this post was submitted on 15 Mar 2024
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Could he not use the excess profits to pay the employees a massive bonus for the success that they created?
Windfalls like this cannot be taking lightly and need to be approached strategically. It depends heavily on tax laws and employee finances overall.
Some common got rich quick concerns off the top of my head: Could accidentally knock people into a higher tax bracket and ruin their finances long term for short term gain. Could accidentally give someone collateral to take out a massive loan they cannot afford long term. Could make someone in a low income area a target before they have a chance to move out. Could accidentally get double taxed by doing the payout incorrectly because they're not practiced with handling this much money. Could overinvest it all back into the company and burn too brightly negating all their success. Doing nothing and simply using it as cash reserves is better than making a foolish mistake and ruining it for themselves.
...you can't ruin finances by knocking some one into a different tax bracket. This statement alone proves you don't understand how tax brackets work
In the us, there are very rare cases where someone's income straddles the line between benefits with a higher value than the increased income. This is not one of those cases, and it effectively only applies to people are below the poverty line and gain only a few hundred dollars in income.