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In theory, you are correct. However, if companies don't pay taxes, then they build up huge cash hoards, and the stock price goes up and the execs (who get paid
by jgalt212 5y ago
In theory, you are correct. However, if companies don't pay taxes, then they build up huge cash hoards, and the stock price goes up and the execs (who get paid in shares) don't pay taxes. why? because they never sell, and just take out loans against their ginormous paper gains. And if they do sell, they pay lower capital gains rates for share-based instead of cash-based compensation.
- csomar 5y agoWhat you are saying doesn't make any sense. The take-a-loan against your shares will work until you have to stop at some point or you die and your estate is taxed...
- ip26 5y agoat some point or you die https://en.wikipedia.org/wiki/Stepped-up_basis https://en.wikipedia.org/wiki/Stepped-up_basis