Netflix Posted Biggest-Ever Profit in 2018 and Paid $0 in Income Taxes • Hacker News Board

Re: Netflix Posted Biggest-Ever Profit in 2018 and Paid $0 in Income Taxes

#181

Post by norswap » Wed, Feb 06, 2019, 5:31 PM UTC

AlexB138 wrote: post #162

chanandler_bong wrote: post #79

Earlier quoted context omitted.

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.

> 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. When you think there are simple answers to big problems it's generally because you don't actually understand the problem. How would you outlaw lobbyists? Setting aside the fact that it would be unconstitutional, do you think it should be illegal for you to air your grievances to elec…

Would it really be unconstitutional? The right of petition cannot abrogated, but surely one can outlaw the exchange of political favors for money or other forms of compensations.

Yes, actually showing that political favors were exchanged for money is tricky, but still, it's better than nothing and it changes the whole discussion from "it's the system" to "who's doing something bad and hiding it?".

Re: Netflix Posted Biggest-Ever Profit in 2018 and Paid $0 in Income Taxes

#182

Post by trhway » Wed, Feb 06, 2019, 5:32 PM UTC

AlexB138 wrote: post #162

chanandler_bong wrote: post #79

Earlier quoted context omitted.

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.

> 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. When you think there are simple answers to big problems it's generally because you don't actually understand the problem. How would you outlaw lobbyists? Setting aside the fact that it would be unconstitutional, do you think it should be illegal for you to air your grievances to elec…

>it should be illegal for you to air your grievances to elected officials?

Doing it for money - yes, that should be illegal.

Re: Netflix Posted Biggest-Ever Profit in 2018 and Paid $0 in Income Taxes

#183

Post by delecti » Wed, Feb 06, 2019, 5:32 PM UTC

wolco wrote: post #137

citilife wrote: post #96

Earlier quoted context omitted.

Not siding one way or the other, that will definitely limit the amount of expertise that comes with a Congressman/Congresswoman. Think about it, it takes at least six months for us to learn our jobs, they have to learn about hundreds of things ongoing in the government before they can make informed decisions. You then even rely more on lobbyists (or "experts") who at least generally know what they are talking about.…

Lobbyist being experts is something I've never heard before. They are salesmen, do you want to get your nutrient information from a McDonald's commercial? It may save you time but isn't really helpful.

The EFF is at least partially a lobbying group, do you think they're salesmen? Lobbying is just people talking to the government.

Re: Netflix Posted Biggest-Ever Profit in 2018 and Paid $0 in Income Taxes

#184

Post by curiousgal » Wed, Feb 06, 2019, 5:32 PM UTC

AlexB138 wrote: post #162

chanandler_bong wrote: post #79

Earlier quoted context omitted.

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.

> 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. When you think there are simple answers to big problems it's generally because you don't actually understand the problem. How would you outlaw lobbyists? Setting aside the fact that it would be unconstitutional, do you think it should be illegal for you to air your grievances to elec…

> unconstitutional

God forbid we think outside the realm of what the Founding Fathers wrote down.

> fly directly in the face of democracy

Except the U.S. has long been classified as a flawed democracy.

The problems you list can "simply" be solved with a comission akin to the FTC. A small business can complain to said comission which would solve the matter.

Re: Netflix Posted Biggest-Ever Profit in 2018 and Paid $0 in Income Taxes

#185

Post by ahoy » Wed, Feb 06, 2019, 5:33 PM UTC

chanandler_bong wrote: post #79

otachack wrote: post #46

Earlier quoted context omitted.

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.

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.

The intent here is good, but I don't think you can do that? Can you define "lobbying" in a way that encompasses all (or at least most) of the bad activity but doesn't encompass acceptable activity?

What even is lobbying? A broad definition would include most any communication with a policymaker, a narrow one would exclude lots of activity that is obviously meant to influence policy.

If you want to reduce the influence that moneyed interests have over politics there's only one answer: take their money away.

Re: Netflix Posted Biggest-Ever Profit in 2018 and Paid $0 in Income Taxes

#186

Post by zdragnar » Wed, Feb 06, 2019, 5:33 PM UTC

chosenbreed37 wrote: post #122

endorphone wrote: post #59

Earlier quoted context omitted.

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…

> at least some portion of the money comes back into the system.

