I guess only pirate billionaires born on 3rd base can imagine being this craven and petty.
My man renamed the damn corp to "Meta" and proceeded to YOLO nearly triple digit billions USD on fire, shamelessly pivots to AI like all the other bros, while holding a solid majority of voting stock, and now we have to listen to him and his pals complain they might have to give something back.
Well then, you haven’t really read what the situation is, have you?
He is going to pay, he just didn’t want to sell his normal shares, so he doesn’t lose his voting control. So instead, they are creating new class of shares that he can sell to pay the taxes.
“Born on third base.” You make him seem like minor nobility. His dad is a dentist and his mom is a psychiatrist. Kids with a background like that are a dime a dozen.
But they aren't "shielding" him really. They are just making it possible for him to pay the tax by selling shares in the company without giving up voting shares...
I mean maybe that is "shielding" but it's not like they are getting him out of paying the tax if it passes
The point of the law is to reduce the power of billionaires. Billionaires Using their power to change the rules and systemically avoid loss of power using a mechanisim available to literally nobody else is pretty much the antithesis of this idea.
Aiming to reduce the number of billionaires is not sound economic policy. You are taking away the incentives that have generated so much progress and job creation in America. Mostly when people complain about billionaires it’s either sour grapes, or a certain type of billionaire they disagree with politically.
The way all these billionaires have built up their wealth is by retaining a certain percentage of stock in the companies they built, and then the market cap of these company got into the billions and sometimes trillions.
Let’s assume a founder has 10%. There are two options to prevent them from becoming a billionaire. Either that company cannot grow past a 10 billion market cap. That would destroy retirement for most normal Americans. The other option is to force the founder to liquidate to pay taxes. If so, then yes, they would stop further building out these companies at a certain market cap once they have no real stake or say in them anymore. Why would they work for free once they are at the limit. I wouldn’t and I think almost nobody would.
Not a big fan since we now only get 2 links a month,
But it would have been easier to relocate to the border in Tahoe than fill out mountains of paperwork; he lives on an estate in a Maui bunker anyway, not spoilt for housing options...
Not very good with building technology; he lost 80 billion on a nonexistent metaverse fail. Is that now a tax loss?
I understand it's a move to keep his voting shares but... Why would the board care if the Zuck was to sell his big house in California? What was the threat to Meta/the board?
He owns enough shares that there would be a significant change in the supply/demand ratio when California forces him to sell to meet his tax burden. That would tank the stock price because way too much supply when he tries to sell.
So basically meta stepped in to say they'd pay a portion of zucks tax burden to protect the supply/demand ratio of the stock, which protects the overall market price of Facebook stock and the valuation of the company as a whole.
Wealth taxes are inherently stupid in our modern financial system and this is a clear example of why.
> Wealth taxes are inherently stupid in our modern financial system
"our modern financial system" is what is left of a reasonable but by now largely dismantled financial system that used to exist between roughly the 1930s and 1980s.
The entire phrase "Wealth taxes are inherently stupid in our modern financial system" has "throwing up my hands" and "there's nothing we can possibly do" written all over it. The financial system is a societal construct, not a natural constant like, say, the speed of light.
No one here seemed to understand your question, which is one I had too. Probably because no one but the board have the answer.
My guess is you can expect a stock price crash if your founder-star CEO moves away from HQ? It would mean tech stocks behave quite differently from e.g. Starbucks. Also seems like a literal chicken race since Mark would be affected even more than the board if that happened on top of everything else.
I guess most likely is they just needed a reason of some sort to report to the SEC so that's what they used. Much nicer sounding than Mark threatening to replace the board, or the board are obviously his puppets, or anything else that happens at a founder-controlled (via low-vote shares) company.
I can only imagine the heartbreaking trauma these poor rich people are made to suffer when parting with their beloved money to pay taxes. What an earth-shattering tragedy. How do they survive?
