>> O'Connell: TONIGHT ON "GREATER BOSTON": I'M SUE O'CONNELL, IN FOR JIM BRAUDE.

BENJAMIN NETANYAHU IS OUT AND HIS FORMER ALLY, NAFTALI BENNETT, IS IN.

WHAT DOES THIS MEAN FOR ISRAEL, THE VIOLENT CONFLICT WITH PALESTINE, AND THE UNITED STATES' RELATIONSHIP WITH THE COUNTRY?

WE'LL DISCUSS.

THEN, LATER, BILLIONAIRES LIKE JEFF BEZOS HAVE PLEDGED TO DONATE A LOT OF MONEY, AND THEY'VE CASHED IN ON TAX CREDITS FOR THOSE DONATIONS, TOO.

BUT A NEW BIPARTISAN BILL IN THE SENATE IS TARGETING SOME OF THE REASONS WHY THAT MONEY OFTEN TAKES YEARS TO END UP IN THE HANDS OF CHARITIES THAT NEED IT.

ONE OF THE ARCHITECTS OF THE BILL, B.C.

LAW SCHOOL PROFESSOR RAY MADOFF, WILL JOIN ME.

♪♪ >> O'Connell: IT'S A NEW DAY IN ISRAEL WHERE, FOR THE FIRST TIME IN 12 YEARS, A NEW GOVERNMENT WAS SWORN IN HOURS AGO.

LONGTIME PRIME MINISTER BENJAMIN NETANYAHU IS OFFICIALLY OUT AFTER THE COUNTRY'S LEGISLATURE SUPPORTED A COALITION GOVERNMENT MADE UP OF HIS OPPONENTS IN A RAZOR-THIN, 59 TO 60, VOTE YESTERDAY, BRINGING AN END TO A TWO-YEAR STALEMATE OF DEADLOCKED ELECTIONS, WHICH COINCIDED WITH A CORRUPTION TRIAL AGAINST NETANYAHU.

THE NEW MAJORITY ISN'T EXACTLY A SEA CHANGE.

PRIME MINISTER NAFTALI BENNETT AND SEVERAL OTHER COALITION MEMBERS ARE FORMER ALLIES OF THE OUSTED LEADER, WHO LARGELY AGREE WITH HIM ON MOST POLICY ISSUES.

ONE POSSIBLE DIFFERENCE?

ISRAEL'S RELATIONSHIP WITH THE U.S., WHICH NETANYAHU HIGHLIGHTED AFTER YESTERDAY'S VOTE, SPEAKING IN BOTH ENGLISH AND HEBREW.

>> WE'LL BE BACK SOON.

WE'LL BE BACK.

INTERPRETER: THE PRIME MINISTER IN ISRAEL MUST BE ABLE TO SAY NO TO THE PRESIDENT OF THE U.S.

IN TOPICS THAT ARE THREATS TO OUR EXISTENCE.

>> O'Connell: FOR HIS PART, PRESIDENT JOE BIDEN IS HOPING FOR A FRIENDLIER RELATIONSHIP THIS TIME AROUND, SAYING IN A STATEMENT, "I LOOK FORWARD TO WORKING WITH PRIME MINISTER BENNETT TO STRENGTHEN ALL ASPECTS OF THE CLOSE AND ENDURING RELATIONSHIP BETWEEN OUR TWO NATIONS.

MY ADMINISTRATION IS FULLY COMMITTED TO WORKING WITH THE NEW ISRAELI GOVERNMENT TO ADVANCE SECURITY, STABILITY, AND PEACE FOR ISRAELIS, PALESTINIANS, AND PEOPLE THROUGHOUT THE BORDER REGION."

JOINING ME TO DISCUSS ARE JEREMY BURTON, EXECUTIVE DIRECTOR OF THE JEWISH COMMUNITY RELATIONS COUNCIL OF GREATER BOSTON; AND LEILA FARSAKH, CHAIR OF THE POLITICAL SCIENCE DEPARTMENT AT UMASS BOSTON AND THE AUTHOR OF "PALESTINIAN LABOUR MIGRATION TO ISRAEL: LABOUR, LAND, AND OCCUPATION."

>> O'Connell: WELCOME TO BOTH OF YOU.

JEREMY, I WANT TO START WITH YOU, BECAUSE I'VE BEEN SPENDING A LOT OF TIME TO EXPLAIN THIS PROCESS OF HOW A NEW PRIME MINISTER WAS CHOSEN, AND I'M NOT GOING TO PUT THAT BURDEN ON YOU COMPLETELY.

BUT I DO WANT YOU TO HELP US POINT OUT THAT THE COALITION FORMED ISN'T REALLY A BLOCK OF PEOPLE THAT HAVE MUCH IN COMMON, EXCEPT THAT THEY ALL WANTED NETANYAHU OUT.

pIS THAT A GOOD ASSESSMENT?

>> THANK YOU, SUE, FOR HAVING ME ON.

