Why can't I...
...be so lucky?
Look, I'll settle for a measly 1% of the proceeds.
Now of course, I've got this unclaimed bank account and I need a little money for a fee, but that is another story. Write to me in Nigeria, address to follow.
If all goes according to plan, Facebook founder, chairman, and CEO Mark Zuckerberg's share of the profit in his company's upcoming initial public offering will result in him facing a tax bill of around $1.5bn for 2012. What's more, the Financial Times reports, that astronomical bill could increase if the IPO is more successful …
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Mitt Romney isn't using particularly creative accounting. He just owns shed loads of investments and lives off the income from those investments, which is taxed at 15%. He donates a few million to charity (church) and so his effective tax rate is a bit less than that.
Blame the US law makers for setting the tax rate at 15%.
I am in no way defending capital gains tax but the 'logic' is that in theory it is already earned and taxed income that is reinvested (and therefore it is unfair to retax it), and also it is taxed lower to encourage reinvestment. The reality is that sales tax and inheritance (or estate) tax shoots down this theory as both are retaxing already taxed income. The rich make the rules, and therefore pay very little tax, as a concession the extremely poor also pay no tax, probably because it would cost more to collect the small amount they would pay.
As a member of the 53% (that do pay tax) I am not happy with it!! There needs to be a much more basic tax system. Have a basic floor that takes into the amount the federal poverty level or something similar and everything above that, no matter what, is taxed at a reasonable percentage. Thus freeing up millions of tax accountants and civil servants to do something useful.
The capital gains tax rate should remain at 15% for the first $100,000... that would encourage savings and investment by the middle class, too. It's the guys making $10m, $20m (or in the case of Zucky, $6b) m and more who should pay a higher rate on that investment income over $100,000 per year.
Lower the corporate tax rate to 4%... and watch companies leave Ireland's 7% rate in droves.
That investments are made with after-tax funds is lame. The fact is your income comes from your employer's pre-tax funds as a cost of goods and services so it has not been taxed prior to your income tax. Any remaining profit is taxed at about 35%. What is left is reinvested in the company and some is paid as dividends to stockholders. Those stockholders are then taxed another 15% capital gains on what has already paid 35% by the business. 35% followed by 15% of the remaining adds up to a 44.75% tax rate, not the 15% rate those who think you are stupid would have you to believe.
I upvoted you already, but you deserve special mention for outing Bono. Sanctimonious millionaire p**ck. Gimme a Buffett any day.
Far as corporate taxes go... lower them, massively.
Then ding the income from shares and dividends as normal income. The only issue left would be to make it so that foreign investors did pay taxes in the corporation's origin country, rather than to their home governments. And you would also have to lower taxes on earnings from _foreign_ investments.
Complicated? Probably, but 15-20% tax brackets on billionaires is not fair by any means. Nor is it really necessary for capitalism to be efficient, unlike what some pretend. Just make sure the tax code is simplified enough to require less tax accountants at the end - otherwise only the rich get tax breaks.
I got some "big" stock options gains a while back. Yes, I worked hard, but it did feel like a total cash grab, tax-wise, compared to my usual hoi polloi (unwashed masses) salaried self.
Back to minding my magical wish granting ponies now...
Maybe a few other MegaCorps
could learn a lesson here. Pay your taxes
shame on you VodaFone, Burton's and U2.
You enjoy the profits now pay your way. Its only fair.
As stated in other public domain docs, the proceeds from the IPO go straight to the IRS for his PERSONAL tax bill. At some point the other shoe will drop and the shareholders will realise that the company is being treated as a personal piggy bank. According to an inside source reported in techradar last years profits were $500 million (half a billion). Zuckerbergs tax liability is three times the companys profits, if that's correct. Stewardship ????
Not really sure what your point is though.
Zuckerberg pays tax = Good
VodaFone/Burton's/St Bono don't don't pay tax = Bad
how tax is paid isn't the issue. Willingness to pay it is!
I pay tax and so should everyone else.
I wonder which shell company St Bono's share of Facebook's profits will be paid into and which tax haven they are based?
