Some voters are sick of companies like Amazon paying no corporate tax(nytimes.com)
nytimes.com
Some voters are sick of companies like Amazon paying no corporate tax
https://www.nytimes.com/2019/04/29/us/politics/democrats-taxes-2020.html
174 comments
> carryforward losses from years when the company was not profitable
yes, this definitely should be talked about. Why can't people's income be carried forward like this as well?
If i made a lot of money one year, why can't i claim away taxes from years that i didn't make income (such that my tax bracket is lower)?
yes, this definitely should be talked about. Why can't people's income be carried forward like this as well?
If i made a lot of money one year, why can't i claim away taxes from years that i didn't make income (such that my tax bracket is lower)?
None of the “well actually” replies you’re getting has yet mentioned that carrying forward personal capital losses is capped at $3000 per year. How could anyone argue that is remotely the same as Amazon avoiding billions in taxes?
There are also a lot of other ways companies get much more favorable tax treatment than people — for one thing just very fundamentally, they are taxed on profits but people are taxed on revenues, with no ability to deduct most major costs like paying rent or healthcare bills below a very high cutoff.
Kind of a tangent here but I can’t help thinking about this discrepancy when I hear about ISAs, and how people should be able to use the funding methods that companies do like selling shares in themselves. You can be a company but without any of the favorable treatment!
There are also a lot of other ways companies get much more favorable tax treatment than people — for one thing just very fundamentally, they are taxed on profits but people are taxed on revenues, with no ability to deduct most major costs like paying rent or healthcare bills below a very high cutoff.
Kind of a tangent here but I can’t help thinking about this discrepancy when I hear about ISAs, and how people should be able to use the funding methods that companies do like selling shares in themselves. You can be a company but without any of the favorable treatment!
In theory, that's what the standard deduction is for. If you spend $1MM/month on rent, that's a luxury and should use after-tax dollars. If you spend $500, that's a necessity and should use before-tax dollars. Thus the 12,000 standard deduction: the first $1000/month you spend on rent, food etc is done with before-tax dollars, subsequent dollars use after-tax dollars.
Businesses get to deduct their actual expenses, though, not just their minimal subsistence-level expenses.
I'm taxed on my actual income though, not something like the whole country's median income. But I can only deduct a crude approximation of the whole country's minimum necessary expenses.
It definitely works against you both ways in high COL areas, where salaries are higher in part bc expenses are higher, but deductions are still fixed.
It definitely works against you both ways in high COL areas, where salaries are higher in part bc expenses are higher, but deductions are still fixed.
Not making money is not the same as making losses. You can carry forwards losses you've made on investments.
> Not making money is not the same as making losses.
I have rent and bills to pay regardless of whether I'm making money, that is the definition of making a loss.
I have rent and bills to pay regardless of whether I'm making money, that is the definition of making a loss.
I love the debate on how evenly distributed the government stuffs its coffers
It pits everyone against each other to make sure someone else gives more money to the same entity
Fascinating
It pits everyone against each other to make sure someone else gives more money to the same entity
Fascinating
Rent and bills are (in general) not deductible expenses.
but the rent and bills of a corporation are deductable? Why is it different?
A corporation has the same legal rights as a person, but a person has to pay more for these rights. It's unfair imho.
A corporation has the same legal rights as a person, but a person has to pay more for these rights. It's unfair imho.
Ordinary and necessary business expenses (expenses incurred with a reasonable overall expectation of profit) are, in general, deductible in the US because we tax income.
Personal expenses are not.
People end up paying all taxes anyway, just sometimes one or two steps removed from the legal entity/TIN who files the returns.
Personal expenses are not.
People end up paying all taxes anyway, just sometimes one or two steps removed from the legal entity/TIN who files the returns.
1. There is a practical aspect - every person would have to have a balance sheet/financial statements
2. Those expenses are in the furtherance of generating profits rather than for personal consumption are we really going to give people write offs for their Apple watches and $6 latte’s?
2. Those expenses are in the furtherance of generating profits rather than for personal consumption are we really going to give people write offs for their Apple watches and $6 latte’s?
Sounds silly, but feel free to become a corporation. Well, it's not quite as easy as I say. When I went remote I had to start my own contracting company. Because I live in Japan and (at the time) corporations were the default company configuration, my contracting company was formed as a corporation. There are lots of advantages:
- I can deduct the rent for my work space. In fact, theoretically in Japanese law I can even rent an entire building and offer myself the ability to rent living space for about $150 per month, with the company eating the rest as a loss. Probably you can do something similar in other countries (although I couldn't actually do it... because in order to rent a place I need a company and in order to form a company I need an address... so... well, it didn't quite work out).
- Internet, some of my utilities, etc, etc are expenses. Some furniture as well. Some of it has to be depreciated, though, so I don't get the benefit immediately.
- I can set my salary to anything I want. If it is beneficial for the company to make a profit and for me to make peanuts, then it's fine. If the opposite is beneficial, then it's fine.
- A fair number of expenses can be deducted by having a life insurance plan for employees, etc, etc.
On the downside:
- I have to submit all my accounts using dual entry accounting. The government gets stroppy if I make a mistake because they expect me to be a corporation.
- I have to submit year end accounting. Seriously, I have no time for this and employ a wonderful tax accountant to do this for me. My tax accountant saves me money, but getting a good one is like getting a good car mechanic -- it's hit or miss and can be very expensive if you choose the wrong person.
- I have to do the payroll, calculate withholding tax, pay fees and employment taxes. I have to do this every month and if I'm late I get a really big fine. Luckily my wife does this (seriously, I would never do this without my wife doing all the heavy lifting)
- I have stupid amounts of bank fees because I have to transfer money between 3 different banks just to pay myself. We actually use a sneaker net in one phase: I literally withdraw our payroll from the ATM and deposit in another ATM just to save $20 in transfer fees. Of course, I have to document all of this so the government knows I'm not fiddling anything.
In the end, it's an absolute PITA. I don't really recommend it. I think I save a little money this way over when I was being paid salary. It's really hard to tell, though. However, if you factor in all the work that I need to do, I think I'm being paid about $2 an hour for that effort. Or I should say my wife is. If I didn't have her, it would not be worth it at all.
- I can deduct the rent for my work space. In fact, theoretically in Japanese law I can even rent an entire building and offer myself the ability to rent living space for about $150 per month, with the company eating the rest as a loss. Probably you can do something similar in other countries (although I couldn't actually do it... because in order to rent a place I need a company and in order to form a company I need an address... so... well, it didn't quite work out).
- Internet, some of my utilities, etc, etc are expenses. Some furniture as well. Some of it has to be depreciated, though, so I don't get the benefit immediately.
- I can set my salary to anything I want. If it is beneficial for the company to make a profit and for me to make peanuts, then it's fine. If the opposite is beneficial, then it's fine.
- A fair number of expenses can be deducted by having a life insurance plan for employees, etc, etc.
On the downside:
- I have to submit all my accounts using dual entry accounting. The government gets stroppy if I make a mistake because they expect me to be a corporation.
- I have to submit year end accounting. Seriously, I have no time for this and employ a wonderful tax accountant to do this for me. My tax accountant saves me money, but getting a good one is like getting a good car mechanic -- it's hit or miss and can be very expensive if you choose the wrong person.
- I have to do the payroll, calculate withholding tax, pay fees and employment taxes. I have to do this every month and if I'm late I get a really big fine. Luckily my wife does this (seriously, I would never do this without my wife doing all the heavy lifting)
- I have stupid amounts of bank fees because I have to transfer money between 3 different banks just to pay myself. We actually use a sneaker net in one phase: I literally withdraw our payroll from the ATM and deposit in another ATM just to save $20 in transfer fees. Of course, I have to document all of this so the government knows I'm not fiddling anything.
In the end, it's an absolute PITA. I don't really recommend it. I think I save a little money this way over when I was being paid salary. It's really hard to tell, though. However, if you factor in all the work that I need to do, I think I'm being paid about $2 an hour for that effort. Or I should say my wife is. If I didn't have her, it would not be worth it at all.
>although I couldn't actually do it... because in order to rent a place I need a company and in order to form a company I need an address... so... well, it didn't quite work out
Couldn’t you get the building first, register as a corporation, then subsidize all following months through the corporation?
Couldn’t you get the building first, register as a corporation, then subsidize all following months through the corporation?
Unfortunately no. The corporation has to either buy or rent the building and it is not allowed to rent it from the owner of the company (and rent it back again at a loss -- for obvious reasons ;-) ). I could potentially buy a building, sell it to my company and have the company rent back my living space. But my company doesn't have anywhere near enough money to buy a building outright. Also in Japan, new companies are treated as toxic waste by the banks, so no loan is possible (and probably "I'd like to get a loan to buy a building and rent it back to myself at a loss to the corporation" is not a viable business plan as far as the bank is concerned anyway...). I can't even get a corporate credit card! We do all of our transactions in cash, if you can believe it.
What I could do is rent a building with the corporation now and move the corporation. The problem is that you have to reincorporate the company at the new address (which would cost me about $3K). Japan is the land of bureaucracy after all! (Edit: I will likely do this if we decide to move since I'll have to pay that money anyway).
The tax break is really to accommodate companies that build a new factory and then build housing for the factory (or a house next to the factory for the owner). It's not really intended to be used the way I want to use it (to literally live in the work space).
What I could do is rent a building with the corporation now and move the corporation. The problem is that you have to reincorporate the company at the new address (which would cost me about $3K). Japan is the land of bureaucracy after all! (Edit: I will likely do this if we decide to move since I'll have to pay that money anyway).
The tax break is really to accommodate companies that build a new factory and then build housing for the factory (or a house next to the factory for the owner). It's not really intended to be used the way I want to use it (to literally live in the work space).
Let's say you run a gas station, which is a notoriously low margin business. You have $1,050,000 in revenue this year, and $1,000,000 in expenses, so you make $50,000.
