Hacker News Reader

Comment by kemiller2002 | Hacker News Reader

kemiller2002

I don't like rankings like this. I'm not saying all of them, but at least a few made their money off of the backs of others, being ruthless in business, etc. How gracious of them to give money to people they hurt in the first place. I'm glad they are doing good, but let's not pretend they were completely altruistic.

Also, a number of these people donated money years ago to avoid taxes, and the money was invested and growing. Its good we have it, but the "we gave away all this money" is an insignificant impact to them for multiple reasons.

View on HN

>a number of these people donated money years ago to avoid taxes

This isn't how taxes work. If you donate money then you've only reduced your taxable principal. You "avoid taxes" in the sense that it's as if you never made that money. You don't magically reduce your burden any further than that.

People won't take your otherwise fine point seriously if you include this commonly made error.

Except for the fact that they are at least partially in control of the fund either through a DAF or their own charity. You're right they can't spend it on anything they want, but they have the ability to direct in many specific instances with few exceptions. Often if it's their own foundation, to further almost any goal they want. So yeah, they get to not pay taxes on their money and at least spend it partially how they want.

A DAF is just donating to a charity with an extra step, so let's put that aside.

They can't further "any" goal they want, it must be a charitable goal. Bill Gates can't take money from the B&M Foundation to buy himself a yacht. I don't really see what your point is. Anyone that donates money is avoiding taxes to spend money on something they want, where "something they want" is a charitable goal.

By running a charity and notably donating to it those people can get clout though and further raise themselves in the eyes of their peers while not paying very much for it. Additionally they can get some other soft benefits from the charity like hosting events with money they paid no taxes on, or, if they're Trump, just buying things they want with their charity fraudulently.

My original point was that a benefactor that stays within moral and written rules is not avoiding taxes, as kemiller2002 suggested. Breaking those rules is tangential to that point.

It's a common mistake that bothers me because it often is used to dismiss (or even demonize) what is, in the majority of cases, an altruistic act.

My point is that it's not necessarily an altruistic act. It's giving someone the choice of either paying the government or sheltering the money to be used within a limited set of circumstances at another time. Yes, in most cases they are putting in more money than they would pay in taxes, but they are maximizing their ability to influence a charitable instance at some point in time in the future. Also, you notice in that list it has their names? They could have made anonymous donations, but they didn't. They benefit from it, just not in a direct monetary sense. Cynical? Yes. True? In a number of cases also yes.

I would add that charitable donations can often be accompanied by strong obligations that hampers the efficiency of that aide - if a donation is made that requires none of the benefits to the homeless goes to people with a past history of drug use then resources need to be diverted to investigate the recipients and ensure that the accounting works out. Sometimes these obligations are burdensome enough that organizations will stop servicing portions of the population altogether or even refund a donation.

Chartiable donations can also come with requirements around evangelism which I personally find aborrent and, as has otherwise been pointed out, yes it's an absolute reduction in take home but abuse of the system is rife and the income reduction mechanic makes this really attractive to some folks if they're hit with a particularly hard year.

In Canada I've actually been pleased to discover that your retirement is mechanically a charity - investing into an RRSP (registered retirement savings plan) counts as a direct income reduction which can mean that swing years when options may be cashed out or other windfalls happen - can be put profitably towards your own future well being while also ensuring you don't become a burden later in life.

A donation to a private foundation is not deductible.

Required reading for anyone making this criticism: https://slatestarcodex.com/2019/07/29/against-against-billio...

It's worth reading that entire well-reasoned and well-researched post, but the tl;dr is that many billionaire philanthropists do a lot more good per dollar spent than the government and they get problems solved that government is often incapable of solving.

Plus, a sizeable portion of every tax dollar goes to the military, so tax minimization helps reduce how much goes to the war machine.

Funding the military is, irrationally, politically untouchable in America. Both parties have let the military-industrial complex deeply embed itself into the political process and need to toe the line when it comes to the very powerful defense lobbying groups. That said society at large generally approves to good pay and equipment for troops while being less enthusiastic for military research and stock purchases - this is a bit contradictory since folks want troops in a war to have good stocks but don't approve of spending money on maintaining equipment during peacetime.

The sort of TL;DR here is that America being the world police isn't something the public approves of and I think it'd be more efficient to pursue addressing this point then hanging your hopes on billionaires. The utter fascination and praise of billionaires is an extremely toxic[1] spin off from general American Exceptionalism which has done quite a lot of damage to... well... Americans actually being exceptional.

1. In my opinion - how you view the effect of this on society is entirely an opinion thing.

Yes, now "donate" to a health charity which buys pharmaceuticals from a company you have stock in. Bam, tax rebate for investing in your company.

You have described what is called a "self-dealing" transaction in non-profit law (or more technically, an excess benefit or private inurement transaction). These transactions are subject to various tax penalties that apply both to the putative "donor"[1] and to the board members and officers of the non-profit that approved the transaction). Depending on the severity of the self-dealing, the IRS can even strip the non-profit of its 501c3 status or refer the matter to the DoJ for criminal charges.

