Comment by lionhearted | Hacker News Reader

Comment by lionhearted | Hacker News Reader

I'll say it -

This guy is a fucking jerk.

When confronted with something that conflicts with his worldview that the rich are bad, he cooks up a bunch of caveats and concerns so he can keep his current worldview.

Many of his arguments aren't even right -

> Wealthy donors don't tend to prioritize lower-income communities, communities of color or other marginalized groups as beneficiaries of their giving.

You mean, like, eradicating Malaria in Africa [1] or funding the USA's worst performing school districts [2]?

Jerks like this have been beating the "the rich are evil and don't care about poor people drum" for so long that they can't adapt now. What's this? In addition to building world changing companies, they're also giving the wealth they got personally to charity? Well, it's still not so good, because you know the rich are evil and don't care about poor people.

I'll say it - he's a jerk. When confronted with effective pragmatic people moving into his backwards-poorly-managed idealistic space, he complains and slings mud and adds doubt.

Screw him. We need less people doing stuff that he's doing, and more people doing entrepreneurship, taking strong pragmatic action to fix problems, and giving voluntarily.

[1] http://www.gatesfoundation.org/topics/Pages/malaria.aspx

[2] http://techcrunch.com/2010/09/24/techcrunch-interview-with-m...

I've not familiar with his writings prior to this, but you seem really, really certain that he unfairly despises the rich and is unthinkingly attached to this position without regard for the evidence or the greater good in general. Personally, I didn't get that impression from this article at all, so I'm curious what makes you so certain of his state of mind. I didn't feel that the thrust of the article was to attack the rich in any way, just to point out that their good intentions might not manifest themselves as powerfully as we expect.

Regarding [1], the author explicitly mentions the Gates' as an exception to the rule. And regarding [2], I don't think a single piece of recent anecdotal evidence invalidates his organization's actual study.

Personally, I read the article as a reminder that the Giving Pledge's success is no reason to rest on our laurels, and not as an indictment of its contributors. Is it so wrong to do something good and still want to do better?

That's because Dorfman is not in philanthropy for the sake of helping anyone, he's about power and control. When pioneers of industry enter into his field with their own money and do a much more effective job at allocating it, it removes the need for the social and economic moochers that Dorfman represents.

Agree with you completely, people like Dorfman disgust me. I guess he forgot that Gates etc never had to give any of their money to anyone, much less their own personal effort and time.

He acknowledged all your points in his article (really, go read it again), and he didn't call you a jerk.

> He acknolwedged all your points in his article, and he didn't call you a jerk.

He acknowledged that charity-as-is is currently failing, largely thanks to poor leadership by people like him?

He acknowledged that he dislikes wealthy people as an almost fundamental belief (as opposed to just having it be an undertone of the article)?

No, he didn't. And you know, when you take time to write a series of articles encouraging people to "Dial Down our Enthusiasm over the Billionare Giving Pledge" - that deserves being called a jerk. He could be building the world, doing things, but no - he's slinging mud. That qualifies as jerk behavior.

Edit: He also doesn't mention the conflict of interest here - he's currently a philanthropy director who stands to lose a lot of influence, power, and prestige as a result of this. He used to be a top dog in philanthropy, and now he's slinging mud at people who are doing different, probably more effective things than him.

It is hard to have an intelligent discussion about charity with someone who's main point is that someone else is a jerk. We can only have a conversation about whether someone (or someone else) is a jerk, or something better, or something worse.

Try again, Sebastian.

> It is hard to have an intelligent discussion about charity with someone who's main point is that someone else is a jerk. ... Try again, Sebastian.

Is "Try again, Sebastian" really the best tone to try to settle down a conversation and have an intelligent discussion?

But okay - the main point isn't that he's a jerk - there's 3-4 points about mudslinging at people who are doing good things, conflict of interests with the old guard in philanthropy, the ineffectiveness of the old models of charity, and entrenched worldviews being defended.

We can discuss those, if you like? I do think his behavior is uncool and that that's worth pointing out - but there's plenty of other points worth discussing too.

Maybe the discussion could start with the conflict of interest here, how a philanthropy director is throwing mud at people involved in philanthropy that stands to make him less personally prestigious and important?