Let's say you run a small software company, which is a high margin business. You have $1,050,000 in revenue this year, and $500,000 in expenses, so you make $550,000.
You should be taxed on the $50,000 and the $550,000, not on the $1,050,000. Otherwise, if business expenses were not deductible, low margin and capital intensive businesses would be punished severely. We would have decreased investment in the economy and everyone would suffer for it.
If individuals could deduct their expenses, it would encourage people to spend every penny they make. The mortgage interest deduction is one example where this nudge becomes apparent (albeit real estate has merit as an investment, not just consumption). We already have a low enough savings rate as it is.
Let's say you run a small software company, which is a high margin business. You have $1,050,000 in revenue this year, and $500,000 in expenses, so you make $550,000.
You should be taxed on the $50,000 and the $550,000, not on the $1,050,000. Otherwise, if business expenses were not deductible, low margin and capital intensive businesses would be punished severely. We would have decreased investment in the economy and everyone would suffer for it.
If individuals could deduct their expenses, it would encourage people to spend every penny they make. The mortgage interest deduction is one example where this nudge becomes apparent (albeit real estate has merit as an investment, not just consumption). We already have a low enough savings rate as it is.
By the logic that justifies subsidizing low margin businesses, housing, food, and other necessities should also be tax free.
Let’s say you make $100,000 a year as a school teacher in SF, and pay $7K a month for a three bedroom house for your family. That’s $84K just for housing. Food clearly uses up more than the rest.
If people and corporations were taxed the same, you could carry over the loss to a future year where your spouse cashed out some stock (or you got a job that paid a living wage).
Alternatively, we could pay everyone a fair wage, and stop subsidizing zero margin businesses that can’t afford the labor costs (which means things like gas would cost a bit more).
I’m for the latter. People have to work in these zero margin places, and their employers should figure out how to make more of a profit (and pay better), or go under.
Why should my taxes subsidize petroleum distributors, Walmart, Amazon, etc?
Let’s say you make $100,000 a year as a school teacher in SF, and pay $7K a month for a three bedroom house for your family. That’s $84K just for housing. Food clearly uses up more than the rest.
If people and corporations were taxed the same, you could carry over the loss to a future year where your spouse cashed out some stock (or you got a job that paid a living wage).
Alternatively, we could pay everyone a fair wage, and stop subsidizing zero margin businesses that can’t afford the labor costs (which means things like gas would cost a bit more).
I’m for the latter. People have to work in these zero margin places, and their employers should figure out how to make more of a profit (and pay better), or go under.
Why should my taxes subsidize petroleum distributors, Walmart, Amazon, etc?
At a high level of just considering taxable income that is true. However, the difference is there are a lot more things a corp can do to reduce taxable income than an individual can do. If you happen to be the owner of a corp you can also use those things to your individual benefit.
If the argument is to say "income is income", then "expenses are expenses" should apply too.
Edit: typo
If the argument is to say "income is income", then "expenses are expenses" should apply too.
Edit: typo
> the difference is there are a lot more things a corp can do to reduce taxable income than an individual can do.
this is exactly it. Rental costs are deducted as expenses for a corporation, but the same rental expense cannot be deducted from income. Arguably, the cost of staying alive for a person is an expense for making the income!
To make it catagorized would be too complex though - i would propose that personal income should be average-able across that person's lifetime. I.e., if i made $1000000 in one year, i should be able to spread the income from when I first started working (and paying taxes), so that my average income per year is the same number. Then you back pay all the "missing" taxes from those years, rather than suddenly jump to the $1,000,000 tax bracket and the gov't taking 45% from you in one go.
this is exactly it. Rental costs are deducted as expenses for a corporation, but the same rental expense cannot be deducted from income. Arguably, the cost of staying alive for a person is an expense for making the income!
To make it catagorized would be too complex though - i would propose that personal income should be average-able across that person's lifetime. I.e., if i made $1000000 in one year, i should be able to spread the income from when I first started working (and paying taxes), so that my average income per year is the same number. Then you back pay all the "missing" taxes from those years, rather than suddenly jump to the $1,000,000 tax bracket and the gov't taking 45% from you in one go.
Though I agree with the annoyance of high marginal rates for one-time windfalls of income, I think it's more practically workable to only allow forward averaging in the form of "pay all the taxes now and fill out this new form XYZ to allow you to perform the alternative averaging process over the next 4 tax years".
Otherwise, you end up effectively amending N returns (possibly opening them back up for examination), needing to calculate what taxes would have been due under the then-extant tax brackets and laws, possibly needing to make inflation adjustments for figures that are decades removed from the tax years in question, realistically needing to pay interest on the taxes that you didn't pay in 1972 but are now claiming are part of your 1972 income because you sold a company in 2019, and everyone would have incentive to file a tax return showing earned income from age 1. (Maybe I arrange for my child to have a job posing for photographs and being paid $20 just to get their income tax filing clock started and being able to income average all the way back to that year instead of only to age 17, 19, or 21.) Forward-only averaging avoids (or substantially avoids) those issues.
Otherwise, you end up effectively amending N returns (possibly opening them back up for examination), needing to calculate what taxes would have been due under the then-extant tax brackets and laws, possibly needing to make inflation adjustments for figures that are decades removed from the tax years in question, realistically needing to pay interest on the taxes that you didn't pay in 1972 but are now claiming are part of your 1972 income because you sold a company in 2019, and everyone would have incentive to file a tax return showing earned income from age 1. (Maybe I arrange for my child to have a job posing for photographs and being paid $20 just to get their income tax filing clock started and being able to income average all the way back to that year instead of only to age 17, 19, or 21.) Forward-only averaging avoids (or substantially avoids) those issues.
Computing tax rates against a moving average of the last 5 years income is a simple and elegant way to have the same effect.
Young people would have lower rates while they’re establishing themselves, people with windfalls would end up paying rates in line with their annual compensation (instead of just maxing out the brackets with a big percentage of their income).
Also, people with sustained high income would be taxed at a much higher rate than upwardly mobile members of the middle class.
Similarly, low income people with intermittent income would have a much better chance at building their savings.
Finally, it defeats all sorts of timing strategies, so people could make major financial decisions without first hiring a cpa.
Young people would have lower rates while they’re establishing themselves, people with windfalls would end up paying rates in line with their annual compensation (instead of just maxing out the brackets with a big percentage of their income).
Also, people with sustained high income would be taxed at a much higher rate than upwardly mobile members of the middle class.
Similarly, low income people with intermittent income would have a much better chance at building their savings.
Finally, it defeats all sorts of timing strategies, so people could make major financial decisions without first hiring a cpa.
That's interesting. In essence (assuming no tax law changes), you claim 20% of your income for the current year over each of the next 5 years for tax purposes. Has very nice properties for initial wage earners as you say.
Downsides: results in a 3x income tax charge if an income earner dies suddenly (assuming you want to settle their estate in less than 5+ years). Acts as a loan from the feds to the taxpayer, resulting in income taxes due after you stop working (perhaps you became disabled or got fired [or die, as above]), and results in deferral of income tax receipts to the government during the transition.
Overall, I really like it.
Downsides: results in a 3x income tax charge if an income earner dies suddenly (assuming you want to settle their estate in less than 5+ years). Acts as a loan from the feds to the taxpayer, resulting in income taxes due after you stop working (perhaps you became disabled or got fired [or die, as above]), and results in deferral of income tax receipts to the government during the transition.
Overall, I really like it.
If you go to a high level of abstraction, you remove useful distinctions. That is not a productive line of thought. Not all income is the same, and not all expenses are the same. Excise taxes and any "nudge" tax laws make this obvious.
It is true that there are some tax deductions that are abused. However, the effect of encouraging investment by businesses is much more important.
>If you happen to be the owner of a corp you can also use those things to your individual benefit.
This could be considered an abuse. However, the benefit of encouraging investment by businesses far outweighs the negative of this abuse. We tend to focus our attention on a few big individuals who cheat, and this excessive focus throws off our moral intuitions. Heck, the gas station owner might have deducted the cost of buying a toolbox needed at the workplace, and then borrowed a wrench from that toolbox to go home and fix his plumbing. That would be fine with me, to the extent that all the damn tax paperwork stops being worth keeping track of.
It is true that there are some tax deductions that are abused. However, the effect of encouraging investment by businesses is much more important.
>If you happen to be the owner of a corp you can also use those things to your individual benefit.
This could be considered an abuse. However, the benefit of encouraging investment by businesses far outweighs the negative of this abuse. We tend to focus our attention on a few big individuals who cheat, and this excessive focus throws off our moral intuitions. Heck, the gas station owner might have deducted the cost of buying a toolbox needed at the workplace, and then borrowed a wrench from that toolbox to go home and fix his plumbing. That would be fine with me, to the extent that all the damn tax paperwork stops being worth keeping track of.
> If you go to a high level of abstraction, you remove useful distinctions.
That's my point and what I was extrapolating from your high-level comment. If you're going to give an example, it's good to talk about things the gas station and software company do to reduce that income to, or below, zero. Things that can provide direct, positive, net gain impact on ownership of the corp. However, those same things are not available to employees of the corp.
To me, the rules should be the same for _any_ taxable entity.
That's my point and what I was extrapolating from your high-level comment. If you're going to give an example, it's good to talk about things the gas station and software company do to reduce that income to, or below, zero. Things that can provide direct, positive, net gain impact on ownership of the corp. However, those same things are not available to employees of the corp.
To me, the rules should be the same for _any_ taxable entity.
If you tax revenue, the government can be funded with much lower tax rates. Businesses will always pass costs on to customers. To claim your benefit is really for everyone else seems a bit narcissistic.
Take another low-margin business: supermarkets. Do you want to raise supermarket (or other necessity) prices across the board by whatever the revenue-based corporate tax rate is? That would have a substantially regressive overall impact on consumers (in that the poor would bear a greater portion of that tax than their share of income).
