Problem with this (in all kinds of contexts) is that it is trivially easy for any company to have zero profit.
Just give out all the profit as bonuses to execs and done, zero profit.
Or in cases where there is some oversight that makes it look bad, just hire a handful of consulting companies (just by random chance owned by friends and family of the execs) to do some highly overpriced work and get rid of the "profit" that way while still funneling the money back to them.
>Just give out all the profit as bonuses to execs and done, zero profit.
It gets taxed as personal income so where is the problem? Even if the execs are located in Georgia where dividends and stock appreciation count as foreign source income and remain untaxed, the bonus is considered to have been earned in Georgia and is taxed (at a low rate).
> It gets taxed as personal income so where is the problem?
The thread was about non-profits. So it's a way to run a non-profit that meets the letter of the law but keeps raking in enourmous profits by shifting them elsewhere.
There are other scenarios as well where this is abused. For instance regulated corporations that are supposed to have a cap on profits in an attempt to control prices. But that fails, because they can raise prices infinitely and just shift the profits elsewhere.
Problem with this (in all kinds of contexts) is that it is trivially easy for any company to have zero profit.
Just give out all the profit as bonuses to execs and done, zero profit.
Or in cases where there is some oversight that makes it look bad, just hire a handful of consulting companies (just by random chance owned by friends and family of the execs) to do some highly overpriced work and get rid of the "profit" that way while still funneling the money back to them.