It's hard to have an intelligent discussion when the opposing side makes comments like these (from the article):

"UNTIL the money is given away, It amounts to very little more than air. Better that we raise their taxes to pay down the deficit and fix the infrastructure that they helped destroy NOW and worry about what lucky people get their giveaways or more importantly those in need who don't."

This kind of thinking baffles me - where did this entitlement culture come from?

One person who I think disagrees with you is Warren Buffett.

Let me play devil's advocate.

Let's say you are bill gates. You own assets worth of 50 billion dollars. Assuming there is no capital gain or loss and that your return on investment is 5%, you should be making 2.5 billion USD annually. Half of that would normally need to be paid as income tax to government. That's around 1 billion dollars every year.

So what you do? You get the best financial advisors and they'll tell you... "move your assets into your own private foundation". this way you won't need to pay tax on your income although to retain tax exempt status, you will need to give away every year at least 5% of your assets. so you will end up paying your "taxes" anyway but it will make you look awesome because now you are doing charity instead of just paying federal income tax like the rest of us.

And this is exactly what bill gates has been doing all these years. His foundation is worth 35 billion dollars and he is giving away exactly 5% every year. Up until now they gave away 24 billion dollars (around 1.5 billion a year).

I think it makes sense to avoid paying income tax and decide to spend your money elsewhere at your discretion.

so let's not pretend these billionaires are better than rest of us.

> Assuming that there is no capital gain or loss and that your return on investment is 5%

That doesn't seem to make sense, as a return on an investment is a capital gain.

> Half of that would normally need to be paid as income tax to government.

How exactly do you figure that? You don't pay income taxes on investments, you pay a flat 15% capital gains tax on investment income. I don't see how you think he'd lose half to taxes, it'd be far far less than half.

Beyond that, giving away 5% of 35 billion (total wealth) costs a lot more than paying 15% of 2.5 billion (investment income that year), so it's not saving him money on taxes which would only be in the range of 350 million a year given your example.

Choosing to spend a billion and a half a year on charity to avoid paying 350 million in taxes doesn't make much sense as a motivation. So I highly doubt that's why he's doing it.

income from dividends or when your money sits in the bank earning interest is not capital gain. capital gain is when you buy shares, real-estate etc and market price of these assets increases while they are on your balance sheet. then it's unrealized capital gain and you don't pay any tax on it until you sell it and make it realized capital gain. for simplicity reasons to explain my point, I didn't want to overcomplicate it with capital gains and losses.

Yes, but dividends are basically taxed at the same rate or slightly higher 20% as capital gains; they aren't taxed as earned income using the progressive bracket system. So while they aren't technically capital gains, my point stands.

In 1994 when Bill Gates started his private foundation, income from dividends was taxed like regular income.

You're right it's 15% right now but don't forget there is new tax law coming into effect pretty much in two weeks that will tax dividends again like regular income.

I wasn't aware the new law did that, but I'm pleased to hear it. Now if only they'd do the same with capital gains.

> You own assets worth of 50 billion dollars. Assuming there is no capital gain or loss and that your return on investment is 5%, you should be making 2.5 billion USD annually. Half of that would normally need to be paid as income tax to government. That's around 1 billion dollars every year.

You're assuming that gain in wealth translates to taxable income. It doesn't (necessarily).

Suppose that you buy $100 worth of microsoft stock and the price rises so it's worth $150 a year later. You don't owe anything on that $50 increase in value. (You don't owe anything until you sell.)

However, if you put that same $100 into a bank account and received $10 in interest over the same year. You owe taxes on that $10.

I'd guess that a large fraction of BillG's investments are of the form that he doesn't pay taxes until he cashes out, either for consumption or to make different investments.

If so, BillG's taxable income can <$100M/year while his wealth is growing by $2.5B/year.

I suspect that BillG taxable income was under $5m/year during most of the years while his wealth was exploding (due to the increase in the value of his microsoft stock).

You seem to imply the point of the foundation is to avoid paying taxes on the capital interest of great hordes of cash, or at least to have direction over what happens to a portion equivalent to the tax.

Okay... but the elephant in the room is the capital itself. Once it's transferred to the foundation, how can it be transferred back, or spent in a personal, non-charitable manner?

I do agree with you on just about every point, but to be fair the author did mention that Gates is an exception to the "don't help the poor" deal. And although Zuckerberg is a good example here, it is also one that HN is inevitably aware of. Can you think of any other charitable donations to the poor so that you might strengthen your argument?

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