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Zoom will pay zero federal taxes due to tax credits from previous years

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Re: Zoom will pay zero federal taxes due to tax credits from previous years

#21

Post by bkirkby »

question000 wrote: post #17
zpeti wrote: post #9

Earlier quoted context omitted.

But hey, at least we got thousands of clicks from outraged people about tech companies not paying taxes? KPIs met! Win!

Is this sarcasm? Why wouldn't I still be outraged? Because they have "tax credits". Okay can I as individual get tax credits by going into debt? If I can't "tax credits" then Zoom shouldn't get them. It's just common sense. Seriously the current tax structure in the United States seems to be anti-human being. Humans have to pay up front in cash 100% each year, corporations can just claim they are writing off debt, ap…

Can you, as an individual, provide the value of a Zoom that benefits society? Are you paying thousands of people a salary (paying taxes on their salary)? Are you providing a service that people are using to, ostensibly, make their lives better?

If so, you should incorporate +and probably already do if you happen to employ thousands of people) since laws around incorporating are there to encourage people to take the risk of providing these values.

Societies that burden business with taxes generally do not understand that businesses are the lifeblood of economy and draining the lifeblood makes the economy sick.

Re: Zoom will pay zero federal taxes due to tax credits from previous years

#22

Post by bkirkby »

TheAdamAndChe wrote: post #15
ephextom wrote: post #6

Or, told another way: For several years, Zoom has spent much more than it has earned ($300M more in fact), on expenses like staff, rent, services and supplies from other companies - which will have generated large amounts of income taxes, payroll taxes, sales taxes, franchise taxes, municipal taxes, etc. This past year they have grown dramatically, and will have generated even more income taxes, franchise taxes, muni…

They don't have to pay taxes this year because they didn't make money in previous years? How are previous years relevant to this year? I know what they're doing is legal, but it sure is silly. Their net loss over the last few years wasn't because they couldn't have been profitable. It was part of their business strategy.

A strategy that grew their capacity to provide value to the world.

The economy is more complex than "look, money, let's take it for government."

Re: Zoom will pay zero federal taxes due to tax credits from previous years

#23

Post by rayiner »

ephextom wrote: post #6

Or, told another way: For several years, Zoom has spent much more than it has earned ($300M more in fact), on expenses like staff, rent, services and supplies from other companies - which will have generated large amounts of income taxes, payroll taxes, sales taxes, franchise taxes, municipal taxes, etc. This past year they have grown dramatically, and will have generated even more income taxes, franchise taxes, muni…

Exactly. Carryover losses are a way of dealing with the fact the tax code seeks to impose taxes on a continuous variable (gains in wealth) but samples at discrete intervals (yearly). They’re necessary to avoid distortion that would result if a company with -$50 one year and $70 the next were taxed much more heavily than one that earned $10 two years in row. The alternative would be to give refunds for losses.

Re: Zoom will pay zero federal taxes due to tax credits from previous years

#24

Post by TheAdamAndChe »

bkirkby wrote: post #22
TheAdamAndChe wrote: post #15

Earlier quoted context omitted.

They don't have to pay taxes this year because they didn't make money in previous years? How are previous years relevant to this year? I know what they're doing is legal, but it sure is silly. Their net loss over the last few years wasn't because they couldn't have been profitable. It was part of their business strategy.

A strategy that grew their capacity to provide value to the world. The economy is more complex than "look, money, let's take it for government."

Yes, and they've been rewarded with profits and a soaring stock price. Why shouldn't they pay taxes for that? It's undoubtable that they used federal and public infrastructure in the process of making and growing the company.

Re: Zoom will pay zero federal taxes due to tax credits from previous years

#25

Post by gruez »

erhk wrote: post #16
zpeti wrote: post #9

Earlier quoted context omitted.

But hey, at least we got thousands of clicks from outraged people about tech companies not paying taxes? KPIs met! Win!

Why should income tax be a substitute? Where is my subsidy for having gone into debt for a degree?