Apple is a fairly decent point to the contrary; they were able to let money sit around doing absolutely nothing at all because they didn't want to touch it until they didn't face stiff repatriation taxes for doing so.

Generally speaking, though, I agree with your later points. The first one- corporate taxes are charged for a reason- I'm less convinced that the reason is a good one. It mostly seems like a feel-good way to bury the tax so people don't realize that they're ultimately paying for it.

Re: Netflix Posted Biggest-Ever Profit in 2018 and Paid $0 in Income Taxes

#187

Post by graeme » Wed, Feb 06, 2019, 5:33 PM UTC

humblebee wrote: post #85

refurb wrote: post #67

Earlier quoted context omitted.

Honest question - can you give an example of a tax law that was lobbied for that benefited corporations? And I mean beyond just a decrease in tax rate which businesses would be expected to lobby for.

I don't have a source on this, but I've commonly heard that tax software companies (intuit, hrblock, etc) lobby for not having simpler taxes because it would take away from a large part of their business. Again, no sources. Just something that is commonly thrown around. Here is a HN discussion on it though: https://news.ycombinator.com/item?id=16841449

This is a different thing: more of a tax regulation.

This thread is about reducing tax payable. The intuit story is about making it harder for citizens to file taxes.

Re: Netflix Posted Biggest-Ever Profit in 2018 and Paid $0 in Income Taxes

#188

Post by briandear » Wed, Feb 06, 2019, 5:34 PM UTC

gammateam wrote: post #127

jjallen wrote: post #111

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 gove…

It is more productive. Taxes always result in some amount of deadweight loss. $10 million spent in the private sector is mathematically more productive than $10 million paid to the government.

https://www.investopedia.com/terms/d/deadweight-loss-of-taxa...

Re: Netflix Posted Biggest-Ever Profit in 2018 and Paid $0 in Income Taxes

#189

Post by SilasX » Wed, Feb 06, 2019, 5:34 PM UTC

otachack wrote: post #46

driverdan wrote: post #34

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 that simple (in the sense of the parent's post): you need to know the specifics of why they were paying no taxes. If, as in the comment, they were carrying over losses, then there's nothing really objectionable. You lost $10 million last year. You profited $10 million this year. Over a reasonable horizon, you weren't profitable.

Did they get a specific exemption against the public interest that no one else got? Great! Let's talk about that!

Did they deduct 100% of their costs for sham "IP licensing" from a foreign subsidiary? Great! Let's talk about that!

But you need to know the why before you conclude there's something objectionable going on.

Edit: More generally, every headline of this form comes with an implicit statement like "By my model, should be regarded as having a profit of X dollars, but tax law views them as having a taxable profit of Y < X." That necessitates a good explanation of why you think X is the right value.

Re: Netflix Posted Biggest-Ever Profit in 2018 and Paid $0 in Income Taxes

#190

Post by MagnumOpus » Wed, Feb 06, 2019, 5:34 PM UTC

frebord wrote: post #136

Can someone explain to me why businesses pay any tax at all. It makes no sense to me that we want to restrict the flow of money through a business. Maybe we could tax cash holdings of a company, but why would you tax any income that ultimately goes to expansion, shareholders, employees? People see these "tax evading" corporations as so evil, but why? Do they really even remotely understand what is going on? I suspect…

Income that goes towards expansion (read op-ex like salaries, or cap-ex like infrastructure) is not taxed, it is "tax deductible".

Income that doesn't go towards economic activity (salaries, expansion) but goes back to profit does get taxed - mostly because dividends and capital gains are so much harder to tax for the ultra-rich due to loopholes on offshore tax residence, inheritance tax uplifts, trusts/foundations. The alternative would be to tax dividends and capital gains worldwide at income tax rates -- a great idea but impossible to implement against the resistance of every US millionaire and billionaire (also operationally quite difficult).

Tax evasion is evil morally because every dollar they don't pay, others have to pay so they are stealing money from millions of other people. The legal kind of tax evasion is called "tax avoidance" instead, it is still morally wrong if loopholes are created and exploited in a very obvious fashion for the sole reason of avoiding to give back to the society that enabled the profit. For some reason the US and many other countries don't have General Anti-Avoidance Rules where bad-faith tax avoidance structures can be outlawed.