You get a personal exemption and a standard deduction for your living expenses. Yes, it's unfairly low compared to Jeff Bezos's deduction for his Gulfstream plane and executive cafe.
"I have rent and bills to pay regardless of whether I'm making money, that is the definition of making a loss."
That is not a loss. That is an exchange of value; you pay $100 for your heating bill and receive $100 of heating.
A loss is when you have some value, and it disappears, and you have no compensating value. Buying a stock at $100 and selling it at $50 is a transaction in which you have less money at the end than you had at the beginning, and where you also had no compensating value exchange
Normal taxpayers do have rights to do things like carry forward losses in many circumstances. Business do get to be not taxed on expenses, but there are conditions on that. You can tell there are conditions on that because you can't just form an LLC and declare all your expenses to be losses, because you won't meet the conditions for your expenses to be losses. Note that that is the source of the problem, "form an LLC" is something you can totally do very easily, it's the failure for your personal expenses to qualify that is the problem.
While it might be emotionally satisfying to tax businesses on expenses, it's not hard to think about it a bit and realize why letting taxpayers deduct all their expenses, or trying to tax businesses on their expenses even when they didn't make a profit, are both not great ideas. (Think about the incentives created. Taxpayers don't need any more incentives to spend all their money on "expenses" as it is, if you've seen the credit card debt statistics.)
That is not a loss. That is an exchange of value; you pay $100 for your heating bill and receive $100 of heating.
A loss is when you have some value, and it disappears, and you have no compensating value. Buying a stock at $100 and selling it at $50 is a transaction in which you have less money at the end than you had at the beginning, and where you also had no compensating value exchange
Normal taxpayers do have rights to do things like carry forward losses in many circumstances. Business do get to be not taxed on expenses, but there are conditions on that. You can tell there are conditions on that because you can't just form an LLC and declare all your expenses to be losses, because you won't meet the conditions for your expenses to be losses. Note that that is the source of the problem, "form an LLC" is something you can totally do very easily, it's the failure for your personal expenses to qualify that is the problem.
While it might be emotionally satisfying to tax businesses on expenses, it's not hard to think about it a bit and realize why letting taxpayers deduct all their expenses, or trying to tax businesses on their expenses even when they didn't make a profit, are both not great ideas. (Think about the incentives created. Taxpayers don't need any more incentives to spend all their money on "expenses" as it is, if you've seen the credit card debt statistics.)
A company paying a cost of $50 to produce widgets for 1 year (and don't sell any that year), then selling all the widgets on the 2nd year for a profit of $100, can claim that they made a loss of $50 in the previous year, and therefore only have $50 that's taxable.
A person who works for 1 year for $100 income, then stops working the 2nd year (and live off their income from the 1st year), must pay their taxes at the $100 rate. If they are allowed the same 'carry forward' as a corp, they should pay at the tax rate of $50 for both years, rather than at $100 for the first year, and $0 at the 2nd year. And yet, this isn't allowed for a person. Of course, you could claim that the gov't can't tell that the first $100 is supposed to be 'averaged out' in the future. So would the situation be any different if you lived off savings for the first year, and replenished them in the 2nd year? I don't think this is any different.
A person who works for 1 year for $100 income, then stops working the 2nd year (and live off their income from the 1st year), must pay their taxes at the $100 rate. If they are allowed the same 'carry forward' as a corp, they should pay at the tax rate of $50 for both years, rather than at $100 for the first year, and $0 at the 2nd year. And yet, this isn't allowed for a person. Of course, you could claim that the gov't can't tell that the first $100 is supposed to be 'averaged out' in the future. So would the situation be any different if you lived off savings for the first year, and replenished them in the 2nd year? I don't think this is any different.
Sorry that is not how it works - basic tenets of accounting (matching revenues and costs) those widgets would sit on the balance sheet and no loss would be recognized in year 1 and just profit in year 2
>those widgets would sit on the balance sheet and no loss would be recognized in year 1 and just profit in year 2
Unless of course the company manufacturing the widgets (A) sells them to a wholly owned subsidiary (B) for a loss...then A can take the deduction.
Unless of course the company manufacturing the widgets (A) sells them to a wholly owned subsidiary (B) for a loss...then A can take the deduction.
Who would then make an even bigger profit, for no tax savings
you do know that this is a well known tax avoidance strategy right? The profits would be later used to offset the losses carried forward by the parent.
Are you an accountant/CPA or attorney?
Are you an accountant/CPA or attorney?
Perhaps you could pencil out this well known tax avoidance strategy (unless you are really talking about time value of money, jurisdictional arbitrage, or some dodgy maneuver that wouldn’t stand up to an audit)
I take it you are neither accountant/CPA nor attorney who regularly deals with these tax matters.
In lieu of penciling you a tax treatise, you may Google “wholly owned subsidiary tax strategies“. While there are no shortage of tax benefits, inevitably one of the elementary examples you find towards the top will be segregation of manufacturing and sales entities. Unfortunately you likely will not find much on more nuanced situations for example Wholly owned IC-Discs or LOB for wholly owned foreign entities (in many instances those situations can result in 0% US withholding and tax rates)
In lieu of penciling you a tax treatise, you may Google “wholly owned subsidiary tax strategies“. While there are no shortage of tax benefits, inevitably one of the elementary examples you find towards the top will be segregation of manufacturing and sales entities. Unfortunately you likely will not find much on more nuanced situations for example Wholly owned IC-Discs or LOB for wholly owned foreign entities (in many instances those situations can result in 0% US withholding and tax rates)
Paying wages and by extension R&D is nothing more than business expenses. It's hard to see why that qualifies as losses that can be used to offset future earnings. I'm sure there is an "explanation", but that is ultimately what people are upset about. It has lead to where they are today and to many people that doesn't sit well.
I am a believer in being upset about the right things. "Expenditures" are not automatically "losses". There are things that may be upsetting about how businesses are taxed, but there mere fact that they are taxed differently than people, or that it subjectively feels unfair that they are, is not one of them. There are reasons for that variance in taxing. Many of them are quite good and ultimately play to the benefit of both the employees of that business (who like having a functioning business around to pay them) and society (who like not just the taxes that come from the business, but all taxable activity it generates, including paying people incomes and health insurance and such).
If most people feeling their way through this problem got their way, they'd simply destroy businesses entirely. They wouldn't necessarily mean to, and only a handful of people would actually appreciate that as a result, with even fewer of those would appreciate it after ten years of experiencing it, but it would be the result.
This is a thing that has happened, and can be studied in history, and is actually happening in the world right now; countries have destroyed their entire business base for good, feel-worthy reasons. Generally speaking, most people have not liked the results. It is not a thing that is beyond the pale, or impossible to happen, or can't happen here, so it's worth encouraging people to be more careful than just feeling.
(This is more opinion than the above, but I don't really believe in the existence of "businesses that aren't taxed", because the business is non-trivially responsible for all of the income tax their employees generate, and directly pay Social Security, health care taxes, sales tax on all the things they buy, and so on. It isn't really the case that there are companies that reach the end of their fiscal year and not a single dollar was "paid in taxes". All it is is that they aren't necessarily paying income taxes, one particular tax, in a field full of lots and lots of taxes. The idea that "companies aren't being taxed" is a lot of rhetoric, which isn't intrinsically a problem, but it can be very misleading and lead to emotions not well-calibrated with reality. By this standard, there's actually a lot of Americans who "don't pay taxes" too, which really makes it all seem a great deal less unfair, and even pay negative taxes, but they still pay various taxes even so, because income is only one taxation element.)
If most people feeling their way through this problem got their way, they'd simply destroy businesses entirely. They wouldn't necessarily mean to, and only a handful of people would actually appreciate that as a result, with even fewer of those would appreciate it after ten years of experiencing it, but it would be the result.
This is a thing that has happened, and can be studied in history, and is actually happening in the world right now; countries have destroyed their entire business base for good, feel-worthy reasons. Generally speaking, most people have not liked the results. It is not a thing that is beyond the pale, or impossible to happen, or can't happen here, so it's worth encouraging people to be more careful than just feeling.
(This is more opinion than the above, but I don't really believe in the existence of "businesses that aren't taxed", because the business is non-trivially responsible for all of the income tax their employees generate, and directly pay Social Security, health care taxes, sales tax on all the things they buy, and so on. It isn't really the case that there are companies that reach the end of their fiscal year and not a single dollar was "paid in taxes". All it is is that they aren't necessarily paying income taxes, one particular tax, in a field full of lots and lots of taxes. The idea that "companies aren't being taxed" is a lot of rhetoric, which isn't intrinsically a problem, but it can be very misleading and lead to emotions not well-calibrated with reality. By this standard, there's actually a lot of Americans who "don't pay taxes" too, which really makes it all seem a great deal less unfair, and even pay negative taxes, but they still pay various taxes even so, because income is only one taxation element.)
They're related. Suppose someone makes $100000 net over two years. Should the amount of tax they pay depend on what happened in the first year?
Individuals can only do this for 7 years FYI. Corporate carry forward is much longer (is there even a limit? I'm not sure. I usually don't keep my corporations that show a loss for longer than a few years before dissolving them and forming new ones).
While the article states it as "did not make a profit" what actually happened was they lost money, that loss was carried forward.You can do this too! If you have previous years where you had a loss, you can carry that loss forward just like Amazon does. There are rules around it, but it isn't that complicated.
There used to be allowed. It was called "income averaging". But then the tax philosophies of the 80s happened.
Forms of that happens in Canada. My effective tax rate was 11% last year because I maxed out my tax shelter retirement savings plan from all the years I made no money.
You can carry forward capital losses.
Theoretically, this is appealing - practically, I see a lot of problems
Theoretically, this is appealing - practically, I see a lot of problems
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What you suggest is something completely unrelated.
Those all sound like corporate tax policies. That's literally what they're talking about. Clearly, a growing portion of the electorate doesn't like those policies.
That's the first step in democracy, no? Engagement?
That's the first step in democracy, no? Engagement?