YES, I DO AGREE THAT ONE ELEMENT OF HOW THIS COALITION CAME TOGETHER IS A BROAD RANGE OF FACTIONS AND A BROAD RANGE OF PEOPLE ACROSS THE SPECTRUM IN ISRAELI POLITICS WANTING A CHANGE IN LEADERSHIP.

AND I DO THINK IT IS A SEA CHANGE.

THIS IS THE MOST DIVERSE GOVERNMENT IN THE HISTORY OF THE STATE OF ISRAEL.

IT BRINGS THE FAR LEFT OF ISRAELI SOCIETY MERITS BACK INTO GOVERNMENT FOR THE FIRST TIME IN 20 YEARS.

IT IS THE FIRST GOVERNMENT IN THE STATE OF ISRAEL THAT HAS AN ISLAMIST PARTY AS A SIGNED MEMBER OF THE COALITION.

IT IS FRANKLY THE FIRST GOVERNMENT OUTSIDE OF THE ISLAMIC WORLD THAT HAS AN ISLAMIST PARTY WITHIN THE GOVERNMENT.

AND, YES, IT ALSO HAS THOSE ON THE RIGHT.

THOSE WHO IN SOME WAYS AGREE AND HAVE BEEN SUPPORTERS OF PRIME MINISTER NETANYAHU'S POLICIES IN THE PAST.

BUT EVEN FOR THOSE POLICIES, IT IS A SEA CHANGE IN HOW THEY UNDERSTAND THE RELATIONSHIP WITH THE UNITED STATES.

I THINK THAT WILL BE A CRITICAL CHANGE GOING FORWARD, WHICH WE SAW ALREADY YESTERDAY, WHEN SENIOR LEADERS OF THE AMERICAN GOVERNMENT WERE ALREADY IN CONVERSATION WITH THE NEW MINISTERS WITHIN HOURS AFTER THE SEATING OF THE GOVERNMENT.

>> O'Connell: PROFESSOR, ONE OF THE CHALLENGES HERE AS NETANYAHU LEAVES THE STAGE, HE IS NOT NECESSARILY LEAVING THE STAGE AS ONE WOULD EXPECT.

HE IS LEAVING THE STAGE IN A REALLY TRUMPIST KIND OF WAY.

CALLING THE GREATEST ELECTION FRAUD IN THE HISTORY OF DEMOCRACY, WHICH I THOUGHT WE WERE JUST LIVING THROUGH RIGHT NOW, ACCORDING TO SOME.

WHAT IS YOUR TAKE ON THE CHANGE?

IS AS BIG A DEAL AND HAVE WE SEEN THE LAST OF NETANYAHU?

>> THIS IS AN IMPORTANT CHANGE.

IN A SENSE, IT IS A CONTINUATION OF ISRAEL'S NATIONALIST PROCESS AND PROTECTING ZIONISM AND THE STATE OF ISRAEL FROM THE VERY FAR RIGHT, EVEN THOUGH IT HAS A RIGHT-WING COALITION.

I THINK WE WILL NOT SEE THE END OF NETANYAHU BECAUSE IT IS NOT THE END OF A PARLIAMENT SYSTEM.

WHEN YOU ARE IN A POSITION, YOU ARE STILL (indiscernable).

THIS IS A NATIONAL UNITY GOVERNMENT.

WE DON'T KNOW HOW LONG IT WILL LAST.

I THINK IT IS NOW PUT TOGETHER AND CO COALESCRED.

I WOULD SAY OVER THE LAST THREE MONTHS -- IT COULD LAST UP TO FOUR YEARS -- I DOUBT IT, AND THAT'S WHAT I THINK.

THE U.S. RELATIONS WILL BE VERY IMPORTANT IN THIS REGARD BECAUSE THIS FORTHCOMING OF BIDEN WILL BE VERY MUCH WELCOMED AS A SIGN OF THINGS, THAT ISRAEL IS A DEMOCRATIC COUNTRY AND IT WANTS TO CONTINUE ON THE PATH AND AWAY FROM TOO MUCH DESTRUCTIVE PURPOSES.

>> O'Connell: JEREMY, I'VE BEEN WATCHING ISRAELN3 MY ENTIRE LIFE, AND I THINK OVER THE PAST FIVE YEARS OR SO, THERE HAS BEEN A GENERATIONAL CHANGE OF HOW BOTH AMERICAN JEWS AND AMERICAN SUPPORTERS OF ISRAEL, AND PEOPLE WHO ARE ACTUALLY LIVING IN ISRAEL, ARE VIEWING SOME OF THE CHALLENGES THAT ISRAEL FACES, AND HOW NETANYAHU WAS FACING THEM.

IS IT TOO MUCH TO EXPECT THAT THAT GENERATIONAL PUSH IS GOING TO CHANGE SOME OF THE STANCES THAT ISRAEL HAS?

AND, ALSO, HOW OUR RELATIONSHIP, HOW THE AMERICAN RELATIONSHIP -- WILL IT IMPROVE OR WILL IT STAY STATUS QUO, THE WAY IT WAS A FEW YEARS AGO?

