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Could george Lucas really have sold now to save on taxes later?

December 4th, 2012 by Christopher Williams Comments

What does this awesome pic have to do with taxes? Absolutely nothing, you're welcome.

Last month website Seeking Alpha had an article about capital gains tax rates going up as a result of Obama’s reelection, and how this had to have a great impact on George Lucas’ decision to sell off his empire before those rates did increase. The article was speculation on their part since they hadn’t actually talked to Lucas, but that’s cool, our site thrives on speculation and our opinions on said speculation. So when my editor in chief, Marc, asked me to write up my opinion on the article, how could I refuse? Plus Marc is a really nice guy, how can I say no? Now to be clear, I am no tax expert, having a minimal understanding of any tax law in existence. This is also not a pro or anti Obama piece since given my worldview is all politicians suck and lie to us daily. What this writing is though, is me using my power of deductive reasoning and…speculation to say, Seeking Alpha, he sold to save on taxes? Really?

First off, the guy is already loaded. I just can’t see saving millions in taxes on a deal worth $4 billion being a great incentive to sell. Lucas had enough money before the deal to live out 100 lifetimes and never have to lift a finger again; do you really see a guy like that selling off his lifetime of work, labor of love to save on taxes? If that was really the case couldn’t he have just held on to the company until the tax rate fell again? I totally understand that this is how the wealthy stay wealthy; by pinching every penny they can, but for some reason I just don’t peg Lucas as this kind of guy. When the model of a wealthy man is someone like Mitt Romney, a man who ran for president just so he could effectively cut his own tax rate to 0%, I just don’t see Lucas as that kind of a guy.

This brings me to my second point, charity. A few days after the deal was announced, it was also announced that Lucas was going to handing over that $4 billion payday to schools. What a guy! Sure he could’ve wanted to off load his whole life’s work at this point so that he could have more of it to give to charity, but I just don’t see that either. If I was giving away the whole pie anyway, I wouldn’t be too concerned with making sure I have a bigger pie. Whatever he would’ve gotten from selling next year I’m sure would’ve been a way bigger pie then these schools have seen anyhow.  I guess in the grand scheme of things I don’t see $4 billion going a lot further than say, $3.5 billion. Either way these schools are going to receive the biggest charitable donation in the history of man.

That leads into my third point, it’s more then I had before. Now this obviously doesn’t apply to Lucas because the guy was loaded before the deal, but in a way it sort of does. You have ever one of those friends that always has to dampen the ‘If I won the lotto’ imagination game with this simple phrase, ”Yeah, but you would have to pay half of that in taxes”? I really hate that guy. Look mood killer, if I won $100,000 from the lotto and had to pay $50,000 in taxes, guess what, it’s still $50,000 more then I had the day before. I guess to my poor man’s mind $3.5 billion sounds just as good to me as $4 billion. I don’t see Lucas as the kind of guy that’s going to nit pick that amount of money either. The amount of taxes that Lucas would be saving by selling now as opposed to after the tax hike would pretty much amount to pocket change to him anyhow.

Given that these are my opinions on the matter and not Lucas’ words, it could be plausible that he sold now to avoid paying more in taxes later. Do I think that it’s the reason why he sold now, probably not. Could the tax hike have had some bearing on his decision, of course it could have, but I highly doubt that it was the number one reason why he sold now. I think it’s more then likely Seeking Alpha was looking to fill some news space and decided an article entitled “Invest Like A Jedi And Sell Before The Fiscal Cliff” based on pure speculation was just too good to pass up. Or at least that’s what I’m speculating.

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Christopher is self-billed as the World's Coolest Nerd (meaning he wears glasses and is clumsy, but he never earned good marks in school). He loves all things Star Wars and superhero related such as comics, books, cartoons and movies. He's a husband and father who somehow manages to keep up with his pastimes since his day job mainly consists of sitting around a store with not much to do. He's very outspoken and wants to share his opinions with the world, or at least his fellow nerds. You can follow him on Twitter @AUDone44.