Buffett spreads his wealth tax-free to Bill & Melinda Gates Foundation [of which he was a trustee], Susan Thompson Buffett Foundation [founded by himself], Sherwood Foundation [founded by his daughter], Howard G. Buffett Foundation [founded by his son] and NoVo Foundation [founded by his other son].
I don’t see how this is nefarious (in itself). The big challenge with donating money is trusting that it will get used “correctly”. Donating to organizations under control of people you know and trust is the easiest way to do this.
If there was some sort of slush-fund thing going on it would be a problem, but I haven’t seen any evidence of that. The tax rate on gifts isn’t that high, and so you’d have to be doing really extreme fraud for it to me more profitable than a straight gift.
How do you come to the conclusion there is no financial benefit in putting your wealth into charity foundations?
I am quoting some parts of an interview last year with BC Law Professor Ray Madoff:
>The government provides generous tax benefits for charitable giving but the rules provide very little assurance that this giving will actually make its way to charities. A well-planned gift can save a donor as much as 74 percent of the value of that gift in taxes. That means a $10 million gift can cost the federal government $7.4 million in forgone taxes and therefore only cost the donor $2.6 million after in after tax dollars.
>Right now, there's over $1 trillion dollars set aside in private foundations and over $120 billion set aside in donor-advised funds. Donors get all the same tax benefits from putting their money in these intermediary vehicles as when they give funds outright to a working charity, like a food bank. Yet the public has no assurance of getting any benefit from this money, because there's no requirement under current law that these funds ever be distributed for public benefit. Donor advised funds have no payout requirements under current law and private foundations can fully meet their payout requirements by giving to donor-advised funds or by paying salaries to family members.
It is just so undemocratic for a handful of people to be in control of infrastructure projects that will affect the lives of millions or billions. They can so easily make a project look good that still benefits them unfairly and there is some evidence that this is what's happening.
It’s about control. Gates and Buffet have massive amounts of control over public policy due to their “donations”. We as a society lose out when a few mega billionaires have anything to do with policy.
I think it's good that taxes can solve problems a decentralized, and therefore disorganized, system will struggle with, but in the same way i don't think that a centralized economy will run as efficiently as a free market, I think philanthropy will make greater gains if a variety of parties are allowed to spend their money on what they think is important without needing collective approval.
You’re discounting scale though. Just like Microsoft destroyed competition and innovation with their monopoly (only possible with government backed IP laws), Gates eliminates competition for philanthropy and policy by force of his fortune. Gates is centralizing things, around himself.
Because allowing billionaires to leverage public policy is a centralization of control. It gives single individuals too much sway. You rely on them being benevolent (they’re not) and deal with their idiosyncrasies (at best). It’s bad system design and it’s not democracy. It’s not even socialism, it’s an oligarchy.
We (as US taxpayers) are subsidizing this donation. He's not just giving away his money -- he's giving away our money, too.
It's totally fair to complain about one of the most powerful people in history transferring wealth from public, democratically-elected organizations to institutions that have far less transparency and no democratic oversight.
That's not how it works at all. Not levying taxes on something is not the same as subsidising something. It's not "our" money until he does something with that money that we as a society have deemed taxable.
I fully agree that there is something criticise here, but it's definitely not that he is somehow taking "our" money. It's his money until he decides to spend it. It's money that could be hours, if we instructed our government to take it from him. But we haven't, so that's that.
I like the idea of charitable foundations being able to receive tax free, though I would admit that is a matter of taste and not a clear right/wrong distinction. What I do object to is that his family has paid positions in those foundations. That just smells of tax loopholes. If those foundations manage to perpetually break-even, they would be able to fund his family with cushiony jobs forever.
But, as far as I can tell they're not being paid egregious amounts, and the foundations are all actually spending their money on good things, so in this case there doesn't seem to be any shadowy business. Especially since most of it is going to the Gates Foundation anyway.
