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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

#461

Post by zdragnar »

esrauch wrote: post #447
smsm42 wrote: post #433

Earlier quoted context omitted.

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 cou…

There's no reason the government wants to promote long-term investment over income-producing labor, is there?

Labor doesn't necessarily generate income. Factory workers are an up-front cost converting one set of resources into another. No income is realized until that second set of resources (i.e. products) are actually sold.

Also, realize that the government does promote both labor and investments, just through different means. Lowering taxes isn't going to affect how a fully employed individual produces labor; they are trading their time for money. Lowering taxes on investment will promote more investments, since the money for those investments have already been taxed, and since the trade of investments is money-now for money-later, taxes have a much more significant influence over the extent to which someone will invest in a business. Someone fully invested in other things (non-stock commodities, etc) might move some of their investments into businesses instead.

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

#462

Post by clebio »

ramshorns wrote: post #368
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/

The average worker probably doesn't have any investments and is losing money by having more expenses than income.

The very fact that parent comment is getting downvoted shows what a bubble this (the HN) community is. If you think the average US working-class person is able to save, let alone have investments, I'd love to see some data to back that up.

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

#463

Post by crdoconnor »

smacktoward wrote: post #303
crdoconnor wrote: post #297

Earlier quoted context omitted.

>So charities and environmental groups can't lobby? They could create form letters for their members to email their representatives. Some charities I belong to operate this way. Obviously Comcast could do this too but I don't think they'd be successful getting real people to lobby on their behalf. >Furthermore, the fact that they have deep pockets is actually important. It means they reflect an important aspect of th…

> Obviously Comcast could do this too but I don't think they'd be successful getting real people to lobby on their behalf. You might be surprised; see https://en.wikipedia.org/wiki/Astroturfing for the way it's usually done.

I'm sure they'd try. Astroturfing is already illegal and not all that difficult to uncover though.

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

#464

Post by smsm42 »

esrauch wrote: post #447
smsm42 wrote: post #433

Earlier quoted context omitted.

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 cou…

There's no reason the government wants to promote long-term investment over income-producing labor, is there?

There is. Basic level of labor is almost always there - people have to work to earn the living (even if you go into crime, you still have to work - maybe you pay taxes to different people and do different things, but you still have to do stuff to earn your money).

However, once you earned enough money, beyond subsistence level, you have a choice - you can spend it all on consumption, or you can defer some of the consumption, or give up a part of it, as an investment, in hope that this would increase your consumption abilities in the future, or you ability to retire, etc. Modern economy would not work without investment - you need massive upfront spending to lift off something like Netflix of the ground, before it starts being profitable.

This investment is, ultimately, financed by people who chose investment over consumption (might be one very rich person, or tens of thousands of not so rich people giving their money to the bank, which in turn loans it to the entrepreneurs, or likely a mix of both). Ensuring this choice remains a viable and attractive one is something that the government would definitely have an incentive to support.

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

#465

Post by gameswithgo »

OrwellianChild wrote: post #309
PurpleBoxDragon wrote: post #261

Earlier quoted context omitted.

>Over a reasonable horizon, you weren't profitable. The average worker isn't allowed to do that even when they lose money in a given year. Why is it so naturally assumed to be acceptable for a business to do it? Maybe the time is to just remove the loopholes in general from both business and personal income taxes.

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/

>If the average worker has any stock or index fund investment

we don't

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

#466

Post by dmix »

SketchySeaBeast wrote: post #133
endorphone wrote: post #59

Earlier quoted context omitted.

Netflix hasn't, to my knowledge, even filed their 2018 annual yet (or their Q4 2018), so I'm not sure what they're even basing their numbers on. But they admit elsewhere that Netflix paid taxes most of the preceding years, averaging out around 13.5%. In the end their tax lawyers do exactly what tax lawyers do, and unless they're breaking the law so be it. As an aside, it's rich that it's always Americans complaining…

> In Canada every single competitor has to charge a sales tax of 13% Just to clarify, there's no 13% sales tax - that'll be 5% federal and X% provincial (which ranges from 0-10%).

It's a bit more complicated than that with harmonized sales tax in 5 of the provinces. So technically in those provinces (such as Ontario) it is indeed a single 13% sales tax and no longer a combination of federal/provincial.

But largely in practice you're correct as even the combined HST varies (13% in Ontario, 15% in the four Atlantic coast provinces).

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

#467

Post by objektif »

Spivak wrote: post #429
objektif wrote: post #415

Earlier quoted context omitted.

Most stocks hold by Americans are owned by the top 10%. Unfortunately this libertarian trickle down fantasy of trickle down economics is not correct.

This is a stupid argument. Say we have 100 people in our economy, 90 of them $50k, 9 of them make $200k, and 1 person makes 1 million. Everyone invests 10% of their income in 'stoks' which cost $5/each. Each of the 90 people invest $5k and have 1000 stoks. Each of the 9 people invest $20k and have 4000 stoks. The millionaire invests $100k and has 20,000 stoks. The top 10% have 99.96% of the stoks. It would be weird i…

So you don’t see the problem in your little example?

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

#468

Post by [deleted] »

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.

[deleted]

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

#469

Post by anigbrowl »

smsm42 wrote: post #433
anigbrowl wrote: post #350

Earlier quoted context omitted.

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 cou…

I'm all for simplifying the tax structure but one kind of income should not be privileged over another.

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

#470

Post by anigbrowl »

smsm42 wrote: post #464
esrauch wrote: post #447

Earlier quoted context omitted.

There's no reason the government wants to promote long-term investment over income-producing labor, is there?

There is. Basic level of labor is almost always there - people have to work to earn the living (even if you go into crime, you still have to work - maybe you pay taxes to different people and do different things, but you still have to do stuff to earn your money). However, once you earned enough money, beyond subsistence level, you have a choice - you can spend it all on consumption, or you can defer some of the cons…

This is predicted on the unstated assumption that everyone starts out from about the same place and subsequently people make a variety of different choices. It ignores the effect of inheritance or the costs of increasingly binomial wealth distribution.
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