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Netflix Posted Biggest-Ever Profit in 2018 and Paid $0 in Income Taxes

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Re: Netflix Posted Biggest-Ever Profit in 2018 and Paid $0 in Income Taxes

#431

Post by smsm42 »

driverdan wrote: post #34

Rather than being outraged at the headline, what are the actual details? Why were they able to pay no taxes? Was it due to carried losses or something like that? Anyone mad at a company for not pay taxes is misdirecting their anger. Companies follow the law. If you don't like the law elect different politicians. Don't get mad at companies that follow the law.

Judging from the text of the article:

> Netflix did it twice, and paid an average tax rate of 13.6 percent over the eight-year period

Carryover losses is the most likely reason, and focusing it on only one year makes for a good headline but terrible economic/policy analysis.

Re: Netflix Posted Biggest-Ever Profit in 2018 and Paid $0 in Income Taxes

#432

Post by SilasX »

jayess wrote: post #427
SilasX wrote: post #189

Earlier quoted context omitted.

It is that simple (in the sense of the parent's post): you need to know the specifics of why they were paying no taxes. If, as in the comment, they were carrying over losses, then there's nothing really objectionable. You lost $10 million last year. You profited $10 million this year. Over a reasonable horizon, you weren't profitable. Did they get a specific exemption against the public interest that no one else got?…

So many replies to your comment, but no one seems to be able to answer the question. Articles like these manufacture outrage with no detail whatsoever on why the company paid no income taxes.

I tried to dig out an answer, but the site was down and so was the Google cache!

Re: Netflix Posted Biggest-Ever Profit in 2018 and Paid $0 in Income Taxes

#433

Post by smsm42 »

anigbrowl wrote: post #350
OrwellianChild wrote: post #309

Earlier quoted context omitted.

If the average worker has any stock or index fund investments, that worker absolutely can take advantage of this (in the U.S.). It's called tax-loss harvesting - worth reading about here [1]. [1] https://www.madfientist.com/tax-loss-harvesting/

There is no good reason investment income should be privileged over income from labor.

One of the reasons why it makes sense to have different rules for investment income is investment income tax (at least if you're investing in a corporative stock) is a double tax - the corporation you invest in is taxed on its profit (so your income from it is less than it would be) and then your income from it is taxed again. It kinda makes sense that parts of the double tax would be less than the single one.

Of course, there's a political component of it too - taxes are always political, and are used to promote or suppress certain actions. I guess the government does want to promote long-term investment and thus defines lower tax rates for this activity.

Re: Netflix Posted Biggest-Ever Profit in 2018 and Paid $0 in Income Taxes

#434

Post by Spivak »

JDiculous wrote: post #388
chongli wrote: post #283

Earlier quoted context omitted.

Why is it so naturally assumed to be acceptable for a business to do it? Because a business isn't a person. Taxing a business is taking real money away from payrolls, money that would get taxed again anyway once it was paid out. Corporate income tax only makes sense when you look at it as a barrier to entry for competition in the marketplace. Big companies like Netflix know how to avoid taxes. Small companies don't.…

> Taxing a business is taking real money away from payrolls By that same logic, taxing personal income is akin to taking money away from the goods/services/investments that that person would've spent that foregone income. There's nothing special about businesses that warrants them special privileges.

The special privilege is that a business is a group of people all of which get taxed individually.

Money goes into the business, gets taxed, and then goes to employees and taxed again or to shareholders as profits and taxed again.

Why tax twice?

Re: Netflix Posted Biggest-Ever Profit in 2018 and Paid $0 in Income Taxes

#436

Post by Charlaxy »

tomnipotent wrote: post #295
Charlaxy wrote: post #101

Earlier quoted context omitted.

Or we could elect people who can't be bought by lobbyists because they have principles. I was taught in poli-sci classes that the single biggest issue wasn't so much the principles of law makers as it was their capabilities and their staff. Most law-makers are incapable of doing the (sometimes overwhelming amount of) work, and rely on hiring professionals to work as a team to review law and then tell the law-makers h…

> Or we could elect people who can't be bought by lobbyists because they have principles Don't see how idealism and fantasies of heroes is going to make our government better. How about we stop expecting mythical people to exist and come save us from the bad guys.

Mythical people are the only ones who have made systemic change. They overcame all of the people who said, "Get real, that'll never happen."

Re: Netflix Posted Biggest-Ever Profit in 2018 and Paid $0 in Income Taxes

#437

Post by smsm42 »

awakeasleep wrote: post #398
SilasX wrote: post #189

Earlier quoted context omitted.