>> THAT'S A VERY COMPLICATED -- THERE IS PROBABLY A VERY COMPLICATED ANSWER TO THAT QUESTION BECAUSE THERE ARE IS SOSO MANY PARTS TO THAT QUESTION.

IN THE AMERICAN POPULOUS, BOTH JEWISH AND MORE BROADLY, BUT IT IS CERTAINLY SIGNIFICANT.

THIS IS A NEW GENERATION PRIME MINISTER FOR ISRAEL.

THE FIRST PRIME MINISTER, REALLY, WHO DIDN'T GROW UP IN THE FIRST YEARS AFTER THE ESTABLISHMENT OF THE STATE OF ISRAEL, AND IS REALLY FROM A YOUNGER GENERATION.

IT IS ALSO TRUE THAT YOUNGER ISRAELIS, THEIR POLITICS ARE SHIFTING.

AND, FRANKLY, YOUNGER AMERICANS, INCLUDING YOUNG AMERICAN JEWS, AND NOT JUST -- I THINK IT WOULD BE SIMPLISTIC TO SAY TO THE RIGHT OR TO THE LEFT.

I WOULD SAY MORE FRACTURED AND DIVIDED, AND FRACTURED BOTH TO THE RIGHT AND TO THE LEFT.

I THINK THE SIGNIFICANT THING -- AND THIS IS AN IMPORTANT THING NOT TO DO, IMMEDIATELY ASSUME THIS GOVERNMENT WILL FALL APART IN THREE MONTHS LITERALLY 24 HOURS IN.

JUST SAY WHAT IS THE CHANGE HERE?

THE CHANGE IS A GENERATIONAL CHANGE.

THE CHANGE IS MANY, MANY PARTS OF THE SOCIETY THAT IS ITSELF FRACTURED COMING TOGETHER AND SAYING, WE NEED TO ENVISION A WORLD BEYOND WHAT WE'VE HAD FOR A LONG TILE.

TIME.

AND WHAT EVERYONE THINKS ABOUT PRIME MINISTER NETANYAHU AND HIS 10YEARS, AND NOT ONLY 12 YEARS, BUT 20 YEARS DOMINATING THE SCENE, IT IS FAIR TO SAY FOR A LOT OF ISRAELIS IT BECAME IMPOSSIBLE TO IMAGINE A FUTURE, A WORLD, A GOVERNMENT BEYOND HIS.

AND EVEN IF THIS GOVERNMENT IS FRAGILE AND DOESN'T MAKE IT THROUGH THE ENTIRE TENURE, ISRAELIS ARE BEGINNING TO REALIZE OR IMAGINE A DIFFERENT TYPE OF GOVERNMENT.

THE FACT THAT SOMEONE LIKE NAFTALI BENNETT WOULD TEAM UP TO CREATE A NEW GOVERNMENT, THAT IS A DIFFERENT WAY OF THINKING.

AND THE FUTURE FOR ISRAEL AND FOR ISRAELIS AND PALESTINIANS, WILL REQUIRE DIFFERENT WAYS OF THINKING BY THE PEOPLE WHO ACTUALLY pLIVE THERE ON THE GROUND.

AND I THINK THAT IS A CAUSE OF HOPE, OR POSSIBILITY AT LEAST, FOR US LIVING IN AMERICA.

>> O'Connell: PROFESSOR, WE'VE SEEN OVER THE PAST YEAR, AND OBVIOUSLY OVER THE PAST MONTH, PEOPLE WE DIDN'T THINK WOULD BE SPEAKING OUT, CHALLENGING ISRAELI POLICY HERE IN AMERICA, PROGRESSIVE DEMOCRATS AND CERTAINLY THE YOUNGER DEMOCRATS, WHO ARE PUSHING THE DEMOCRATIC PARTY TO THE LEFT, AND LOOKING TO PUSH THE REST OF THE WORLD IN A DIRECTION THAT THEY THINK IS MORE EQUITY.

DOEQUITABLE.DO YOU SEE THIS AS AN OPPORTUNITY FOR ISRAEL AND PALESTINE TO MAKE A DIFFERENT SORT OF WORLD TOGETHER?

IS THAT SOMETHING YOU SEE HAPPENING AND MOVING?

AS WE SAID, THIS LEADERSHIP IS NOT THAT FAR AWAY FROM NETANYAHU'S VIEWPOINT ON THINGS?

>> I THINK WE'LL HAVE TO WAIT AND SEE.

AFTER ALL, BENNETT WAS THE HEAD OF THE COUNCIL.

SO HE IS VERY MUCH IN SUPPORT OF THIS MOVEMENT IN THE WEST BANK, WHICH COMPROMISES THE PALESTINIAN STATE.

