Because doing crap like this is how the rich avoid paying their fair share of taxes.
And yes running it a loss is a legitimate thing:
- Open up subsidiary company that you know/think will operate at a loss or near loss
- Use the negative profit to offset positive profit from another subsidiary (main operations for example)
- Parent company now has lower NET Profit!! Thus paying less in taxes since your “income” is now much lower than it was before.
- Laugh at the taxman because you just got away with stealing from your countrymen
That’s just an off the cuff example, obviously it can be a little more complicated depending on the jurisdiction
That’s just salaried folks though. The vast majority of american workers are hourly or contractors. Per the Dept of Labor’s own site:
Wage theft is when employers don’t properly pay their employees and is a HUGE problem because it isn’t always out of malevolence, it can be as simple as the time clock not properly computing overtime, etc.
If you don’t think that $274 million is large amount, think about how the vast majority of these things never get reported to the authorities; that number should be higher.
Source for quote: https://www.dol.gov/agencies/whd/data