It is that simple (in the sense of the parent's post): you need to know the specifics of why they were paying no taxes. If, as in the comment, they were carrying over losses, then there's nothing really objectionable. You lost $10 million last year. You profited $10 million this year. Over a reasonable horizon, you weren't profitable. Did they get a specific exemption against the public interest that no one else got?…

Your argument is a form of 'this is too complicated for you to understand' .. aka bullshit. The average joe doesn't need to grok the whole tax code to know it's wrong when one of the most high profile profitable companies doesn't pay any income tax. That indicates the system is fucked. There isn't a technicality in the universe that will indicate that somehow our perception is wrong.

> The average joe doesn't need to grok the whole tax code to know it's wrong when one of the most high profile profitable companies doesn't pay any income tax.

The problem is that this is false. I mean, it is true on very short term - but then you can as well be outraged about Netflix not paying taxes this Monday, and ignore the fact that they paid tax on Thursday. If you read the article and try to figure out what it actually says, you'll find out that they do pay taxes (albeit, claimed that at lower rate - 13.6% - no idea why, or how it was calculated, based on what, so one can't verify it) even if they didn't pay income taxes (they probably still pay a lot of other taxes) in one particular period of time. If the average joe can't grok this, it's ok, but then it's probably premature for the average joe to have an opinion on the tax policy. Not that this ever stopped anybody...

> That indicates the system is fucked.

No it does not. It indicates that a clickbait article successfully triggered you into an outrage fit without informing you or enhancing your knowledge.

> There isn't a technicality in the universe that will indicate that somehow our perception is wrong.

If you actually read the article, you'll easily find out why your perception is wrong. It plainly says that Netflix does pay taxes, if you bother to look beyond one single year. Given how many corporations are in the US, and how uneven business cycle and investment/profit undulations are, there always would be cases where some corporation lost a ton last year, and then made some profit this year, but this profit is offset with last year's loss, so they pay little or no taxes in single year. You can always find such examples and blow an outrage out of it. But if you bother to understand it, then you'd see there's nothing to be outraged about - if the profits over longer term are higher than losses over the same term, it will be taxed. Maybe not this year but next - who cares.

Re: Netflix Posted Biggest-Ever Profit in 2018 and Paid $0 in Income Taxes

#438

Post by dlp211 »

anonymous5133 wrote: post #417
anigbrowl wrote: post #350

Earlier quoted context omitted.

There is no good reason investment income should be privileged over income from labor.

lol yes there is. If investment income is taxed at 50% (top federal bracket + top state income tax rate) then who in their right mind is going to risk their capital? lol, I know I absolutely wouldn't.

That is not how marginal tax rates work. I'm also completely fine moving to an inflation based basis system if capital gets the same tax treatment as labor.

Re: Netflix Posted Biggest-Ever Profit in 2018 and Paid $0 in Income Taxes

#439

Post by smsm42 »

objektif wrote: post #418
SilasX wrote: post #403

Earlier quoted context omitted.

No, it's the opposite. It's saying, "get the facts first", and I gave a few examples (some positive and some negative), at a high level of abstraction, of what would and wouldn't be objectionable. I completely agree that you shouldn't need to know the whole tax code to say, "deducting arbitrary figures for payments to a foreign subsidiary shouldn't be allowed and is shady". But "profits didn't cancel out recent losse…

It is really contreversial to have a defensive tone when it comes to corporate taxes. Tell me a year you made money and paid 0 taxes. Or anyone? Why cant we have a sceptical approach when the topic in question is large corps?

Most of people here do not rely 100% on investment income, I assume, thus such a situation would be impossible for them, since labor income tax does not allow to deduct this much. But I have successfully lowered my taxes at occasion where I incurred some substantial investment losses (the startup I owned stock in folded). It didn't make my tax to zero (and thank God, because this would mean I've lost as much as I make, I don't want this kind of losses) but it did reduce my taxes.

> Why cant we have a sceptical approach when the topic in question is large corps?

Sure we can, in fact we must. But skeptical approach means get the facts, verify them, then make decision. Not read the outline, feel outraged, reject any reasonable explanation because we must be skeptical about large corps. Having losses carried over from previous years is nothing wrong, and one part of being skeptical is being able to recognize there's no "there" there, and move on.

Re: Netflix Posted Biggest-Ever Profit in 2018 and Paid $0 in Income Taxes

#440

Post by T2_t2 »

objektif wrote: post #418
SilasX wrote: post #403

Earlier quoted context omitted.

No, it's the opposite. It's saying, "get the facts first", and I gave a few examples (some positive and some negative), at a high level of abstraction, of what would and wouldn't be objectionable. I completely agree that you shouldn't need to know the whole tax code to say, "deducting arbitrary figures for payments to a foreign subsidiary shouldn't be allowed and is shady". But "profits didn't cancel out recent losse…

It is really contreversial to have a defensive tone when it comes to corporate taxes. Tell me a year you made money and paid 0 taxes. Or anyone? Why cant we have a sceptical approach when the topic in question is large corps?

GP IS skeptical, by asking that the facts be made clear. The non-skeptical people are the ones implying "this MUST be wrong just because".
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