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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

#381

Post by smaryjerry »

Retric wrote: post #378
smaryjerry wrote: post #370

Earlier quoted context omitted.

It’s not a hand out whatsoever. Firstly you are making an assumption that everything that is depreciated can be sold when the majority of depreciated items are not sold, ever. They get used up over time, kind of like... depreciation. That is why that capitalized items are capitalized, not land, which again _does not get depreciated_ so I don’t know why you would use that as your comparison for normal deduction. You a…

Now you buy something for $100,000, say construction of a building, that building falls apart and breaks down after 39 years, it was not sold. The day it falls down it stops being useful, the day before that you have full use and therefore value of the building. Or as I said several posts ago: “The general rule is something is a deductible expense at the point of destruction or sale not purchase.” Sure, it burned in…

And who decides when it has “stopped working.” It is standardized to 39 years because it is impossible to prove for every single item individually and people would then be incentivized to not take care of their possessions so they can finally deduct it. This is all besides my original point which is that accelerated depreciation is a big factor in determining whether projects occur, the opposite of the article. You yourself are calling it a subsidy and a loan, and so even if your reasoning is wrong, would agree with me that it is something that helps make a project feasible. So all this arguing is just you trying to argue. Get your CPA and talk to me again.

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

#382

Post by thehappypm »

webinvest wrote: post #380
thehappypm wrote: post #295

Earlier quoted context omitted.

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

For the privilege of continued access to a workforce that was educated by public schooling For access to roads that are maintained by tax dollars For environmental damages and other negative externalities that the tax payer has to pay to clean up For an army and police system that allows the flow of commerce to continue without attacks and interruption For a sovereign wealth fund if there is a surplus of tax revenue…

You’re describing taxes. But why specifically taxes on profits? Why not taxes on things like property? Payroll? Sales taxes on things they buy? The myriad of taxes their employees pay?

Why tax profits?

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

#383

Post by Retric »

smaryjerry wrote: post #381
Retric wrote: post #378

Earlier quoted context omitted.

Now you buy something for $100,000, say construction of a building, that building falls apart and breaks down after 39 years, it was not sold. The day it falls down it stops being useful, the day before that you have full use and therefore value of the building. Or as I said several posts ago: “The general rule is something is a deductible expense at the point of destruction or sale not purchase.” Sure, it burned in…

And who decides when it has “stopped working.” It is standardized to 39 years because it is impossible to prove for every single item individually and people would then be incentivized to not take care of their possessions so they can finally deduct it. This is all besides my original point which is that accelerated depreciation is a big factor in determining whether projects occur, the opposite of the article. You y…

> And who decides when it has “stopped working.”

Initially the company, though audits and penalties help keep them honest.

> accelerated depreciation is a big factor in determining whether projects occur

And clearly that’s a problem. Just as government farm subsidies waste money growing excess food accelerated depreciation causes significant economic waste.

> CPA

Ahh, there’s your problem a CPA has nothing to do with economic issues. This is an economic and thus a policy issue but you’re trying to argue based on the existing law rather than the underlying reality. I don’t expect you to get a in depth education on the topic, but if you’re interested I can recommended some good books to get you started.

But to summarize a huge body of work, the broken window fallacy demonstrates that economic activity isn’t inherently beneficial. Maximum efficiency isn’t equivalent to maximum GDP etc. As such policies that increase economic activity can be and generally are detrimental.

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

#384

Post by gamblor956 »

bradleyjg wrote: post #377
gamblor956 wrote: post #348

Earlier quoted context omitted.

The interest on personal loans is also deductible, if used for (a) education, (b) buying a residence, or (c) for business activities of the individual.

> (a) education, (b) buying a residence Only up to some low limit. Netflix can deduct unlimited interest.

No, it can't. Business interest deduction is limited to 30% of taxable income...

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

#385

Post by bzbarsky »

asdff wrote: post #335
bzbarsky wrote: post #192

Earlier quoted context omitted.

> 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.

