Monday, December 14, 2015

230.6 - Corporations and the rich are usually scumbags

Corporations and the rich are usually scumbags

I'm going to spend a couple of minutes here, just so we don't forget, on a couple of reminders that most rich people and most big corporations - no, not all, but most - are self-serving scumbags.

A new rule to combat water pollution by extending Clean Water Act protections to millions of acres of wetlands and streams was finalized this year. And of course a lot of corporations want to see it overturned. Obama has pledged to veto any Congressional attempt to overturn the regulation, so trying to insert such a provision into the omnibus budget bill would have attracted a lot of attention.

Note I say "would have." The right-wing-dominated Congress is expected to include a provision to block Syrian refugees from entering the US. In a conference call held the week before Thanksgiving, lobbyists representing a number of polluting industries such as electric utilities, the American Forest and Paper Association, and others agreed among themselves that this, the fight about Syrian refugees, that this is great news for them.

Why? Because it takes the focus off them, giving them the cover they need to slip under the radar and attach a legislative rider to roll back the new rules.

Up to 10,000 refugees, hoping to escape the violence and insanity of the Syrian civil war and resettle in the US, their hopes being slammed against brick walls by xenophobic religious bigots attacking them as mere conduits for terrorists if not terrorists themselves, and the only thing these cretins can think about is how it will help them continue to pollute streams and wetlands.


Martin Shkreli
Next up, you surely remember Martin Shkreli, the smirking little prig of a man who raised the price of a drug used by HIV patients among others to fight a parasitic infection by some 5000%, up to $750 per pill. After a massive outcry, he said he would reduce the price. Remember?

He hasn't. And he's not going to.

The day before Thanksgiving, his company announced it would drop prices for hospitals, create smaller bottles with 30 pills, and provide free starter packs in 2016. The problem? The discounts only apply to bulk orders. The list price of the drug remains the same: $750 a pill.

And Martin Shkreli remains a smirking little prig. And a scumbag.

Last but by no means least, and the thing that prompted me to do this, you unquestionably heard all the raucous fawning over Mark Zuckerberg, the megabillionaire co-founder of Facebook, when he and his wife announced they would donate 99 percent of their worth, the vast majority of which is tied up in Facebook stock valued at $45 billion today.

Mark Zuckerberg
But contrary to what you likely heard, they not donate $45 billion to charity. Nope. Not even close.

What Zuckerberg and his wife, Priscilla Chan, did was set up a limited liability company, an LLC, one which he controls, and then "donated" the stock to it. In effect, Zuckerberg moved his wealth from one bank account to another.

If instead they had set up a charitable foundation, it would have been subject to rules and oversight, it would have to allocate to charity a certain percentage of its assets every year, and it would have to meet transparency requirements. An LLC has none of those requirements. It can invest in for-profit companies. It can make political donations. It can lobby for changes in laws. In short, Zuckerberg can do exactly what he wants with his money, precisely like before.

What this does do is create wonderful tax benefits for him. Here's how it works without getting into the weeds of tax law: The LLC donates appreciated shares - remember, its assets are shares in Facebook - to charity. He gets a tax deduction equal to the fair market value of the shares but owes no tax on the transaction because the shares were donated, not sold, so there is no capital gain.

The bottom line is that Mark Zuckerberg has amassed a fortune valued at $45 billion and he may never pay a penny in tax on it. Yes, it is all legal, but that makes it no less scummy, especially when he allows himself to be described as a great philanthropist who "gave away" his fortune.

He would better be described as a scumbag.

Sources cited in links:

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