I am not a fan of this wisdom. People think that tax write offs are some magic solution to tax liabilities.
This is how it works. The company can 'write off' the cost of goods sold. As such, if an items sells for 200 but costs 100 to make, the company only gets to deduct 100 dollars. Now here is the rub...assuming a 25% corporate tax rate, they only get a tax benefit of $25. As such, why would any company spend $100 to save $25. It doesnt make sense. Tax deductions are only beneficial when you are going to spend the money anyway. (ironically, the same argument i use when buying stuff on black friday with their 'discounts') Throwing away money to get a tax deduction is not economically sound. You can't 'buy a tax deduction' without losing money.
I used to hear the same argument on why someone would take out a mortgage. Would you prefer to give $30 to the government in taxes, or $100 to your bank and save $30 from being paid to the government (net 70 loss).
