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Tuesday, May 15, 2012

OK, Zuck's an asshole too.
Posted by Jill | 9:23 PM
And yet, I find Zuckerberg's greed slightly less heinous than Saverin's, because a) Zuckerberg actually did the work, b) he's expressed (though it WAS two years ago) at least a passing interest in philanthropy, which he's somewhat demonstrated by donating $100 million to the Newark, New Jersey school system; and c) what he plans to do to hoard as much of the billions more he's likely to make from the Facebook IPO is written right into the tax code, which means it's Congress' fault:

While Zuckerberg will pay a hefty tax bill right off the bat if he follows through on his plan to sell $5 billion in Facebook stock options, as the New York Times noted, he may then never pay a dime of taxes on the rest of his Facebook wealth. “Instead, he can simply use his stock as collateral to borrow against his tremendous wealth and avoid all tax,” the Times reported.

And, as Citizens for Tax Justice has noted, Facebook may use the issuance of stock options to avoid corporate income taxes, instead receiving hundreds of millions of taxpayer dollars in refunds:

The tax law says that if a corporation issues options for employees to buy the company’s stock in the future for its price when the option issued, then if the stock has gone up in value when employees exercise the options, the company gets to deduct the difference between what the employee bought it for and its market price.

When, as Facebook expects, the 187 million stock options are cashed in this year, Facebook will get $7.5 billion in tax deductions (which will reduce the company’s federal and state taxes by $3 billion). According to Facebook, these tax deductions should exceed the company’s U.S. taxable 2012 income and result in a net operating loss (NOL) that can then be carried back to the preceding two years to offset its past taxes, resulting in a refund of up to $500 million.

“When profitable corporations can use the stock option tax deduction to pay zero corporate income taxes for years on end, average taxpayers are forced to pick up the tax burden,” said Sen. Carl Levin (D-MI). “It isn’t right, and we can’t afford it.” This tax preference for corporations costs the U.S. about $2 billion in revenue per year.

In addition, Zuckerberg’s using a totally legal accounting gimmick to transfer money to his unborn children, thus avoiding the gift tax. He also — by virtue of accepting a $1 dollar salary and purely living off his wealth — could be eligible for the Earned Income Tax Credit, which is intended to benefit low-income Americans.

If only I could be convinced that he's doing this so he can emulate Bill Gates as a philanthropist, rather than to be just another greedy prick who feels he owes nothing to the country that made it possible for the son of a mail carrier to become a dentist and for HIS son revolutionize social networking.
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3 Comments:
Blogger Jimbo said...
If he wanted to be a working class hero, he would have announced his strategy for investing in the American people. Giving $100 million to the Newark school system is fine but it's got to be more than just a money dump, even if the school system could use it.

Call me skeptical until proven otherwise.
5/15/12, 10:20 PM  
Blogger jurassicpork said...
Jill, the only work Zuckerberg did was in stealing Facebook's design and concept from Harvard University and fucking over his closest friends.
5/16/12, 11:42 AM  
Anonymous Anonymous said...
It's not really Zuckerberg's fault. Blame the fools who wrote such ridiculous laws...and the 1%ers who bought them.
5/16/12, 12:56 PM  
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