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Palworld Dev Says Massive Profits Are ‘Too Big for a Studio With Our Size to Handle’ (www.ign.com)

submitted 8 months ago* (last edited 8 months ago) by [email protected] to c/[email protected]

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[+] [email protected] -124 points 8 months ago (23 children)

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.

[–] [email protected] 115 points 8 months ago* (last edited 8 months ago) (8 children)

These are all ludicrous.

Could accidentally knock people into a higher tax bracket and ruin their finances long term for short term gain.

This makes zero sense. Read up on how tax brackets actually work. Hitting higher tax brackets doesn't mean your existing income is taxed at the higher rate. No "ruining."

Could accidentally give someone collateral to take out a massive loan they cannot afford long term.

Wtf is this paternalistic BS. They could buy drugs or guns too!! 😱

Doing nothing and simply using it as cash reserves is better than making a foolish mistake and ruining it for themselves.

Nah. Pay people.

[+] [email protected] -16 points 8 months ago* (last edited 8 months ago) (4 children)

Posting US tax code like it's the only country in the world and using it as a basis to say something about a Japanese company could be construed as ludicrous, could it not?

And you choose drugs or guns for your example? Again, JAPAN.

Japanese bonuses are heavily taxed and highest salary periods can have big implications on how much one has to pay into the national pension system. The way taxes are paid in arrears can also very easily put people in difficult positions if they aren't financially responsible and happen to suddenly lose their jobs.

[–] [email protected] 15 points 8 months ago (1 children)

Still doesn't matter if something is "heavily taxed" because regardless of how much tax, you'll never own more in taxes than you made. So if you got a 10,000 bonus and it was heavily taxed at 60 percent, you don't somehow have to pay like 15,000 in taxes or something on it. You pay 60% of 10,000, leaving you with 4,000 left over. This is typically done before you even see the money, if not ensure that you keep funds aside to pay for the tax.

Also looking briefly at Japan, it appears that their income tax is a bracket based system similar to the US. So again, even if you go up a bracket, you'll never own more taxes than you make. Honestly, people need to stop thinking in brackets when it comes to taxes, all you need to worry about is your "effective tax rate." That's it, you don't need to worry that your income pushed you into a 29% tax bracket or whatever. All that matters is your effective tax rate is 24.2% or whatever. You'll never own more money because you "moved" into a higher bracket, because that's not how that works.