Companies also lobby heavily for these tax laws. The laws may be directly responsible, but big companies share some blame as well.
The answer is to outlaw lobbyists, it would fix a lot of problems. That, and enact term limits for Congress. That will fix even more.
I’m not sure what we are mad about here, that companies and individuals want good tax laws? I am not sure how Netflix’s alleged tax rate hurts anyone. Remember, 45% of Americans pay no federal income tax at all! How about we complain about that first assuming the goal is that everyone pay their fair share. There is no argument that is logical that can justify the top 20% of earners paying 70% of all income taxes. Nobody’s fair share is zero.
Rather than being outraged at the headline, what are the actual details? Why were they able to pay no taxes? Was it due to carried losses or something like that? Anyone mad at a company for not pay taxes is misdirecting their anger. Companies follow the law. If you don't like the law elect different politicians. Don't get mad at companies that follow the law.
Netflix hasn't, to my knowledge, even filed their 2018 annual yet (or their Q4 2018), so I'm not sure what they're even basing their numbers on. But they admit elsewhere that Netflix paid taxes most of the preceding years, averaging out around 13.5%. In the end their tax lawyers do exactly what tax lawyers do, and unless they're breaking the law so be it. As an aside, it's rich that it's always Americans complaining…
> In any case, corporate tax rates are often much ado about nothing because in the end that money ends up in various other tax brackets. It becomes a capital gain, or a dividend, or some other form that often gets taxed at the personal level.
Clearly corporate taxes are charged for a reason and presumably the additional revenue would be of benefit. However it seems to me that in our outrage we lose sight of the fact that the money doesn't disappear. If a company retains a greater portion of its revenue it has to do something with it. And as you say whether they payout dividends, hire more staff, expand their operations the at least some portion of the money comes back into the system. I guess the main difference is that the government doesn't get to decide how it is spent...
It's not that simple. Companies lobby to keep, even coerce, laws that benefit them and allow these sorts of things to happen. What is the common person, or collection of persons, supposed to do when they are against that kind of force? I believe one way is to actually be involved in politics and get into the seats that govern and make the laws. But it's easier said than done.
> What is the common person, or collection of persons, supposed to do when they are against that kind of force? Vote. All sorts of interests lobby, all the time. These include consumer-focused interest groups, as well as corporations. But, at the end of the day, politicians gain (and keep) office based on the votes of their constituents. These politicians are (generally) not going to vote on bills that they think mig…
I suggest it's not as simple as just saying "vote" given the massive disparity in funding capabilities between the average citizen and the average Fortune 500 company. Money is powerful and greatly influences elections. Now due to media consolidation, Facebook, etc. it's also easy to manipulate at a grand scale. Politicians who vote the right way can guarantee very high paying jobs when they are out of office.
It seems to me that democracy has been hijacked in the U.S. From my perspective, regardless of reason or solution it remains that corporations are not paying enough for the maintenance of society. Given that we have had free elections for some time it appears that the answer is more complex than just saying in theory we can vote out the scoundrels. In actuality this hasn't occurred and this suggests that something is wrong with the system.
Rather than being outraged at the headline, what are the actual details? Why were they able to pay no taxes? Was it due to carried losses or something like that? Anyone mad at a company for not pay taxes is misdirecting their anger. Companies follow the law. If you don't like the law elect different politicians. Don't get mad at companies that follow the law.
Netflix hasn't, to my knowledge, even filed their 2018 annual yet (or their Q4 2018), so I'm not sure what they're even basing their numbers on. But they admit elsewhere that Netflix paid taxes most of the preceding years, averaging out around 13.5%. In the end their tax lawyers do exactly what tax lawyers do, and unless they're breaking the law so be it. As an aside, it's rich that it's always Americans complaining…
Netflix unaudited numbers for the 12 months ending 2018-12-31 were published on the 17th of last month. 15.216M USD in income tax paid, if I am reading the statement correctly. Income before tax during that period is stated to be 1.226G USD. Income tax rebate of 73.608M USD in the 12 months ending 2017-12-31, for comparison.
