Facebook chief faces tax bill of $1.5bn

http://www.ft.com/cms/s/2/6dbffbce-4e8b-11e1-ada2-00144feabdc0.html#axzz1lQlRsbel

by tilt • 14 years ago

7 4 14 years ago

ft.com

tokenadult• 14 years ago

Reported earlier (by a few hours) in the Wall Street Journal

http://blogs.wsj.com/wealth/2012/02/03/mark-zuckerbergs-2-bi...

with a different estimated tax bill, submitted to HN yesterday.

http://news.ycombinator.com/item?id=3550074

For either story, the underlying primary source is the registration statement for Facebook's initial public offering of stock.

aChrisSmith• 14 years ago

Am I missing the story here? Man makes billions in income and has to pay billions in taxes?

Cushman• 14 years ago

Socio-economic considerations aside, there's something subtly absurd about this situation— I think it's captured especially in the last line of the article:

Politicians in Sacramento, California’s state capital, are arguing over how to spend the tax windfall expected from Facebook’s IPO.

While conversely, NYT article noted that Warren Buffet paid under $7 million in taxes last year.

Personally, I'm of the opinion that taxing the flow of money doesn't make a lot of sense on the face of it. Taxing the static accumulation of money seems like it provides a more sensible set of incentives. Of course, I'm just a guy.

dfield• 14 years ago

The NYT article (http://www.nytimes.com/2012/02/04/business/zuckerbergs-big-t...) made a more interesting point:

"The taxes Mr. Zuckerberg and other Facebook shareholders pay on exercised stock options will translate into a big tax benefit for the company. The I.R.S. allows companies to take a mirror deduction for the employees’ option compensation. Facebook anticipates that the deduction will eliminate the tax bill on its $1 billion in 2011 profits, according to its regulatory filings. The company also expects the break to generate as much as $500 million in additional deductions, which can be used for refunds for 2009 and 2010 and for reductions in future years. Facebook declined to comment further on Mr. Zuckerberg’s tax plans."

“Due to the stock option loophole, Facebook may not pay any corporate income taxes on its profits for a generation,” said Senator Carl Levin, a Michigan Democrat who has proposed changing the policy. “When profitable corporations can use the stock option tax deduction to pay zero corporate income taxes for years on end, average taxpayers are forced to pick up the tax burden,” he said. “It isn’t right, and we can’t afford it.”

Facebook chief faces tax bill of $1.5bn

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