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Tesla Reported Zero Federal Income Tax on $2B of U.S. Income in 2024

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Re: Tesla Reported Zero Federal Income Tax on $2B of U.S. Income in 2024

#21
post #16

Earlier quoted context omitted.

Corporate tax is quite misunderstood in my opinion. Tesla makes revenue, and they have costs. Their revenues are offset by their costs. Any profit Tesla makes is eventually taxed -- either when Tesla shareholders sell appreciated stock, when the company makes distributions or when they liquidate. Corporate tax only applies to un-distributed profits carried forward from year to year instead of invested into the busine…

> either when Tesla shareholders sell appreciated stock, when the company makes distributions or when they liquidate. Feels like a fatal flaw in the law if you can bypass paying the corporate taxes in that way. That is individual tax - not the tax payed by the corporation. Normally the tax is payed twice. Tax from the corporation profits and then the individual employee/shareholder tax based on their income.

> Normally the tax is payed twice. Tax from the corporation profits and then the individual employee tax based on their income.

Payroll tax is the second check you're looking for.

Tesla is almost certainly fucking around. But the concept of taxing corporate profits--versus earnings--is solid. You massively favour high-margin (tech) over low-margin (manufacturing, service, anything with physical assets) and incumbents over new entrants if you tax the top line.

Re: Tesla Reported Zero Federal Income Tax on $2B of U.S. Income in 2024

#22
post #6

So I pay more taxes than one of the highest-valued companies in the world? sure the system works well

This article is such a cheap and generic anti-corporate jab (Tesla not being unique here at all). Don't get me wrong, I too disagree that expenses can only be written off by corporate entities, but that is just the way it is.

I'm sure if we really unpacked the numbers, we'd see that all of Tesla's employees' salaries that were exempted from Tesla's "taxable income" meant plenty of income taxes being paid over to the government for social welfare and other spending.

No one wants to go down that rabbit hole, because we'd then have to have an honest discussion about why I, as a human, don't get to deduct most of my personal expenses and only pay tax on my "saved" or "non-spent' income. At that point, we'd be getting almost 0 tax income because most people spend a huge chunk of their income on necessary survival and arguably in the "cost" of being an employee.

Re: Tesla Reported Zero Federal Income Tax on $2B of U.S. Income in 2024

#23
post #3

Tesla seems to be a pretty big social welfare beneficiary.

Socialism for the big, capitalism for the rest.

I think capitalism or socialism are neither problem nor solution; they're just tools, frameworks. The problem is greed and our willingness to accept it.

Re: Tesla Reported Zero Federal Income Tax on $2B of U.S. Income in 2024

#24
post #19

Earlier quoted context omitted.

Corporate tax is quite misunderstood in my opinion. Tesla makes revenue, and they have costs. Their revenues are offset by their costs. Any profit Tesla makes is eventually taxed -- either when Tesla shareholders sell appreciated stock, when the company makes distributions or when they liquidate. Corporate tax only applies to un-distributed profits carried forward from year to year instead of invested into the busine…

Yes, but that’s not the whole picture. If the value of the company goes up, shareholders capture value as capital gains which has a very low tax rate.

Low... ish... depending on where you are. Short term gains are taxed as ordinary income, long-term gains are taxed up to 20% (already the corporate rate) and states like California treat it as ordinary income exposing you to another up to 13.3%

Re: Tesla Reported Zero Federal Income Tax on $2B of U.S. Income in 2024

#25
post #6

So I pay more taxes than one of the highest-valued companies in the world? sure the system works well

Corporations get to pay their costs before paying taxes on what's left. Only the population pays taxes before their costs.

> Only the population pays taxes before their costs

Not that simple. Plenty of individuals pay a negative income tax. Plenty of individuals deduct various expenses.

And if you're a sole proprietor, you get to deduct expenses like a corporation. Labour v capital != corporations v people.

Re: Tesla Reported Zero Federal Income Tax on $2B of U.S. Income in 2024

#26
post #6

So I pay more taxes than one of the highest-valued companies in the world? sure the system works well

Corporate tax is quite misunderstood in my opinion. Tesla makes revenue, and they have costs. Their revenues are offset by their costs. Any profit Tesla makes is eventually taxed -- either when Tesla shareholders sell appreciated stock, when the company makes distributions or when they liquidate. Corporate tax only applies to un-distributed profits carried forward from year to year instead of invested into the busine…

So in politics companies are people but in taxes they are not?

Or why do I have to pay taxes instead of nothing because I invest in my company aka me?

Re: Tesla Reported Zero Federal Income Tax on $2B of U.S. Income in 2024

#27
post #16

Earlier quoted context omitted.

> either when Tesla shareholders sell appreciated stock, when the company makes distributions or when they liquidate. Feels like a fatal flaw in the law if you can bypass paying the corporate taxes in that way. That is individual tax - not the tax payed by the corporation. Normally the tax is payed twice. Tax from the corporation profits and then the individual employee/shareholder tax based on their income.

At least today the corporate tax rate is 21%. Individual tax rates in California are as high as like 52%. In almost every scenario you'll see a higher rate on the distributions and buybacks than you would carrying it forward to the following year. I guess you could make a case for double-taxation but... why?

    > Individual tax rates in California are as high as like 52%.
Is that a marginal tax rate (not very useful for comparison) or an effective tax rate? Also, can you explain why income level is required to achieve 52% "individual tax rate"?

Re: Tesla Reported Zero Federal Income Tax on $2B of U.S. Income in 2024

#30

Earlier quoted context omitted.

Oh yea share buybacks are very nice costs for a lot of companies. Then you can also take loans based off of that to make sure you never have to pay taxes again.

Those are taxable events for the people who sell the shares Tesla is buying back. > Then you can also take loans based off of that to make sure you never have to pay taxes again. You can borrow against the after tax amount yes, you'll pay interest on it and when you die, you will pay the capital gains. On your final tax return, you are required to pay taxes on all of the capital gains you up to your departure. This r…

"Those are taxable events for the people who sell the shares Tesla is buying back."

But in which jurisdictions is that tax payable, and at what rates?

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