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If he pays them more he also pays payroll taxes. If he donates to charity he gets a tax credit. Am I missing something? Else seems logical to me.

maxxxxx 9y ago
Charity also has higher PR value for each dollar.
- dvfjsdhgfv 9y ago
  And that's exactly this approach that is criticized in the article.
toomuchtodo 9y ago
> If he donates to charity he gets a tax credit. A tax deduction + PR.
matt4077 9y ago
No, that doesn't make sense. Both types of expenses are fully tax-deductible. Technically, payroll taxes are paid by the employee, even if–even more technically–the money itself goes directly from employer to Government. To the employer, it's just part of the employees' wages. Of course neither option means that it's a net positive for him (or anyone) to spend money. If he pays 1 Million more in wages, or gives that same million to a recognized charity: in both cases he save only the taxes he would have paid on that million, i. e. something around 25%-35%, depending on the source of that money. And taxes aren't just a black hole that swallows money. The marginal utility can be extremely high. Because so much of the budget is tied up in long-term obligations, administrative wages etc, any additional money has an outsized impact when it comes to the discretionary budget, where politics is actually able to shape communities. The government is also much better at allocating funds where they're needed, compared to most charity work. Trying to replace government with benevolent giving just leads to every stray puppy on earth being pampered, but nobody is going to finance reintegration efforts for convicted sex offenders.
mankash666 9y ago
Less payroll = lower costs = higher profits = higher stock price = greater wealth for Besos & investors.
prostoalex 9y ago
The tax situation is a bit more complex. Jeff Bezos and Amazon.com are separate entities. Transfer of assets, whether shares or cash, would have to be recognized somehow on the corporate side, possibly triggering other tax events.

maxxxxx 9y ago

Charity also has higher PR value for each dollar.

dvfjsdhgfv 9y ago
And that's exactly this approach that is criticized in the article.

toomuchtodo 9y ago

> If he donates to charity he gets a tax credit. A tax deduction + PR.

matt4077 9y ago

No, that doesn't make sense. Both types of expenses are fully tax-deductible. Technically, payroll taxes are paid by the employee, even if–even more technically–the money itself goes directly from employer to Government. To the employer, it's just part of the employees' wages. Of course neither option means that it's a net positive for him (or anyone) to spend money. If he pays 1 Million more in wages, or gives that same million to a recognized charity: in both cases he save only the taxes he would have paid on that million, i. e. something around 25%-35%, depending on the source of that money. And taxes aren't just a black hole that swallows money. The marginal utility can be extremely high. Because so much of the budget is tied up in long-term obligations, administrative wages etc, any additional money has an outsized impact when it comes to the discretionary budget, where politics is actually able to shape communities. The government is also much better at allocating funds where they're needed, compared to most charity work. Trying to replace government with benevolent giving just leads to every stray puppy on earth being pampered, but nobody is going to finance reintegration efforts for convicted sex offenders.

mankash666 9y ago

Less payroll = lower costs = higher profits = higher stock price = greater wealth for Besos & investors.

prostoalex 9y ago

The tax situation is a bit more complex. Jeff Bezos and Amazon.com are separate entities. Transfer of assets, whether shares or cash, would have to be recognized somehow on the corporate side, possibly triggering other tax events.