I agree that engagement and discussing policies is important. But it does feel disingenuous and aimed at provoking outrage (to trigger a knee-jerk reaction) when you just mention a fact like "look at these rich guys that don't share anything!" and ignore the context of why it got to be the way it is.
And I'm not saying that there aren't changes that could and should be made. Just that this particular article doesn't have the feel of a fair debate aiming to inform people, but more of an outrage-inducing propaganda.
And I'm not saying that there aren't changes that could and should be made. Just that this particular article doesn't have the feel of a fair debate aiming to inform people, but more of an outrage-inducing propaganda.
jealousy leading to anger is all part of the political play book and the NYT is there to serve its political masters by running stories that will soon be picked up by candidates to run with.
it is all part and parcel with an upcoming election. get your direction from the PAC you deny feeds you stuff, write an article with enough truth in it to pass muster but leaving out enough to make a "rational" decision. Thereby upsetting people by appealing to jealousy, envy, and such, by playing on their morals. After all everyone is for justice, protecting children, the environment, and fairness, aren't they?
tripe like this doesn't belong on HN but with the election season spinning up we will get flooded with both direct and indirect stories that are politically driven.
it is all part and parcel with an upcoming election. get your direction from the PAC you deny feeds you stuff, write an article with enough truth in it to pass muster but leaving out enough to make a "rational" decision. Thereby upsetting people by appealing to jealousy, envy, and such, by playing on their morals. After all everyone is for justice, protecting children, the environment, and fairness, aren't they?
tripe like this doesn't belong on HN but with the election season spinning up we will get flooded with both direct and indirect stories that are politically driven.
Right, except the candidate with the most detailed and thought out policies designed to tackle these issues (and one of the front runners currently) is Elizabeth Warren, a senator who has built her career doing the exact opposite of what you're claiming. The vast, vast majority of her funding comes from individual contributions and the vast majority of the rest comes from such "lobbying powerhouses" like Emily's List. Are you seriously claiming that the NYT's political master is the woman who spearheaded the CFPB?
Intellectually void "everyone is corrupt why cant the sheeple see" tripe is best saved for Reddit.
Intellectually void "everyone is corrupt why cant the sheeple see" tripe is best saved for Reddit.
I'm fine with outrage-inducing propaganda against people who have tens or hundreds of billions of dollars since that class as a whole spends so much time putting out propaganda in their favor. I'm not particularly interested in the details as long as it elevates consciousness about the inherent problems with a society that allows Jeff Bezos to have more money than he could spend in ten thousand lifetimes while millions of people aren't entirely sure how they're going to afford food next week
How about we don’t encourage outrage inducing propaganda against anyone? If you have an issue with some someone has actually done (like for example putting out their own propoganda) then by all means be critical of that. What value is there in accepting vapid nonsense, just because it targets someone you dislike?
Amazon is not Jeff Bezos. Taxing him would be a whole different topic of conversation. Probably more on the topics of executive compensation, taxes for high incomes, and a bunch of other possible subjects.
Interesting discussion to be had, for sure, but not what the article is really about.
Interesting discussion to be had, for sure, but not what the article is really about.
It all falls under the same umbrella, which as you accurately described as "rich guys who don't share anything" and as far as I'm concerned any amount of elevated consciousness around that is a good thing, even if strictly speaking taking money from Bezos the man and Amazon the company are two separate types of taxation and two different discussions. Bezos and his company Amazon both make almost unfathomable amounts of money and don't pay anywhere near what I'd consider a fair share of it back into society. As Amazon's PR people point out this is legal, naturally, but this article does a good job of contrasting Amazon using every tax trick in the book with normal human beings who aren't able to deduct their expenses for cancer treatment. Likely because the lobby representing the financial interests of individuals with cancer is not all that strong.
"Amazon doesn’t pay taxes, but I pay taxes" is a very good sound byte from this, even if the reasons why that's the case are obviously more complicated.
"Amazon doesn’t pay taxes, but I pay taxes" is a very good sound byte from this, even if the reasons why that's the case are obviously more complicated.
Amazon is not a human person. Which human people pay too little taxes for the wealth they receive or consume? That's what matters.
> Jeff Bezos to have more money
Out of all the rich people we could talk about, Bezos is actually one of the ones I have the least problem with. Bezos has a lot of money, but he doesn't have tens of billions of dollars of "money". His net worth is mostly tied up in Amazon ownership, and if he tried to liquidate more than a small fraction of it then it'd suddenly be worth much less, both because of increased supply, and because Amazon's value is very tied up in his ability to drive the company. Maybe we could talk about problems with a system that allow Amazon to be worth as much as it is, but for the founder of a company to be worth a lot because they built a big company, that doesn't seem like a problem to me.
Out of all the rich people we could talk about, Bezos is actually one of the ones I have the least problem with. Bezos has a lot of money, but he doesn't have tens of billions of dollars of "money". His net worth is mostly tied up in Amazon ownership, and if he tried to liquidate more than a small fraction of it then it'd suddenly be worth much less, both because of increased supply, and because Amazon's value is very tied up in his ability to drive the company. Maybe we could talk about problems with a system that allow Amazon to be worth as much as it is, but for the founder of a company to be worth a lot because they built a big company, that doesn't seem like a problem to me.
Fair enough. I agree that the word count would much better be spent on discussing the relevant legislation and resulting tax codes.
But let me be honest. I wouldn't read that story. I'm not a tax policy wonk, nor am I qualified to opine on the legislative process except to express exasperation at the gridlock. I am however qualified to vote for candidates who are and that first requires awareness of the issues, a topic orthogonal to a precise understanding of the solutions, just like I need a doctor to tell me what to do about my infection after the pain has brought attention to it, not explain the intricate details of how assays work or how antibiotics disrupt bacterial functions.
But let me be honest. I wouldn't read that story. I'm not a tax policy wonk, nor am I qualified to opine on the legislative process except to express exasperation at the gridlock. I am however qualified to vote for candidates who are and that first requires awareness of the issues, a topic orthogonal to a precise understanding of the solutions, just like I need a doctor to tell me what to do about my infection after the pain has brought attention to it, not explain the intricate details of how assays work or how antibiotics disrupt bacterial functions.
> I'm not a tax policy wonk, nor am I qualified to opine
Which makes it so easy for the NYT to manipulate you into jealous frenzy.
A lot of people see an outrageous headline and too few ask "what's the other side of the story?" The media knows this and can use it to direct your ire at any of their competitors because it's so effective
Which makes it so easy for the NYT to manipulate you into jealous frenzy.
A lot of people see an outrageous headline and too few ask "what's the other side of the story?" The media knows this and can use it to direct your ire at any of their competitors because it's so effective
The other side of it is what my personal and business's accountants do. I don't need to know the intricate details of their work to look at the final bill and realize that maybe I should be paying more for the benefits I enjoy in this country, especially considering my native tax rate - which gets me a hell of a lot less in Russia than the nearly equivalent effective rate does in the US.
The problem is that the NYT ignored the why almost entirely to generate outrage because they are creating an issue. Most people wouldn’t be outraged if you said “this company didn’t pay tax this year on its $2B in profits because it lost $1B last year, and invested $1B in a new research facility (and got accelerated depreciation)”
I thought this (among other paragraphs) provided context:
"Though both parties have sought to lower the top corporate tax rate in the last decade — President Barack Obama proposed lowering it from 35 percent to 28 percent — Republicans in 2017 pushed it down to 21 percent, in addition to expanding some generous tax breaks. The new law allowed immediate expensing of capital expenditures, for example, in order to goose investment. That was one of the primary reasons that more corporations paid no federal taxes, according to the report.
Mr. Trump and his Republican allies argued that the tax changes would stimulate investment and economic growth. That has happened, though not by as much as they predicted."
There's no debate here, the article was written by one person. It juxtaposes several facts (changes in tax law over the last 10 years, a group of profitable corporations with an effective corporate tax rate of 0 (or negative), poll results, factory closings, and a number of statements by presidential contenders) and, for context, adds a handful of statements from voters and minor activists to give the reader a sense of of how voters in Ohio are viewing these changes.
It's full of charts and dates and numbers. While the title is a little provocative, I find the body text to be informative and interesting, and feel the temperature is kept relatively low given the extremely contentious subject matter.
"Though both parties have sought to lower the top corporate tax rate in the last decade — President Barack Obama proposed lowering it from 35 percent to 28 percent — Republicans in 2017 pushed it down to 21 percent, in addition to expanding some generous tax breaks. The new law allowed immediate expensing of capital expenditures, for example, in order to goose investment. That was one of the primary reasons that more corporations paid no federal taxes, according to the report.
Mr. Trump and his Republican allies argued that the tax changes would stimulate investment and economic growth. That has happened, though not by as much as they predicted."
There's no debate here, the article was written by one person. It juxtaposes several facts (changes in tax law over the last 10 years, a group of profitable corporations with an effective corporate tax rate of 0 (or negative), poll results, factory closings, and a number of statements by presidential contenders) and, for context, adds a handful of statements from voters and minor activists to give the reader a sense of of how voters in Ohio are viewing these changes.
It's full of charts and dates and numbers. While the title is a little provocative, I find the body text to be informative and interesting, and feel the temperature is kept relatively low given the extremely contentious subject matter.
It mentions tax rate laws, but those don't actually cover why Amazon effectively paid no taxes. I.e. massive investments in R&D, stock-based employee compensation, carry-forwards losses, and whatever else I may still be missing.
I don't think it can be considered fairly informative if it doesn't cover how we got to those values. From reading this article, one could still ask if a tax rate is at 21%, how does that mean a profitable company doesn't pay any taxes?
I don't think it can be considered fairly informative if it doesn't cover how we got to those values. From reading this article, one could still ask if a tax rate is at 21%, how does that mean a profitable company doesn't pay any taxes?
I don't think its an article about Amazon's tax bill as such. It's about how Ohio voters and presidential candidates are reacting to Amazon and several other firms' effective tax rates.
