As the much-ballyhooed Facebook IPO looms closer, there's a mountain being made out of a molehill.
Turns out 27-year-old founder and CEO Mark Zuckerberg may have a $2 billion tax bill that, according to a variety of sources, he intends to pay in full.
He seems like a regular guy...or is he?
To say I'm skeptical of his intentions would be an insult to actual skeptics. I think the "Zuck" is a great guy, but a regular guy? No way.
He didn't build from scratch a business that has 845 million customers by being stupid.
Zuckerberg goes to great lengths to project an aw-shucks kind of image. But in reality, this move is about as down-to-earth as Kim Kardashian's wedding. And it's every bit as sophisticated a play as I would have expected out of Larry Ellison or the late Steve Jobs.
Zuckerberg (and presumably his advisors) knows that the stakes couldn't be higher than they are at the moment, which is why he wants to pay this tax bill and reinforce the illusion that Facebook is part of Middle America - instead of being built upon its back.
He knows that successfully doing so will help him monetize your information when Facebook goes public.
I say this because it's important to remember the only reason Facebook is worth anything is because users - people like you - have voluntarily, with no compensation whatsoever, assembled the greatest single collection of marketing data in recorded history. That's right. Your data is going to make him rich.
So where are all the privacy advocates now?
I'd love to see what Facebook's proposed valuation would be if 845 million people suddenly decided they really don't want to share their most intimate moments with friends or decide they don't really want to "like" anything.
And why hasn't the Occupy Wall Street crowd or the Tax the Rich bunch latched onto this?
Because evidently none of them can spell h-y-p-o-c-r-i-s-y. And many are probably too busy using Facebook to "meme" about their activities to pay attention anyway.
But that's really beside the point.
A Zuckerberg Tax? ...Give me a Break
There should be a huge amount of backlash, but there isn't. Well, unless you count any number of proposals like the "Zuckerberg Tax" advanced last Tuesday in a New York Times OpEd piece by tax lawyer David Miller.
Miller advocates allowing the government to claw back money from the ultra-wealthy. He believes that individuals earning more than $2.2 million in income or having more than $5.7 million in securities should have their stocks marked to market and taxed even if they haven't sold their investments.
This is like students earning "Cs" and Ds" asking the dean of a university to redistribute the grades of those earning "As" because those students are too successful in their studies.
I don't know what's scarier - the fact that something like the Zuckerberg tax is actually being considered in Washington, or that things are so bad we have to use somebody's name as a euphemism for saying the government is so broke it's looking to sink its greasy hooks into those who have built real wealth in this country.
We already have a dysfunctional tax code that's so convoluted an estimated 80% of Americans have to use tax preparation help.
It's so complex nobody is really sure how many lines of code there actually are.
In fact, estimates range from 5.5 million to 7 million words on more than 9,000 pages. By comparison, the novel "War and Peace" is "only" 1,444 pages.
Zuckerberg's stunt aside, our tax code is smothering industry, killing the incentive to work harder and completely removing the one thing that makes America different from anyplace else on the planet - the ability to make our dreams reality.
To hear the government tell the story, we are the problem.
Evidently our leaders on both sides of the aisle don't recall the words of President Abraham Lincoln, who noted "some should be rich shows that others may be rich, and hence is just encouragement to industry and enterprise. Let not him who is houseless pull down the house of another; but let him labor diligently to build one for himself."
Or President Calvin Coolidge, who opined that "the wise and correct course to follow in taxation and all other economic legislation is not to destroy those who have already secured success but to create conditions under which everyone will have a better chance to be successful."
Somehow our sacrifice, our hard work and our entrepreneurial spirit is what's wrong with America, according to the Beltway Bunch.
Worse, somehow only the government can save us. Bull.
Zuckerberg's True Intentions
The way to save this country is for our government to get out of the way.
We founded this country because we sought "freedom from government not freedom through government;" and I didn't write that. New York Times bestselling author Tommy Newberry did in his aptly titled book, "The War on Success."
Much of our current tax regulation is designed to rein in risk takers. It's written by men and women who, as lifelong career government employees, have never really known risk their entire lives.
The way I see it, the government is lucky that Zuckerberg is such a calculating and clever businessman.
He could easily have borrowed against his stock and effectively created an income stream against which he never pays taxes.
Yet he didn't.
Instead, he's made a calculated decision that creating a media circus around what could be the single largest tax payment in history will benefit Facebook and ultimately create still more wealth when the stock debuts.
He couldn't give a rip about making a $2 billion tax payment - he's making a $2 billion investment in his own future at a time when the markets are likely to maximize his efforts.
Way to go, Mark!
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About the Author
Keith is a seasoned market analyst and professional trader with more than 37 years of global experience. He is one of very few experts to correctly see both the dot.bomb crisis and the ongoing financial crisis coming ahead of time - and one of even fewer to help millions of investors around the world successfully navigate them both. Forbes hailed him as a "Market Visionary." He is a regular on FOX Business News and Yahoo! Finance, and his observations have been featured in Bloomberg, The Wall Street Journal, WIRED, and MarketWatch. Keith previously led The Money Map Report, Money Map's flagship newsletter, as Chief Investment Strategist, from 20007 to 2020. Keith holds a BS in management and finance from Skidmore College and an MS in international finance (with a focus on Japanese business science) from Chaminade University. He regularly travels the world in search of investment opportunities others don't yet see or understand.