Income taxes are not a big issue for Zuckerberg either: his annual base salary is just $1. (He has reported other taxable compensation related to his personal use of the company’s aircraft.)
Some tax experts have proposed a federal tax on wealth -- regardless of whether the richest sell their stock or other property -- similar to that imposed by countries such as France, Italy and Spain. David S. Miller, a tax lawyer at Cadwalader Wickersham & Taft LLP, has proposed “marking to market” the holdings of the country’s top 0.1 percent wealthiest citizens and imposing a tax at capital gains rates. He estimates it would raise almost $1 trillion over a decade.
‘Double Irish’
Zuckerberg’s wealth has grown as his company has deployed its own tax-avoidance strategies: Facebook has used a popular tax shelter employed by other big U.S. multinationals known as a “Double Irish” to shift profits to the Cayman Islands.
He and his wife described their desire to help others with passion. In the letter to their newborn, Maxima, the two wrote of promoting equality, and spoke more specifically, and repeatedly, about spending money to cure disease. “We can also help hundreds of millions of children get an education and save millions of lives by helping people avoid disease,” they wrote.
Zuckerberg may want an entity that can influence policy decisions based on his past experience. A $100 million donation he made to schools in Newark, New Jersey, was widely criticized for failing to achieve its result of holding teachers more accountable. His philanthropic initiative couldn’t address state law providing teachers with tenure.
Though not adopting a typical charity’s structure, the couple could even wind up doing something else innovative, creating a new kind of socially responsible company.
“I applaud their emphasis on ‘promoting equality,’ but that starts with paying one’s taxes,” said Gabriel Zucman, an economics professor at the University of California, Berkeley. “A society where rich people decide for themselves how much taxes they pay and to what public goods they are willing to contribute is not a civilized society.”
Fueled partly by tax incentives for the wealthy, charitable giving in the U.S. totaled almost $457 billion in the U.S. in 2014, a 9.3 percent rise from the previous year, according to the Atlas of Giving website.
The pledge by Zuckerberg and Chan places them in a century- long tradition of American philanthropists including Bill Gates and Warren Buffett, a line that stretches back to industrialists Andrew Carnegie and John Rockefeller, whose foundations still rank among the biggest in the country.