If they went through what Amazon and Goodyear and GM and Duke Energy all did then they would just be rehashing the report that they conveniently linked.
If they went through what Amazon and Goodyear and GM and Duke Energy all did then they would just be rehashing the report that they conveniently linked.
No.
The only thing worse than a fool is an engaged fool.
First educate the people, then crank up the engagement. Doing it in the opposite order is a recipe for disaster.
The only thing worse than a fool is an engaged fool.
First educate the people, then crank up the engagement. Doing it in the opposite order is a recipe for disaster.
I thought it was education. Like, about why carry-forwards make sense. If there's a (somewhat) reflectively consistent reason why we want to break the "only tax profits" model, and voters generally understand the tradeoffs, great, that sounds like a good debate to have. As it stands, like the OP suggests, it comes off more as misleading rabble-rousing.
>>These are the actual things we should be talking about.
I (hesitantly) disagree. That specific tax policy change is a tree in a vast forest. It happens to be relevant here, but without it... It's not like Amazon, Google, apple, etc would have paid anywhere near the simple tax rate had that legislation not been enacted. Amazon had a different loophole/strategy in 2016 and will have another one for whenever the 2017 one expires whatnot.
Ultimately, corporate income tax has been broken for over 50 years, and it's been brought ken internationally, not just in the US.
...broken in the sense that the "rate" can be 35%, 23% or whatever and the total tax raised in an economy some number unrelated to that.
Reporting the way you suggest implies that in 2016 things were different, or that canceling that policy will yield a meaningfully different result. That's not the case.
I (hesitantly) disagree. That specific tax policy change is a tree in a vast forest. It happens to be relevant here, but without it... It's not like Amazon, Google, apple, etc would have paid anywhere near the simple tax rate had that legislation not been enacted. Amazon had a different loophole/strategy in 2016 and will have another one for whenever the 2017 one expires whatnot.
Ultimately, corporate income tax has been broken for over 50 years, and it's been brought ken internationally, not just in the US.
...broken in the sense that the "rate" can be 35%, 23% or whatever and the total tax raised in an economy some number unrelated to that.
Reporting the way you suggest implies that in 2016 things were different, or that canceling that policy will yield a meaningfully different result. That's not the case.
> (...) It happens to be relevant here (...)
Then it should be discussed. Along with the policies already mentioned in the article and it's disingenuous not to do so. How can we expect to make informed decisions if we selectively choose what information to expose or hide for discussion?
Then it should be discussed. Along with the policies already mentioned in the article and it's disingenuous not to do so. How can we expect to make informed decisions if we selectively choose what information to expose or hide for discussion?
>and stock-based employee compensation.
Do we have any more information on this line item? I'm in a position where over 1/2 of my income is via RSU grants from my employer. If those are deductible from corporate taxes, that seems to make sense since they are treated as regular income to the recipients, just like salaries (other payroll taxes, etc. are another story). I know there are other forms of equity-based compensation as well. I'm curious to see how these things work.
Do we have any more information on this line item? I'm in a position where over 1/2 of my income is via RSU grants from my employer. If those are deductible from corporate taxes, that seems to make sense since they are treated as regular income to the recipients, just like salaries (other payroll taxes, etc. are another story). I know there are other forms of equity-based compensation as well. I'm curious to see how these things work.
This is a good article on the subject
https://hbr.org/2009/08/expensing-stock-options-the-co
https://hbr.org/2009/08/expensing-stock-options-the-co
I wish there were individual income tax credits for R&D work.
Go look at Amazon's 8k and 10k filings; If memory serves it wasn't until 2015 or 2016 they turned a profit after almost 2 decades. It's been illegal, under racketeering laws, to sell at a loss in order to capture a market for a long, long time, and that's the real story here.
Republicans and Democrats have let that one go; blaming political parties is a straw-man argument. They expect to utter the words and hope you believe it and not fight what they're doing.
In 2008 after the crash the retail industry switched to hiring part-time jobs only; Wal-mart, Meijer, Kroger, almost everyone and a lot of that was due to pricing pressure from online retail namely E-bay and to a larger extent Amazon. People began working 3 or 4 unstable part time jobs to piece together 60+hr weeks in order to make ends meet and still living in destitution (not having savings for a car or house repair). Many turned to drugs and alcohol to deal with the trauma of being in a sitaution where that looked to be a permanent state of affairs. Today, Wal-mart has stopped drug testing new hires, they've implimented a drug rehab program for new hires because they drug test 100 people and literally 99 fail. Other retailers and employers are doing the same.
Any company that views it's customers as the product ultimately is looking to do what anyone does with a product once they are done with it; throw it into the garbage. CNBC is filling your head with garbage and turning you into garbage just like Amazon and the retail industry did to those retail workers I just mentioned; now they get to clean up their mess. Those people get to lose a good 15-20 years of productive live due to this. You have literally nothing to gain by listening to them whatsoever; take a news literacy course and invest a little bit of money on real journalism.
Republicans and Democrats have let that one go; blaming political parties is a straw-man argument. They expect to utter the words and hope you believe it and not fight what they're doing.
In 2008 after the crash the retail industry switched to hiring part-time jobs only; Wal-mart, Meijer, Kroger, almost everyone and a lot of that was due to pricing pressure from online retail namely E-bay and to a larger extent Amazon. People began working 3 or 4 unstable part time jobs to piece together 60+hr weeks in order to make ends meet and still living in destitution (not having savings for a car or house repair). Many turned to drugs and alcohol to deal with the trauma of being in a sitaution where that looked to be a permanent state of affairs. Today, Wal-mart has stopped drug testing new hires, they've implimented a drug rehab program for new hires because they drug test 100 people and literally 99 fail. Other retailers and employers are doing the same.
Any company that views it's customers as the product ultimately is looking to do what anyone does with a product once they are done with it; throw it into the garbage. CNBC is filling your head with garbage and turning you into garbage just like Amazon and the retail industry did to those retail workers I just mentioned; now they get to clean up their mess. Those people get to lose a good 15-20 years of productive live due to this. You have literally nothing to gain by listening to them whatsoever; take a news literacy course and invest a little bit of money on real journalism.
> It's been illegal, under racketeering laws, to sell at a loss in order to capture a market for a long, long time, and that's the real story here.
You're thinking of an antitrust violation, not racketeering. The Sherman Antitrust Act prohibits any "attempt to monopolize" which includes predatory pricing. Racketeering is running a criminal organization for-profit (a Ponzi scheme, dealing dreams, illegal gambling, loan sharks, prostitution, etc.).
You're thinking of an antitrust violation, not racketeering. The Sherman Antitrust Act prohibits any "attempt to monopolize" which includes predatory pricing. Racketeering is running a criminal organization for-profit (a Ponzi scheme, dealing dreams, illegal gambling, loan sharks, prostitution, etc.).
Not turning a profit does not mean or even imply selling at loss at all.
It does actually. Cost of doing business includes all costs.
If amazon believes they need to spend money on R&D then that R&D is a cost of doing business, if its not turning a profit with that R&D spending then the business is not sustainable by definition.
Amazon was not doing R&D for shits and giggles. Just because the time horizon was long doesn't mean it wasn't any less of a requirement for their success. Amazon would not be in the same place it is today if not for that expenditure so claiming it wasn't a "cost" is just disingenuous.
If amazon believes they need to spend money on R&D then that R&D is a cost of doing business, if its not turning a profit with that R&D spending then the business is not sustainable by definition.
Amazon was not doing R&D for shits and giggles. Just because the time horizon was long doesn't mean it wasn't any less of a requirement for their success. Amazon would not be in the same place it is today if not for that expenditure so claiming it wasn't a "cost" is just disingenuous.
Should we have been allowing amazon to capitalize that R&D though? It creates one of their largest assets and yet is not reflected on the balance sheet and is expensed immediately.
> if its not turning a profit with that R&D spending then the business is not sustainable by definition.
Why? If the revenue perfectly matches the expenses (including R&D), it won't turn a profit, but it can be sustained indefinitely.
Why? If the revenue perfectly matches the expenses (including R&D), it won't turn a profit, but it can be sustained indefinitely.
It doesn't actually. When we're talking about taxes, we have specific timeframes in mind, that is one year. You don't have to turn a profit at year 1 or even year 100 in order to be profitable.
In the last 16 years (2003-2018), Amazon had only two years of negative earnings: 2012 and 2014.
If Amazon was selling at a loss until 2016 (almost twenty years since their IPO) where was the rest of the money coming from?
The intellectual dishonesty of this from allegedly smart people continues to astound me. Amazon has little-to-no taxes mainly because they have such low taxable income in the first place because they spend so much in R&D and other things. They’re actually creating jobs and new businesses rather than showing massive profits and paying a ton in taxes. I have no doubt they take advantage of perfectly legal tax code items like accelerated depreciation, just like millions of other companies. At the end of the day, people of a certain mindset just want to take other peoples’ money and the more of it they have they more desperately people believe they don’t deserve to have it.
Can you prove that all the other businesses that didn't survive, either online or shops weren't has much jobs than the one Amazon provide?
Also, all the taxes that they don't pay needs to be paid by others. For each optimizations done by those companies, it's as much money that needs to be paid by others as each country runs on a budget that is mainly based on taxes. Them not paying taxes as a direct impact on taxes that needs to be paid by the one who pay taxes as well as the quality of service and infrastructure of a country. Infrastructure they uses a lot by the way, like roads to deliver their goods for example.
Also, all the taxes that they don't pay needs to be paid by others. For each optimizations done by those companies, it's as much money that needs to be paid by others as each country runs on a budget that is mainly based on taxes. Them not paying taxes as a direct impact on taxes that needs to be paid by the one who pay taxes as well as the quality of service and infrastructure of a country. Infrastructure they uses a lot by the way, like roads to deliver their goods for example.
It’s hard to compare to other businesses because amazon cannot capitalize R&D. If they spend $1bn on software dev and Tesla spends the same amount on a factory, Amazon’s ebitda is down $1bn and Tesla’s is only down ~$100M.
https://www.thetaxadviser.com/issues/2016/may/deductibility-...
Says software is capitalized over 3-5yrs. The difference is that software dev costs usually grow smoothly year over year but gigafactory launches are spiky
Says software is capitalized over 3-5yrs. The difference is that software dev costs usually grow smoothly year over year but gigafactory launches are spiky
Taxes are no end in itself, they are necessary to provide the infrastructure (streets, legal system, ...) so that people and businesses can thrive.
Not wanting to contribute to that is the epitome of free-riding.
Not wanting to contribute to that is the epitome of free-riding.
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> take advantage of perfectly legal tax code items
Nobody is saying otherwise. They are saying these legal loopholes are the problem that need changing.
Nobody is saying otherwise. They are saying these legal loopholes are the problem that need changing.
Plenty of people are saying otherwise, either directly "These cross-national inter-company agreements are illegal and should be reversed" or indirectly "These companies are free-riding by improperly exploiting loopholes and should pay more."
If the only issue were loopholes, the fixes are outside of Amazon/Google/other companies hands and in the hands of the legislatures of the various companies.
If the only issue were loopholes, the fixes are outside of Amazon/Google/other companies hands and in the hands of the legislatures of the various companies.
Exactly. There is such a thing as fiduciary duty. As a board member, if I find out my CEO is overpaying on taxes because he feels like it's the "right thing to do", his ass is getting canned. Our competition is not going to do that, and you get no brownie points for being a naive simp. This is a competition, not a drum circle.
Why is it better to tax employee personal income than corporate income?
Companies can easily move, people mostly don't.
It was the other way around until XIX century. People had been moving around Europe or emigrating to America in search of lower taxation while moving physical business (like local brewery) was next to impossible.
It was the other way around until XIX century. People had been moving around Europe or emigrating to America in search of lower taxation while moving physical business (like local brewery) was next to impossible.
Novel. I was expecting some variation of the supply side doctrine. Not penalizing people because holding corporations accountable is hard.
They reported $12 billion in profit last year. That's not low.
> carryforward losses from years when the company was not profitable
The idea of carrying forward losses in general is sound, but I'm beginning to wonder if there should be an exception. If the loss is intentional, using investment instead of profit to drive growth, I'm not so sure those losses deserve to be carried forward. Probably an unpopular opinion here on HN, but I think denying reductions in those cases would be beneficial not only in terms of tax revenue from the larger companies but also in terms of reducing the VC-fueled ""unicorn or bust" mentality among the smaller ones.
The idea of carrying forward losses in general is sound, but I'm beginning to wonder if there should be an exception. If the loss is intentional, using investment instead of profit to drive growth, I'm not so sure those losses deserve to be carried forward. Probably an unpopular opinion here on HN, but I think denying reductions in those cases would be beneficial not only in terms of tax revenue from the larger companies but also in terms of reducing the VC-fueled ""unicorn or bust" mentality among the smaller ones.
Agree that these companies are using the tax code to write off losses that they are intentionally incurring in order to achieve a lower cost point than their (profitable) competitors. This is a very predatory practice that should be ended. Companies should compete in the marketplace. Having tax payers foot the bill for some companies disruption gambit makes no sense.
Any new company, including a mom&pop restaurant or whatever, will have startup costs that established companies do not (e.g. buying equipment, training people, etc). How do you propose to distinguish those from these "predatory" losses? Or should those losses not be carried over either?
That's a really good question, and - contrary to HN tradition - I'm not even going to pretend I have a complete answer. Some cases are easy, for example a lot of non-tech startups are funded by loans rather than equity exchanges. Other cases are surely harder, but I think clear lines can and should be drawn.
The key IMO is that the company should be paying tax somewhere along the line. Right now VC is a double gift - it provides funds to grow, and the corresponding expenditures magically turn into "losses" that erase future tax. Besides its effect on government revenue, it also gives VC-funded companies an unfair advantage (as though they didn't have enough) over competitors who are being taxed more for having the audacity to grow organically.
The key IMO is that the company should be paying tax somewhere along the line. Right now VC is a double gift - it provides funds to grow, and the corresponding expenditures magically turn into "losses" that erase future tax. Besides its effect on government revenue, it also gives VC-funded companies an unfair advantage (as though they didn't have enough) over competitors who are being taxed more for having the audacity to grow organically.
The effects on government revenue seem more complex than that. For example, if a customer of a startup spends $8 instead of $12 thanks to VC subsidization, those $4 remaining in their pocket will be spent somewhere else, and the IRS will get to tax that expense too.
Taxing profits (as opposed to revenue, value add, capital gains..) is the ultimate quixotic temptation for politicians.
On paper, it is a fantastic tax. Google, Apple, FB, Amazon... all the new economy winners are very profitable, 20% - 30% margins & fast growth are expected (and priced into market caps).
They're so profitable that money is just piling up, atm. They can't usefully invest it all. This means you can tax their profits without affecting the real economy. There's nothing google is doing that it couldn't do if they had to pay $10bn (25%-30%) as a tax on profits.
OTOH, unprofitable companies (eg Tesla), would have trouble paying extra taxes. It'd need to come out of investments in production capacity, R&D, etc. They wouldn't have to pay.
Corporate income tax is just a sensible idea, on the face of it. Unprofitable? Don't pay. Profitable? Pay. Minimum economic disruption.
But in practice... across many times and places... it's proved very hard to make a corporate tax scheme work.
Tax policy complexity. Accounting complexity. Multiple jurisdictions. The looping cascade of company ownership, partial ownership, contractual relationships, making up the legal "structure" of a google or amazon.
It all adds up to a reality wherein politicans cannot make a law that says 25% tax.. and have that mean something similar to what it sounds like.
This is a pill very few politicans or voters can swallow. Of course we can! We're legislators. We make laws. We have police, and tax authorities. Google finance said google made $40.42bn. The rate is 25%. Gives us $10.1bn.
Empirically, they generally can't. Changing things to enable corporate tax would require massive, difficult legal/bureaucratic reforms. You would need to consider insanely difficult changes, like heavy handed restrictions on a company's ability to own other companies, and the types of legal entities that can own legal entities. You'd need new accounting standards. The bureaucratic guts of the economic machine.
On paper, it is a fantastic tax. Google, Apple, FB, Amazon... all the new economy winners are very profitable, 20% - 30% margins & fast growth are expected (and priced into market caps).
They're so profitable that money is just piling up, atm. They can't usefully invest it all. This means you can tax their profits without affecting the real economy. There's nothing google is doing that it couldn't do if they had to pay $10bn (25%-30%) as a tax on profits.
OTOH, unprofitable companies (eg Tesla), would have trouble paying extra taxes. It'd need to come out of investments in production capacity, R&D, etc. They wouldn't have to pay.
Corporate income tax is just a sensible idea, on the face of it. Unprofitable? Don't pay. Profitable? Pay. Minimum economic disruption.
But in practice... across many times and places... it's proved very hard to make a corporate tax scheme work.
Tax policy complexity. Accounting complexity. Multiple jurisdictions. The looping cascade of company ownership, partial ownership, contractual relationships, making up the legal "structure" of a google or amazon.
It all adds up to a reality wherein politicans cannot make a law that says 25% tax.. and have that mean something similar to what it sounds like.
This is a pill very few politicans or voters can swallow. Of course we can! We're legislators. We make laws. We have police, and tax authorities. Google finance said google made $40.42bn. The rate is 25%. Gives us $10.1bn.
Empirically, they generally can't. Changing things to enable corporate tax would require massive, difficult legal/bureaucratic reforms. You would need to consider insanely difficult changes, like heavy handed restrictions on a company's ability to own other companies, and the types of legal entities that can own legal entities. You'd need new accounting standards. The bureaucratic guts of the economic machine.
We make laws. We have police, and tax authorities. Google finance said google made $40.42bn. The rate is 25%. Gives us $10.1bn.
Your post is very insightful. The only thing I’d add is that when you have a $10 billion tax bill that you can afford to pay $5 billion to attorneys and accountants to avoid it.
That’s the crux of the problem to me. No matter what scheme the government can come up with to tax it, the numbers are so large that it is in the company’s interest and ability to find loopholes. That’s why we end up with sophisticated shell companies shuffling money around in tax havens that are perfectly legal but don’t make sense outside of tax avoidance schemes.
Your post is very insightful. The only thing I’d add is that when you have a $10 billion tax bill that you can afford to pay $5 billion to attorneys and accountants to avoid it.
That’s the crux of the problem to me. No matter what scheme the government can come up with to tax it, the numbers are so large that it is in the company’s interest and ability to find loopholes. That’s why we end up with sophisticated shell companies shuffling money around in tax havens that are perfectly legal but don’t make sense outside of tax avoidance schemes.
when you have a $10 billion tax bill that you can afford to pay $5 billion to attorneys and accountants to avoid it.
I personally think this is overstated as a root cause. Giant corporations have the same lawyer budget to spend avoiding payroll taxes or GSTs/VATs, but it doesn't make that kind of difference. That's because salaries, sales and value adds are, in practical terms, objective truths. The law & accounting standards define them, locate them to a jurisdiction and that definition is defensible. A transaction either is or isn't a salary, or a sale.
Profit otoh, is subjective. Expenses can be expressed as investments, retained earnings can be expressed as growth. Most importantly, profit doesn't have an objective location.
I personally think this is overstated as a root cause. Giant corporations have the same lawyer budget to spend avoiding payroll taxes or GSTs/VATs, but it doesn't make that kind of difference. That's because salaries, sales and value adds are, in practical terms, objective truths. The law & accounting standards define them, locate them to a jurisdiction and that definition is defensible. A transaction either is or isn't a salary, or a sale.
