111–120 of 175 posts
Taxing profits (as opposed to revenue, value add, capital gains..) is the ultimate quixotic temptation for politicians. On paper, it is a fantastic tax. Google, Apple, FB, Amazon... all the new economy winners are very profit able, 20% - 30% margins & fast growth are expected (and priced into market caps). They're so profitable that money is just piling up, atm. They can't usefully invest it all. This means you can t…
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A company paying a cost of $50 to produce widgets for 1 year (and don't sell any that year), then selling all the widgets on the 2nd year for a profit of $100, can claim that they made a loss of $50 in the previous year, and therefore only have $50 that's taxable. A person who works for 1 year for $100 income, then stops working the 2nd year (and live off their income from the 1st year), must pay their taxes at the $…
Sorry that is not how it works - basic tenets of accounting (matching revenues and costs) those widgets would sit on the balance sheet and no loss would be recognized in year 1 and just profit in year 2
Unless of course the company manufacturing the widgets (A) sells them to a wholly owned subsidiary (B) for a loss...then A can take the deduction.
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"I have rent and bills to pay regardless of whether I'm making money, that is the definition of making a loss." That is not a loss. That is an exchange of value; you pay $100 for your heating bill and receive $100 of heating. A loss is when you have some value, and it disappears, and you have no compensating value. Buying a stock at $100 and selling it at $50 is a transaction in which you have less money at the end t…
Paying wages and by extension R&D is nothing more than business expenses. It's hard to see why that qualifies as losses that can be used to offset future earnings. I'm sure there is an "explanation", but that is ultimately what people are upset about. It has lead to where they are today and to many people that doesn't sit well.
If most people feeling their way through this problem got their way, they'd simply destroy businesses entirely. They wouldn't necessarily mean to, and only a handful of people would actually appreciate that as a result, with even fewer of those would appreciate it after ten years of experiencing it, but it would be the result.
This is a thing that has happened, and can be studied in history, and is actually happening in the world right now; countries have destroyed their entire business base for good, feel-worthy reasons. Generally speaking, most people have not liked the results. It is not a thing that is beyond the pale, or impossible to happen, or can't happen here, so it's worth encouraging people to be more careful than just feeling.
(This is more opinion than the above, but I don't really believe in the existence of "businesses that aren't taxed", because the business is non-trivially responsible for all of the income tax their employees generate, and directly pay Social Security, health care taxes, sales tax on all the things they buy, and so on. It isn't really the case that there are companies that reach the end of their fiscal year and not a single dollar was "paid in taxes". All it is is that they aren't necessarily paying income taxes, one particular tax, in a field full of lots and lots of taxes. The idea that "companies aren't being taxed" is a lot of rhetoric, which isn't intrinsically a problem, but it can be very misleading and lead to emotions not well-calibrated with reality. By this standard, there's actually a lot of Americans who "don't pay taxes" too, which really makes it all seem a great deal less unfair, and even pay negative taxes, but they still pay various taxes even so, because income is only one taxation element.)
Voters are sick of it because of a general misunderstanding of corporate taxes, and sensationalized headlines are just making it worse.
It is probably the case that profitable companies pay too little in tax, but articles like this are misleading as hell.
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I agree that engagement and discussing policies is important. But it does feel disingenuous and aimed at provoking outrage (to trigger a knee-jerk reaction) when you just mention a fact like "look at these rich guys that don't share anything!" and ignore the context of why it got to be the way it is. And I'm not saying that there aren't changes that could and should be made. Just that this particular article doesn't…
I'm fine with outrage-inducing propaganda against people who have tens or hundreds of billions of dollars since that class as a whole spends so much time putting out propaganda in their favor. I'm not particularly interested in the details as long as it elevates consciousness about the inherent problems with a society that allows Jeff Bezos to have more money than he could spend in ten thousand lifetimes while millio…
Out of all the rich people we could talk about, Bezos is actually one of the ones I have the least problem with. Bezos has a lot of money, but he doesn't have tens of billions of dollars of "money". His net worth is mostly tied up in Amazon ownership, and if he tried to liquidate more than a small fraction of it then it'd suddenly be worth much less, both because of increased supply, and because Amazon's value is very tied up in his ability to drive the company. Maybe we could talk about problems with a system that allow Amazon to be worth as much as it is, but for the founder of a company to be worth a lot because they built a big company, that doesn't seem like a problem to me.
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I agree that engagement and discussing policies is important. But it does feel disingenuous and aimed at provoking outrage (to trigger a knee-jerk reaction) when you just mention a fact like "look at these rich guys that don't share anything!" and ignore the context of why it got to be the way it is. And I'm not saying that there aren't changes that could and should be made. Just that this particular article doesn't…
Fair enough. I agree that the word count would much better be spent on discussing the relevant legislation and resulting tax codes. But let me be honest. I wouldn't read that story. I'm not a tax policy wonk, nor am I qualified to opine on the legislative process except to express exasperation at the gridlock. I am however qualified to vote for candidates who are and that first requires awareness of the issues, a top…
The article is reluctant to mention the reason why they got those tax rebates, and focuses on the way people feel about it. This seems like bad journalism. According to CNBC, “Amazon's low tax bill mainly stemmed from the Republican tax cuts of 2017, carryforward losses from years when the company was not profitable, tax credits for massive investments in R&D and stock-based employee compensation.” https://www.cnbc.c…
Do we have any more information on this line item? I'm in a position where over 1/2 of my income is via RSU grants from my employer. If those are deductible from corporate taxes, that seems to make sense since they are treated as regular income to the recipients, just like salaries (other payroll taxes, etc. are another story). I know there are other forms of equity-based compensation as well. I'm curious to see how these things work.
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Can you prove that all the other businesses that didn't survive, either online or shops weren't has much jobs than the one Amazon provide? Also, all the taxes that they don't pay needs to be paid by others. For each optimizations done by those companies, it's as much money that needs to be paid by others as each country runs on a budget that is mainly based on taxes. Them not paying taxes as a direct impact on taxes…
It’s hard to compare to other businesses because amazon cannot capitalize R&D. If they spend $1bn on software dev and Tesla spends the same amount on a factory, Amazon’s ebitda is down $1bn and Tesla’s is only down ~$100M.
Says software is capitalized over 3-5yrs. The difference is that software dev costs usually grow smoothly year over year but gigafactory launches are spiky
Taxing profits (as opposed to revenue, value add, capital gains..) is the ultimate quixotic temptation for politicians. On paper, it is a fantastic tax. Google, Apple, FB, Amazon... all the new economy winners are very profit able, 20% - 30% margins & fast growth are expected (and priced into market caps). They're so profitable that money is just piling up, atm. They can't usefully invest it all. This means you can t…
Would a VAT be preferable?
But it's not a tax on profits. It's more like a sales tax.
The difference is market distortion. A VAT has more consequences. Higher prices, possibly some impact on employment and/or GDP.
So, in practice it's preferable because it's possible. In theory it's worse because corporate income is more efficient.