Why do companies not purchase debt at debt collector prices and forgive it like Stephen Colbert did every year to massively reduce their tax liabilities?

Question

Why do companies not purchase debt at debt collector prices and forgive it like Stephen Colbert did every year to massively reduce their tax liabilities?

In: Economics

Answer 1

Off the top of my head 3 reasons

1) Companies already deduct all business related expenses before declaring profit – so the tax benefit might be small or non existent.

2) Stephen Colbert as a private individual makes his own choices and has to justify it to no one else. Companies don’t really have that luxury as they have a duty to shareholders.

3) Similar to above but a company wouldn’t risk the bad PR. Ultimately no company can afford to buy ALL debt. So it takes very little for someone to claim “my debt is more serious than their debt” or “why did you buy the debt from so and so. This other group is more deserving etc etc”.