TNe consequences of the Zuckerberg birth announcement.
Matt Levine writes: The Chan Zuckerberg Initiative, to which Mark Zuckerberg and Priscilla Chan have pledged to donate 99 percent of their Facebook stock, is not a charitable foundation, but just an LLC. That is, it’s just a pot into which Zuckerberg and Chan can put their money, and out of which they can give money to charities, or for-profit investments, or political advocacy, or whatever.
One upshot of this is that they won’t get a tax deduction for putting money into that pot, because it is not a charitable foundation. This is of course not at all important to them, because they don’t have that much taxable income (Zuckerberg is paid $1 a year, and most of their wealth is in unrealized capital gains). Also, they are planning to give away 99 percent of the shares that make up the bulk of their fortune, and giving away 99 percent of your money to shield yourself from income taxes on the other 1 percent is economically nonsensical.
But a surprising number of people are making a claims like this: There’s an almost overnight financial benefit, too: The Facebook founder will deduct the fair value of his gift to his foundation from his taxable income in the year he makes the donation. A donor like Zuckerberg could realize a tax benefit equal to about one-third of the value of his gift.
Nope! No foundation, no tax benefit.
Elsewhere, Dylan Matthews has some ideas for what Mark Zuckerberg should do with his money, including giving it to his college roommate or spending it on monetary policy lobbying. (These are mostly not jokes, though who’s to say what a joke is really.)
David Auerbach asks, Can We Trust the Hacker Philanthropists?
Here’s the truth: No matter how good their intentions, the net result of most such efforts has typically been neutral at best, and can sometimes be deeply destructive. The most valuable path may well be to simply invest this enormous pool of resources in the people and institutions that are already doing this work (including, yes, public institutions funded by tax dollars) and trust that they know their domains better than someone who’s already got a pretty demanding day job. That may not be as appealing to the cult of disruption within the tech echo chamber, but would be exactly the kind of brave and unexpected move that might offer Max a great example of how to engage with the real world that the rest of us live in.
