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I find large interest free loans useful.

I don't hate this (and it's why I don't pay quarterlies--also, I tend to generate enough deductions to be okay.)

But it's absolutely not correct that paying people with bonuses lowers their effective tax rate.

You will have to pay penalties if you underpaid over the course of the year. This makes it not interest free.

There are plenty of games you can play with withholdings. EX: As long as you witholdings are enough to pay last years taxes or 90% of this years you are good.

Or if your bonus is in January you can have a higher witholdings from salary and the default 25% from the bonus. Just balance it by the end of the year.

But that's just simple stuff, there are also other benefits to the company.

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