3M). Marginal income under this threshold shall be no higher than say 40%? Tax on income above this amount ($3M as calculated today) shall be (just off the top of my head) 90%? I think that sounds fair.

So, in the example above, if Maxima only draws salary and benefits (cars, personal jet rides whatever) worth less than $3M per year, I don't see a reason to see that as bad for society as a whole. I think this keeps the interests of the 0.01% in touch with the minimum wage. Yes, it sounds rather naive but it is a working idea. Thoughts?

This is a red herring. Real news is "Facebook plans new non-voting shares to keep Zuckerberg at helm"

"http://www.reuters.com/article/us-facebook-results-stock-idU...

This smells of a unwanted dilution.

A 3:1 split but only 1 of your 3 shares post split will have voting rights, assuming I've read this correctly.

> Facebook will issue two of the so-called "Class C" shares for each outstanding Class A and Class B share held by shareholders.

> So, for example, someone who held a single Class A share at Wednesday's closing price of $108.76 would end up instead with one Class A share and two Class C shares, each of which would be priced at $36.25.

> "Since the Class C shares would have the same economic rights as the Class A and Class B shares, we would expect that after the payment of the stock dividend, the share price of the Class A common stock would generally reflect a three for one stock split," Facebook Chief Financial Officer Dave Wehner said on a conference call.

It is not a non-profit. It is explicitly a for-profit private company because there are many things a non-profit is legally prohibited from doing.

http://www.forbes.com/sites/kerryadolan/2015/12/04/mark-zuck...

> Poon noted that a charitable foundation cannot own more than 10% of a company’s stock. If at some point Zuckerberg chooses to move 10% of Facebook stock into his Chan Zuckerberg Initiative, he is free to do that.

One requirement he likely wants to avert is the legal requirement for non profits to give away 5% of their assets every year.

It's not a 'death' tax. It's an inheritance tax that is paid by the person receiving the money. If he doesn't let relatives inherit enough of his wealth, then none of it gets taxed.

If he himself doesn't believe his company is going to last a generation, then the quickest way to cash out (for himself, his family, and the causes he believes in) without raising alarms is to claim it's for his non-profit, right?

tl;dr: Mark Zuckerberg is proposing to restructure Facebook's stock in a way that trades his future dividends for present-day spending money. He plans to spend this money philanthropically, through the Chan Zuckerberg Initiative.

why is it a wordpress site?

hey, whatever works

It's powered by https://vip.wordpress.com

^^ This is correct.

early 00's php standard-bearers gotta stick together

Wouldn't call it a standards bearer then - it really picked up momentum around 2010. Many shops that use Ruby, or whatever the cool kids are using, in their core products, deploy their public-facing site using Wordpress.

Why not? The Facebook platform doesn't have a blogging component, so they have to use a CMS, or a custom written solution, or just public static HTML.

Perhaps you should jump to the actual value statement you're making ("Real tech companies shouldn't use X (Wordpress)" or "Real tech companies should use Y")

Not that Facebook hasn't tried to have a blogging component before...

Yes it does, Mark has used it for public letters in the past: https://www.facebook.com/notes/mark-zuckerberg/a-letter-to-o...

But this is more of an investor relations thing, so that might've had something to do with it.

That's like asking someone why they drive a Toyota Corolla.

If Elon Musk drove a Fiat that leaked flaming oil, everybody would ask why.

seriously Mark? Seriously?

You keep control AND get the money and try to sell it with charity?

This is what the 0,0001% wants us to believe...

if i fits i sits

Facebook takes a 40% rake from advertisers. Ouch!

$2B income from $5B in ad revenue.

Hopeful businesses just keep running ads and lining Facebook's wallet. If Mark really wanted to give back, he'd give us more clicks per $.

If he wants day-to-day control as a founder but doesn't want to keep an ownership interest, then he can sell his shares and apply for the job of CEO. But that means he can be fired. So he wants to be CEO, not own the company, and yet nobody can fire him. The Romans had a word for that: Tyrant, with tyrannicide being a virtue. This scheme is doomed. The sooner he realizes it the fewer heads will roll during the cleanup.

That escalated quickly!

>Everything we do at Facebook is focused on our mission to make the world more open and connected.

1st thought: Then what's with all the passwords? (tongue-in-cheek)

2nd thought: Open and connected for who? SIGINT?

3rd thought: Well, if that's really the case, then why doesn't FB resemble /b/ a lot more?

4th thought: I'm definitely not the target market here, but I hope people who try to invest in FB can afford the risk of the investment.

5th thought: Who am I kidding with #4?

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