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

#231

Post by postingawayonhn » Mon, Apr 05, 2021, 1:42 PM 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…

Paying tuition is more like an investment in a non-depreciating asset.

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

#232

Post by JumpCrisscross » Mon, Apr 05, 2021, 1:43 PM 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…

> Human beings cannot do the equivalent

Some can. Those with assets to depreciate, for example.

Frankly, the whole corporate tax debate seems manufactured to obscure the top personal tax bracket being about $500,000. Raise corporate taxes and you tax everyone with shares. That hits the rich, sure [1], but it also hits every pension fund and middle class saver. And if the corporate tax rate goes up instead of a $1mm, $2mm, $4mm and $8mm tax bracket being created, everyone at the top comes out ahead.

[1] Screw with the tax code for companies, legal fictions, enough and they’ll magically start moving. Then it’s a game of whack-a-mole. People are much less likely to change their way of life in response to tax codes; this is well documented.

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

#233

Post by blackoil » Mon, Apr 05, 2021, 1:43 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.

That's true for all taxes, If tax is at 0%, you'll have all the money. Idea is for a person making 20k, tax is going out of food/shelter money, for someone making 100k, it is going out of vacation/investing, for one making millions, it is going out of extra money.

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

#234

Post by SavantIdiot » Mon, Apr 05, 2021, 1:44 PM UTC

frockington1 wrote: post #204

SavantIdiot wrote: post #190

Earlier quoted context omitted.

> A lot of growing companies have US taxes that are quite low Netflix has been around for 20+ years

They are still growing, growth can happen at any and often multiple times

Define growth? How do you prove: "Hi I'm company X and I'm growing so I shouldn't have to pay taxes" isn't full of BS and slick accounting? Because you know if there are rules corporations are going to lie their way around them. Better have fewer rules and more consistent taxes. But lobbyist love to make things complex so that corporations can cheat.

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

#235

Post by wtf_is_up » Mon, Apr 05, 2021, 1:46 PM 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…

Why would you expect it to be the same (besides some nonsense appeal to 'corporations are people')?

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

#236

Post by gmadsen » Mon, Apr 05, 2021, 1:46 PM UTC

JumpCrisscross wrote: post #232

bradleyjg wrote: post #110

Earlier quoted context omitted.

> 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…

> Human beings cannot do the equivalent Some can. Those with assets to depreciate, for example. Frankly, the whole corporate tax debate seems manufactured to obscure the top personal tax bracket being about $500,000. Raise corporate taxes and you tax everyone with shares. That hits the rich, sure [1], but it also hits every pension fund and middle class saver. And if the corporate tax rate goes up instead of a $1mm,…

the ultra rich are paid in stocks, not salary. Raising the tax brackets wouldn't do anything

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

#237

Post by villgax » Mon, Apr 05, 2021, 1:46 PM UTC

6nf wrote: post #33

villgax wrote: post #30

Can people band together & save money doing the exact same thing?

You could incorporate

But like still be on payroll & ask your OG company to pay this new company instead of you directly, has anyone done that or am I just re-inventing contract work?

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

#238

Post by postingawayonhn » Mon, Apr 05, 2021, 1:48 PM UTC

varispeed wrote: post #127

Guthur wrote: post #81

Earlier quoted context omitted.

Everyone they employ already pays tax. Everyone that gets a dividend pays tax. Everyone that enjoys capital growth pays tax. Just looking at the direct corporate tax rate is grossly myopic.

> Everyone they employ already pays tax. But this is their tax they pay on the money _they_ earned. Not sure why this is okay for corporations to appropriate this tax as theirs. > Everyone that gets a dividend pays tax. In my country dividend tax has a lower rate. You have this insanity where a person making money out of their hard work pays more tax than a person living off dividends and doing nothing.

But does your tax system allow for company tax payments to be offset against the tax liabilities of those receiving dividends? Here in Australia/NZ companies can provide shareholders with franking/imputation credits.

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

#239

Post by Guthur » Mon, Apr 05, 2021, 1:48 PM UTC

varispeed wrote: post #127

Guthur wrote: post #81

Earlier quoted context omitted.

Everyone they employ already pays tax. Everyone that gets a dividend pays tax. Everyone that enjoys capital growth pays tax. Just looking at the direct corporate tax rate is grossly myopic.

> Everyone they employ already pays tax. But this is their tax they pay on the money _they_ earned. Not sure why this is okay for corporations to appropriate this tax as theirs. > Everyone that gets a dividend pays tax. In my country dividend tax has a lower rate. You have this insanity where a person making money out of their hard work pays more tax than a person living off dividends and doing nothing.

In a corporation who is this "they", employees? (paying taxes), c-suite? (paying taxes), stockholders (paying taxes)

The problem, there is no "they".

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

#240

Post by TuringNYC » Mon, Apr 05, 2021, 1:49 PM UTC

bzbarsky wrote: post #203

lotsofpulp wrote: post #54

Earlier quoted context omitted.

How was it paid out that your federal income tax liability is 40% Or are you talking about withholding? Which is not accurate to describe as “taxes paid”. Also, if including state tax, then it might be higher, but I would still be surprised if your total tax liability was over 40%.

If it's paid out as ordinary (W-2) income, then your top federal tax rate right this minute is 39.35% (37% regular tax, 1.45% medicare tax, 0.9% medicare surtax). If it's paid out as some sort of investment income not subject to long-term capital gains treatment (e.g. interest, non-qualified dividends), then your top federal rate is 40.8% (37% regular, 3.8% net investment tax). That does assume $500k of taxable incom…

>> If it's paid out as ordinary (W-2) income, then your top federal tax rate right this minute is 39.35% (37% regular tax, 1.45% medicare tax, 0.9% medicare surtax).

There is also state tax, which can be significant (double digits), esp for top brackets.