Earlier quoted context omitted.
If 0% is how they work, then they don't work.
What if they pay more taxes in the future by using a system for paying less take this time?
There is no future, only today, short terms results
Tesla Paid Zero Federal Income Tax in 2024, Despite $2.3B in Income
171–180 of 267 posts
Re: Tesla Paid Zero Federal Income Tax in 2024, Despite $2.3B in Income
#172Earlier quoted context omitted.
Sure, especially if they own a corporation. My wife’s business was a net loss for a couple of years during COVID. We scrounged by on my salary so she could keep her employees and not close down for good. It got better, but our net income was negative even though we had what looked like a decent chunk of revenue. I’m glad we were taxed on net, not gross.
They were asking about private citizens, not corporations. Your wife isn't a corporation, is she?
Dude should've wifed Google
Re: Tesla Paid Zero Federal Income Tax in 2024, Despite $2.3B in Income
#173Earlier quoted context omitted.
> In what world is a massively profitable company paying almost nothing in taxes polarizing? I mean they didn't just decide not to pay taxes. They followed the tax law. They accelerated some depreciation to take it now at the expense of a higher tax bill later. They took advantage of some government credits. Corporate taxation is only one point of taxation. They pay payroll taxes, they pay sales tax on equipment they…
Something is wrong with the tax law if this is an accounting trick that only a few companies can use this effectively, which I suspect it is. I also suspect that the CEO of Tesla supposedly being placed in charge of federal agencies will somehow reduce that future tax bill. Corporate tax doesn't have to be a thing, but if it is, it needs to be applied fairly.
Depreciation schedule is arbitrary to begin with.
Say a company spends $1 billion in 2024 to build a factory.
What is the "right" number of years (depreciation schedule)? 10? 5? 3? 1?
Whatever number N you pick, tell me why it's more "right" than N+1 or N-1.
Re: Tesla Paid Zero Federal Income Tax in 2024, Despite $2.3B in Income
#174You know what’s ironic is that Tesla survived because of Obama era subsidies. They were desperate to get one private enterprise to succeed because so many solar and other “clean” energy private ventures failed during that period. So, in my view, Obama created Elon. Now the rest of America has to deal with it in addition to the abject failure that is PPACA which ballooned US healthcare costs (not that Republicans have…
Also, under Obama SpaceX got it's first big contracts from NASA, without which SpaceX wouldn't exist today. That was a risky bet then, but the government got a really good return on that investment.
Re: Tesla Paid Zero Federal Income Tax in 2024, Despite $2.3B in Income
#175Earlier quoted context omitted.
>Only people can pay taxes. But corporations are people..? Can't have it both ways right :/ Unless I'm missing something here.
Yes. Corporations are made of people, and they produce goods and services for other people. The people that compose that corporation pay the tax, or the people they sell to.
You don't understand that in the US's capitalism corporations are people. That's why they are able to use infinite money to influence elections (because in American CAPITALism, corporations' usage of money equals free speech and you can't limit people' speech). Yes, I agree, it's absolutely insane.
Google "Citizens United v. FEC" Supreme Court decision.
Conveniently, they are people only when it comes to corruption and influence. But not when it comes to rules or punishment (like if a corporation killed people, it should be possible to give it a death sentence).
Re: Tesla Paid Zero Federal Income Tax in 2024, Despite $2.3B in Income
#176Earlier quoted context omitted.
> In what world is a massively profitable company paying almost nothing in taxes polarizing? I mean they didn't just decide not to pay taxes. They followed the tax law. They accelerated some depreciation to take it now at the expense of a higher tax bill later. They took advantage of some government credits. Corporate taxation is only one point of taxation. They pay payroll taxes, they pay sales tax on equipment they…
Something is wrong with the tax law if this is an accounting trick that only a few companies can use this effectively, which I suspect it is. I also suspect that the CEO of Tesla supposedly being placed in charge of federal agencies will somehow reduce that future tax bill. Corporate tax doesn't have to be a thing, but if it is, it needs to be applied fairly.
> Something is wrong with the tax law if this is an accounting trick that only a few companies can use effectively, which I suspect it is.
Yes only a few companies could use this, but the main factor here is not really a trick. Any other company that sells electric cars and has 0-3% profit could do the same thing.
If you get a small tax credit per sale, and your taxes are 21% of 3% of your sales revenue, and that makes your taxes smaller than the credit, then you don't have to pay taxes.
Re: Tesla Paid Zero Federal Income Tax in 2024, Despite $2.3B in Income
#177I wish this article was written with a less biased tone. I'm genuinely interested in understanding it better. As far as I can tell, the article cites two things: $500M tax savings by using an accelerated depreciation schedule (unclear if they saved $500M more by using accelerated vs a regular depreciation schedule, but I assume no) and they claimed $300M in tax credits. The article doesn't address the other $1.5B, pr…
I think the point of the accelerated depreciation is roughly equivalent to taking a loan with 0% interest. It's allegedly zero-sum with respect to net income . They get to claim this income later, with various benefits, e.g. more cash on hand in the intervening period, inflation makes that "debt" less valuable later, and it's possible that the corporate tax rate will be lower in the future, so the tax rate on "this y…
The way depreciation works is that a company buys something, like a computer, which is a business expense. Then at the end of the year, you're out the $2000 that you paid, but you still have the computer, which is now a used device and is now a year older. So it's no longer worth $2000 but it's not worth nothing. Suppose it loses $500 in value. Then the book value of the asset becomes $1500 and you have depreciation expense of $500. That depreciation is the deduction for this year, they don't let you deduct the whole $2000 the year you bought it. Next year you can deduct some more, until the book value of the asset is scrap or you dispose of it or sell it.
Estimating how much value it lost is subjective so the government specifies what percent of the value you can deduct each year. Straight line deprecation is when the depreciation expense is the same percentage of the original cost every year. Accelerated depreciation is when the early years use a higher percentage than the later years. In both cases the total amount of depreciation is the same but accelerated depreciation is often a better approximation for actual value. The true market value of a piece of equipment will decline more in absolute dollars in the first year than the fourth year. It's also what businesses typically pick when given the choice, because a bigger deduction now is better than a bigger deduction later.
It's not any kind of tax dodge at all, it's just an accounting method in the tax code.
Re: Tesla Paid Zero Federal Income Tax in 2024, Despite $2.3B in Income
#178Re: Tesla Paid Zero Federal Income Tax in 2024, Despite $2.3B in Income
#179Earlier quoted context omitted.
Yes if you have business income. In fact it's common.
If you're using business income to invest in yourself as an individual, that's pretty illegal where I live. Maybe it's different where you are. The extent to which I can invest in myself is using business supplies or equipment for personal tasks here and there. Like, print some things or use some software I didn't pay taxes on. I know some people go as far as driving their work vehicles around, but that's totally ill…
Check out Hess v Commissioner.
For certain types of businesses the individual is almost indistinguishable from the business.
Re: Tesla Paid Zero Federal Income Tax in 2024, Despite $2.3B in Income
#180Earlier quoted context omitted.
Dang are we back to the years of the "Thanks Obama" I guess we truly live at the end of history and have no option but to rehash the classics, don't we ?
I'll stop "thanking" Obama for the ACA when health premiums go back to something sensible. But honestly I liked everything else about him.
ACA was not intended to address costs. It was a compromise to expand access without threatening the insurance industry. A more comprehensive reform had just failed.