Friday, March 20, 2009

Bonuses and Tax Codes

A reader alerts Josh Marshall to the regressive bonus tax rate:

Late Accountancy Update: One reader points out that there are big tax benefits to the companies to paying compensation in the form of bonuses as opposed to ordinary salary income, which is no doubt the reason why, for many in the finance industry, the bonuses totally dwarf the base salaries.

Maybe this will get more people focused on this, as yet, mostly unnoticed element of the present scandal.


Anonymous said...

interesting - the tax benefits could explain the whole issue a bit. On the other hand no tax benefits can ever explain benefits of 50-100 times the average salary in the US. There are bonuses and there are also BONUSES.. how much money does one need?
Take care,

Mo MoDo said...

The scandal is always what is perfectly legal.