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While there may be something to your concern, the example you give confuses the idea of how taxes work for companies. Reddit is already getting a "massive writ
by mhp 12y ago
While there may be something to your concern, the example you give confuses the idea of how taxes work for companies.
Reddit is already getting a "massive write-off" for its developers salaries. It's called a payroll expense and it's directly deducted from any income the corporation makes before calculating it's profit.
Formula: Reddit's revenue - all of its expense (including payroll) = profit that it has to pay taxes on.
In that same way, corporations that are paying IBM for their consulting services already deduct those payments from their revenue. The payment doesn't need to be a donation. It's a legitimate business expense.
- jedberg 12y agoThe developers are already a write off, but they wouldn't have to count the reddit gold "donations" as income.
- icebraining 12y agoBut then they couldn't actually give the profits to the owners/shareholders, right?
- TylerE 12y agoOfficially? No Unofficially? Look how many "charities" pay their founders/presidents 6-figure salaries.
- nknighthb 12y agoLook at how many companies pay their founders/presidents 8-figure salaries. What's the problem?
- deleted 12y ago[deleted]
- hrjet 12y agoBut then, the founders / presidents would need to pay income-tax on their salaries. The only benefit in this arrangement is that sops given to individuals might be higher than that to companies.
- TylerE 12y agoIt stops it being taxed twice - once as corporate income and once as personal income.
- nknighthb 12y agoWhat are you talking about? Six-figure salaries would never be taxed as corporate income in the first place. Compensation up to a million is a straight-up deduction, no questions asked. You don't need to be a tax-exempt entity to avoid corporate income tax on them.