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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

#101

Post by gbrindisi »

hyko wrote: post #76
throwaway2a02 wrote: post #47

Earlier quoted context omitted.

> 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 ran…

Really wealthy people are probably not paying much income taxes to begin with

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

#102

Post by tomrod »

b112 wrote: post #61
tomrod wrote: post #42

Earlier quoted context omitted.

Flaw in argumemt: real wages not improving for several decades. Can you please provide sources where corporations were the primary tax vehicle?

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…

Hey, I sell the biggest pigs you can buy at a bovine stockyards. Also the best wheat forward contracts you'll find in the metals futures market.

Facetciousness aside, the Canadian experience is not comparable to the US experience, which is the subject of the article.

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

#103

Post by throwaway667555 »

hnmullany wrote: post #52

Netflix recorded a worldwide income tax accounting expense of about 13.7% last year ($438M on $3.2B of Net Income). It also paid cash taxes of $292M (cash taxes differ from accounting taxes because of timing issues - just like revenue is not the same as cash-in). A lot of growing companies have US taxes that are quite low because they lose money for a long time while they're investing in growth. When they finally bec…

Adding one thing: in the past, mega-companies spent money on tangible assets which were depreciated over time as they produced income. Now mega-companies spend money on intangible assets but they can expense immediately, so tax is deferred and they can grow without that tax friction. Dollars spent are the same, but expensing is accelerated, shrinking tax and unleashing growth, and the cycle continues. It’s kind of a cheat, or at least an unintended omission from old laws designed before intangible assets became the biggest assets on the planet.

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

#104

Post by [deleted] »

hnmullany wrote: post #52

Netflix recorded a worldwide income tax accounting expense of about 13.7% last year ($438M on $3.2B of Net Income). It also paid cash taxes of $292M (cash taxes differ from accounting taxes because of timing issues - just like revenue is not the same as cash-in). A lot of growing companies have US taxes that are quite low because they lose money for a long time while they're investing in growth. When they finally bec…

[deleted]

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

#106

Post by isbvhodnvemrwvn »

varispeed wrote: post #80
throwaway2a02 wrote: post #47

Earlier quoted context omitted.

> 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 includ…

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

How so? With progressive tax there is no point at which you make less money than if you had less income.

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

#107

Post by varispeed »

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…

If you make £60k before tax, your effective rate is still about 40% (if you add employer's NI which does not appear on payslips). Then you also have to add local taxes like council tax etc. It's not looking good. From tomorrow we are also going to get this - https://norightsemployee.uk/faq - workers on such contracts will have to factor employer's NI and apprenticeship levy in their rates.

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

#108

Post by pessimizer »

tenaciousDaniel wrote: post #25
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…

Yep. I just got an equity payout from an acquisition. It’s a lot of money, though it isn’t going to allow me to retire early. Would be enough for a house down payment, which is good enough for me! However, I am paying literally 40% in taxes due to how it was paid out. As someone who desperately needs this money, it’s devastating. To hear that large corps can weasel their way out of paying is extremely infuriating.

Needing the equity payment from your acquisition, untaxed, to put a down payment down on a house is not what the vast majority of people would think of as desperation.

You're going to get enough tax breaks and subsidy for buying the house anyway.

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

#109

Post by II2II »

b112 wrote: post #39
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…

Yes, but... Decades and decades ago, corporations paid most of the tax. People paid very little. Then things shifted. Instead of taxing corporations, people were taxed. Said people, with less money in their pocket, required raises. And so, over time, tax shifted from corporate to personal, but with people in the end taking home approximately as much as they had before. For example, you have $60k pretax, $50k take hom…

With corporations paying more for labour, they start looking for cheaper labour costs. They look for jurisdictions where there is a greater supply of labour and lower labour standards. This reduces the negotiating power of labour in regions with higher taxation, resulting in the stagnation or reduction of wages. In turn, this results in lower tax revenues which results in higher taxation or cuts to government spending.

Whether this is good or bad is a matter of perspective. Some people are all for lower government spending (sometimes for justifiable reasons) and labour in the lower tax jurisdictions may benefit. What doesn't change is the balance of power: the wealthy will virtually always benefit it. The people at the bottom have very little autonomy since they have to roll with the punches to simply survive.

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

#110

Post by bradleyjg »

hnmullany wrote: post #52

Netflix recorded a worldwide income tax accounting expense of about 13.7% last year ($438M on $3.2B of Net Income). It also paid cash taxes of $292M (cash taxes differ from accounting taxes because of timing issues - just like revenue is not the same as cash-in). A lot of growing companies have US taxes that are quite low because they lose money for a long time while they're investing in growth. When they finally bec…

> A lot of growing companies have US taxes that are quite low because they lose money for a long time while they're investing in growth. When they finally become profitable, they're allowed to roll forward those losses (within limits) to offset their profits.

Human beings cannot do the equivalent. Spend the entirety of your 20s making very little money because you are investing in growth and then make $800k as an orthopedic surgeon at age 30, and you’ll pay the top marginal rate. You don’t get to go back and use all the unused 24% bracket income from prior years. You also can’t deduct the interest on the loans you took to finance that growth.

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