I THINK MORE WE HAVE TO UNDERSTAND THIS GOVERNMENT IN THE GAZA WAR -- THE WAR IN GAZA, WHICH CAUSED A BIG SHIFT, IN THE FACT IT IS LOSING SOME OF THE IM IMAGE -- THE IMAGE OF ISRAEL HAS BEEN TAINTED BECAUSE OF THE PALESTINIAN STRUGGLE.

THE OPPRESSION IN GAZA AND JERUSALEM.

SO I THINK IT BECAME CLEAR TO THE WORLD THAT THIS NEW GENERATION (indiscernable).

AND THIS CANNOT BE SHUFFLED BY COMPARTMENTALIZING PALESTINIANS AND PUTTING THEM IN CERTAIN AREAS.

IT EXPLAINS THE ENTRY OF THE COALITION WITH ISRAEL (indiscernable), CLAIMING THERE IS AN AGENCY HOLDING ISRAEL ACCOUNTABLE TO BEING A LIBERAL DEMOCRACY.

SO WE HAVE FORCES THAT ARE PROMISING THINGS WITH THE BIDEN ADMINISTRATION ON ISSUES OF EQUALITY, AND THE LINK THAT PEOPLE ARE MAKING BETWEEN BLACK LIVES MATTER AND THE PALESTNIAN PLIGHT.

IT SEEMS TO ME THAT THE KEY, ABOVE ALL, IS BEING AWARE OF THE IMPORTANCE OF WINNING, ALSO, THE MEDIA WAR OR THE DIPLOMATIC SCENE, AND SHOWING THAT ISRAEL IS WILLING TO PAVE A NEW PATH WITH THE PALESTINIANS.

IF THEY DO, THAT I'M NOT SURE BECAUSE IT IS SUCH A DIFFICULT COALITION WITH VERY DIFFERENT OPINIONS.

>> O'Connell: JEREMY, WE'VE BEEN HEARING OF THE SPECIAL RELATIONSHIP BETWEEN THE UNITED STATES AND GREAT BRITAIN, AS PRESIDENT BIDEN IS AT THE G-7 NATO MEETINGS.

AND WE ALSO HAVE A SPECIAL RELATIONSHIP WITH ISRAEL.

I'M JUST WONDERING HOW YOU THINK THAT THIS NEW LEADERSHIP, AND HOPEFULLY A RENEWED RELATIONSHIP WITH THE UNITED STATES MAY IMPACT THE REGION IN UNION, AND ESPECIALLY IRAN'S ROLE IN THE LATEST VIOLENCE IS CERTAIN PROPLY PROBLEMATIC AND INTERNATIONALLY PROBLEMATIC.

ARE YOU OPTIMISTIC THAT THINGS WILL PROGRESS IN A PEACEFUL WAY?

>> THE REASON ISRAEL AND THE UNITED STATES HAS A SPECIAL RELATIONSHIP IS BECAUSE IT IS BIPARTISAN.

IF THERE IS PROBABLY ONE THING MOST AMERICAN JEWS PUBLICLY, OR NOT SO PUBLICLY, WILL SAY IT MADE THAT RELATIONSHIP MORE PARTISAN.

I THINK WHAT IS BROADLY FELT BY A LOT OF PEOPLE, BOTH IN THE DEMOCRATIC PARTY AS WELL, IS THAT UNDER PRIME MINISTER NETANYAHU, THAT RELATIONSHIP MAYBE GOT A LITTLE TARNISHED BY BEING TIED UP IN SOME OF THE PARTISAN FRACTURES IN OUR OWN SOCIETY.

NOW FOREIGN MINISTER LAPID, MORE THAN ANY ONE PERSON IS AN ARCHITECT OF THIS COALITION.

AND HE IS IN THE CENTER LEFT OF ISRAELI SOCIETY, AND HISTORY CULTIVATED LONG AND SERIOUS RELATIONSHIPS THROUGHOUT HIS TIME IN GOVERNMENT WITH MEMBERS ON CAPITOL HILL.

THERE IS NO QUESTION THAT PEOPLE LIKE NOW TRANSPORTATION MINISTER MAHALI, WHO IS THE LEADER OF THE LABOR PARTY, THE OLD PARTY OF THE ISRAELI LEFT, THE PARTY THAT HAS THE DEEPEST TIES TO THE DEMOCRATIC PARTY, GOING BACK TO THE CLINTON YEARS, HAS CULTIVATED RELATIONSHIPS.

I WAS JUST WATCHING OVER THE WEEKEND A VIDEO WHEN OUR SENATOR, ELIZABETH WARREN, WAS VISITING THE KNESSET IN ANOTHER YELLING AND SCREAMING SESSION, AND MAHALI WAS THE ONE GREETING HER AND GIVING HER THE TOUR.

SO THOSE RELATIONSHIPS EXIST.

MORE THAN ANYTHING, THE STORY TODAY IS THAT WE'RE MOVING BEYOND THE PERSONALITY RELATIONSHIP THAT HAS DOMINATED THE LAST 12 YEARS.

AND THERE ARE A LOT MORE PERSONALITIES.