I could be wrong about this BUT, I believe the tax bill would be for exercising his stock options whereby he is paid (allowed to buy) a large number of shares at a cut price, therefore he then owns X squillion shares that he only paid a relatively small fee for, the difference being in effect a bonus which is taxable. i.e. pay 10 million for 100 million in shares, pay tax on the 90 million you didn't pay for them, so you pay 35% on the 'gifted' 90 % portion of the options, you still end up rolling in it. Again I could be completely wrong, I'm still figuring out this crazy tax system here.
It's a bit complicated but (IIRC) you get taxed on them on the day of the IPO as if the difference between the option price (effectively nowt) and the launch price had been salary.
If you never sell the shares or the they become worthless, eg. the company goes bust, - you still owe that tax. Some friends got screwed by this in the first dot-com bubble 10 years ago.
If I sell you something for £1 which I'm selling to other people for £1000, then you have had the equivalent of £999 given to you as a subsidy to buy the asset. The actual value when/if you sell it again is not relevant as it was your choice to buy the item and take the subsidy.
That's what's happening here: 6¢ is not the price other people will pay for the shares so the difference is de facto income, which happens to be instantly spent on buying shares.
Always always remember: the rules on stocks and shares in the US are ALL in place because someone sometime ripped the arse out of the system and had to be stopped. The rules didn't just fall out of the sky in a land that worships the imaginary free market almost as much as it worships their imaginary god.
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that in addition to the $1.5B owed to the IRS, Mr. Zuckerberg will also owe $500M to the State of California. That's a $2B tax bill just for income taxes, not to mention that the other various taxes sapping Californias and Americas of their money (gasoline, sales, property, school, blah blah blah).
Despite all the protests about the top 1% paying their fair share, where is all the fecking money going? Trillions of dollars a year and frankly little to show for it methinks. So much for the common decency to give a man a reacharound every once in a while.
I really doubt he will pay anything like that, time will tel though, im sure his people will whittle that tax liability down to feck all.
on the subject of Bono...
Bono is using these investments to create a trust to fund his philanthropic adventures. you can do so much more with a few billion then a few million.. He was advised to make those plays to do just that.
Maybe if MegaCorps paid their taxes we wouldn't require 'philanthropic adventures'
So by this theroy.....
Steal/Avoid/Evade taxes which causes cuts in the public sector, private business to go under and real hardship in Ireland as people lose their jobs and homes... so that St Bono can return at sometime in the future with a ship load of cash and dole it out on a 'philanthropic adventure'
You either work for 'Elevation Partners' or are just plain dumb! People like Bono and Bob Geldolf and all the other hedge funders avoid tax because of greed.
I pay tax so should he
because you have to have the tax avoidance measures in place before the deal closes. If he'd had the appropriate vehicles in place beforehand, sure he could have avoided much or all of that. Just remember, even with the stupendous gross amount he is paying, because of an upper level inversion, he'll still be paying less as a percentage of actual income than some other schmucks who are pulling in a measly $150,000K because they are actually closer to the inflection point of the tax collection curve.
And I say that as a schmuck who is downside and nowhere near the $150,000K number.
He will exercise 120,000,000 options on or about the day of the IPO. If he's lucky he will get all of his options exercised. If he's lucky the Obama recovery will be strong and the market will reflect that. Who knows, maybe the FB treasury will get to sell some stock and add a pittance to its books.
If the IPO closes at $20 a share, Zuckerberg makes $2.4 billion, $30 a share, $3.6 billion, $40 a share (what they're hoping for) $4.8 billion. Then he pays his tax of 35%. Depending on what he sold the stock he got for his options. -- let's say $40 -- he pays the government $0.06 on every $40 of tax. The new FB shareholders pay the rest.
So if his liability is $2 billion, he pays $3,000,000 out of pocket and uses the $39.94 per share given to him by the hapless investor to pay the balance due of $1,997,000,000.
