- Sep 25, 2001
The challenge would be within the government, not from it. Let's just call them a pro-sports faction and an anti-sports faction. I just think the pro-sports faction would win and rewrite whatever code was necessary to allow a new framework to function tax free. Of course, that in, and of itself, is debatable. But the lobbies on the pro-sports side are gigantic and would include the entire charitable world, as well.But you also go on to say that you don't think a challenge by the Government/IRS would be successful. Why do you think that?
Interesting that you'd use this example. Have you ever heard of an ESOP? I have a business client that is structured as a 100% ESOP - which basically means they are 100% employee owned and a tax exempt company. They have 100 employees, $20M in annual sales, and are reasonably profitable. So who pays the tax? Ultimately, the shareholders/employees will when they retire. Currently, each employee owns shares of the company. When they retire their share will basically look like any other retirement account; they'll roll it over or pay taxes, and if they do roll it over (to an IRA) they'll pay pay taxes when they take distributions. It's a very complex ownership arrangement, but that's it in a nutshell, and one possible option for your scenario.I mean, what if the U bought several grocery stores, and all the profit was either paid out to employees or retained? It would simply be a for profit business - don't you think that would be subject to corporate tax?