Facebook’s Zuckerberg's Perfectly Legal Scheme to Avoid Taxes

[xcel]

Can I get paid via stock options too? Nope.

Wayne Gerdes - CleanMPG - May 15, 2012

Facebook - A “No Tax” deal for all concerned. Those concerns behind Facebook anyway?

In an article posted at Thinkprogress - Facebook Unfriends Uncle Sam: Mark Zuckerberg’s Plan to Avoid Taxes, apparently some in Congress are cheering his and co-founder of Facebook Edward Saverin’s plan on?

With the way the “IPO” is being structured, both CEO Mark Zuckerberg and Facebook itself will lower their tax bills to “$0.00” for years to come and in fact, generate up to $500 Million of our taxes paid in refunds back to Facebook. Wow!!!

In a NY Times Op-Ed piece written by Tax Attorney David S. Miller, Zuckerberg may then never pay a dime of taxes on the rest of his Facebook wealth.

“But how much income tax will Mr. Zuckerberg pay on the rest of his stock that he won’t immediately sell? He need not pay any. Instead, he can simply use his stock as collateral to borrow against his tremendous wealth and avoid all tax.

If Mr. Zuckerberg never sells his shares, he can avoid all income tax and then, on his death, pass on his shares to his heirs. When they sell them, they will be taxed only on any appreciation in value since his death.

Larry Ellison of Oracle and the late Steve Jobs of Apple has benefitted greatly from some of the ultra wealthy’s completely legal tax avoidance practices. Read the NY Times Op-Ed as it’s a good one.

The Citizen’s for Tax Justice reported on the Facebook IPO financial structure in February revealing a number of interesting methods in which the company is going to cost you and I dearly.

Facebook's First Public Filing Reveals Its Plan to be a Champion Tax Dodger

“Facebook, Inc.’s upcoming initial public stock offering (IPO) paperwork reveals that it plans to wipe out all of the company’s federal and state income tax obligations for 2012 and actually generate a half billion dollar tax refund. As part of the plan, Facebook co-founder and controlling stockholder, Mark Zuckerberg can expect a $2.8 billion after tax cash windfall…

Senator Carl Levin:

“Facebook may not pay any corporate income taxes on its profits for a generation. 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. It isn’t right, and we can’t afford it.”

Facebook just like most major corporations in the US use this section of the tax code to avoid paying corporate income taxes and in fact generate refunds and credits to carry forward essentially forever.

Way to go Congress. In an election year when they are asking for donations from those very same corporations and the wealthiest of tax payers, do you think they might change this?

Why would they as the Government is only taking in $0.60 on every $1.00 it is spending and what’s a few more $Trillion each year added onto the almost $16 Trillion we have racked up so far?

[rfruth]

Zuck is going to duck

[08EscapeHybrid]

Not to take this too political, but I feel that the Gov't should not be making budgets with money they don't have. Expanding the Nat'l debt should only be done to take care of sudden, unexpected emergencies.

[waltermlee]

These tax loop holes have been around for a long time its just that the Facebook IPO is incredible huge and Zuckerberg, et al stands to make a fortune from it. Normally, most of the IPO shares are spoken for before the first share are allowed to be sold (and if there is enough interest in the IPO there are stock options that allow Zuckerberg, et al to sell or buy more) - so there's a bit of insider wheeling and dealing with any IPO. My guess is that Zuckerberg will make sure he has a controlling interest in FB and the IPO will just change the amount of capital that FB will have to work with (e.g. it can buy more servers and hire more programmers or lawyers with the extra cash)

[Indigo]

Originally Posted by 08EscapeHybrid

Not to take this too political, but I feel that the Gov't should not be making budgets with money they don't have. Expanding the Nat'l debt should only be done to take care of sudden, unexpected emergencies.

There would be no deficit if the war hawks didn't pick fights all over the world. Legalization and Su sequent taxation of marijuana would cut costs and raise revenue at the same time.

[Indigo]

Any person who renounces citizenship as part of a tax avoidance scheme should be expelled from the United States.

[Kurz]

Thats why income Tax is a dumb system.

[Carcus]

The National Debt and Federal Budget Deficit Deconstructed

http://www.youtube.com/watch?v=jboTe...e_gdata_player

[jpleong]

Originally Posted by herm

Zuckerberg is not renouncing his citizenship.

Yeah, I'm confused by the title of the thread. It's Saverin, not Zuckerberg: http://www.latimes.com/business/tech...,7396346.story

A dirty move, regardless.

JP

[Blackbelt]

The only way to fix the current tax code is to use 2 things.
A gallon of gas
A match

Then, start over, and limit it to 10 pages.