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

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

#111

Post by throwawayfire » Mon, Apr 05, 2021, 11:55 AM UTC

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…

> Your comment sounds like a rationalization from a middle/upper income person.

In most countries that I am aware of, the tax rate becomes essentially flat at, or relatively close to, a median income.

If you tax people on a lower income at that same rate, then that is highly punitive and is likely to put people into poverty.

It's immediately advantageous for governments to set a "progressive" lower tax rate, to avoid paying the cost of resources dealing with poverty.

Aside from this, governments are continuing to tax people up to and approaching median incomes at the highest rate that they can bear.

It's only once you get significantly above median that the tax rate doesn't continue to be punitive - for example, in terms of young people being able to access security of housing.

I'd argue these [existing tax schemes] aren't therefore progressive at all. It's just a different mechanism to provide minimal/essential support to people in poverty.

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

#112

Post by varispeed » Mon, Apr 05, 2021, 11:57 AM UTC

isbvhodnvemrwvn wrote: post #106

varispeed wrote: post #80

Earlier quoted context omitted.

> 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.

If you cross a threshold from 20% to 40%, for every £1000 made over that threshold you pay £400 instead of £200. Sure you are still making more money, but suddenly you don't have that £200 that you could save or invest.

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

#113

Post by sumedh » Mon, Apr 05, 2021, 11:58 AM UTC

alvah wrote: post #24

Company generates revenue, offsets costs against that revenue, pays tax on the balance. Yawn.

> offsets costs against that revenue, pays tax on the balance. Yawn.

How does it offset them, does it use some shenanigans like other companies?

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

#114

Post by refurb » Mon, Apr 05, 2021, 11:59 AM UTC

bradleyjg wrote: post #110

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 ort…

Student loans interest is deductible at lower incomes. You can deduct mortgage interest (investing in long term housing). You can defer taxes on income through a 401k.

It’s not like individuals don’t have mechanisms to save on taxes.

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

#115

Post by ipaddr » Mon, Apr 05, 2021, 12:01 PM UTC

isbvhodnvemrwvn wrote: post #106

varispeed wrote: post #80

Earlier quoted context omitted.

> 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.

If you are paying 40%-50% you will never move up classes. It is a tool to prevent the middle class from reaching rich person status.

For the poorest many are paying no or little income taxes so the income is the issue not the taxes.

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

#116

Post by sokoloff » Mon, Apr 05, 2021, 12:02 PM UTC

lotsofpulp wrote: post #95

sokoloff wrote: post #90

Earlier quoted context omitted.

They didn’t claim their federal tax liability was 40%; they claimed they were paying 40% total tax rate on the acquisition-related income, something which is true for most employees in most states for many acquisitions.

I’m aware, but I don’t see how that has a relevance to discussion Netflix’s federal income tax liability. My point was people in these comments are throwing out personal tax liability figures for comparison including various things such as state taxes, social security, Medicare, which makes things not very comparable.

Because people are people and not math proof generation engines.

Someone worked hard, achieved an intermediate goal that they hoped was going to move them one rung up the economic ladder only to find out that taxes took a much larger bite than they’d hoped or previously considered. So, they’re naturally discouraged to read about some big company somewhere paying a much lower overall rate while comparing it to their own.

Perhaps the real question is why the authors of these articles don’t put everything into terms more directly relatable to the people reading the article? That’s because doing so makes for less outrage-sharing of the article.

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

#117

Post by guerrilla » Mon, Apr 05, 2021, 12:03 PM UTC

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…

It seems like you don't know what progressive taxation is since it's what you're actually arguing for...

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

#118

Post by rev_d » Mon, Apr 05, 2021, 12:04 PM UTC

What's also quite gross about this is that we have large multinationals paying zero in taxes to the US government, but there are small businesses owned by overseas US citizens that are being subjected to both resident country & US tax due to the US being "unique" in its practice of taxing overseas citizens.

If you're small, you get hit by the tax. If you're big enough for creative structuring, you're fine.

It's just as disgusting when you get down to individual tax. Larger companies are for the most part taxed territorially (where they make the money) while individuals are fully (and often in ways that are incompatible with local market practice) liable for US taxes, even if they live outside the US.

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

#119

Post by LockAndLol » Mon, Apr 05, 2021, 12:04 PM UTC

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…

Companies in the US are people until it comes to taxes, then all of a sudden they're not. There is a lot to fix...

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

#120

Post by [deleted] » Mon, Apr 05, 2021, 12:06 PM UTC

varispeed wrote: post #112

isbvhodnvemrwvn wrote: post #106

Earlier quoted context omitted.

> 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.

If you cross a threshold from 20% to 40%, for every £1000 made over that threshold you pay £400 instead of £200. Sure you are still making more money, but suddenly you don't have that £200 that you could save or invest.

[deleted]