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yes, but that income will be fully taxed by the recipient (at whatever their tax rate is). The recipient isn't getting it tax free.
by compsciphd 4y ago
yes, but that income will be fully taxed by the recipient (at whatever their tax rate is). The recipient isn't getting it tax free.
- weego 4y agoNot fully taxed, you have the next level of legal tax avoidance in the gap between company and person. The key to getting low single digit % tax burdens is adding in steps that allow you to add lots of % reductions and obfuscations because more overt methods tend to not be sustainable and in some jurisdictions (as in the UK) csn lead to the method being retrospectively classed as tax evasion and you end up paying the outstanding balance with interest.
- Retric 4y agoYou avoid both income and gift taxes and they don’t pay taxes on benefits like health insurance so it’s a significant tax savings over just handing out money. More importantly is the social benefits as working at a charity is seen more positively than living on a trust fund.
- HDThoreaun 4y agoPaying all your family members $200k a year until the end of time has a much lower tax liability than taking a billion dollars of income in one year.
- compsciphd 4y agoI agree, but its also less valuable (money today is worth more than money tomorrow). It's a tax management strategy, I just don't find it "evil" and find the arguments that taxes aren't paid to be a bit false (less taxes in the end, but not no taxes, so perhaps my phrasing of "fully taxed" is also a bit off, not fully taxed at the level of the giver). The only way to get around it would be to hurt charities in general (which perhaps the more socialist amongst us would have zero problem with, but I personally think would be bad for society).