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

Post by andruby » Mon, Apr 05, 2021, 12:39 PM UTC

symlinkk wrote: post #129

PragmaticPulp wrote: post #124

Earlier quoted context omitted.

> Human beings cannot do the equivalent. Spend the entirety of your 20s making very little money because you are investing in growth That’s not really an equivalent, though. These companies aren’t simply giving up opportunity cost. They’re spending real money on real R&D expenditures. In software, that R&D expenditure is largely wages for developers like us. The tax code gives companies benefits for spending this R&D…

That doctor is spending real money on attending medical school, which pays professors. It is an equivalent.

Post by kube-system » Mon, Apr 05, 2021, 12:42 PM UTC

londons_explore wrote: post #135

hnmullany wrote: post #52

Netflix recorded a worldwide income tax accounting expense of about 13.7% last year ($438M on $3.2B of Net Income). It also paid cash taxes of $292M (cash taxes differ from accounting taxes because of timing issues - just like revenue is not the same as cash-in). A lot of growing companies have US taxes that are quite low because they lose money for a long time while they're investing in growth. When they finally bec…

I wonder what would happen if an entirely new approach to taxation were tested. A jury of 12 random people would inspect a companies accounts, assets etc and decide if the tax paid is "fair". The jury would have no training in tax matters, but would be presented documents produced by the government and the company to argue their cases. If the tax paid is found to be unfair by the jury, the company gets nationalised w…

Post by bradleyjg » Mon, Apr 05, 2021, 12:45 PM UTC

Schiendelman wrote: post #161

ysavir wrote: post #136

Earlier quoted context omitted.

> That's not equivalent. An equivalent example would be a person who makes a large amount of money in their 20s, but spends the majority of it on things that could conceivably appreciate, such that their income artificially represents a loss. Then all of a sudden, whatever they spent money on becomes extremely profitable in their mid 30s. Like someone getting a $150k student loan to go to college and/or post-college…

A loan isn’t a loss. A business can’t deduct that either.

Post by fitchjo » Mon, Apr 05, 2021, 12:48 PM UTC

bradleyjg wrote: post #156

Naga wrote: post #143

Earlier quoted context omitted.

The purpose is to equalize the amount of tax that companies pay. Consider the following example: Assuming a tax rate of 30%, Company A has net income (profit) of $100 in year 1 and $100 in year two pays $60 in tax on a total profit of $200. Company B has a net loss of $100 in year 1 and net income of $300 ni year 2 has a total profit still of $200. Assuming loss carryforwards are allowed, Company B pays $60 in tax st…

I understand why the rule exists. What I don’t understand is why a similar rule doesn’t exist for people. Here’s another example of where it could help. Take two men, one earns $75k/year (let’s say inflation adjusted) for thirty years as a bus driver. The other plays in the NFL for 1 year makes $2MM and thereafter only makes $250k over the next twenty five years. They’ve made the same amount of money over their lifet…

Post by kube-system » Mon, Apr 05, 2021, 12:49 PM UTC

varispeed wrote: post #112

isbvhodnvemrwvn wrote: post #106

Earlier quoted context omitted.

> Progressive tax ensures that person from poor background will stay poor. How so? With progressive tax there is no point at which you make less money than if you had less income.

If you cross a threshold from 20% to 40%, for every £1000 made over that threshold you pay £400 instead of £200. Sure you are still making more money, but suddenly you don't have that £200 that you could save or invest.