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

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

#241

Post by gmadsen » Mon, Apr 05, 2021, 1:49 PM UTC

wtf_is_up wrote: post #235

bradleyjg wrote: post #110

Earlier quoted context omitted.

> 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 become profitable, they're allowed to roll forward those losses (within limits) to offset their profits. Human beings cannot do the equivalent. Spend the entirety of your 20s making very little money because you are investing in growth and then make $800k as an ort…

Why would you expect it to be the same (besides some nonsense appeal to 'corporations are people')?

not sure what side you are trying to argue?

The whole point, is corporations get the benefits of both, and the downside of neither. They have liability and tax advantages that people don't have, yet they also have tremendous politic power as if acting with personal free speech (citizens united)

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

#242

Post by leetcrew » Mon, Apr 05, 2021, 1:49 PM UTC

gmadsen wrote: post #236

JumpCrisscross wrote: post #232

Earlier quoted context omitted.

> Human beings cannot do the equivalent Some can. Those with assets to depreciate, for example. Frankly, the whole corporate tax debate seems manufactured to obscure the top personal tax bracket being about $500,000. Raise corporate taxes and you tax everyone with shares. That hits the rich, sure [1], but it also hits every pension fund and middle class saver. And if the corporate tax rate goes up instead of a $1mm,…

the ultra rich are paid in stocks, not salary. Raising the tax brackets wouldn't do anything

if you receive stock as compensation, it is taxed as income. if the stock wildly appreciates after that event (and is later sold), it is capital gains.

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

#243

Post by merpnderp » Mon, Apr 05, 2021, 1:50 PM UTC

gfiorav wrote: post #223

bradleyjg wrote: post #110

Earlier quoted context omitted.

> 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 become profitable, they're allowed to roll forward those losses (within limits) to offset their profits. Human beings cannot do the equivalent. Spend the entirety of your 20s making very little money because you are investing in growth and then make $800k as an ort…

Individual humans don’t employ large groups of people and don’t move forward the economy like a company does. I don’t understand why we want to equate rules for companies to rules for individuals? People say “it’s not fair”? Who’s going to employ people? The government can’t produce your salary, companies do that. Btw, many countries should regulate companies more IMO, but that’s not to say companies shouldn’t be enc…

But the example you're responding to does employ people. A surgeon will have to hire a whole host of employees to run his outpatient clinic. Or if she works in a hospital, an entire team will be built around her.

Plus there is the fairness issue. Corporations are just groups of people working together. So why does a single surgeon not get to be treated as the economic growth engine she is, but two surgeons can incorporate and get special treatment?

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

#244

Post by lm28469 » Mon, Apr 05, 2021, 1:50 PM UTC

frockington1 wrote: post #204

SavantIdiot wrote: post #190

Earlier quoted context omitted.

> A lot of growing companies have US taxes that are quite low Netflix has been around for 20+ years

They are still growing, growth can happen at any and often multiple times

Amazon and Google are still growing too.. I don't feel like these are good basis to decide who pay or not taxes.

Should we only tax companies that are collapsing ?

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

#245

Post by TuringNYC » Mon, Apr 05, 2021, 1:51 PM UTC

tlholaday wrote: post #11

> Among the mechanisms Netflix is using to achieve its next-to-nothing tax liability are accelerated depreciation (which appears to have cut the company’s tax expense by $148 million); deductions for stock options for Netflix executives and other employees ($339 million); and research and development tax credits ($113 million). These are straightforward deductions.

>> Among the mechanisms Netflix is using to achieve its next-to-nothing tax liability are accelerated depreciation (which appears to have cut the company’s tax expense by $148 million); deductions for stock options for Netflix executives...

Remember the corps used to get in trouble for not deducting stock options. Now it has turned into a "mechanism to achieve its next-to-nothing tax liability"

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

#246

Post by bzbarsky » Mon, Apr 05, 2021, 1:51 PM UTC

TuringNYC wrote: post #240

bzbarsky wrote: post #203

Earlier quoted context omitted.

If it's paid out as ordinary (W-2) income, then your top federal tax rate right this minute is 39.35% (37% regular tax, 1.45% medicare tax, 0.9% medicare surtax). If it's paid out as some sort of investment income not subject to long-term capital gains treatment (e.g. interest, non-qualified dividends), then your top federal rate is 40.8% (37% regular, 3.8% net investment tax). That does assume $500k of taxable incom…

>> If it's paid out as ordinary (W-2) income, then your top federal tax rate right this minute is 39.35% (37% regular tax, 1.45% medicare tax, 0.9% medicare surtax). There is also state tax, which can be significant (double digits), esp for top brackets.

Indeed. That varies widely, though, and corporations are subject to it too, with its own weirdnesses, so I was trying to stick to apples-to-apples federal tax comparisons.

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

#247

Post by varispeed » Mon, Apr 05, 2021, 1:52 PM UTC

Erlich_Bachman wrote: post #188

varispeed wrote: post #133

Earlier quoted context omitted.

> Does it count tax for all the employees? Why do you think it is okay for a corporation to appropriate the tax employees pay as theirs? Employee pays this tax, not the corporation.

Well it is tax money that is sent to the government and that is taken from the total amount of money that the company receives for the products it provides. If we are talking about some moral side of the issue (as the articles tries to, if I'm not mistaken), then why wouldn't we count it? I'm not saying that the company shouldn't pay a direct tax on their profit, but that I want to know the real number counting every…

That is true that in some countries the employee income is taxed at source, but it doesn't mean that the tax is not paid by the employee just because the company sends it on his or hers behalf. It is happening this way because governments don't trust people that they would send that money each month. What employees pay should be a completely separated equation, as this is what employee makes with their own hard work, not the corporation.

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

#248

Post by tyingq » Mon, Apr 05, 2021, 1:53 PM UTC

bradleyjg wrote: post #110

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…

> 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 become profitable, they're allowed to roll forward those losses (within limits) to offset their profits. Human beings cannot do the equivalent. Spend the entirety of your 20s making very little money because you are investing in growth and then make $800k as an ort…

Well, and US corporations are taxed on profits, not income...like people are.

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

#249

Post by throwaway9870 » Mon, Apr 05, 2021, 1:54 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…

Nobody in their right mind would ever create a company in that environment. No bank would lend you money. Nobody would invest. Would you invest your life savings in a company when a random jury could just take it away?

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

#250

Post by varispeed » Mon, Apr 05, 2021, 1:55 PM UTC

postingawayonhn wrote: post #238

varispeed wrote: post #127

Earlier quoted context omitted.

> Everyone they employ already pays tax. But this is their tax they pay on the money _they_ earned. Not sure why this is okay for corporations to appropriate this tax as theirs. > Everyone that gets a dividend pays tax. In my country dividend tax has a lower rate. You have this insanity where a person making money out of their hard work pays more tax than a person living off dividends and doing nothing.

But does your tax system allow for company tax payments to be offset against the tax liabilities of those receiving dividends? Here in Australia/NZ companies can provide shareholders with franking/imputation credits.

No, here dividends cannot be offset, but there used to be tax credits to improve the effective double taxation. However, I don't think this is a problem as the right way of getting money out of company should be a salary, not dividend.