AND, YES, ONE CAN POINT AT ONE MEMBER, THE PRIME MINISTER, WHO WAS A FORMER AIDE TO NETANYAHU, WHO SAW, FRANKLY, HOW UNHELPFUL NETANYAHU'S POLITICS, BOTH INTERNALLY AND DIPLOMATICALLY WERE BEING UNPRODUCTIVE.

AND I THINK THAT IS SOMETHING TO REALLY FOCUS ON RIGHT NOW.

AND FRANKLY, FOR ANYONE WHO CARES ABOUT THE FAWMP OF THEFUTUREOF THE REGION IS TO INVEST IN THE SUCCESS OF THOSE WHO ARE WILLING TO ENGAGE IN CHANGE FOR THE SAKE OF A MORE HOPEFUL FUTURE.

>> O'Connell: IT IS HOPEFUL YOU CAN YELL AT EACH OTHER AND MOVE FORWARD.

MAYBE THERE IS A MODEL THERE FOR THE UNITED STATES.

THANK YOU BOTH FOR JOINING ME.

>> THANK YOU.

>> THANK YOU.

>> O'Connell: NEXT UP, THERE'S NOT A LOT OF BIPARTISAN AGREEMENT IN CONGRESS THESE DAYS, WHERE LAWMAKERS CAN'T EVEN GET TOGETHER TO CREATE AN INDEPENDENT COMMISSION TO INVESTIGATE AN ATTACK ON CONGRESS.

BUT THERE IS ONE ISSUE BRINGING THE TWO SIDES TOGETHER: DECADES-OLD CHARITABLE GIVING LAWS AND THE GAP BETWEEN THE VAST SUMS AMERICAN MILLIONAIRES AND BILLIONAIRES PLEDGE TO GIVE AWAY, AND THE MONEY THAT ACTUALLY GETS TO PEOPLE WHO NEED IT.

LAST WEEK ONE OF THE TOP REPUBLICANS IN THE SENATE, IOWA'S CHUCK GRASSLEY AND MAINE SENATOR ANGUS KING, AN INDEPENDENT WHO CAUCUSES WITH THE DEMOCRATS, INTRODUCED A BILL AIMED AT CLOSING THAT GAP.

IT TARGETS THE ISSUE OF DONOR-ADVISED FUNDS, WHICH ALLOWS DONORS TO CLAIM THE TAX BENEFITS OF THEIR DONATIONS RIGHT AWAY, WHILE MOST OF THEIR MONEY CAN END UP JUST SITTING IN THE FUNDS INDEFINITELY.

ONE OF THE LEADING FORCES BEHIND IT, BOSTON COLLEGE LAW SCHOOL PROFESSOR RAY MADOFF, TOLD "THE NEW YORK TIMES" THAT THE PROPOSED RULES WITHIN THE BILL ARE INCREDIBLY IMPORTANT AT A TIME WHEN THERE ARE MORE AND MORE SUPER WEALTHY AND GREATER AND GREATER NEEDS OF SOCIETY.

SHE'S ALSO THE AUTHOR OF THE BOOK "IMMORTALITY AND THE LAW: THE RISING POWER OF THE AMERICAN DEAD," AND SHE JOINS ME NOW.

>> O'Connell: WELCOME, PROFESSOR.

THANK YOU FOR JOINING ME.

>> THANK YOU SO MUCH FOR HAVING ME.

>> O'Connell: I HAVE TO TELL YOU, THIS IS ONE OF THESE ISSUES I BORE PEOPLE WHEN WE GET BACK TO COCKTAIL PARTIES BECAUSE IT MAKES ME CRAZY.

WHAT IS THE PROBLEM?

WHY SHOULD I BE CONCERNED IF A BILLIONAIRE OR MILLIONAIRE WANTS TO START A FOUNDATION THAT THEY WILL FUND CHARITABLE ORGANIZATIONS ACROSS THE COUNTRY.

SHOULDN'T I SALUTE THEM AND SAY GOOD FOR YOU?

>> ABSOLUTELY YOU SHOULD SALUTE THEM.

BUT YOU SHOULD SALUTE CONGRESS TO CHANGE THE RULES TO MAKE SURE THAT MONEY IS PUT TO USE FOR CHARITABLE USE.

THE THING THAT FEW AMERICANS REALIZE IS HOW MUCH EACH AND EVERY ONE OF US IS CONTRIBUTING WHEN THOSE MILLIONAIRES AND BILLIONAIRES PUT MONEY ASIDE.

INDEED, THE TAX SAVINGS ON THEIR PART, OR THE COST TO THE REST OF US IN FOREGONE TAXES, COULD BE WORTH AS MUCH AS 74% OF THE VALUE OF THE DONATION.

IF SOMEBODY SETS UP A $100 MILLION FOUNDATION, THAT IS BEING FINANCED, $74 MILLION BY US, AND ONLY $26 MILLION BY THEM.

