Thursday, December 26, 2013
Forbes: Mark Zuckerberg's $2 Billion Tax Bill Double Last Year, Higher Than Most Billionaries, by Robert W. Wood:
Last year Mark Zuckerberg caused a kerfuffle by generating what many called the biggest tax bill ever for an individual, about $1 billion in taxes. That was impressive, but much of it was done via withholding as part of his Facebook pay. Besides, Facebook got a tax deduction for every dollar.
The Facebook founder and CEO is in for an even bigger tax hit now. But as with last year, it seems largely within his control. Company filings say he is selling 41.4 million shares worth approximately $2.3 billion. Most of the net proceeds are supposed to be used to pay the taxes Mr. Zuckerberg will incur by exercising options to purchase 60 million shares of Facebook Class B common stock.
Mr. Zuckerberg now has 58.8% of the voting power, but this whopping sale of shares would take him down to 56.1%. Still, post-sale he will retain more than 444 million shares. And he may still have unexercised options too.
But it is easy to see that even among elite filers, Mr. Zuckerberg is, well, elite. According to IRS data on the top 400 tax returns, the average in that elite group was about $48 million. And the entire group of 400 paid only $16 billion.
That was in 2009, but even accounting for inflation and a now somewhat more robust economy, the $2 billion tax payment is astounding, on top of big numbers last year. Warren Buffett paid less than $7 million in 2010. Yes, that was million, not billion.
Prior TaxProf Blog coverage: