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Alphabet Q1 2018 Earnings [pdf]

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Re: Alphabet Q1 2018 Earnings [pdf]

#111

Post by cycrutchfield »

briandear wrote: post #84
aphextron wrote: post #29

Earlier quoted context omitted.

It's not just corporate rates. Doubling the standard deduction is the most reckless thing that has ever been done to our federal tax code for individuals. The fact that I am going to pay an effective 15% this year on a $100k salary is absolutely insane.

So send a check to the Treasury. Nobody is stopping you. You could even organize a bunch of like minded people to send checks to the Treasury. I needed the tax cut. If you don’t, you don’t have to keep it. I am a better steward of my money than the government, especially when it comes to saving and investing for my family’s future.

This argument is so lazy and seems to crop up every time income tax is discussed. It's perfectly fair to criticize tax policy while also acknowledging that you (and others like you) are paying a lot less than what you should be paying.

Re: Alphabet Q1 2018 Earnings [pdf]

#112

Post by kgwgk »

fjsolwmv wrote: post #56
sounds wrote: post #2

Double EPS (non-GAAP) from $7.73 to $13.33... On the downside, effective tax rate is down to 11%. That's concerning because the EU is very unhappy about the whole "double Irish with a Dutch sandwich."

What does EU care about how much Google pays in US tax?

That’s the global tax.

Re: Alphabet Q1 2018 Earnings [pdf]

#113

Post by spbaar »

chrischen wrote: post #60
aphextron wrote: post #10

>Effective tax rate 11% Absolutely obscene. Literally their entire Net Income increase from $5.4b to $9.4b is due to a tax cut from 20%. We will be paying for this Republican tax policy for the rest of our lives.

I don’t get the whole issue with low coporate taxes. I get why people should be taxed so as to reduce consumption and increase production, but a coporation is not a person, so why hinder their ability to further productivity and economic output? It’s redirecting money earned that could be used to further economic activity and redirecting it to the hands of some highly corruptable bureaucrat in public office given the…

Your concerns make sense for considering things like payroll taxes and taxing other operating expenses. But if we consider taxing corporate profits that go to shareholders, taxing here is a very relatively painless place to tax, as opposed to, say sales tax. This is doubly so when corporations are already sitting in hoards of cash and not investing, due to lack of opportunity or demand, interest rates are low, productivity gains are going towards the top, etc.

I'm not quite as cynical when it comes to bureaucrats (military contractors aside), because as we can see in some of the recent teachers strikes, it makes sense to tax oil/gas corporations who are making full use of states infrastructure to for the benefit of themselves (and workers etc). The tax rate is not really affecting how much they invest. [1]

I'm with you on corporate influence though. However, I think the answer there is to limit corporate influence of elections, say by disallowing funding of candidate specific ads and limiting the $ they can put towards issue lobbying.

[1]https://qz.com/1243098/oklahoma-teachers-strike-how-income-t...

Re: Alphabet Q1 2018 Earnings [pdf]

#114

Post by prewett »

tedunangst wrote: post #66
brink wrote: post #46

Earlier quoted context omitted.

Can someone without bias ELI5 on why I pay ~30% in taxes, but Alphabet pays 11%?

I'd start by revisiting the assumption that individual and corporate tax rates should be similar, or even comparable.

Why shouldn't they be similar? Seems reasonable that a "legal person" should be subject to similar taxes as a real person. And from a fairness standpoint, it doesn't seem fair that Google is taxed 11% on $billions of income after expenses while I get taxed 25% on $thousands of income sort-of-before expenses. Fairness is not always best for society, but it does seem like a reasonable default. In my mind, the default is that they should be similar, and any deviation from that requires a reason.

This isn't a very helpful comment. The parent presumably doesn't have the information to make a different assumption (or they would have already). Telling them to revisit their assumptions without giving them any additional resources to do so is unhelpful. Besides, the rest of us (me, at least) would like to know your reasons.

Re: Alphabet Q1 2018 Earnings [pdf]

#115

Post by killjoywashere »

aaavl2821 wrote: post #95
bob_theslob646 wrote: post #39

Earlier quoted context omitted.

Not a far comparison considering the size of some of the companies. Definetely needs to be weighted. An example, Murphy Oil Corporation has 1,294 employees... Also another interesting trend is how many healthcare companies are in that list.