Not a bad deal, no? (I hope I got my decimal places right) :-)
Current capital-gains taxes are a joke. The original idea was to counteract the live-or-die-by-quarterly-results mindset prevalent in most companies, and encouraged by stock analysts.
In the beginning, the requirement to be eligible for c-g rates was that you must have held the investment for (IIRC) five (5) years; the theory being that if you knew you wouldn't get the preferential treatment for half a decade, you'd be more willing to see the company run for long-term results. (I don't remember what the rate started at, but I'd bet a doughnut it was higher that 15%.)
Of course, once this was instituted, all the guys with large amounts of money started using some of it to bribe^Wlobby congressmen to cut down the term, and it was gradually whittled away (and probably the rate, too) until it has become the loophole for the wealthy you see before you.
Another good idea bites the dust.
Nobody seems to be asking why so much tax needs to be paid. Oh, yes that's right - for Ponzi schemes that are going bankrupt (i.e. Social Security/Welfare & Gold plated pensions for civil "servants"), Public Private Finance Initiatives in which the government gets totally ripped off by private companies and a free health system just about anybody from any part of the world can use. The solution is not in making companies and risk takers pay the same taxes as employees (i.e. people who take no risks) but in making the government more accountable for how it uses the taxes it currently collects. A fair taxation system would be something like this: any income below 20 000 is free of tax and any other income above 20 000 being taxed at 15% (regardless of source) and a land tax rate of 2%. With stiff penalties for tax evasion and avoidance. Simples...
Perhaps it's because the lion's share of the government's revenue comes from taxes. And the government has committed itself to expenses far in excess of it's revenues. If the deficit between revenue and expenses is $400 billion, what do you propose to do?
Medicare, Social Security, Defense are most responsible for the red ink. Medicare is keeping elderly, sick people alive. We could save a lot of money trimming Medicare. Would you want that?
We could cut the benefits of everyone collecting SS, who would then have scramble to try to make their monthly nut. And we could move eligibility up to 70.
With China and Russia flexing their strength (and an alliance which we just saw in the Security Council vote on Syria) do you really want to cut the Defense Department budget. And there's the possibility that if the government removes $400 billion from the economy by not spending it, it will create a vicious cycle of a shrinking GDP and shrinking tax revenues.
Whatever tinkering you do, you run the risk of "unintended consequences", some of which are not very pretty.
They aren't forward thinking here. It's an SEC filing announcing the strong possibility that the CEO will shortly sell off a vast number of shares, and explaining *why* he will be doing so. Other investors need to know this so that they don't think it means something is wrong with the company, or the CEO, or something.
Even if it is not required by law / SEC regs, it is just good policy. It's not about planning ahead.
Social media megacorp Meta is the target of a class action suit which claims potentially thousands of medical details of hospital patients were shared with its Facebook brand.
The proposed class action [PDF], filed on Friday, centers on the use of Facebook Pixel, a tool for website marketing and analytics.
An anonymous hospital patient, named John Doe in court papers, is bringing the case — filed in the Northern District of California — alleging Facebook has received patient data from at least 664 hospital systems or medical providers, per the suit.
Comment Facebook parent Meta has reportedly said it needs to increase its fleet of datacenter GPUs fivefold to help it compete against short-form video app and perennial security concern TikTok.
The oft-controversial tech giant needs these hardware accelerators in its servers by the end of the year to power its so-called discovery engine that will become the center of future social media efforts, according to an internal memo seen by Reuters that was written by Meta Chief Product Officer Chris Cox.
Separately, CEO Mark Zuckerberg told Meta staff on Thursday in a weekly Q&A the biz had planned to hire 10,000 engineers this year, and this has now been cut to between 6,000 and 7,000 in the shadow of an economic downturn. He also said some open positions would be removed, and pressure will be placed on the performance of those staying at the corporation.
Updated Arm today told The Reg its restructuring ahead of its return to the stock market is focused on cutting "non-engineering" jobs.
This is after we queried comments made this morning by Arm chief executive Rene Haas in the Financial Times, in which he indicated he was looking to use funds generated by the expected public listing to expand the company, hire more staff, and potentially pursue acquisitions. This comes as some staff face the chop.