[1] Note that a 200% penalty rate can apply to uncorrected self-dealing transactions. For the board members and officers, an excise tax of 10% may apply, which the non-profit cannot pay on their behalf.

That doesn't sound legal.

It's more complicated than that, as far as I understand. If you shift your money into a foundation, under some constructions, you can retain a lot of control over how it's spent, while avoiding taxes. Later you can pass control (and hence effectively wealth) along to your kids, this time avoiding inheritance taxes.

But the kids still don't get that money. They only get control of a charity. It's not like they can buy a yacht.

but they get the connections with the charity. That's why any vaguely defined charity that organize "events" for donors should be under a lot of scrutiny. people should check if the charityPR and lobbying dpt is working for the charity, the founder, or both.

I'm okay with scrutiny and oversight as you suggested to prevent fraud from related party transactions, but what's wrong with someone's children getting connections with the charity?

One of the reasons I'm working hard and saving money is to provide my family with better opportunities than I had. To say I'm not allowed to better the lives of my family is to deprive me of rights and freedoms to do what I want with what I create.

Seems simple enough, but never is in reality. There's a reason why the POTUS and his family are banned from running charities in nyc.

> I'm not saying all of them, but at least a few made their money off of the backs of others, being ruthless in business

No, that's all of them. You don't become a billionaire by being nice and non-exploitative.

What? I can think of several off the top of my head.

J. K. Rowling became a billionaire by writing the Harry Potter books. Oprah Winfrey became a billionaire through her brand as a talented talk show host. Michael Jordan became a billionaire thanks to his basketball skills. None of those are even remotely exploitative.

> J. K. Rowling became a billionaire by writing the Harry Potter books.

And the hundreds of marketing people and the editors?

> Oprah Winfrey became a billionaire through her brand as a talented talk show host.

And everyone who makes her shows work?

> Michael Jordan became a billionaire thanks to his basketball skills.

And his coaches and trainers?

Without these people, none of those billionaires would've made it.

That's all true, but when you say "off the backs of others" that generally means by unfairly exploiting the labor of others without giving them anything back (see every dictionary, or https://www.collinsdictionary.com/us/dictionary/english/live...).

In the examples you have cited, all of those people were paid for their labor. In the cases of Winfrey and especially Jordan, many of those people were paid extremely well for their labor.

If you consider voluntary association and compensation for labor exploitative, then I'm not sure what to say to you.

By your standard, anyone who participates in the economy is making money off the backs of others. My mother is now happily retired on the savings she accumulated working as a nurse. She couldn't have done that without all the people working at drug manufacturers, EMR companies, or health insurance providers. Did she make money off the backs of the hospital lab techs? Did she exploit the ER security guards? After all without those people, she wouldn't have made it.

Admittedly, you're probably right. I don't know the personal conquests of Dorsey or Buffet, so part of me was hoping at least a little bit that they weren't as ruthless as the others.

Imagine an analog of such a ranking from 300 years ago.

"Which of our Gracious Lords are doing the moste Good?"

Creator here. Joke is indeed A+ funny.

This made me chuckle

That Louis XV, he's really doing a lot for us!

When it comes to doing good Charles VI is really on fire[1] though!

1. https://en.wikipedia.org/wiki/Bal_des_Ardents

Sadly the truth is that except inheriting money it's nearly impossible to become a multi billionaire without doing ruthless maybe legal but immoral actions (or having someone do them for your).

E.g. Suckerberg did questionable business tactics to kick out early invester which where the people which enabled him to become successful. After this Facebook under him repeatedly acted in bad faite to gain a competitive advantage even if this meant lying to the government, smaller business being unfairly destroy and even lives being lost.

I'm not sure if he even once put social responsibilities over long term profit. At least it looks that way.

And compared to many other companies this might even be harmless.

Through not that this isn't true for (multi-)millionaires, you can get that while acting morally responsible. It's just harder and you need more luck.

For more on this, I highly recommend Anand Giridharadas's 2018 book "Winners Take All: The Elite Charade of Changing the World" on the problems behind billionaire philanthropy.

It feels more and more relevant in a post COVID world.

Altruism doesn't exist. There are a lot of reasons people do things that are helpful to others, but they're all selfish. Maybe they're trying to assuage guilt; maybe they're doing it for attention; maybe they're doing it to deflect bad PR or engender good PR for their organization; maybe it's a pragmatic financial decision; maybe it's political; maybe it just pumps up their endorphins. No matter what, it's done because they get something out of it.

This doesn't make giving bad. You can be selfish and do a tremendous amount of good for others. There's nothing wrong with feeling good or being socially rewarded for helping. This idea that some forms of giving are "altruistic" and others are schemes or manipulations isn't helpful. Attacking a generous person's character because you suspect their motives are somehow impure for unrelated reasons isn't helpful.

By all means, call people out for their bullshit when their motives are hypocritical and transparent, but don't beatify some and demonize others because of unrelated faults in their character. They're all giving for selfish reasons.

Reply on news.ycombinator.com