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There's no tax strategy here. Perhaps if Jobs found a way to pay less than the tax rate for dividends, this exciting headline would make sense, but he didn't. T
by michaeldhopkins 15y ago
There's no tax strategy here. Perhaps if Jobs found a way to pay less than the tax rate for dividends, this exciting headline would make sense, but he didn't. The two percentages have nothing to do with each other.
I realize the author wants to show that dividend investing lets one keep more of one's money in the long run than by taking out a large salary each year, but Jobs could do that because he bought Pixar at low prices and grew it (if he bought it when it was really expensive, he would have to come up with the money which means income or capital gains events.) He didn't really choose between income and stock each year.
- hussong 15y agoAlso, becoming the single largest stock owner of a company like Disney is probably not a strategy that generalizes well.
- ck2 15y agoBut most investor-billionares are also in the 15% area, Warren Buffett admits he only pays 17% taxes.
- pwaring 15y agoIt could arguably be a tax strategy if he received a dividend from his Apple shares in lieu of a salary, although that ignores the fact that dividends have been taxed already because they're paid from post-tax profits. Even that isn't a new thing, directors in the UK (and no doubt the US too) have been doing that for years to avoid national insurance contributions.
- ck2 15y agoHaving your company pay you only $1 to avoid paying taxes is definitely a strategy when other equivalent CEOs are getting paid millions per year.
- michaeldhopkins 15y agoReceiving a nominal sum is a symbolic gesture by the CEO to show that the CEO's interests are entirely aligned with the company's, and usually only taken in times of crisis or when the company is/will be making buckets of money (Jobs, Eric Schmidt, etc.)
- roel_v 15y agoNo it's not, because even if he took a salary from Apple, that would be on top of his income he's getting from Pixar dividends. So it's no 'strategy' because there is no trade off - the two income streams are independent. (I guess it could be called a 'strategy' if the goal is to pay as little tax as possible, but it's not - the goal is to maximize net income, otherwise one could 'win' by not making any money at all).