This afternoon we were told by an Arm spokesperson: "Rene was referring more to the fact that Arm continues to invest significantly in its engineering talent, which makes up around 75 percent of the global headcount. For example, we currently have more than 250 engineering roles available globally."
Facebook parent Meta has settled a complaint brought by the US government, which alleged the internet giant's machine-learning algorithms broke the law by blocking certain users from seeing online real-estate adverts based on their nationality, race, religion, sex, and marital status.
Specifically, Meta violated America's Fair Housing Act, which protects people looking to buy or rent properties from discrimination, it was claimed; it is illegal for homeowners to refuse to sell or rent their houses or advertise homes to specific demographics, and to evict tenants based on their demographics.
This week, prosecutors sued Meta in New York City, alleging the mega-corp's algorithms discriminated against users on Facebook by unfairly targeting people with housing ads based on their "race, color, religion, sex, disability, familial status, and national origin."
Accounting software colossus Intuit has decided to pull its QuickBooks product from India.
The decision comes into effect on January 31 2023, after which QuickBooks products and service offerings for accountancy and small business customers will no longer be available in the world's second most populous country.
"After careful consideration, the decision was made that we can no longer continue to deliver and support QuickBooks products that serve the needs of small businesses and accounting professionals across India," reads a notice posted yesterday.
Facebook owner Meta's pivot to the metaverse is drawing significant amounts of resources: not just billions in case, but time. The tech giant has demonstrated some prototype virtual-reality headsets that aren't close to shipping and highlight some of the challenges that must be overcome.
The metaverse is CEO Mark Zuckerberg's grand idea of connected virtual worlds in which people can interact, play, shop, and work. For instance, inhabitants will be able to create avatars to represent themselves, wearing clothes bought using actual money – with designer gear going for five figures.
Apropos of nothing, Meta COO Sheryl Sandberg is leaving the biz.
Opinion Consulting giant McKinsey & Company has been playing a round of MythBusters: Metaverse Edition.
Though its origins lie in the 1992 sci-fi novel Snow Crash, the metaverse has been heavily talked about in business circles as if it's a real thing over the last year or so, peaking with Facebook's Earth-shattering rebrand to Meta in October 2021.
The metaverse, in all but name, is already here and has been for some time in the realm of online video games. However, Meta CEO Mark Zuckerberg's vision of it is not.
Judges in the UK have dismissed the majority of an appeal made by Facebook parent Meta to overturn a watchdog's decision to order the social media giant to sell Giphy for antitrust reasons.
Facebook acquired GIF-sharing biz Giphy in May 2020. But Blighty's Competition Markets Authority (CMA) wasn't happy with the $400 million deal, arguing it gave Mark Zuckerberg's empire way too much control over the distribution of a lot of GIFs. After the CMA launched an official probe investigating the acquisition last June, it ordered Meta to sell Giphy to prevent Facebook from potentially monopolizing access to the animated images.
Meta appealed the decision to the Competition Appeal Tribunal (CAT), arguing six grounds. All but one of them – known as Ground 4 – were dismissed by the tribunal's judges this week. And even then only one part of Ground 4 was upheld: the second element.
The government of the Philippines has welcomed the decision by giant business process outsourcer Concentrix Corporation to forgo tax incentives and instead allow its staff to continue working from home for the foreseeable future. The nation feels that subsidising outsourcers' bottom lines does nothing to boost the local economy.
The Philippines imposed lengthy and strict COVID-19 lockdowns that saw its substantial business process outsourcing sector quickly adapt to working from home. The nation's government supported that move by continuing to offer the pre-COVID subsidies it offered to outsourcers that run offices located in certain special economic zones.
Those subsidies have subsequently been removed, and the requirement to operate from special economic zones restored.
Infosys celebrated the first anniversary of the e-filing portal it built for India's tax authorities fixing another prominent glitch – this time a search functionality error.
Complaints about the error streamed in to India's Income Tax Department, which tweeted about the error on Tuesday.
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