>Yeah, I generally look at it as legitimate compensation rather than a kickback.
But, to the extent that it's a way to circumvent taxes, it's not so legitimate -- it's a way of providing a private gain [1] that works as compensation but which isn't taxed. When you have marginal tax rates on high income workers hitting ~50% [2], that's a pretty big incentive for tax-free compensation! (And, IMHO is also an argument for reducing them, since they cause such distortionary collateral damage.)
[1] Don't know the specific jargon the tax code uses for "something that really ought to be taxed if we want to be consistent"
But, to the extent that it's a way to circumvent taxes, it's not so legitimate -- it's a way of providing a private gain [1] that works as compensation but which isn't taxed. When you have marginal tax rates on high income workers hitting ~50% [2], that's a pretty big incentive for tax-free compensation! (And, IMHO is also an argument for reducing them, since they cause such distortionary collateral damage.)
[1] Don't know the specific jargon the tax code uses for "something that really ought to be taxed if we want to be consistent"
[2] https://www.jcfny.org/effective-top-marginal-income-tax-rate...