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Sarah Lazare – Zuckerberg’s Facebook Giveaway: ‘Charity’ or Tax-Dodging Scheme?

Facebook CEO Mark Zuckerberg and his wife, Priscilla Chan, attracted attention and praise when they announced Tuesday they plan to “give” 99 percent of their Facebook shares—worth roughly $45 billion—to the causes of “advancing human potential and promoting equality.”

However, there is a key problem with the declaration, unrolled in a public letter to the couple’s newborn child. The couple is not donating their money to charity, but in fact shuffling it into their own limited liability company (LLC)—the Chan Zuckerberg Initiative.

While this venture will allow the couple to donate to charity, they will not be required to do so, and they can also invest in private companies. What’s more, they can use cash from the fund to pay lobbyists and donate to politicians. Under this framework, Zuckerberg and Chan will have the power to transfer ownership of their massive stock in Facebook without paying a penny in capital gains taxes.

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