AND YET UNDER THE CURRENT RULES, THERE IS NO ASSURANCES THAT THOSE FUNDS WILL EVER BE PUT TO CHARITABLE USE.

>> O'Connell: LET'S SAY I'M WORTH A BILLION DOLLARS.

WE'RE ALL LAUGHING AT THAT.

AND I TAKE $100 MILLION, AND I GIVE IT TO THE SUE O'CONNELL FOUNDATION THAT I SET UP THAT IS GOING TO FUND CHARITABLE WORKS ACROSS THE COUNTRY.

AND ANY JUST KEEP THE MONEY IN THE BANK AT THE CHARITY.

I SET UP THIS SEPARATE CHARITY.

HOW DOES THAT BENEFIT ME AS THE BILLIONAIRE?

IS THERE A DEDUCTION OF MY TAXABLE INCOME?

IS THAT WHAT HAPPENS?

OR DOES IT HAPPEN YEARLY?

>> FIRST OF ALL, THERE ARE THREE DIFFERENT TYPES OF TAX BENEFITS.

ONE IS THAT YOU GET TO OFFSET YOUR ORDINARY INCOME.

YOU GET TO TAKE A CHARITABLE DEDUCTION THAT REDUCES YOUR INCOME LIABILITY.

SECOND, IF YOU ARE SMART, YOU MAKE A DONATION OF CASH, BUT OF SOME FORM OF APPRECIATED PROPERTY.

MAYBE YOU HAVE A PARTNERSHIP INTEREST.

MAYBE YOU HAVE STOCK OR SOMETHING THAT HAS GONE UP IN VALUE, AND YOU GET TO AVOID THE CAPITAL GAINS TAXES.

THAT SAVES YOU ANOTHER 20%.

SO WE'RE NOW UP TO 37% 57%.

THE WELT WEALTHIEST AMERICANS -- WHEN YOU PUT ALL OF THE THINGS TOGETHER, THAT'S HOW YOU GET THE 74% SAVINGS BECAUSE CHARITABLE GIVING IS THE MOST POWERFUL WAY FOR THE WEALTHY TO AVOID TAXES.

WE OFTEN DESCRIBE IT AS THE EXIT RAMP FROM THE AMERICAN TAX SYSTEM.

A LOT OF GREAT THINGS CAN HAPPEN WITH CHARITABLE GIVING, BUT THE RULES RIGHT NOW ALLOWS FOR A LOT OF LESS GOOD THINGS.

FOR EXAMPLE, PRIVATE FOUNDATIONS ARE REQUIRED TO SPEND 5% OF THEIR ASSETS EACH YEAR.

SO OUR PERSON WHO SETS UP THE $100 MILLION FOUNDATION, THE SUE O'CONNELL $100 MILLION CHARITABLE FOUNDATION NOW HAS TO SPEND $5 MILLION A YEAR.

YOU CAN MEET THAT 5% IN WAYS THAT DON'T NECESSARILY FULFILL THE PURPOSE.

FIRST OF ALL, YOU CAN EMPLOY YOUR KIDS.

AND THOSE SALARIES CAN COUNT TOWARDS THE 5%.

INDEED, THERE IS NO LIMIT ABOUT HOW MUCH.

IT IS NOT 2% OF IT CAN COUNT.

IT IS UP TO -- IT HAS BE TO A REASONABLE COMPENSATION, BUT AS LONG AS IT IS REASONABLE, IT COULD BE YOUR FULL 5%.

IN ADDITION, YOU COULD HAVE MEETINGS IN EXOTIC LOCALES.

YOU CAN HAVE YOUR ANNUAL MEETING IN HAWAII AND THAT, TOO, CAN COUNT UNDER YOUR 5%.

AND, FINALLY, YOU CAN MEET YOUR 5% BY GIVING TO A DONOR-ADVISED FUND.

THAT'S AN ACCOUNT MAINTAINED TYPICALLY AT A FINANCIAL INSTITUTION, FIDELITY, SWABB AND VANGUARD, AND THERE IS NO REQUIREMENT FOR THAT MONEY TO EVER BE SPENT.

SO WE SUPPOSEDLY HAVE THIS 5% PAYOFF REQUIREMENT, BUT FUNCTIONALLY IT IS MEANINGLESS BECAUSE IT CAN BE MET BY PUTTING MONEY ASIDE INTO A VEHICLE WHERE THERE IS NO FURTHER PAYOFF REQUIREMENT.

>> O'Connell: >> O'Connell: SO YOUR ARGUMENT IS I CAN FUND MY OWN CHARITABLE FOUNDATION, HIRE MY KIDS, AND MAYBE FUND MY KIDS' PRE-SCHOOL -- MAKE A TAXABLE DONATION TO OUR KIDS' PRESCHOOLS, AND IN THAT TIME REALLY SPEND NONE OF THE MONEY THAT I'VE DONATED THAT I'M GETTING THE TAX BREAK FROM, BUT GETTING ADDITIONAL TAX BREAKS FROM THAT.

