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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

#291

Post by Retric »

smaryjerry wrote: post #268
Retric wrote: post #153

Earlier quoted context omitted.

Yes, the Doctor likely makes to much to even deduct the interest on student loans from their taxes where a company could in effect deduct both the interest and principal from those student loans as an expense. Deducting every cost associated with a job would be a huge tax benefit that simply doesn’t apply to people. It’s one of the ways that referring to tax burdens based on income as defined by the tax code is misle…

First of all you can deduct interest but the standard tax deduction already given usually accommodates a lot of that deduction. Companies can’t deduct principal payments either. There is a crazy amount of people including this article that have no concept of what taxes are. Taxes are not on gross income they are on profit. Calculating taxes on gross income, as this article says, would be outrageous. Take this article…

> Companies can’t deduct principal payments either.

The initial cost would be tax deductible and could rollover across multiple years, therefore in effect the principle is deductible even if the specific payments aren’t. The way the deduction actually works is actually better than simply deducting principle payments from the loan due to time value of money.

The issue with accelerated depreciation is it’s a subsidy. The government is paying interest on it’s debt so companies can defer tax payments, that’s directly costing actual taxpayers money. Further, communism has already been tried and it’s a bad idea, we really don’t want central planning as part of the tax code because it’s a bad idea. Subsides for industry X over industry Y has all the same issues.

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

#292

Post by gfiorav »

tehWeeb wrote: post #229
gfiorav wrote: post #223

Earlier quoted context omitted.

Individual humans don’t employ large groups of people and don’t move forward the economy like a company does. I don’t understand why we want to equate rules for companies to rules for individuals? People say “it’s not fair”? Who’s going to employ people? The government can’t produce your salary, companies do that. Btw, many countries should regulate companies more IMO, but that’s not to say companies shouldn’t be enc…

Why not let people employ each other where they are instead of importing grandpa’s beliefs about how money is produced? It’s the workers doing that produce the real value, not a rich person holding capital they’ll only spend on us if we capitulate. Why do we need the age old tale of a shared ephemeral store like religion and fiat finance when we see those things become monopolized and gamed by the previous generation…

Most companies are not AT&T. To cite one European example, in Spain 80% of companies are 1-3 employees. Giving the entrepreneur a tax break is a great way to help 80% of employers.

In the US that number might be even higher [0] (99% percent according to that article but we’d have to cross check what “small business” means in this context).

Your rhetoric seems to imply that all companies are owned and managed by greedy monopoly-esque despots wearing a penguin suit and smoking a cigar, but reality just doesn’t follow.

You should also consider the alternative. Where is wealth generated if not through companies? Is it the government? In this scheme, the government is the company and covers 100% of business. How’s a government different than the closed board of a monopolic company? Or are they just “the good ones” and therefore somehow immune to produce injustice? To me, as you can probably tell, this notion is naive at best.

I have no issues with taxing the super rich a lot more. I don’t think anyone needs to be worth USD 185 Billion. However, I’m not sour about it and don’t believe a “revolution” is the only solution. Far from it. We’ve dealt with this before: it’s about regulation and policy. Very incremental.

IMHO what makes fairness is a social ladder. As long as there’s a way for the willing, there’s fairness. Any immigrant will tell you as much.

[0] https://www.fundera.com/blog/small-business-employment-and-g...

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

#293

Post by thehappypm »

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…

Controversial opinion: companies with zero profits should be encouraged, not vilified.

A company that isn't profitable means every dollar that flows into the company flows out. It flows out to other companies, to payroll, to R&D, to charities. That's where the real economic engine is -- money flowing, investment happening.

And plenty of taxes come from it, too.

Companies pay taxes when they start hoarding profits instead of investing them. That's a good thing.

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

#294

Post by leetcrew »

dragonwriter wrote: post #285
leetcrew wrote: post #276

Earlier quoted context omitted.

it doesn't really make sense to tax long-term capital gains as income, especially under a progressive system. if I hold an asset for ten years and then sell it, a significant part of the nominal gain will be due to inflation (though this is also a problem with the existing cap gain rules). but conceptually, an LTCG is not a sudden windfall, and should not be taxed as such. it is the result of one or more years' appre…

> it doesn't really make sense to tax long-term capital gains as income, especially under a progressive system. Yes it does. OTOH, it doesn't make sense to not have a means of spreading out irregular income by recognizing it for tax purposes over several years in advance of realization if it can be anticipated, or deferring it over several years otherwise, in a progressive tax system. Which is why you should provide…

I posted elsewhere that it would make sense to allow individuals to apply some smoothing to their yearly income to reduce the impact that progressive brackets have on highly variable incomes.

so let me rephrase my statement about capital gains. it doesn't make sense to treat LTCG as income unless we first make significant changes to the way we assess income tax in the first place. obviously this would be a lot more complicated. imo the existing cap gain rules is a somewhat reasonable solution for a tax system that mostly looks at each year in isolation. the 15% rate is really not much of a concession to a retirement saver who has held a lot of those assets for decades and has experienced meaningful inflation. but the whole system leaves a lot to be desired.

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

#295

Post by thehappypm »

listenallyall wrote: post #49
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…

>> It would be perfectly fine for corporations to pay comically low taxes No it wouldn't

Why should corporations pay taxes on their profits? What's the argument for it?

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

#296

Post by thehappypm »

FpUser wrote: post #134
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.

The easy ( yeah right ) fix would be single universal sales tax. You buy something - you pay. Does not matter corporation or person. No expense claims on that either. This will also eliminate need to count assets as the taxes has already been paid on those. Tax can be progressive with the possibility of rate going negative for low income people.

I used to think this was a good idea but it ends up really, really favoring big corporations.

Startup A wants to get into a market and it buys Zoom licenses, GSuite, AWS servers, etc and pays a hefty tax bill.

Microsoft wants to get into that market? They don't have to buy any of that stuff, they already own everything. No tax dollars, lower cost to the incumbent.

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

#297

Post by thehappypm »

browningstreet wrote: post #282

Might be time for a gross revenue tax for companies pulling in more than $B

Corps would find a way around it. They always do.

Maybe Netflix could spin off one of its studios into a $999M business, of which Netflix conveniently owns a 51% stake in.

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

#299

Post by tracer4201 »

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…

How is a company the same as an individual? How do you compare risk the company takes when investing in research, marketing, hiring, etc to a person going to medical school?

This is an apples and oranges comparison at best. If companies were treated exactly as individuals in this case, I don’t think many companies would survive. With less of the pie to go around, that’s effectively fewer jobs and less wealth created for people who work at these companies.

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

#300

Post by ocdtrekkie »

refurb wrote: post #82
ocdtrekkie wrote: post #77

Earlier quoted context omitted.

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.

Why would a company just sit on funds like that? It makes no sense. Any cash a company has is usually in short term investments. The current offshore “hoarding” is actually due to the current tax code.

Is the problem the current tax code, or the fact that companies know they can pay politicians to change the tax code in their future to favor them, and they just need to wait it out?

If companies knew they were going to pay the tax one way or the other, there would be no point in hoarding overseas.

We should penalize companies for the behavior until it makes more sense for them to repatriate it immediately.

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