Healthcare is just under 20% of US GDP and 20% of the companies are in healthcare AmerisourceBergen is a drug distributor / wholesaler, so they have huge revenues bc they sell expensive drugs, but they don't capture much of that (their net income is negative) Express scripts is a PBM and highly profitable. I don't really know what PBMs do at a useful level of detail, but their profitability has been a subject of deba…

> drugs only account for 10% ... hospital care (30%) and physician services (20%)

Were you in a class with Professor Long at Tulane? He has a great, great slide illustrating these and many other facts about the US healthcare economy over the last century.

Re: Alphabet Q1 2018 Earnings [pdf]

#116

Post by killjoywashere »

panarky wrote: post #26
alberth wrote: post #11

Their efficiency is impressive. On an annualized basis, they are doing ~$120B. They have ~85k employees. That means they are generating ~1.5M Revenue Per Employee. That's crazy

Usually companies grow at a slower rate as they get larger. Alphabet's growth rate is actually accelerating. And they're not acquiring this growth, they're generating it organically. Truly astounding.

It's been said that they created the first self-replicating talent machine. Having worked with them, I believe it.

Re: Alphabet Q1 2018 Earnings [pdf]

#117

Post by rlanday »

DC-3 wrote: post #55
brink wrote: post #46

Earlier quoted context omitted.

Can someone without bias ELI5 on why I pay ~30% in taxes, but Alphabet pays 11%?

You can't afford to lobby politicians. Alphabet can.

This is not correct. The real reason is capital is more mobile than individuals are. Most Americans won’t (or can’t) leave the country if their taxes go up, but businesses are constantly making decisions about where to invest and hire people. Under the old tax code, the US had the highest corporate income tax rate of any OECD country:

https://taxfoundation.org/us-has-highest-corporate-income-ta...

and also taxed corporations based on their worldwide income, which led to a number of high profile tax inversions.

Re: Alphabet Q1 2018 Earnings [pdf]

#118

Post by aaavl2821 »

killjoywashere wrote: post #115
aaavl2821 wrote: post #95

Earlier quoted context omitted.

Healthcare is just under 20% of US GDP and 20% of the companies are in healthcare AmerisourceBergen is a drug distributor / wholesaler, so they have huge revenues bc they sell expensive drugs, but they don't capture much of that (their net income is negative) Express scripts is a PBM and highly profitable. I don't really know what PBMs do at a useful level of detail, but their profitability has been a subject of deba…

> drugs only account for 10% ... hospital care (30%) and physician services (20%) Were you in a class with Professor Long at Tulane? He has a great, great slide illustrating these and many other facts about the US healthcare economy over the last century.

I was not but would be interested in seeing the slides. Are they publicly available?

Re: Alphabet Q1 2018 Earnings [pdf]

#119

Post by teraflop »

prewett wrote: post #104
teraflop wrote: post #42

Earlier quoted context omitted.

How can it be true that their net income doubled because they went from keeping 80% of their profit to keeping 89%?

Your assumptions are wrong, or you have confusion based on wording. By definition, net profit is after taxes and expenses. By definition, one always keeps 100% of net profits. If by "profit" you meant "gross profit" (i.e. after cost of goods, but before other expenses and taxes), I think that would go a long ways to explaining your confusion. A small increase in your net profit margin usually causes a large increase…

Am I confused? I realized afterwards that I should have said "of their income" rather than "of their profit", but I think my point still stands.

Corporate tax (at least in the US, and I assume in most other places) is calculated on income, i.e. revenue minus expenses. The original commenter was asserting that halving the company's tax rate, and nothing else, was responsible for a doubling of profits. My point was simply that it should be obvious that this is nonsense. Cutting the tax rate can't double the company's profit unless the company was already paying half of its income as tax.

It's irrelevant that expenses are a large fraction of revenue, because expenses are already excluded from taxation.

Re: Alphabet Q1 2018 Earnings [pdf]

#120

Post by stochastic_monk »

mcintyre1994 wrote: post #108
okreallywtf wrote: post #73

Earlier quoted context omitted.

OP might be exaggerating, but they are not talking about who lobbies, they are talking about the politicians who pass the bills and implement the tax cuts. In that they are right. In the house, 191 democrats voted against the tax overhaul, 0 voted for it. 227 republicans voted for it, 12 against it [0]. The senate was much the same [1]. You can say what you want, but this is a republican tax bill no matter who it ben…

> I'm sure if it was possible to isolate by party they would have done so It actually does seem to do that fairly effectively from my understanding, by restricting the deductions those in high tax states (ie Democrat) can claim.

Correct, the bill benefited lower-tax (that is, Republican-controlled) states very disproportionately.
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