AND YOU'RE TELLING ME THERE ARE NO LAWS ON THE BOOKS RIGHT NOW TO STOP ME FROM DOING THAT?

>> RIGHT.

THE LAWS ON THE BOOKS IS IF YOU HAVE A PRIVATE FOUNDATION, THE PRIVATE FOUNDATIONS HAVE TO SPEND 5%.

BUT AS LONG AS YOU TAKE IT OUT OF YOUR PRIVATE FOUNDATION OR PAY YOUR KIDS OR TAKE YOUR TRIP, YOU HAVE MET YOUR 5% REQUIREMENT.

THAT ONE IS THE CASE WHERE WE HAVE RULES ON THE BOOKS, BUT THERE ARE ALL SORTS OF LOOPHOLES TO MAKE THE RULES MEANINGLESS.

WITH RESPECT TO DONOR-ADVISED FUNDS -- RIGHT NOW THERE IS OVER $140 BILLION IN DONOR-ADVISED FUNDS, AND THERE IS NO PAYOUT OBLIGATION AT ALL UNDER THE CURRENT RULES.

AND WHAT MAKES IT PARTICULARLY TROUBLING, BECAUSE OF THE TAX RULES, CONTRIBUTIONS TO DONOR-ADVISED FUNDS RECEIVE THE MAXIMUM TAX BENEFITS, EVEN BETTER THAN THOSE FOR PRIVATE FOUNDATIONS.

AND THAT'S BECAUSE THESE ARE BENEFITS THAT WERE SUPPOSED TO ONLY APPLY TO OUTRIGHT GIFTS TO CHARITY.

WHEN YOU GIVE MONEY TO THE SOUP KITCHEN, HOSPITAL, YOUR CHURCH OR TEMPLE OR MOSQUE, WHATEVER CHARITABLE ORGANIZATION, WE HAVE PREFERRED TAX BENEFITS FOR THOSE.

BUT NOW DONOR-ADVISED FUNDS CAPTURE THOSE TAX BENEFITS AND PROVIDE THEM FOR DONORS, BUT SAY YOU HAVE NO OBLIGATION AT ALL FOR THAT MONEY TO EVER COME OUT.

>> O'Connell: SO WHAT IS THE LEGISLATION THAT IS MOVING FORWARD THAT HAS BIPARTISAN SUPPORT?

WHAT WOULD IT DO, AND WHAT ARE THE CHANCES OF IT ACTUALLY PASSING?

>> RIGHT.

SO IT DOES TWO THINGS.

FIRST OF ALL, WITH RESPECT TO THE PRIVATE FOUNDATION, IT WOULD LIMIT YOU IN CERTAIN WAYS.

IT WOULD SAY NOT THAT YOU CAN'T PAY YOUR KIDS, BUT THOSE PAYMENTS WOULD NOT SATISFY THE 5%.

SIMILARLY, IF YOU GO ON YOUR TRIP FOR THE YOUR FAMILY MEETING SOMEWHERE, THAT WOULD ALSO NOT SATISFY THE 5%, AND PAYMENTS TO DONOR-ADVISED FUNDS WOULD NOT SATISFY THE 5%.

SO WHEN YOU CREATE YOUR $100 MILLION FOUNDATION, YOU HAVE TO SPEND THAT $5 MILLION FOR CHARITABLE ENDS.

THAT IS ONE SET OF RULES.

WE ALSO HAVE INCENTIVES TO ENCOURAGE RATE PAYOFFS.

BECAUSE RIGHT NOW A LOT OF FOUNDATIONS LIMIT THEIR PAYOUTS TO 5%, AND NOBODY DOES MORE.

BUT WE HAVE INCENTIVES FOR FASTER PAYOUTS, AND YOU GET A LITTLE BETTER TAX BENEFIT IF YOU SPEND 7%.

>> O'Connell: SO -- GO AHEAD.

CONTINUE.

>> ON THE DONOR-ADVISED FUND SIDE, THE AREA THAT DOESN'T HAVE ANY REGULATIONS, WE HAVE REASONABLE TERMS FOR PAYOUT, WHICH IS IF YOU GET THE TAX BENEFITS TODAY FOR PUTTING FUNDS ASIDE, IT NEEDS TO BE SPENT WITHIN 15 YEARS.

AND THEN YOU CAN TAKE ALL OF THE TAX BENEFITS UP FRONT.

IF YOU DON'T WANT TO SPEND IT WITHIN 15YEARS, YOU WANT TO SPEND IT LONGER, YOU COULD TAKE AN ALTERNATE ROUTE WHERE BASICALLY YOU GET SOME OF THE TAX BENEFITS WHEN YOU PUT THE MONEY IN, BUT YOU GET THE REST OF THE TAX BENEFITS WHEN THE MONEY COMES OUT, AND YOU CAN HAVE UP TO 50 YEARS.

THESE ARE VERY DIFFICULT TO OBJECT TO THESE TYPES OF CHANGES, THESE SORT OF LOOPHOLE CLOSINGS.

