Sam Altman, the president of top startup mentorship and investment program Y Combinator, thinks venture capitalists like himself have gotten off too easily, tax-wise — so he’s putting the difference into improving the world.
“I donate up to the tax amount I think I should pay,” Altman told BuzzFeed News’ Nitasha Tiku.
The fiscal issue Altman is rebelling against is the “carried interest” tax for hedge fund managers and VCs. It’s one of Wall Street’s favourite loopholes, and one that President Barack Obama has long railed against. Basically, it allows these fund managers to take the incentive portion of their fees — which they earn based on the gain in value of the investments they made for clients — and classify that income as capital gains rather than ordinary income, thereby paying a much lower tax rate.
In lieu of carried interest tax reform, Altman tells Business Insider that he’s simply calculating “up to what it would be if everything was taxed as ordinary income.” The difference between what Altman actually pays and thinks he should pay goes into YC Research, the newly-formed nonprofit arm of Y Combinator.
YC Research, formed in October 2015, kicked off with a $10 million personal investment from Altman, to give you a sense of how his calculations turned out. Altman’s big donation initiative only started last year, he tells Business Insider, because he “had much more liquidity last year than previous years which is what really got me thinking about it.”
We’ve already seen some of what YC Research is focused on: In December 2015, YC Research joined up with Tesla CEO Elon Musk to start OpenAI, a nonprofit researching safer and more humane artificial intelligence research.
Other YC Research projects include a study into “universal basic income,” an ambitious and utopian plan to give Americans unconditional free money. More recently, the nonprofit discussed plans for building new, smarter cities from scratch.
All of this is crazy ambitious, but Altman is an ambitious kind of guy. And as the public face of the startup mentorship program that turned out companies like Dropbox and Airbnb, he wields a lot of influence. Maybe, like Bill Gates before him, Altman can inspire real change among his powerful peers.