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Netflix Made Record Profits in 2020, Paid a Tax Rate of Less Than 1 Percent

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Re: Netflix Made Record Profits in 2020, Paid a Tax Rate of Less Than 1 Percent

#71

Post by lotsofpulp »

verbify wrote: post #63
nvarsj wrote: post #37

Earlier quoted context omitted.

In pretty much every western European country your tax rates can easily hit 60%+ (like the 100k 60% cliff in the UK). The budgets of these governments are all largely funded on the backs of middle class income tax - 40% of all receipts in the UK, plus another 10-15% from VAT - compared to a lowly 9% from corporation tax [1]. You have to wonder how the economy can ever evolve given everything is geared towards suppres…

The 60% effective tax rate is only on earnings between 100k and 125k, and only because of the loss of certain tax benefits. After 125k it drops back to 40%. It's really silly that it exists, but isn't representative of UK tax rates, it is just a weird side effect of the loss of the personal allowance. And I reckon most earning between 100k and 125k would avoid that 60% by contributing to their pension, so I don't thi…

That’s the same kind of nuance which makes the linked article’s claim of 1% tax paid a non story (at least in the context of talking about Netflix specifically).

Re: Netflix Made Record Profits in 2020, Paid a Tax Rate of Less Than 1 Percent

#72

Post by Black101 »

chaoxu wrote: post #62

I actually don't get why corporation should pay taxes. When the profit of the company is distributed, or paying the employees, the employees/shareholders will be taxed on that money.

So it would be fine if only corporations would pay taxes? Get rid of all income tax, sales tax, etc...

Re: Netflix Made Record Profits in 2020, Paid a Tax Rate of Less Than 1 Percent

#73

Post by cjpearson »

chaoxu wrote: post #62

I actually don't get why corporation should pay taxes. When the profit of the company is distributed, or paying the employees, the employees/shareholders will be taxed on that money.

Corporate taxes allow governments some level over control over corporate policy by incentivizing certain behaviors through deductions/credits etc. Also, dropping the corporate tax rate to 0 would probably be politically impossible, even an identical amount was then taxed on the individuals who benefit.

Re: Netflix Made Record Profits in 2020, Paid a Tax Rate of Less Than 1 Percent

#74

Post by sumedh »

tehwebguy wrote: post #7

After a decade or two of these stories it’s clear this won’t change until someone offers a retail solution for everyday small businesses and individuals to enjoy the same level of “tAx PlAnNiNg.” It’s the only thing that will motivate the rest of the legislature to plug the holes.

> won’t change until someone offers a retail solution for everyday small businesses and individuals to enjoy the same level of “tAx PlAnNiNg.”

Couple of years back when I heard about tax havens, I had an idea why not create a service for individuals/small business people who can use it to open offshore bank accounts and use the same loopholes to save/ minimize taxes legally.

Ofcourse I did not have the motivation to do all the research needed for this service but I still wonder if there is such a service for the little guy.

Re: Netflix Made Record Profits in 2020, Paid a Tax Rate of Less Than 1 Percent

#75

Post by Guthur »

crispyambulance wrote: post #15

It would be perfectly fine for corporations to pay comically low taxes--- IF they also had NO ability to fund large-scale lobbying operations and were not allowed to put unlimited amounts of money into political campaigns. That's NOT ever going to happen. But now is the best time for the tax part to change. The economy has been floated by unprecedented government pay-outs, narrowly avoiding a deep depression that wou…

Then advocate to remove every form of regressive taxation that takes away poorest already limited wealth.

Abolish sales tax, and punitive fines at the very least, theses are highly regressive in nature.

Though i suspect quite a few don't believe the poor should have more wealth but rather that the government should just get bigger.

Re: Netflix Made Record Profits in 2020, Paid a Tax Rate of Less Than 1 Percent

#76

Post by hyko »

throwaway2a02 wrote: post #47
varispeed wrote: post #12

This is crazy how economy is tilted in favour of these big corporations. If you are a worker, it is not uncommon to pay over 40% of tax and if you work on your own small business you can pay even more and have very little left to reinvest. Then you have progressive tax that is preventing you from saving much - if you want to save for a deposit to buy a house, spend time on education and getting a better job, you'll g…

> tax progression will be removed, so that people will have a chance of levelling up Progressive taxation has the exact opposite function to what you're suggesting. It's a mechanism designed to reduce economic inequality and the poverty among the low income workers. Your comment sounds like a rationalization from a middle/upper income person. > it is not uncommon to pay over 40% of tax That figure is misleading, beca…

It's a mechanism designed to reduce economic inequality

Income inequality. Totally different thing; really wealthy people can play all sorts of games with income, so it’s not relevant to them. And that’s the way they like this debate framed: ignore their enormous piles of wealth and instead focus on the earnings distribution of ordinary people.

