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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

#331

Post by browningstreet »

thehappypm wrote: post #297
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.

> Netflix annual revenue for 2020 was $24.996B, a 24.01% increase from 2019.

Would they go to the trouble of making themselves 25 different companies?

There might be a way for lawmakers to figure this out...

-- https://www.macrotrends.net/stocks/charts/NFLX/netflix/reven...

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

#332

Post by owenversteeg »

leetcrew wrote: post #276
dragonwriter wrote: post #272

Earlier quoted context omitted.

So, new brackets or not, tax capital gains, gifts, and inheritances as regular income to the recipient. Also, apply taxes (and corresponding benefit eligibility) equivalent to payroll/self-employment taxes to that income. At the same time, allow corporations to expense disbursements: you are taxing individual income fairly, corporate tax just is a tool to prevent indefinite tax-free deferral of income.

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…

I'd be very curious to see HN's perspective on Biden's plan to scrap the LTCG tax (aka tax it the same as income.) On the one hand, it would be a fairly clean way to tax the wealthy (basically nobody poor has LTCGs.) On the other hand, it disincentivizes long term investing. It'd also cost a lot of people here a lot of money, so I imagine that would make it at least mildly unpopular.

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

#333

Post by beaconstudios »

TuringNYC wrote: post #245
tlholaday wrote: post #11

> Among the mechanisms Netflix is using to achieve its next-to-nothing tax liability are accelerated depreciation (which appears to have cut the company’s tax expense by $148 million); deductions for stock options for Netflix executives and other employees ($339 million); and research and development tax credits ($113 million). These are straightforward deductions.

>> Among the mechanisms Netflix is using to achieve its next-to-nothing tax liability are accelerated depreciation (which appears to have cut the company’s tax expense by $148 million); deductions for stock options for Netflix executives... Remember the corps used to get in trouble for not deducting stock options. Now it has turned into a "mechanism to achieve its next-to-nothing tax liability"

Journalists just trying to make them look like tax dodgers.

Which they are, as discussed elsewhere in this thread, but the journalist doesn't know enough to point to the actual problematic behaviour.

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

#334

Post by smaryjerry »

Retric wrote: post #291
smaryjerry wrote: post #268

Earlier quoted context omitted.

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. T…

Principle is not at all “in effect deductible” in the slightest. If you spent money on expenses that is deductible whether you borrowed that money or not and has absolutely nothing to do with principal. On the second point accelerated depreciation is NOT a subsidy in the slightest either and not at all related to government debt. Depreciation is already a delayed acknowledgment of expenses. Without depreciation someone would deduct the entire amount of a cost immediately and pay much lower taxes. Accelerated depreciation costs taxpayers nothing. The government is not funding anything, the government is collecting less tax up front but more over time. Whether the government has liabilities is irrelevant. I don’t understand the point you are making on communism or how that relates at all unless you assume all tax collected is communist.

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

#335

Post by asdff »

bzbarsky wrote: post #192
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. They can to some extent, actually... See IRS publication Publication 536, "Net Operating Losses (NOLs) for Individuals, Estates, and Trusts". > Spend the entirety of your 20s making very little money because you are investing in growth To actually do the equivalent you would need to spend your 20s _losing_ money. And if you do (in the NOL sense per publication 536) then you ca…

If tuition is not considered a loss, surely every other expense would be considered a loss then. A medical school student isn't working a part time job to pay their rent and feed themselves; that's all out of pocket and a pure loss.

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

#336

Post by koshnaranek »

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.

Netflix makes a lot of money in Europe. Most of that profit would move to the US... even more than it currently does.

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

#337

Post by asdff »

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…

>And under the current model, it is hard to get it from corporations, squeeze too much, and they're gone

How can that possibly be? All corporations cannot just move elsewhere. There is not infinite space or talent or customers in this magical 'elsewhere' that everyone fears the corporations will move to. There are simply not enough trained people while, on the other hand, there are people right here right now currently working the very job in question at these corporations. Sure, out of 1000 companies, maybe 10 would find enough skilled workers to fully staff an office in Germany or Singapore or Australia, but the other ones will have just shot themselves in the foot and they know it. That's why they currently pay the premium to have an American office and not one in Bangladesh today, because if cost was end all be all these companies would have left for Bangladesh in the 1980s. Twitter would be a Bangladeshi company. We would be posting on news.ycombinator.bd right now. It's not cost, it's talent. It's also access to the American market of 400 million people at a higher standard of living than the median person on Earth. If we are worried Ford is going to take their manufacturing jobs to Bangladesh and make us buy Bangladeshi Fords, we could just sanction these industries such that the only legal Ford is an American one, like how we make Honda assemble Civics domestically. We already do this with domestic auto markets to an extent, having certain regulations means certain companies do not bother selling cars here, and vis versa, despite the car being an in demand product world wide.

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

#338

Post by imtringued »

swebs wrote: post #122
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 sounds like both of you want Fair Tax https://en.wikipedia.org/wiki/FairTax

This tax proposal makes no sense. It's very easy to dodge sales taxes and VAT taxes by doing under the table deals.

If anything, you want to replace all consumption taxes with a flat income tax (always 40% for example) combined with a flat deduction (first $40k are not taxed).

If you absolutely must replace income taxes, then replace them with land value taxes because it is impossible to avoid them as the owner (who may not be in the country) or as a person living in the country (because all land is taxed).

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

#339

Post by tehWeeb »

gfiorav wrote: post #304
tehWeeb wrote: post #303

Earlier quoted context omitted.

Why must the masses be tethered to a monopolized ephemeral value store? None of us owe servitude to old debts, contracts, wives tales, sonnets, limericks, hymns, poems, stories. When the world changes it does so because society decides there are different words to better represent its goals. Laws are no longer based upon the words of Gods. The rich are not Gods. They don’t represent meritorious effort when they’re in…

You're not reading me. We are the companies. 99% of companies are small business. No such monopoly.

I’m not disputing the value of collective effort.

I’m disputing our implementation that favors minority capture of collective effort.

Why do I need to be a “company”?

We already have a system of collective effort called “government”.

Why another layer of abstraction?

Why must they run on grandpa’s fiscal beliefs, and previously brokered debt servicing and network effects?

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

#340

Post by asdff »

hntrader wrote: post #94
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.

What would be the incentive for this? The whole point is for stakeholders to eventually get paid in a taxable event; either shareholders through a capital gains taxable event or employees through an income taxable event. Some tech companies are hoarding cash but I don't believe this is due to incentives created by taxation, although I could be mistaken.

What share price is higher? The lemonade stand, or the identical lemonade stand with a huge bag of money kept beneath the table? If you are a shareholder you only care about one thing.
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