Some Corporations Pay a Lot More Taxes Than Others
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Some Corporations Pay a Lot More Taxes Than Others
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Re: Some Corporations Pay a Lot More Taxes Than Others
#2This is why corporate taxes are a dumb idea. Firms should not keep one set of books for management accounting and another set that they use for tax purposes.
When money is paid to an individual, tax it as income tax. Very simple. Don't give firms an incentive to act as tax shelters or tax avoiders.
Think about all the legal fees that have been spent by the firms on that list to avoid and reduce corporate taxes. It's outlandish.
Not only do the complicated tax avoidance schemes waste lots of money getting created/maintained, they also drastically reduce transparency and make auditing the company (by regulators, shareholders, etc.) far more subjective and complex.
There is no issue of fairness, since all the firms can conceivably do any of the avoidance schemes any of the others are doing if it offers positive ROI. The issue is that so much time, money, and energy is spent on corporate taxation that should be spent on things that benefit society.
Re: Some Corporations Pay a Lot More Taxes Than Others
#3This is because some corporations make a lot more profit than others.
"Amazon's corporate income tax bill is so small, though, because its corporate income (aka profit) is so small. Wal-Mart's pretax income since 2008 has totaled $209 billion, Amazon's less than $11 billion. So while Amazon's rise to fifth-biggest market cap in the world on the strength of such small earnings is a fascinating and perhaps disturbing phenomenon, it doesn't necessarily signal a problem with our system of corporate taxation."
Re: Some Corporations Pay a Lot More Taxes Than Others
#4Amazon decided to "re-invest" all profits back into equipment and etc for the business. Thus there are very few profits to tax.
Wal-Mart decided to what, I guess keep all the cash on hand or something. I didn't look up their 10K or 10Qs, but that's what I assume is happening.
I'm glad Amazon doesn't pay that much in taxes. 609B in tax money per year goes to the US Military, which has been responsible for more death and destruction on this planet than could ever be imagined previously.
So, thank you Amazon for making sure the warmongers don't get too drunk off of your success.
Re: Some Corporations Pay a Lot More Taxes Than Others
#5Is there any way to determine how much Amazon employees, contractors, and third-parties have paid in taxes? Even if Amazon only pays 1.4 billion itself, doesn't the company still contribute to government taxes paying employees and buying other goods, which are then taxed in turn?
Re: Some Corporations Pay a Lot More Taxes Than Others
#6This is because some corporations make a lot more profit than others. "Amazon's corporate income tax bill is so small, though, because its corporate income (aka profit) is so small. Wal-Mart's pretax income since 2008 has totaled $209 billion, Amazon's less than $11 billion. So while Amazon's rise to fifth-biggest market cap in the world on the strength of such small earnings is a fascinating and perhaps disturbing p…
The author is acting like this wasn't an intended phenomenon. I don't understand the mental gymnastics required to NOT see this.
Bezos decided, "we need to grow, and to grow we need equipment and real estate, so I'm going to spend the profits on those assets, since we will get more bang for our buck than just holding onto after-tax cash."
A corporation doesn't just accidentally conduct business that way lol, for better or worse.
Re: Some Corporations Pay a Lot More Taxes Than Others
#7It's hard to imagine a tax that would be sensitive to this difference unless it was a tax on market cap, which would be very odd because shareholders are the owners. So it would be a tax on one entity for the value of assets owned by another.
Re: Some Corporations Pay a Lot More Taxes Than Others
#8This is why corporate taxes are a dumb idea. Firms should not keep one set of books for management accounting and another set that they use for tax purposes. When money is paid to an individual, tax it as income tax. Very simple. Don't give firms an incentive to act as tax shelters or tax avoiders. Think about all the legal fees that have been spent by the firms on that list to avoid and reduce corporate taxes. It's…
I think that what you're suggesting (based on a vague understanding of the UK tax system) is abolishing corporate taxes and taxing dividends as income?
I'd be curious to hear someone who knows more accounting's view on this.
I've always thought that the answer was to have wealth taxes, easier to avoid but surely what we should actually aim for.
Re: Some Corporations Pay a Lot More Taxes Than Others
#9It's hard to imagine a tax that would be sensitive to this difference unless it was a tax on market cap, which would be very odd because shareholders are the owners. So it would be a tax on one entity for the value of assets owned by another.
Startup stock options, if you exercise before a liquidity event, are given a cap gains tax based on the de facto market cap.
Re: Some Corporations Pay a Lot More Taxes Than Others
#10It's hard to imagine a tax that would be sensitive to this difference unless it was a tax on market cap, which would be very odd because shareholders are the owners. So it would be a tax on one entity for the value of assets owned by another.
Startup stock options, if you exercise before a liquidity event, are given a cap gains tax based on the de facto market cap.
> Startup stock options, if you exercise before a liquidity event, are given a cap gains tax based on the de facto market cap.
That's not really the same thing. ISOs are taxed (as income) because you're purchasing something for below-market price, so the difference between the market price and the price you pay is income. If you hold onto it for long enough, you may then be able to qualify for capital gains tax when you sell it, but that's different.
And in addition, that's the individual who's being taxed on it (the value of their own income).
If you think of how this works similarly for publicly-traded companies, it's easier to understand.