If anything, it just stops you getting anywhere near to joining their ranks on an honest wage.

Re: Netflix Made Record Profits in 2020, Paid a Tax Rate of Less Than 1 Percent

#77

Post by ocdtrekkie »

chaoxu wrote: post #62

I actually don't get why corporation should pay taxes. When the profit of the company is distributed, or paying the employees, the employees/shareholders will be taxed on that money.

Well, one problem is this just encourages companies to collect and never disburse funds to employers or shareholders. Companies in some cases are holding onto hundreds of billions in cash offshore.

Your idea would make that money free to keep out of the economy and out of employee's hands.

Re: Netflix Made Record Profits in 2020, Paid a Tax Rate of Less Than 1 Percent

#78

Post by pinky1417 »

One aspect I haven’t seen mentioned in the comments or in the article: double taxation. One of the drawbacks of structuring a business as a c-corp is that you have double taxation: once, at the corporate rate then again at the individual income tax rate if the corporation distributed earnings to shareholders. An advantage of that, however, is that if you’re investing for the future, double taxation can be more efficient. If my business makes $100 before taxes, I can reinvest about $80 for future growth if it’s a c-Corp but if it’s a pass-through entity (like an LLC or S-Corp designated as a pass-through), I may only be able to invest $60 because I pay ordinary income rates on earnings.

Put another way: in the steady-state, corporate shareholders end up paying big taxes because distributions are taxed once again at ordinary income rates.

Re: Netflix Made Record Profits in 2020, Paid a Tax Rate of Less Than 1 Percent

#79

Post by refurb »

b112 wrote: post #68
b112 wrote: post #61

Earlier quoted context omitted.

See my reply to my original post. Tax rate changes are well known, but here's an example. Click on 'max' for a decades long look. https://tradingeconomics.com/canada/corporate-tax-rate In terms of 'real world' wages not improving, that's a somewhat arbitrary term. If you mean 'pre-tax', wages HAVE improved over time pre-tax. We're talking over 50+ years here. 'post-tax', they did improve, but that was before the grea…

Further to this ; in Canada, we have to constantly, and directly, worry about the US corporate tax rate. If it drops too low, compared to our tax rate? Companies can VERY easily flee to the US, and with the FTA/NAFTA/whatever it's called now? No issues with product across the border. So even though many Canadians are in favour of a higher corporate tax rate, it would literally be deadly. We must compete, we must race…

Canada has a lower corporate tax rate than the US, at least prior to the Trump tax cuts.

Re: Netflix Made Record Profits in 2020, Paid a Tax Rate of Less Than 1 Percent

#80

Post by varispeed »

throwaway2a02 wrote: post #47
varispeed wrote: post #12

This is crazy how economy is tilted in favour of these big corporations. If you are a worker, it is not uncommon to pay over 40% of tax and if you work on your own small business you can pay even more and have very little left to reinvest. Then you have progressive tax that is preventing you from saving much - if you want to save for a deposit to buy a house, spend time on education and getting a better job, you'll g…

> tax progression will be removed, so that people will have a chance of levelling up Progressive taxation has the exact opposite function to what you're suggesting. It's a mechanism designed to reduce economic inequality and the poverty among the low income workers. Your comment sounds like a rationalization from a middle/upper income person. > it is not uncommon to pay over 40% of tax That figure is misleading, beca…

> Progressive taxation has the exact opposite function to what you're suggesting. It's a mechanism designed to reduce economic inequality and the poverty among the low income workers.

I am not advocating that low income workers pay higher taxes - in fact they should be exempt. I am saying that if you are from such family, progressive tax ensures you'll stay in your lane.

> That figure is misleading, because it includes a set of expenses like social security, health insurance, government pension plans etc. Corporations don't pay that and that's why the difference may seems so big

My number is based on what you get in your pocket from your salary (plus employer's national insurance that is most of the time hidden from the payslip) I didn't include local taxes (like council tax) and so on. Corporations are supposed to pay Corporation Tax, but they can too easily transfer profits offshore and largely avoid that in contrast to SME who mostly pay this tax.

Progressive tax ensures that person from poor background will stay poor.

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