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Some voters are sick of companies like Amazon paying no corporate tax

nytimes.com

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Re: Some voters are sick of companies like Amazon paying no corporate tax

#131

Post by will_brown »

cascom wrote: post #121
will_brown wrote: post #112

Earlier quoted context omitted.

>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.

Who would then make an even bigger profit, for no tax savings

you do know that this is a well known tax avoidance strategy right? The profits would be later used to offset the losses carried forward by the parent.

Are you an accountant/CPA or attorney?

Re: Some voters are sick of companies like Amazon paying no corporate tax

#132

Post by ex_ex_nihilo »

jdhn wrote: post #95
glerk wrote: post #91

> Colin Robertson wonders why he pays federal taxes on the $18,000 a year he makes cleaning carpets, while the tech giant Amazon got a tax rebate. Who cares about what Colin Robertson thinks?

There's also no way that he doesn't get a massive refund at the end of the year based on his salary.

Yes, if he's married filing jointly the standard deduction is $24k. Meaning he pays zero taxes. If he's unmarried his standard deduction is still most of his salary (~$12k), and the remaining amount would fall into the 10% tax bracket. But he would qualify for tax credits with income that low. Also very likely social services and safety nets. His effective income tax rate should be negative.

Reading these comments, it's apparent most people have no idea how this shit works. I thought here of all places, I wouldn't see people falling into the "I don't understand how progressive tax brackets work" trap.

Re: Some voters are sick of companies like Amazon paying no corporate tax

#133

Post by icebraining »

ikeboy wrote: post #53
icebraining wrote: post #43

Earlier quoted context omitted.

If Amazon was selling at a loss until 2016 (almost twenty years since their IPO) where was the rest of the money coming from?

AWS

That may account for half the time, at most.

Re: Some voters are sick of companies like Amazon paying no corporate tax

#134

Post by elliekelly »

TheBobinator wrote: post #27
seunosewa wrote: post #5

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…

Go look at Amazon's 8k and 10k filings; If memory serves it wasn't until 2015 or 2016 they turned a profit after almost 2 decades. It's been illegal, under racketeering laws, to sell at a loss in order to capture a market for a long, long time, and that's the real story here. Republicans and Democrats have let that one go; blaming political parties is a straw-man argument. They expect to utter the words and hope you…

> It's been illegal, under racketeering laws, to sell at a loss in order to capture a market for a long, long time, and that's the real story here.

You're thinking of an antitrust violation, not racketeering. The Sherman Antitrust Act prohibits any "attempt to monopolize" which includes predatory pricing. Racketeering is running a criminal organization for-profit (a Ponzi scheme, dealing dreams, illegal gambling, loan sharks, prostitution, etc.).

Re: Some voters are sick of companies like Amazon paying no corporate tax

#135

Post by icebraining »

lugg wrote: post #47
TomMarius wrote: post #31

Earlier quoted context omitted.

Not turning a profit does not mean or even imply selling at loss at all.

It does actually. Cost of doing business includes all costs. If amazon believes they need to spend money on R&D then that R&D is a cost of doing business, if its not turning a profit with that R&D spending then the business is not sustainable by definition. Amazon was not doing R&D for shits and giggles. Just because the time horizon was long doesn't mean it wasn't any less of a requirement for their success. Amazon…

> if its not turning a profit with that R&D spending then the business is not sustainable by definition.

Why? If the revenue perfectly matches the expenses (including R&D), it won't turn a profit, but it can be sustained indefinitely.

Re: Some voters are sick of companies like Amazon paying no corporate tax

#136

Post by kamarg »

AlexTWithBeard wrote: post #64
civilitty wrote: post #16

Earlier quoted context omitted.

Those all sound like corporate tax policies. That's literally what they're talking about. Clearly, a growing portion of the electorate doesn't like those policies. That's the first step in democracy, no? Engagement?

No. The only thing worse than a fool is an engaged fool. First educate the people, then crank up the engagement. Doing it in the opposite order is a recipe for disaster.

That kind of sounds like you're saying "These people aren't smart enough to have a say in how their lives are run".

Re: Some voters are sick of companies like Amazon paying no corporate tax

#137

Post by icebraining »

tomohawk wrote: post #88
notacoward wrote: post #80

> carryforward losses from years when the company was not profitable The idea of carrying forward losses in general is sound, but I'm beginning to wonder if there should be an exception. If the loss is intentional, using investment instead of profit to drive growth, I'm not so sure those losses deserve to be carried forward. Probably an unpopular opinion here on HN, but I think denying reductions in those cases would…

Agree that these companies are using the tax code to write off losses that they are intentionally incurring in order to achieve a lower cost point than their (profitable) competitors. This is a very predatory practice that should be ended. Companies should compete in the marketplace. Having tax payers foot the bill for some companies disruption gambit makes no sense.

Any new company, including a mom&pop restaurant or whatever, will have startup costs that established companies do not (e.g. buying equipment, training people, etc). How do you propose to distinguish those from these "predatory" losses? Or should those losses not be carried over either?

Re: Some voters are sick of companies like Amazon paying no corporate tax

#138

Post by dcosson »

chii wrote: post #19
seunosewa wrote: post #5

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…

> carryforward losses from years when the company was not profitable yes, this definitely should be talked about. Why can't people's income be carried forward like this as well? If i made a lot of money one year, why can't i claim away taxes from years that i didn't make income (such that my tax bracket is lower)?

None of the “well actually” replies you’re getting has yet mentioned that carrying forward personal capital losses is capped at $3000 per year. How could anyone argue that is remotely the same as Amazon avoiding billions in taxes?

There are also a lot of other ways companies get much more favorable tax treatment than people — for one thing just very fundamentally, they are taxed on profits but people are taxed on revenues, with no ability to deduct most major costs like paying rent or healthcare bills below a very high cutoff.

Kind of a tangent here but I can’t help thinking about this discrepancy when I hear about ISAs, and how people should be able to use the funding methods that companies do like selling shares in themselves. You can be a company but without any of the favorable treatment!

Re: Some voters are sick of companies like Amazon paying no corporate tax

#139

Post by [deleted] »

_Microft wrote: post #45
bedhead wrote: post #23

The intellectual dishonesty of this from allegedly smart people continues to astound me. Amazon has little-to-no taxes mainly because they have such low taxable income in the first place because they spend so much in R&D and other things. They’re actually creating jobs and new businesses rather than showing massive profits and paying a ton in taxes. I have no doubt they take advantage of perfectly legal tax code item…

Taxes are no end in itself, they are necessary to provide the infrastructure (streets, legal system, ...) so that people and businesses can thrive. Not wanting to contribute to that is the epitome of free-riding.

[deleted]

Re: Some voters are sick of companies like Amazon paying no corporate tax

#140

Post by achenatx »

subchapter S (and other pass through) corporations pay no corporate income tax at all. this is the majority of small businesses.

Corporations ultimately distribute their profits to actual people. Those people will pay tax on that income.

It isnt automatically obvious that corporations should pay any taxes on income (or revenue) until it is distributed to actual people (shareholders and employees). We tax the profit of larger corporations because we can and because we need the tax dollars, not because there is some moral imperative to do it.

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