The set of things that are considered "losses" (i.e. deductible expenses) for personal tax filings in the US is pretty limited. State/local taxes (now up to a cap). Mortgage interest payments (also with some cap). Mortgage points, mortgage insurance premiums. Medical expenses exceeding some percentage of AGI. Investment interest expenses. Capital losses. Gifts to charity. Casualty/theft losses, subject to a bunch of constraints. Gambling losses (but can't exceed gambling winnings). Some other things I can't recall off the top of my head.

As I said above, corporation have a much larger set of things that are considered deductible against revenue to determine taxable income. Starting with the fact that corporations are generally taxed on "profit" while people are generally taxed on "income", which is closer to "revenue" in general.

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

#386

Post by [deleted] »

asdff wrote: post #340
hntrader wrote: post #94

Earlier quoted context omitted.

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.

[deleted]

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

#387

Post by hntrader »

asdff wrote: post #359
imtringued wrote: post #354

Earlier quoted context omitted.

If the first lemonade stand did a stock buyback it would be worth just as much as the second lemonade stand. If the first lemonade stand issues a dividend and holders of the stock automatically buy more stock, then the share price will also be exactly the same as the second lemonade stand. Why do companies do dividends or stock buybacks? Because they think investors can do better investments elsewhere with the money.

What about a third lemonade stand that took their huge sack of cash and instead paid their employees six figures? This would be the stand that is worth less to the shareholder, as that money in the sack has left the lemonade stand entirely and is now being spent by the employee elsewhere in the economy with a portion of it used for different taxes. This is also the stand that is worth the most to the public, as this…

But that's marked to market value.

The shareholder still has to receive a dividend or sell that higher priced stock, which are both taxable events.

So I still don't get it.

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

#388

Post by scrollaway »

goatinaboat wrote: post #308
gsnedders wrote: post #220

Earlier quoted context omitted.

In many industries it's hard to quantify the value of imports from the parent company. What is the value of the software engineering services Amazon US provide to Amazon UK, maintaining amazon.co.uk? Because, rationally, that's an expense of the UK company. How much in the Starbucks brand worth? How do you distinguish a franchise from a subsidiary? If Starbucks split in two, with Starbucks Corporation maintaining onl…

Like, there's definitely questions to be had about international accounting, but some of the complexity is because national subsidiaries rarely operate in isolation, and valuing much of what they get from their parent organisation is exceptionally hard. The very, very easy solution is for every corporate entity to be taxed on revenue in each jurisdiction. E.g. if I am in the UK and I spend £4 on a coffee in Starbucks…

You just reinvented VAT.

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

#389

Post by goatinaboat »

scrollaway wrote: post #388
goatinaboat wrote: post #308

Earlier quoted context omitted.

Like, there's definitely questions to be had about international accounting, but some of the complexity is because national subsidiaries rarely operate in isolation, and valuing much of what they get from their parent organisation is exceptionally hard. The very, very easy solution is for every corporate entity to be taxed on revenue in each jurisdiction. E.g. if I am in the UK and I spend £4 on a coffee in Starbucks…

You just reinvented VAT.

You just reinvented VAT.

VAT is passed “through” a company, I mean for this to be charged to the company on what is normally considered income. Essentially, since corporations are supposedly people, they can pay income tax like people.

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

#390

Post by smaryjerry »

Retric wrote: post #383
smaryjerry wrote: post #381

Earlier quoted context omitted.

And who decides when it has “stopped working.” It is standardized to 39 years because it is impossible to prove for every single item individually and people would then be incentivized to not take care of their possessions so they can finally deduct it. This is all besides my original point which is that accelerated depreciation is a big factor in determining whether projects occur, the opposite of the article. You y…

> And who decides when it has “stopped working.” Initially the company, though audits and penalties help keep them honest. > accelerated depreciation is a big factor in determining whether projects occur And clearly that’s a problem. Just as government farm subsidies waste money growing excess food accelerated depreciation causes significant economic waste. > CPA Ahh, there’s your problem a CPA has nothing to do with…

Didn’t read, I’m not here to teach you accounting.
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