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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

#51

Post by michaelt »

zo1 wrote: post #22
h1fra wrote: 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…

This is one of those places where a sensible theory leads to a bunch of loopholes in practice.

If we applied a 20% income tax to corporate entities, then buying a car through a dealership would cost 20% more than buying direct from the factory.

You can imagine what that would do to intermediary-heavy transactions, like when I give pension money to a fund marketplace who buy a fund who go to a stockbroker and buy shares; I'd end up paying 20% tax four times in a row.

Of course the problem with letting companies deduct expenses is they can deduct sham expenses to move expenses between tax regimes. Sell your brand name to a company in a tax haven, pay a per-product 'license fee' for the right to use the name, and suddenly you're making zero profit in the place you do all your operations, as all the profit is, on paper, being made in the tax haven.

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

#52

Post by Ekaros »

JumpCrisscross wrote: post #21
nicce wrote: 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.

> 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…

It really comes to simple process lot of companies operate. They buy some materials, they spend some labour to refine it, sell it, ship it. And what is above all these costs is profit. Taxing them on what they sold for, is not really sensible say with fuel, a low margin product.

Now what can be called cost is very reasonable question. Clearly dividends or stock buybacks should not be costs. And thus such spending should only come from post tax money...

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

#53

Post by JumpCrisscross »

Ekaros wrote: post #52
JumpCrisscross wrote: post #21

Earlier quoted context omitted.

> 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…

It really comes to simple process lot of companies operate. They buy some materials, they spend some labour to refine it, sell it, ship it. And what is above all these costs is profit. Taxing them on what they sold for, is not really sensible say with fuel, a low margin product. Now what can be called cost is very reasonable question. Clearly dividends or stock buybacks should not be costs. And thus such spending sho…

> Clearly dividends or stock buybacks should not be costs. And thus such spending should only come from post tax money

It does. Dividends and stock buybacks are not tax deductiable [1][2].

[1] https://www.thetaxadviser.com/issues/2022/sep/paying-dividen...

[2] https://www.grantthornton.com/insights/alerts/tax/2024/flash...

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

#54

Post by JumpCrisscross »

michaelt wrote: post #51
zo1 wrote: post #22

Earlier quoted context omitted.

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…

This is one of those places where a sensible theory leads to a bunch of loopholes in practice. If we applied a 20% income tax to corporate entities, then buying a car through a dealership would cost 20% more than buying direct from the factory. You can imagine what that would do to intermediary-heavy transactions, like when I give pension money to a fund marketplace who buy a fund who go to a stockbroker and buy shar…

> If we applied a 20% income tax to corporate entities, then buying a car through a dealership would cost 20% more than buying direct from the factory

You'd also have to add a massive border-adjustment tax, because otherwise I wouldn't buy it from the dealership or the factory, but buy it in Mexico--where producers don't have to pay the tax--and then drive it home.

Not super applicable for a car, I know, but it's a general problem with taxing legal fictions.

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

#55

Post by StefanBatory »

GolfPopper wrote: post #23
StefanBatory wrote: post #8

Earlier quoted context omitted.

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.

I know, but that's just the standard idiom, isn't it?

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

#56

Post by ksec »

dxuh wrote: post #33
arcticbull wrote: post #10

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…

I have income and I have costs. Why is my income not completely offset by my costs? I'd love to spend more money to pay fewer taxes. My labor is turned into profits for my employer and similarly their profit is eventually taxed. In that sense my labor doesn't have to be taxed directly either. Why is it? I think it's absurd that one the hand they are reporting revenue to shareholders and on the other hand they are rep…

Because part of their cost is to pay for your income. You also get Tax deduction on certain "cost" as well. Just not everything.

> My labor is turned into profits for my employer and similarly their profit is eventually taxed.

Your labour is tuned into revenue first. There are plenty of companies burning through cash for 10 years before making a single cent of profits.

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

#57

Post by ffsm8 »

JumpCrisscross wrote: post #48
purplethinking wrote: post #44

Earlier quoted context omitted.

An interesting thought experiment what would happen if we treated people as corporations. I guess we'd have to raise income taxes quite a bit to make ends meet, as most people spend everything they make.

> what would happen if we treated people as corporations You'd rename line items and move on. Companies can't deduct any expense. The chief ones are things they've already paid tax on, e.g. wages subject to payroll and purchases subject to sales taxes.

Uh, isn't that exactly like it is for people? They pay taxes on income and VAT

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

#58

Post by jared_mccluskey »

Frieren wrote: post #31
jared_mccluskey wrote: post #4

Deprecation, loss, etc. Standard for every company. Is this supposed to be an own or something?

> Standard for every company. That Apple, Google, Amazon, etc do not pay their taxes either makes it worse not better. The rich have accumulated a lot of money, that is killing the economic system. Redistribution of that wealth is needed for the system to continue working, and taxation is part of the solution.

All you told me is that you don’t understand how depreciation and loss works. If you lose money, why should that be taxed?

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

#59

Post by mihaic »

JumpCrisscross wrote: post #50
mihaic wrote: post #47

Earlier quoted context omitted.

You've said something true that misses the point. Taxation disproportionately comes from wages, and most in the middle class can't avoid them, even though they are a pillar of the economy.

> Taxation disproportionately comes from wages, and most in the middle class can't avoid them Totally correct. Ironically, a classic labour vs. capital argument holds water better than people vs. corporations. We absolutely tax returns on labour too much in America and capital not enough. That doesn't really result in concluding that we should let people deduct more expenses or corporations pay on their top line. You…

Well, in this case I think the subject also is corporations v. people, as people can't lobby to Congress to get tax breaks. In this particular issue, the problem is both that corporations aren't taxed enough AND that they can evade the law by getting special dispensations.

I'd be upset the most at:

> Congress might give Tesla even more tax breaks. A bill passed by the House of Representatives in the previous Congress would have retroactively reinstated a provision allowing full expensing of research and development expenses which could save the company up to $2.4 billion in taxes.

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

#60

Post by arcticbull »

Ekaros wrote: post #52
JumpCrisscross wrote: post #21

Earlier quoted context omitted.

> 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…

It really comes to simple process lot of companies operate. They buy some materials, they spend some labour to refine it, sell it, ship it. And what is above all these costs is profit. Taxing them on what they sold for, is not really sensible say with fuel, a low margin product. Now what can be called cost is very reasonable question. Clearly dividends or stock buybacks should not be costs. And thus such spending sho…

> Taxing them on what they sold for, is not really sensible say with fuel, a low margin product.

That's what SF instituted with Prop C -- only to see an exodus of low margin tech companies.

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