It's not that simple. Companies lobby to keep, even coerce, laws that benefit them and allow these sorts of things to happen. What is the common person, or collection of persons, supposed to do when they are against that kind of force? I believe one way is to actually be involved in politics and get into the seats that govern and make the laws. But it's easier said than done.
If you look at the histories of many politicians, you see them making honest efforts to represent their people... in the beginning of their careers. A major problem is that there's so much money in campaigns that in order to get enough money to compete, a politician must make deals with donors. Often these donors are small groups of high wealth individuals or industries. Now the politician is effectively in the pocke…
That's why I'm watching the new crop of Congresspeople like AOC, to see if we can spot if/when that change does occur.
I know for folks like Sanders, it might have switched early on, but he's getting more and more curmudgeonly about corporate thievery, eco-destruction, and worker rights.
There can be a huge difference between "income tax expense", which will be the numerator for any headline income tax rate and "income taxes paid". For Netflix this is true for 2018. In fact they paid $131 million for income taxes, which, as a percent of their income is way higher than "$0" which the original article claims in its. Also, the article makes no mention of R&D tax credits, which saved NFLX $141 million in…
From the article
> "In fact, the company reported a $22 million federal income tax rebate."
So if they paid 131 in income taxes, and received 141 in tax credits, then that accounts for $10 million of the $22 million the article mentions.
That's pretty cool, I was assuming their earnings were just debt fueled. Therefore spending more money than they made, which is always a fun way of not sending that money to the government but on something you feel is more productive.
Rather than being outraged at the headline, what are the actual details? Why were they able to pay no taxes? Was it due to carried losses or something like that? Anyone mad at a company for not pay taxes is misdirecting their anger. Companies follow the law. If you don't like the law elect different politicians. Don't get mad at companies that follow the law.
Moneyland by Oliver Bullough tells you exactly how.
Rather than being outraged at the headline, what are the actual details? Why were they able to pay no taxes? Was it due to carried losses or something like that? Anyone mad at a company for not pay taxes is misdirecting their anger. Companies follow the law. If you don't like the law elect different politicians. Don't get mad at companies that follow the law.
It's not that simple. Companies lobby to keep, even coerce, laws that benefit them and allow these sorts of things to happen. What is the common person, or collection of persons, supposed to do when they are against that kind of force? I believe one way is to actually be involved in politics and get into the seats that govern and make the laws. But it's easier said than done.
It is a double edge sword. The tax laws that help business fewer taxes help small businesses too. Companies are allowed to carry over losses for five years, and since a lot of the streaming business operate at a loss, they can subsidize their future. Ideally, this allows you to spend a lot of money to gain growth and then profit from it. Preferably, after you start to profit you pay your taxes, but a lot of these businesses are public companies and have to maximize their stock price or give dividends. Very few tech companies pay dividends so it is all about there stock price. Typically, the stock price is linked to the revenue/profit growth. Apple, for example, took a beating because iPhone sales are normalizing and not growing, over a billion devices sold and Apple is still making record amounts of profit/revenue, and that is still not good enough.
Unfortunately, it is a societal/human/capitalist problem, how do you keep the majority happy? That is typically through expansion, not contraction. Usually, contraction results in limited moral and over time that ends of cause governments and economies to fall.
> What is the common person, or collection of persons, supposed to do when they are against that kind of force? Vote. All sorts of interests lobby, all the time. These include consumer-focused interest groups, as well as corporations. But, at the end of the day, politicians gain (and keep) office based on the votes of their constituents. These politicians are (generally) not going to vote on bills that they think mig…
I've voted in every election I since I turned 18 and nothing seems to have been done about this and many other things. But issues that megacorps care about happen right away. Voting isn't a real solution to unchecked corporate lobbying.
The solution is reversing Citizen's United, when the Supreme Court held 5-4 that campaign contributions represented "freedom of speech" and could not be limited. In a literal sense, Citizen's United enshrined the idea that your voice (and vote) are proportional to the amount of money you can bring to bear.
One of the lessons I've taken from this case and others related to gerrymandering and voter suppression, for instance, is how deeply the integrity our democracy depends on tactical execution of the broader ideals at stake. It's our ability to handle issues at the margin that will determine whether the whole thing works or falls apart.