Profit otoh, is subjective. Expenses can be expressed as investments, retained earnings can be expressed as growth. Most importantly, profit doesn't have an objective location.
Would a VAT be preferable?
VAT would work. You can enact it (most countries do) and collect the expected tax revenue.
But it's not a tax on profits. It's more like a sales tax.
The difference is market distortion. A VAT has more consequences. Higher prices, possibly some impact on employment and/or GDP.
So, in practice it's preferable because it's possible. In theory it's worse because corporate income is more efficient.
But it's not a tax on profits. It's more like a sales tax.
The difference is market distortion. A VAT has more consequences. Higher prices, possibly some impact on employment and/or GDP.
So, in practice it's preferable because it's possible. In theory it's worse because corporate income is more efficient.
Voters are sick of it because of a general misunderstanding of corporate taxes, and sensationalized headlines are just making it worse.
I must admit that my knowledge is lacking in this area. Can someone offer a high-level explanation to one of the people who don't understand corporate taxes in the US?
As far as my understanding goes, the bulk of taxes are paid on profit (to be more precise, operating income), and not revenue. As far as I understand, big companies do everything possible to make it seem like they are not profitable from an accounting perspective. As an example, this might mean that they'd pay some subsidiary in Ireland, where corporation taxes are smaller. What am I missing?
As far as my understanding goes, the bulk of taxes are paid on profit (to be more precise, operating income), and not revenue. As far as I understand, big companies do everything possible to make it seem like they are not profitable from an accounting perspective. As an example, this might mean that they'd pay some subsidiary in Ireland, where corporation taxes are smaller. What am I missing?
You're missing that Amazon is reinvesting, not hiding profit.
"Margrethe Vestager, the EU commissioner in charge of competition, said Luxembourg’s “illegal tax advantages to Amazon” had allowed almost three-quarters of the company’s profits to go untaxed, allowing it to pay four times less tax than local rivals."
https://www.theguardian.com/technology/2017/oct/04/amazon-eu...
https://www.theguardian.com/technology/2017/oct/04/amazon-eu...
That is in EU, we're talking about the USA corporation.
The fact that they're not so neatly distinguishable is very much at the heart of the problem. One of the main ways companies avoid tax is by making it appear that their revenue, profits, and (to a lesser extent) costs are somewhere other than where they really are. Amazon in the US is very much aware of the tax implications of hiring or locating assets in the EU, whether legitimately or as a pure dodge, and depends on the difference.
Tax burden shifted from corporations to people. The resulting inequity was bound to provoke some resentment.
Surprised to see a headline from the NYT that uses weasel words ("some voters"? well some voters are also uneducated, so what?), which even Wikipedia has rules against. That being said, why does it matter if Amazon is not paying taxes itself if it is creating many jobs, with a good percentage of them being high paying, and who end up paying income taxes anyway? Not to mention taxes that Amazon pays for those employees to begin with.
Really have to start taxing over revenues. It's long due.
Initially I too thought this was a bad idea, but if you think about it and set the tax rate really low - like a handful of percent, say 1% or 2%, not more than 5% - it might actually work.
Because even if the corporate tax rate is 30%, but we only collect it on profit, which ends up being only 5%-10% of revenue. So in actual fact, if the corporation was honest, we're really only collecting 30% of 5% or so, which is about 1-2% of revenue.
The thing which I think works with this "revenue tax" is that it removes the ability of the corporation to do clever accounting tricks to reduce the amount of profit. For example moving the IP offshore to a lower taxed country. It is something that could work for a lot of countries and would satisfy a lot of people.
The one place where it might not work is where margins are already razor thin and the business makes up on volume. But then again the business would have to charge more to cover the extra expense.
Because even if the corporate tax rate is 30%, but we only collect it on profit, which ends up being only 5%-10% of revenue. So in actual fact, if the corporation was honest, we're really only collecting 30% of 5% or so, which is about 1-2% of revenue.
The thing which I think works with this "revenue tax" is that it removes the ability of the corporation to do clever accounting tricks to reduce the amount of profit. For example moving the IP offshore to a lower taxed country. It is something that could work for a lot of countries and would satisfy a lot of people.
The one place where it might not work is where margins are already razor thin and the business makes up on volume. But then again the business would have to charge more to cover the extra expense.
Seems like that would lead to massive vertical consolidation.
If you have a retailer buying from a distributor buying from manufacturer buying from a raw material producer, the revenue flowing from each to the next would be taxed again and again, but a single company doing everything would only pay once.
Is that something you want to encourage?
A VAT might make more sense, since you can deduct the VAT you paid to your supplier from the amount charged to your customers.
If you have a retailer buying from a distributor buying from manufacturer buying from a raw material producer, the revenue flowing from each to the next would be taxed again and again, but a single company doing everything would only pay once.
Is that something you want to encourage?
A VAT might make more sense, since you can deduct the VAT you paid to your supplier from the amount charged to your customers.
A VAT, GST, or sales tax always affects only the final consumer, where as a revenue tax would dig into every stage whenever goods or services are moved between companies.
There is nothing inherently wrong about taxing the revenue at each stage as material flows between companies. Right now we tax those companies profitability instead, and at a much higher rate. So there is an incentive for companies to minimise profitability in terms of how much tax they have to pay. If instead we tax revenue directly it could simplify things and mean that they could optimise profit to some degree. It could lead to more vertical integration but it would also lead to the dissolution of accounting schemes between companies like the double Dutch Irish sandwich (or whatever it's called). Because every time a company makes revenue it would be taxed in that country.
In general you could think of a revenue tax as more of a land tax for companies. Real-estate owners generally pay government an amount per year which is just because they own that property. So think of a revenue tax as one which is applied to businesses.
There is nothing inherently wrong about taxing the revenue at each stage as material flows between companies. Right now we tax those companies profitability instead, and at a much higher rate. So there is an incentive for companies to minimise profitability in terms of how much tax they have to pay. If instead we tax revenue directly it could simplify things and mean that they could optimise profit to some degree. It could lead to more vertical integration but it would also lead to the dissolution of accounting schemes between companies like the double Dutch Irish sandwich (or whatever it's called). Because every time a company makes revenue it would be taxed in that country.
In general you could think of a revenue tax as more of a land tax for companies. Real-estate owners generally pay government an amount per year which is just because they own that property. So think of a revenue tax as one which is applied to businesses.
If it costs you 95 cents to make 1 dollar, an 8% revenue tax would means you would pay 1.03 in cost to make 1.00.
In my country, my company has to pay 21% VAT. For a dollar in sales we have to add 21% in taxes. But we deduct the VAT paid, so if we had to buy stuff for 95 cents, we'd get back the VAT paid on that, resulting in having to pay taxes only on the difference, being 5 cents x 21%, approx 1 cent. Hence it being called "value added tax".
I think this is a better tax than income taxes because it taxes consumption, not labor (although if you do work to add value this does get taxed).
I think this is a better tax than income taxes because it taxes consumption, not labor (although if you do work to add value this does get taxed).
Except then it affects poor people more as consumption of things that people need makes up more of their income than the rich who have more disposable income, savings, capital and investments. Thus driving even more wealth inequality. But HN readers are more of the "Temporarily Embarrassed Millionaire" types...
So you don't apply VAT to inelastic commodities. We have in fact figured this shit out. Austrian or Keynesian are not the only two choices available to us, despite what some would try to lead you to believe.
Many companies explicitly pass VAT to the consumer. For example, I have to pay VAT as a line item on the rent for my coworking space.
VAT is the reason a MacBook is hundreds of dollars more expensive to buy in Europe than in the US.
I’m an American living in UK. I bought a jacket here, wore it home, and then forgot it, so I had my mom send it to be in the UK (where I bought it). She declared its value and so I had to pay £35 in VAT for a jacket I bought in the UK for £150.
VAT also makes it difficult for companies in a VAT jurisdiction to compete on price with companies in other jurisdictions, and for small businesses to sell internationally.
I’m not sure I’ve ever heard someone talk about how great VAT is. It’s a system you implement when your country fails to innovate and instead siphons off the innovation of others.
VAT is the reason a MacBook is hundreds of dollars more expensive to buy in Europe than in the US.
I’m an American living in UK. I bought a jacket here, wore it home, and then forgot it, so I had my mom send it to be in the UK (where I bought it). She declared its value and so I had to pay £35 in VAT for a jacket I bought in the UK for £150.
VAT also makes it difficult for companies in a VAT jurisdiction to compete on price with companies in other jurisdictions, and for small businesses to sell internationally.
I’m not sure I’ve ever heard someone talk about how great VAT is. It’s a system you implement when your country fails to innovate and instead siphons off the innovation of others.
I don't like paying taxes either, but we have to fund our government and the services it provides somehow, right?
If you rent a space and buy a Mac for work you can probably get the VAT you paid back, deducting if from the VAT you add to your own invoices.
Income tax and VAT are the biggest taxes here, what I am saying is that income tax is worse because it hurts jobs directly. VAT does distort pricing internationally, as you say. If all countries would have the same it would be better for everyone.
It would be even better if we could tax capital and corporate profits more, but powerful forces work against that.
Of course we can also not sufficiently fund the government and gut it. We'll see in a decennium or two how that works out in the US.
If you rent a space and buy a Mac for work you can probably get the VAT you paid back, deducting if from the VAT you add to your own invoices.
Income tax and VAT are the biggest taxes here, what I am saying is that income tax is worse because it hurts jobs directly. VAT does distort pricing internationally, as you say. If all countries would have the same it would be better for everyone.
It would be even better if we could tax capital and corporate profits more, but powerful forces work against that.
Of course we can also not sufficiently fund the government and gut it. We'll see in a decennium or two how that works out in the US.
They do. Sales tax.
One could argue that the consumers are the ones paying this too. Sales tax is almost always passed onto the consumer in the form of raised prices.
One could argue that consumers are the ones paying every tax.
Sure. But what is taxed does steer society. Imagine only taxing on pollution (so not on wages/sales/home ownership).
