| 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... |
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.