That's nice, but let's be honest: She is a billionaire, and will continue to make hundreds of millions, if not billions of dollars during her future tenure at Google. A person of average means donating $500 may be a bigger personal sacrifice than Greene donating $150M.
I dont know why this is being down-voted. While what she did is great, it is a true point in terms of personal sacrifice.
I saw an interview with Bill Gates where he said much the same thing to a comment about his generosity. He pointed out he doesn't sacrifice a single item/experience he wants in life giving away what he does. And a ordinary person that gives a few hundred gives up more than him in terms of what it costs them.
Its a valid point as long as it doesn't take away from the fact the other is also generous.
As someone who used to give away hundreds when he was on the average wage, no, it didn't really cost me life experiences. When I was on less than the average wage, I never had hundreds to give away, but on the average wage (with no kids), a few hundred didn't make much difference.
Few people giving to charity actually sacrifice their own life experiences to do so. As a result, it seems silly to dismiss philanthropic billionaires. We want more of those, not fewer.
True, but how many humans are able to take that perspective? If history has taught me anything, it's that our desires don't end when they are satisfied.
Me too, almost as if acquiring all that wealth, primarily from corporations then redistribution was not something that was pre-considered, surely he is not that smart ;)
How do you know how much money she has? What is her net worth? She's way below someone like Bill Gates (who could count $150M as disposable at .17% of his net worth), and (unless she's doing some impressive money laundering) is not a billionaire. So even if you say she has $999M, $150M is 15% of her money. Unless someone average has ~$3k to their name, $150M is a lot more to her.
I hear this line of reasoning frequently and have come to agree with it. Is it even really a donation when donating 150 million has zero impact on your quality of life? There should be some self-sacrifice for it to actually be a gesture of goodwill. I don't pat myself on the back for donating excess clothes.
I don't quite understand the idea of tax dodging a smaller tax bill by donating a larger amount of money? She had $150mm in stock, and donated it all, avoiding a tax bill of $30mm? If she had paid the tax bill, she would have had net $120mm, but after donating it, she had net $0mm?
There must be something I'm missing here. I've seen these kinds of schemes discussed before, but don't understand how they would work.
TL;DR It looks like she donated $150MM when in actuality she only donated $37.5MM
Can you imagine the optics of an active board member, of a multi-billion dollar company, profiting from said company -- she's on the board of -- buying the company she runs? Good grief that reeks.
She understood she couldn't take that money in good conscience. So, she got out in front of the optics for a small fee by "donating to charity." (I mean look at the comments here applauding her for donating her shares.)
When you donate $150MM in stock, not only do you dodge the $30MM capital-gains tax (at a 20% tax rate), you receive a tax write-off for the full market value of the stock when you donated: $150MM in this case. Which means, in any year, she can take $150MM in income taxed at say 55%, and pay $0 in taxes on it. Much better than the $82.5MM she'd originally owe. And it makes tax planning a lot easier -- you don't have to worry about timing.
All in all: $120MM net - $82.5MM write-off = $37.5MM total cost to her for shares she didn't even want -- for good reason.
Understand that I don't care. But I would've been more impressed if she had donated those shares to her employees...
> Which means, in any year, she can take $150MM in income taxed at say 55%, and pay $0 in taxes on it.
55% is greater than the maximum combined federal and state marginal income tax rate on normal income, and no one making that much does it as normal (mainly, labor) rather than long-term capital gains (which pays lower rates) income in the first place, because no one pays that kind of money for labor, you only make it by capital returns, so, no, she can't even in principal, and even if the tax rates were such that she could in principal, she still wouldn't be likely to be able to in practice.
Firstly, 55% is not greater than the maximum tax rate one could pay on income (especially in CA) [1].
Secondly, you understand that RSUs (restricted stock units) are taxed as normal W-2 income at the time of vesting, right! You pay capital-gains tax on any appreciation in value after said vesting -- should you choose to sell the stock.
You should probably stop spreading misinformation on topics you don't have experience in.
> Firstly, 55% is not greater than the maximum tax rate one could pay on income
But it is, AFAICT, greater than the maximum marginal income tax rate [0]; since the deduction affects only income taxes and not other taxes on income, it is the maximum marginal income tax rate, not the maximum marginal rate of taxation on income, that is relevant.
> Secondly, you understand that RSUs (restricted stock units) are taxed as normal W-2 income at the time of vesting
Yes, I do. That doesn't change anything I said. People that are making hundreds of millions of dollars of income in a year aren't making it from RSU vesting, or any other source of income subject to regular income taxes.
[0] just barely; the maximum marginal income tax rate in any US jurisdiction seems to be 39.6% federal + 13.3% CA state + 1.5% SF local, or 54.4%.
Certainly it was better optics for her to donate the stock to charity, but she didn't come out ahead from it AFAICT.
A simplified example, assuming one year of income from the shares, and one year of $150mm income from Google.
### Keep the shares:
Year1 = $150 - ($150 * 0.2) => $120
Year2 = $150 - ($150 * 0.55) => $67.5
Year1 + Year2 => $187.5
### Donate the shares:
Year1 = $150 - $150 - $0 => $0
Year2 = $150 - $0 => $150
Year1 + Year2 => $150
The first law of tax is that it is always better to have more money than less money. I could be wrong here, but I can't seem to find a way that you come out with more money by giving it away (ignoring donations to your own dodgy charity). I'm a big proponent of charity giving, but I don't see a way to make it turn a profit.
Did you read my reply? You've arrived at the same number I posted in my TL;DR... $37.5MM.
The point was never for her to come out ahead, just less behind.
Why does this matter?
I was simply pointing out that she achieved exactly what she wanted. Better optics. :)
People commending her and commenting how amazing, how selfless, how fantastic it is that she donated all her proceeds to charity.
Understand that her primary motivation in donating was the write-off, not charity.
Otherwise, if she was feeling so chummy, why didn't she instead divide her almost 50% share among the employees that helped build her company? Hint: there's no write-off for that.
It really ought not to be though. I get that the reality is that it is but it irks me greatly that we don't simply tax more heavily and have a social system which works to solve the types of problems that charities aim to solve. Then if you wanted to do "charity work" you'd just work for the government.
I think it does not work for the same reason Soviet-style government-planned economy does not work. The incentives of private persons and of government officials are unreconcilably different.