But, if we're talking policy, I think it would be a good thing if there were restrictions on how much family members of philanthropes can earn at charity organisations, if anything at all.
I do not consider for instance, PARCC / Common Core, to be a great example of why we should let the richies run public things and decide where resources go.
The internet today… nerds will hero worship any billionaire regardless of how damaging their actions are. Gates, Buffet, Musk… do not have your interests at heart but they have created cults of personality that have been adopted by those who are weak of mind.
They do though, you're wrong and there's a lot of evidence for it. This very article we're commenting on is hard evidence Buffet has our interests at heart, and you're just too hard headed to interpret it that way.
With nerds, you just mean people who take a rational view of things. And with worship, you mean appreciation of their efforts.
I'd say they wouldn't hurt a fly, but Gates has saved millions of people horrible ends by literally fighting mosquitos so that goes out of the window.
There's loads of horrible billionaires out there, that you would single out 3 of them that are actually accomplishing good in the world is ridiculous.
If you're so against billionaires, why don't you go spread the names of some who are not contributing to the world? Do you even know them? I bet you don't because you're just riding some ill informed band wagon.
You’ve bought their propaganda. Bill Gates does immense damage by gaining control over large swaths public policy. We do not need or want any billionaire in control of policy. You’re literally arguing for oligarchy.
When I said “nerd” I meant fan boy culture. A geek who was logical would know centralization of control is bad system design.
Bill Gates doesn't control shit. He attempted influence some education stuff, it failed and it backfired hard and because he didn't actually have control he could also not undo his influence. What sort of policy do you feel he has control over?
He doesn't have enough money to actually control anything. He couldn't even get people in Afghanistan to vaccinate when that was his sole goal for a decade, just because some local warlords were working against him.
You have a misguided idea about how much control he can actually exert with the couple billion he spends on this stuff. Do you know how little money it actually is in the grand scheme of things? He can barely move the needle on the topics he finds important.
A single power plant costs upwards of 10 billion dollars, and that will power maybe 1 large city. You know who really has the money to influence those? Corporations, you know, the things that actually have no soul, and that have no motivation other than greed arguably dictated by law? They'll counter Gates' billions with trillions. All the billionaires in the US couldn't stop a Putin or a Salman from doing anything they want.
That's what an oligarchy is. I'm not arguing for oligarchy, I'm not even arguing Gates should even have that much money to spend. But to say he's being nefarious with it, or that he's spending it in a bad way is just ridiculous.
And who the fuck fanboys over Gates. Literally no one, he's as unlikable as fuck, he fucked up Windows in the 90's he fucked up my job as a webdeveloper in the 2000s. I think he should spend his money on fighting climate change, but he's spending it on sick and hungry children. He probably saved my life by funding vaccine research, but I still don't really appreciate him.
But yeah, complain about fan boy culture and the distinction about geeks and nerds, as if those are not just things you just made up. All this propaganda I'm watching.. you know the movies that really indoctrinate me where I'm watching actual Bill Gates saying things about the things he actually did that you can actually measure and verify that had actual and measurable positive impact in the world. Yeah those things really got to me, I'm so indoctrinated right now.
Capitalism as practiced in America is a meritocracy... As long as you stretch the definition far enough to include "being friends with, or descended from, a billionaire" in the tent of "merit."
Edit: to paraphrase Hannibal Buress, you can boo me, but I'm right. ;) Some people succeed by having a better idea and executing on it with technical proficiency, some succeed by convincing someone with a lot of resources to support their endeavors. Most succeed through a mix of the two, but pretending that support of entrenched big-money interests has minimal impact is disjoint from reality.
Warren Buffett is also 90 years old now, and has been resigning from all corporate boards except his own. Hard to say if the resignation is actually a story or if the reporter wanted to create one.