37 comments
[ 2.6 ms ] story [ 9.9 ms ] threadGuardian: Meta strikes deal with Zuckerberg to protect him from California wealth tax (39 points, 2 days ago, 33 comments) https://news.ycombinator.com/item?id=50193581
Wired: Mark Zuckerberg Agrees to Stay in California Despite Billionaires' Tax Measure (5 points, 2 days ago, 3 comments) https://news.ycombinator.com/item?id=50188801
Telegraph: Meta strikes deal to protect Zuckerberg from California billionaire tax (9 points, 2 days ago) https://news.ycombinator.com/item?id=50191129
WSJ: Mark Zuckerberg Threatened to Leave California. Meta’s Board Cut Him a Deal (4 points, 2 days ago) https://news.ycombinator.com/item?id=50193052 (30 points, 1 day ago, 40 comments) https://news.ycombinator.com/item?id=50199284
My man renamed the damn corp to "Meta" and proceeded to YOLO nearly triple digit billions USD on fire, shamelessly pivots to AI like all the other bros, while holding a solid majority of voting stock, and now we have to listen to him and his pals complain they might have to give something back.
Gross.
He is going to pay, he just didn’t want to sell his normal shares, so he doesn’t lose his voting control. So instead, they are creating new class of shares that he can sell to pay the taxes.
FWIW I think this is better than avoiding the tax.
I mean maybe that is "shielding" but it's not like they are getting him out of paying the tax if it passes
Let’s assume a founder has 10%. There are two options to prevent them from becoming a billionaire. Either that company cannot grow past a 10 billion market cap. That would destroy retirement for most normal Americans. The other option is to force the founder to liquidate to pay taxes. If so, then yes, they would stop further building out these companies at a certain market cap once they have no real stake or say in them anymore. Why would they work for free once they are at the limit. I wouldn’t and I think almost nobody would.
Billionaires are a symptom of a problem that the US had under control for almost half a century until Reagan basically broke American economic policy.
https://www.sec.gov/Archives/edgar/data/1326801/000162828026...
NOTE: Look for "Founder Alignment Agreement" in the above doc as an example if you're doing a quick scan.
https://www.sec.gov/Archives/edgar/data/1326801/000162828026...
https://investor.atmeta.com/investor-news/press-release-deta...
But it would have been easier to relocate to the border in Tahoe than fill out mountains of paperwork; he lives on an estate in a Maui bunker anyway, not spoilt for housing options...
Not very good with building technology; he lost 80 billion on a nonexistent metaverse fail. Is that now a tax loss?
So basically meta stepped in to say they'd pay a portion of zucks tax burden to protect the supply/demand ratio of the stock, which protects the overall market price of Facebook stock and the valuation of the company as a whole.
Wealth taxes are inherently stupid in our modern financial system and this is a clear example of why.
"our modern financial system" is what is left of a reasonable but by now largely dismantled financial system that used to exist between roughly the 1930s and 1980s.
The entire phrase "Wealth taxes are inherently stupid in our modern financial system" has "throwing up my hands" and "there's nothing we can possibly do" written all over it. The financial system is a societal construct, not a natural constant like, say, the speed of light.
If not "wealth taxes", then what? Poverty taxes?
We are on HN. Do you have any doubts about the demographic here would prefer?
Gotta brown nose those corporate overlords.
My guess is you can expect a stock price crash if your founder-star CEO moves away from HQ? It would mean tech stocks behave quite differently from e.g. Starbucks. Also seems like a literal chicken race since Mark would be affected even more than the board if that happened on top of everything else.
I guess most likely is they just needed a reason of some sort to report to the SEC so that's what they used. Much nicer sounding than Mark threatening to replace the board, or the board are obviously his puppets, or anything else that happens at a founder-controlled (via low-vote shares) company.
https://news.ycombinator.com/item?id=50193581
This wealth tax is poorly planned, tax the wealth, but find a better way.