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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

#321

Post by whatthesmack »

varispeed wrote: post #88
dpkrjb wrote: post #59

Earlier quoted context omitted.

I remember reading that employment numbers is often a case big Corps make when they warrant dodging tax. “We employe X thousand people who contribute Y to the tax base so we really do pay tax”. It gets worse when you think about how few people technology companies really employ when compared to more traditional companies (Alphabet employs 130k, Walmart 2.2 million). They have annual profits of 40billion and ~4billion…

To add to that - they essentially appropriate taxes workers pay as their own taxes - as if they owned the work that worker put their life into. This is insanely evil.

No. They appropriate the employment taxes that they themselves are paying. Most folks aren't aware that employees in the US only pay half of the income tax for their employment. The company pays the other half. And those taxes usually aren't counted in these dramatic "blah company paid zero taxes" headlines. They also usually don't include real property taxes, sales taxes, etc.

Also to note, the US (now) has somewhat competitive corporate tax rates compared to its peer countries. However, most countries have a lower (or much lower) corporate tax rate than the US has. We shouldn't be comparing corporate tax rates with personal income tax rates... we should be comparing corporate tax rates amongst similar countries.

The lack of understanding of the tax rules by folks writing these dramatic headlines is really irritating.

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

#322

Post by varispeed »

kube-system wrote: post #280
varispeed wrote: post #260

Earlier quoted context omitted.

Are you saying that 40% of tax is less than 20% of tax? I don't follow. My point is that the tax should be linear with tax free allowance. That is everyone pays 20% on income above tax free allowance. You can call it a progression, but this way anyone can level up if they want to. If you add 40% and more further down the line you are slowing down how people from poor background can improve their living.

For a government to make the same revenue with a linear tax as they do with a progressive tax, this mathematically implies that a tax increase for poorer people and a tax cut for lower people. Alternatively, you can cut government spending, which normally means cutting services that disproportionately affects the poor. Either way, moving from a progressive tax to a flat tax is a guaranteed net negative for the poor.

My original point is that corporation do not pay as much tax as they should. The come down from progression should be gradual - as corporate tax holes are plugged, the higher tax rates could be reduced. So that wouldn't affect the poor. It only slightly changes who pays for it.

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

#323

Post by rs999gti »

symlinkk wrote: post #129
PragmaticPulp wrote: post #124

Earlier quoted context omitted.

> Human beings cannot do the equivalent. Spend the entirety of your 20s making very little money because you are investing in growth That’s not really an equivalent, though. These companies aren’t simply giving up opportunity cost. They’re spending real money on real R&D expenditures. In software, that R&D expenditure is largely wages for developers like us. The tax code gives companies benefits for spending this R&D…

That doctor is spending real money on attending medical school, which pays professors. It is an equivalent.

Also, if the doctor goes into private practice, they will live with significant loses until the practice is established:

Expenses such as:

1. Rent 2. Marketing 3. Equipment 4. Student loans 5. Malpractice insurance 6. Billing service, unless they want to do this themselves 7. Staff

All these expenses can be written off until the business is established and profitable.

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

#325

Post by rs999gti »

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…

> Why not let people employ each other where they are instead of importing grandpa’s beliefs about how money is produced?

Corporations and small businesses already do this

> 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.

Yes, but the worker is fungible. The capital holder was entrusted with the money and risk. Workers have little risk, they can walk away from a company at any time. The capital holder is stuck.

> 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 every time?

What is the alternative? It isn't communism or socialism, both have failed numerous times before.

Also, you're posting on a board for capitalists. YC literally bets capital on moonshots to get a return on investment.

> We need to believe one old person is literally worth 100x the average person?

If the old person, had the capital and took the risk, then yes financial value is higher. In terms of being a person, no, they both go in the same box at the end.

> Who does that benefit?

Society. Jobs created a new economy by introducing the iPhone. YC gambles on new companies that benefit society. The phone in your pocket, the internet and computer you use employees tons of people. More than any government jobs program could.

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

#326

Post by bradleyjg »

dont__panic wrote: post #319
bradleyjg wrote: post #169

Earlier quoted context omitted.

There’s a low cap ($2500) on the amount of interest that can be deducted and if the tax payers income gets too high ($85k for a single filer) you can’t deduct anything.

Not to mention that unless you're taking losses from other investments or doing fairly complicated things with your income, the standard deduction is likely high enough that you don't benefit at all from student loan interest deductions. So other people without interest get the same deduction as you anyway.

That’s the one bright spot, student loan interest is above the line (i.e. can be taken in addition to the std deduction). But the other limitation are very low.

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

#327

Post by bzbarsky »

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…

The thing that would make the most sense to me for smoothing out irregular income is to have progressive taxation with the bracket based on cumulative lifetime earnings so far, not on current-year income.

I should also note that even our current tax code admits that the setup with marginal taxes we have is kind of insane. See "Schedule J: Income Averaging for Farmers and Fishermen" which allows those occupations to do exactly what you suggest: average income over multiple years for tax purposes (can average with the previous 3 years). Why only farmers and fishermen? And why do you not get to do the averaging for AMT purposes? That's back to the "insane" part....

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

#328

Post by listenallyall »

gher-shyu3i wrote: post #305
listenallyall wrote: post #49

Earlier quoted context omitted.

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

Of course it would, the government is already taking taxes from employees by means of income tax. Double dipping by taking from the company means less money for the employees.

No, employee compensation is an expense to the company, the more they pay the employees, the lower the eventual profit, which is the basis upon which income tax is determined.

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

#329

Post by koheripbal »

gmadsen wrote: post #236
JumpCrisscross wrote: post #232

Earlier quoted context omitted.

> 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

Stocks paid to employees are taxed at the same exact rate as cash salary income.

There is so much politically motivated misinformation going around on social media - it's really concerning.

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