“For years I have been a trustee — an inactive trustee at that — of only one recipient of my funds, the Bill and Melinda Gates Foundation (BMG). I am now resigning from that post, just as I have done at all corporate boards other than Berkshire’s,” Buffett said. “The CEO of BMG is Mark Suzman, an outstanding recent selection who has my full support. My goals are 100% in sync with those of the foundation, and my physical participation is in no way needed to achieve these goals.”
Pretty sure they predicted media spin on this and headed it off directly and explicitly in the announcement, in the exact same sentence as the resignation none-the-less, as to the fact he resigned from all boards (other than his baby of course). Yet, here we are.
Honest question: What do you want from the guy? Billionaire donates billions, you hate him. Billionaire doesn't donate billions, you hate him. Billionaire bails out company saving thousands of jobs, you hate him. Billionaire doesn't bail out company, you hate him. You can hate the system for letting people become billionaires, but Warren is giving away all of his money to charity and lives a frugal life. Is this just fetishizing the hate of rich people?
Just imagine the world we'd live in if 20% of the billionaires were like Warren Buffett... Not saying we should have that many (or few) billionaires, just that as far as billionaires are concerned, it's hard to be much better than him.
The article says Buffett has resigned from all boards except Berkshire Hathaway. It must be because he thinks he's getting old, which he's mentioned a number of times regarding succession planning.
Not OP but I presume this refers to the rumored Epstein connection. And he divorced recently, which the media has spun in a way that his wife found out some dark secret and had enough.
The donation is newsworthy in the sense that Buffett is donating ~2,000 lifetimes of income (for a US citizen) to various organizations.
The resignation is newsworthy because it suggests Buffett's transition into full retirement. As someone who can move markets with a quote in a newspaper, his potential retirement is certainly important enough to hit the "publish" button on a digital outlet.
Listen to the latest three episodes of Acquired for a ~9 hour exploration of Warren Buffet/Berkshire Hathaway. It gives a lot of context for people trying to figure out what this news means.
>> “In 2006, I pledged to distribute all of my Berkshire Hathaway shares — more than 99% of my net worth — to philanthropy. With today’s $4.1 billion distribution, I’m halfway there.”
So that would imply his net worth is half what it was in 2006. But of course it’s not, it’s never been higher (103 Billion according to Forbes last year). Interesting that CNBC chose not to explore this rather obvious inconsistency in Buffet’s statement.
According to the article he's donated 45 billion, which is really close to half of the 103 billion figure you're quoting, especially considering that those donations were made over the last decade. So where's the inconsistency?
Where’s the inconsistency? When he made this claim (2006), his net worth was around 50 billion. Now it’s around 100 billion. He’s somehow managed to double his net worth AND get media coverage that he’s given away half his wealth.
The statements seem pretty clear. He said he has given away half his shares, which he has. The other half happens to have appreciated a great amount since his last statements. Do you understand how the stock market works? It goes up all the time. Berkshire Hathaway is no exception. Tens of billions were still donated, regardless of his current wealth.
What do you mean "somehow"? Warren Buffet doesn't magically make money, he runs a successful investment business. At some point in history it was worth 10k later it was 50 billion and later still it was 100 billion. Also in 2006 he said he would give half away, which at the time was worth 25 billion according to you, but at this point he has given away 45 billion, which according to him is half his net worth.
There's obviously no inconsistency, interesting that you would not point that out.
If I’m misunderstanding the math here, can someone please explain this (instead of just downvoting me )? The numbers from Forbes show him roughly doubling his wealth since 2006.
He is accruing value faster than he is spending it. He was worth 50 billion in 2006, and giving away half would have meant giving away 25 billion. But last year he was apparently worth 100 billion, and he has already given away 45 billion worth of assets.
It's a bit hard to quantify exactly how much he should give away to make good on his promise, because the dollar amount is a moving target. I think maybe he means half of his holdings in Berkshire Hathaway. I haven't looked into what sort of assets he has, but judging from his public writings I wouldn't be surprised if the shares are the only thing of significant value he owns.
