Friday, May 18, 2012

Should we unfriend Facebook?

Facebook is growing up. It has gone from a chic social networking site aimed at college students to a global behemoth. It used to be a cool tool to keep up with your friends. Now it is becoming a robot to mine your personal data so advertisers can bomb you with well-targeted ads. Ho hum.

There are many reasons to dislike Facebook. Prospective and current employers can use the information posted on your page against you. You can be bullied in cyberspace. Cyber-thieves and Big Brother love it.

Here is another reason. The company is run by people who have become obscenely rich but have no interest in contributing to the common good.

We face a crisis in this country. Poverty is rampant and growing as more and more wealth is concentrated at the very top of the economic ladder. Government programs to help the most vulnerable are on the chopping block because the rich do not want to pay taxes. When Greed is God, we are all going to Hell.

And Facebook is run by people with underdeveloped consciences. You have probably heard about Facebook's co-founder, Eduardo Saverin. He decided to give up his American citizenship to avoid a big capital gains tax bill. But Severin is the tip of the iceberg.

The me-first ethic is pervasive among everyone at the top of Facebook's food chain.
The biggest tax burden, unsurprisingly, falls to the senior-most Facebook employees and biggest shareholders who will be collectively saddled with a bill from Uncle Sam to the tune of about $200 million. However six of these folks -- Mark Zuckerberg, Dustin Moskovitz, Sean Parker, Sheryl Sandberg, Reid Hoffman and his wife Michelle Yee -- will take advantage of a somewhat arcane and totally legal tax trick by putting large portions of their shares in grantor-retained annuity trusts (GRATs). According to The Wall Street Journal's Laura Saunders, "these trusts transfer asset appreciation from one taxpayer to others, virtually tax-free."
All of these people already have more money than they can spend and they are about to be showered with even more once the company goes public. Their first thought is how can I give back as little as possible to the society that made my success possible.

Zuckerberg is even considering another tax gambit popular among the internet billionaires.
But how much income tax will Mr. Zuckerberg pay on the rest of his stock that he won’t immediately sell? He need not pay any. Instead, he can simply use his stock as collateral to borrow against his tremendous wealth and avoid all tax. That’s what Lawrence J. Ellison, the chief executive of Oracle, did. He reportedly borrowed more than a billion dollars against his Oracle shares and bought one of the most expensive yachts in the world.

Isn't that special? All of this reveals the gigantic tax loopholes that have been created to serve the rich and leave the rest of us scrambling for crumbs. The temptation is certainly there, but no one is obligated to give in to it. The trouble is people like Mark Zuckerberg do not think twice about it.

And here is the real kicker. The tax rate applicable to these billions and billions is only 15%. Yes, thanks to the hard work of Ronald Reagan and George W. Bush, the capital gains tax has been slashed and slashed. But even that is too high for these pigs. Every year we hear more cries to lower it further or eliminate it altogether, including calls from a vulture capitalist currently running for president.

And the icing on the cake is that tech companies like Facebook have corporate tax loopholes large enough to drive Larry Ellison's massive yacht through.
Tech firms have a few advantages that make them especially able to exploit loopholes in the U.S. corporate income tax. One is that a lot of their income comes from intellectual property. Firms can use strategies to shift the ownership of U.S.-developed IP into subsidiaries located abroad, thus treating the income it generates as foreign and not taxable in the U.S. Our corporate income tax also has generous credits for research and development; since a large share of tech firms’ expenditure is R&D, that preference benefits them.
If you are a retailer, manufacturer, or small business, you have a big tax bill. If you are a tech company or energy company, there is a veritable Garden of Eden filled with juicy loopholes to pick from so you give back nothing to our society.

I hear people ask what the Occupy movement is all about. Simple, it is about the rigged system that allows the rich to get richer at great cost and consequence to the rest of us. It is the financial bankruptcy of our nation driven by the moral bankruptcy of the rich.

The mark of a successful parasite is one that does not kill the host. Those are only tiny brain parasites. The truly dangerous ones are human with no ethics about how they treat their fellow humans. And isn't it funny that the founders of a social network site are among the most socially callous people you can imagine.

When you sit down at your computer, log into your Facebook account, and start friending this person, liking that company, and posting videos of dancing cats, understand that every click makes people without a conscience richer. Just remember that Mark Zuckerberg got his start by invading privacy to steal photographs and create a demeaning game known as Facemash.

It all gives me a greater appreciation of why Jesus said that it will be easier for a camel to pass through the eye of a needle than for a rich man to enter the kingdom of heaven. What I cannot understand is why Christians are so reluctant to make greed a moral issue. Could it be that money corrupts? Well, if you are going to go on Facebook, at least unfriend Judas and High Priests.

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