4 ms·

I'm curious why some workarounds become widespread, but others don't. For example, why don't US companies find ways to compensate all employees through some so

• jonknee 13y ago
  For most employees that would be worse. Dividends are taxed (15-20%) by the recipient after at the corporate level (35%). Also the small problem of what happens when the company doesn't make money.
  • brownbat 13y ago
    > What happens when the company doesn't make money I'm not talking about company stock, I'm talking about stock in a sort of artificial vehicle used to compensate employees. I see your point, though, salaries/wages are tax deductible, so it's hard for companies to use other things besides salaries/wages. But... > If you transfer property (including your company's stock) to an employee as payment for services, you can generally deduct it as wages. http://www.irs.gov/publications/p535/ch02.html http://www.irs.gov/publications/p535/ch02.html But then if it's a transfer of property, you can't turn it into a long term capital gain, unless maybe you rented it to them? Hmm... probably wouldn't work. Turns out tax law is complex and not quite as easy to game as I thought.
• gamblor956 13y ago
  For starters, interest is taxed at ordinary income rates... As for the other suggestion...it has already been around for decades. Look up ESOPs ("employee stock ownership plans," frequently aka "profit-sharing plans").