Currently we tax on wages/ sales/ home ownership and not on Amazon an little on pollution. Look around to see the result.
Currently we tax on wages/ sales/ home ownership and not on Amazon an little on pollution. Look around to see the result.
I don't get your point. Are you suggesting that Amazon alone should pay a tax on revenue (steering business to its competitors and reducing consumption slightly), that every company should pay a tax on revenue (steering business from more expensive and less vertically-integreated competitors to Amazon, but reducing overall consumption) or something else entirely?
Im saying all tax is paid by consumers in the end. But what is being taxed is still interesting.
I'm suggesting Amazon is currently doing what it does because of taxation law. It simply complies/optimizes. Profit taxed? Dont make profit. Pollution free, dont worry about pollution.
I'm suggesting Amazon is currently doing what it does because of taxation law. It simply complies/optimizes. Profit taxed? Dont make profit. Pollution free, dont worry about pollution.
Strawman. Not all companies pay the same amount of taxes.
Also customers not are supposed to indirectly pay corporate taxes in the same way.
Also customers not are supposed to indirectly pay corporate taxes in the same way.
I don't understand: What's the difference in them passing on the sales taxes and passing on the corp. taxes, or indeed any other expense?
Agreed. But where the tax is coming from pushes society in one direction or another.
Picture this: all tax for the budget collected from pollution taxes, so: zero sales tax, zero wage tax, zero home owner taxes.
What do you think society will optimize in that case?
Yet currently we tax on labour and on home ownership, but not on Amazon. Look around an see the result.
Picture this: all tax for the budget collected from pollution taxes, so: zero sales tax, zero wage tax, zero home owner taxes.
What do you think society will optimize in that case?
Yet currently we tax on labour and on home ownership, but not on Amazon. Look around an see the result.
This assumes tech giants aren't the giant colluding monopolies that they are, and actually need to be competitive in quality or price to survive. The tax will be payed by consumers, and shareholders aren't going to see a difference in their dividends.
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So increase sales tax and drop corporate taxes maybe?
> One of the benefits of taxation is taking it and using it for the collective good
Which is true no matter if the tax rate is 1% or 75%
> He could be taxed at 99.9 percent and still have millions left over
I realize this is hyperbole but do realize that no 99.9% tax would be complied with
> tax on every dollar over $100 million in profits they earn anywhere in the world
oh the American hubris, so lost in the goal of catering to their constituents that they think this institution has a valid claim on assets, and income. Lets take a cut of everyone's productivity IN A MORE FAIR WAY crowd cheers.
But alas, the US rule of law makes it secure for you to do business and these corporations benefit from this society and use its services - but thats also true whether the tax is 1% of 75%, so it isn't really an argument
> article shows graphs about tax rebates
Article doesn't talk about how the corporations used tax rebates at all. It talks about the outcome of paying no tax, talks about all these proposals, and none of the proposals talk about tax rebates. Even the most ambitious proposal here would probably not effect how these corporations operate. Are people - I dare say - stupid? Is this a mass reading comprehension issue?
It is interesting that people who can simply read can play tax games like this for another 100 years before anyone catches on.
Which is true no matter if the tax rate is 1% or 75%
> He could be taxed at 99.9 percent and still have millions left over
I realize this is hyperbole but do realize that no 99.9% tax would be complied with
> tax on every dollar over $100 million in profits they earn anywhere in the world
oh the American hubris, so lost in the goal of catering to their constituents that they think this institution has a valid claim on assets, and income. Lets take a cut of everyone's productivity IN A MORE FAIR WAY crowd cheers.
But alas, the US rule of law makes it secure for you to do business and these corporations benefit from this society and use its services - but thats also true whether the tax is 1% of 75%, so it isn't really an argument
> article shows graphs about tax rebates
Article doesn't talk about how the corporations used tax rebates at all. It talks about the outcome of paying no tax, talks about all these proposals, and none of the proposals talk about tax rebates. Even the most ambitious proposal here would probably not effect how these corporations operate. Are people - I dare say - stupid? Is this a mass reading comprehension issue?
It is interesting that people who can simply read can play tax games like this for another 100 years before anyone catches on.
Amazon paid no income tax. Amazon paid a shitton in taxes, and will continue to do so.
It is probably the case that profitable companies pay too little in tax, but articles like this are misleading as hell.
It is probably the case that profitable companies pay too little in tax, but articles like this are misleading as hell.
subchapter S (and other pass through) corporations pay no corporate income tax at all. this is the majority of small businesses.
Corporations ultimately distribute their profits to actual people. Those people will pay tax on that income.
It isnt automatically obvious that corporations should pay any taxes on income (or revenue) until it is distributed to actual people (shareholders and employees). We tax the profit of larger corporations because we can and because we need the tax dollars, not because there is some moral imperative to do it.
Corporations ultimately distribute their profits to actual people. Those people will pay tax on that income.
It isnt automatically obvious that corporations should pay any taxes on income (or revenue) until it is distributed to actual people (shareholders and employees). We tax the profit of larger corporations because we can and because we need the tax dollars, not because there is some moral imperative to do it.
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It doesn’t matter if corporations pay taxes because the money just flows to people who own equity in or work for those corporations, and they pay taxes.
It would be OK if corporations didn't pay taxes.
BUT there's more to the story.
Not only do they not pay taxes, they also enjoy absurd political power through lobbyists and through being able to pump huge sums of money into politics thanks to the Citizen's United decision.
There is simply too much power in the hands of the corporations. I mean, Amazon literally had dozens of city governments falling over themselves to give up enormous tax goodies and red carpet roll out all for the weak promise of 50000 jobs and an HQ2.
BUT there's more to the story.
Not only do they not pay taxes, they also enjoy absurd political power through lobbyists and through being able to pump huge sums of money into politics thanks to the Citizen's United decision.
There is simply too much power in the hands of the corporations. I mean, Amazon literally had dozens of city governments falling over themselves to give up enormous tax goodies and red carpet roll out all for the weak promise of 50000 jobs and an HQ2.
Am I to believe Bezos and his investors will simply take the hit of paying taxes, or will that expense get passed to consumers?
Smaller companies pay their taxes and set their prices at a level where they can afford that. If Amazon are forced to compete fairly on efficiency/quality/... rather than on tax avoidance, that's a good thing for customers in the long run (and of course collecting tax to be spent on public services is good for citizens immediately).
That makes sense, thank you.
We means test access to the social safety net programs for the poor.
We can means test access to tax loopholes as well.
We can means test access to tax loopholes as well.
High revenue low profit is good. Surely Apple are a better target?
This comes up all the time. The issue is not the companies. The issue is the loopholes that their highly paid tax accountants are taking advantage of. Change the law not attack the company for acting in the best interest of its shareholders.
And how did we end up with those loopholes?
Repeat after me: elected officials are our representatives. If you don’t like them either by how they vote or the bribes I mean donations they receive then make your voice known by getting involved, voting, or donating to causes and people you do support.
A flat tax is an idea. It has come up from time to time and failed. There are lobbyists on both sides and both are evil in their own ways.
In the end the elected officials pass laws. Companies pay tax under those laws. The laws have loopholes and those same companies use them.
The. Companies. Are. Not. To. Blame. For. Saving. On. Their. Taxes. Legally. Even if it is a bit unethical while being profitable.
A flat tax is an idea. It has come up from time to time and failed. There are lobbyists on both sides and both are evil in their own ways.
In the end the elected officials pass laws. Companies pay tax under those laws. The laws have loopholes and those same companies use them.
The. Companies. Are. Not. To. Blame. For. Saving. On. Their. Taxes. Legally. Even if it is a bit unethical while being profitable.
Most people would hold that offering a bribe is not the unethical action, accepting the bribe is the unethical side. So if you're implying that the companies acted unethically by bribing politicians, I beg to differ. That is like blaming a lion for killing gazelles. Corporations are in competition with one another. It's a winner-take-all world, and they will always seek every edge they can get. If you want to hold someone accountable, vote the bastards out and elect someone with a spine.
> some
I'd call that a success.
I'd call that a success.
To be fair, why companies should be paying tax at all? Companies are taking all the risk, employees aren't.
>the list of those paying zero roughly doubled last year as a result of provisions in President Trump’s 2017 tax bill
The gripes seem to largely a political issue which I guess is down to the voters as to who they vote in.
The gripes seem to largely a political issue which I guess is down to the voters as to who they vote in.
> Colin Robertson wonders why he pays federal taxes on the $18,000 a year he makes cleaning carpets, while the tech giant Amazon got a tax rebate.
Who cares about what Colin Robertson thinks?
Who cares about what Colin Robertson thinks?
synecdoche: a figure of speech by which a part is put for the whole (such as fifty sail for fifty ships), the whole for a part (such as society for high society), the species for the genus (such as cutthroat for assassin), the genus for the species (such as a creature for a man), or the name of the material for the thing made (such as boards for stage)
There's also no way that he doesn't get a massive refund at the end of the year based on his salary.
Yes, if he's married filing jointly the standard deduction is $24k. Meaning he pays zero taxes. If he's unmarried his standard deduction is still most of his salary (~$12k), and the remaining amount would fall into the 10% tax bracket. But he would qualify for tax credits with income that low. Also very likely social services and safety nets. His effective income tax rate should be negative.
Reading these comments, it's apparent most people have no idea how this shit works. I thought here of all places, I wouldn't see people falling into the "I don't understand how progressive tax brackets work" trap.
Reading these comments, it's apparent most people have no idea how this shit works. I thought here of all places, I wouldn't see people falling into the "I don't understand how progressive tax brackets work" trap.
According to CNBC, “Amazon's low tax bill mainly stemmed from the Republican tax cuts of 2017, carryforward losses from years when the company was not profitable, tax credits for massive investments in R&D and stock-based employee compensation.” https://www.cnbc.com/amp/2019/04/03/why-amazon-paid-no-feder...
These are the actual things we should be talking about.