Because corporations are taxed on profit but you as an individual are taxed on income.

Re: Zoom will pay zero federal taxes due to tax credits from previous years

#26

Post by [deleted] »

bkirkby wrote: post #22
TheAdamAndChe wrote: post #15

Earlier quoted context omitted.

They don't have to pay taxes this year because they didn't make money in previous years? How are previous years relevant to this year? I know what they're doing is legal, but it sure is silly. Their net loss over the last few years wasn't because they couldn't have been profitable. It was part of their business strategy.

A strategy that grew their capacity to provide value to the world. The economy is more complex than "look, money, let's take it for government."

[deleted]

Re: Zoom will pay zero federal taxes due to tax credits from previous years

#28

Post by MrPowers »

Federal income taxes are highly economically inefficient. They create a huge deadweight loss of taxation (productive employees wasting their time helping corporations comply with tax law).

Land and gas are economically efficient to tax. They don't have a big deadweight loss of taxation and create positive incentives.

The Federal government creates tax laws that corporations need to follow. The government added the concept of net operating loss carryforwards to the tax law. Not looks like government officials are complaining about the rules they added to the tax code.

I used to work with the Section 482 tax laws for pricing among multinational enterprises. I found the laws to be complicated and ridiculously impractical, particularly the residual profit split method for valuing intellectual property. Many companies used these laws to shift IP offshore. Politicians are made about the tax structures that were created following their laws.

This isn't a democrats / republicans thing. Both political parties are adding tons of rules to an already bloated US tax code. And congress is constantly upset about the rules they have created.

Re: Zoom will pay zero federal taxes due to tax credits from previous years

#29

Post by TheAdamAndChe »

bkirkby wrote: post #21
question000 wrote: post #17

Earlier quoted context omitted.

Is this sarcasm? Why wouldn't I still be outraged? Because they have "tax credits". Okay can I as individual get tax credits by going into debt? If I can't "tax credits" then Zoom shouldn't get them. It's just common sense. Seriously the current tax structure in the United States seems to be anti-human being. Humans have to pay up front in cash 100% each year, corporations can just claim they are writing off debt, ap…

Can you, as an individual, provide the value of a Zoom that benefits society? Are you paying thousands of people a salary (paying taxes on their salary)? Are you providing a service that people are using to, ostensibly, make their lives better? If so, you should incorporate +and probably already do if you happen to employ thousands of people) since laws around incorporating are there to encourage people to take the r…

If companies are the lifeblood of the country, then the government is the bones. It provides absolutely necessary infrastructure like roads, water, sewers, and law enforcement. It provides economic and social stability through fiscal controls and food subsidies. It provides an educated population through schools.

When viewed this way, the vitriol arising from a large company not paying taxes makes sense. The entire organism requires coordination in order to survive, and the government and companies need to work together and support each other in order to thrive.

This isn't even going into the outrage arising from the fact that large companies are treated very differently from small businesses and individuals.

Re: Zoom will pay zero federal taxes due to tax credits from previous years

#30

Post by MrPowers »

question000 wrote: post #17
zpeti wrote: post #9

Earlier quoted context omitted.

But hey, at least we got thousands of clicks from outraged people about tech companies not paying taxes? KPIs met! Win!

Is this sarcasm? Why wouldn't I still be outraged? Because they have "tax credits". Okay can I as individual get tax credits by going into debt? If I can't "tax credits" then Zoom shouldn't get them. It's just common sense. Seriously the current tax structure in the United States seems to be anti-human being. Humans have to pay up front in cash 100% each year, corporations can just claim they are writing off debt, ap…

Yes, you as an individual can get tax credits. If you own foreign stocks, you pay foreign taxes and get a US tax credit for the foreign taxes paid. Or if you lose money on a stock (and realize the loss by selling), you get tax credits.

Sounds like you're questioning the validity of the concept of a tax credit, a fundamental and necessary component of income taxation. Income taxation is economically inefficient, but if it's implemented, deductions / credits are vital.

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