AND SO AS A RESULT, WE ARE FEELING VERY, VERY GOOD ABOUT THE LIKELIHOOD OF THESE BEING ADOPTED.

>> O'Connell: IS THIS WHY IT WAS SUCH A BIG DEAL WHEN JEFF BEZOS' EX-WIFE DECIDED SHE WAS GOING TO DO DIRECT GIVING.

SHE WASN'T GOING TO START HER OWN FOUNDATION.

SHE WAS JUST GOING TO GIVE TO ORGANIZATIONS DIRECTLY, INSTEAD OF GOING THROUGH THIS SORT OF SHUFFLE?

>> ABSOLUTELY.

BECAUSE I THINK THERE IS A CONCERN.

YOU HAVE -- THE GATES' GIVING PLEDGE, WHICH HAS GOTTEN A LOT OF ATTENTION, AND YOU HAVE A LOT OF BILLIONAIRES WHO SAID, I SIGNED THE GIVING PLEDGE.

I PROMISE TO GIVE AWAY MY MONEY, OR MAYBE THEY PUT THEM INTO THEIR PRIVATE FOUNDATION, BUT UNTIL THE MONEY ACTUALLY COMES OUT, THERE IS NO CHARITABLE ACT, AT LEAST IN THE WAY THAT MOST AMERICANS UNDERSTAND IT.

AND SO WHAT McKENZIE DID WAS REALLY SOMETHING ONE WOULD THINK OF WOULD BE AS NOT REMARKABLE AT ALL, SHE ACTUALLY GAVE HER MONEY AWAY WHEN SHE CLAIMED THE CHARITABLE DEDUCTION, BUT IN THE WORLD WE'RE IN, IT WAS SEEN AS QUITE REMARKABLE BECAUSE IT IS SO COMMON FOR PEOPLE TO SET THE MONEY ASIDE FOR FUTURE CHARITABLE GIVING BUT NOT NECESSARILY COMPLETE THE ACT.

>> O'Connell: IT SEEMS LIKE WE'RE SUPPORTING BILLIONAIRES AND MILLIONAIRES, BETWEEN FOLKS THAT WORK FOR THEM HAVING TO BE ON PUBLIC ASSISTANCE, AND THEM FINDING NEW WAYS TO SHELTER NON-TAXABLE GIVING THEY'RE DOING.

DO YOU THINK THERE IS AN APPETITE IN THE UNITED STATES FOR PEOPLE TO UNDERSTAND THIS, FOR CITIZENS TO UNDERSTAND THIS, AND TO GET ANGRY ABOUT IT?

>> I DO.

I THINK, OBVIOUSLY, WHENEVER YOU HAVE TAX ISSUES, I DON'T KNOW WHY, BUT SOME PEOPLE THINK IT CAN BE BORING AND COMPLICATED.

BUT I THINK WHAT HAS HAPPENED IS PEOPLE HAVE BECOME EDUCATED ABOUT HOW REALLY UNFAIR OUR TAX SYSTEM IS.

BECAUSE WHAT IT DOES IS IT WAY OVERBURDENS LABOR WAGES.

SO PEOPLE WHO WORK FOR A LIVING, THEY PAY ALL SORTS OF TAXES AT THE HIGHEST RATE, AND THE GOVERNMENT MAKES SURE THAT THOSE TAXES GET PAID.

WHEREAS THE TYPE OF WEALTH THAT THE WEALTHY EARN, WHETHER IT IS INHERITANCES OR THROUGH THEIR INVESTMENTS OR FROM STARTING BUSINESSES, WE IMPOSE VIRTUALLY NO TAXES ON THOSE TYPES OF INCOME.

AND I THINK AMERICANS ARE GETTING WISE TO IT AND ARE FEELING UNCOMFORTABLE ABOUT IT.

I BELIEVE WE'RE REALLY GOING TO START TO SEE SOME CHANGES NOW.

>> O'Connell: ALL RIGHT, PROFESSOR, I COULD TALK TO YOU ABOUT THIS FOR THREE HOURS, BUT WE ONLY HAVE A CERTAIN AMOUNT OF TIME.

THANK YOU SO MUCH FOR JOINING ME.

>> THANK YOU SO MUCH FOR HAVING ME.

>> O'Connell: THAT'S IT FOR TONIGHT, BUT YOU COME BACK TOMORROW.

I'LL BE JOINED BY THE TWO DIRECTORS BEHIND FRONTLINE'S "UNRESOLVED," A NEW MULTI-PLATFORM INVESTIGATION INTO HUNDREDS OF CIVIL RIGHTS ERA COLD CASE MURDERS IN CONJUNCTION WITH NORTHEASTERN'S CIVIL RIGHTS AND RESTORATIVE JUSTICE PROJECT.

THAT AND MORE, TOMORROW AT 7:00.

THANKS FOR WATCHING.

Captioned by Media Access Group at WGBH access.wgbh.org