They paid over $1B in income taxes alone last year.
They reported a net 129M federal income tax rebate for 2018
Thatâs what the corporatists media wants you to believe you Koch Brothers Shill â˘
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Ignoring the other taxes they pay (property, FICA, sales, etcâŚ), I donât see anything in their 10-K that shows a $129M rebate?
âCash taxes paid (net of refunds) were $412 million, $957 million, and $1.2 billion for 2016, 2017,
and 2018. As of December 31, 2018, our federal net operating loss carryforward was approximately $627 million and we had approximately $1.4 billion of
federal tax credits potentially available to offset future tax liabilities.â
https://ir.aboutamazon.com/static-files/ce3b13a9-4bf1-4388-89a0-e4bd4abd07b8
Dude seems pretty angry that Amazon is following the tax codeâŚ
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From 2019 10k filing.
It was the chart below your first screenshot.
I think the anger is based on school teachers paying a higher US federal tax rate than Amazon.
I canât say I agree that the tax code should exist in its current form given companies can profit billions and not pay federal income taxes. Anger seems VERY justified compared to virtually all modern day anger of all issues.
This is all Iâve read about them mate
Earlier this week, US-backed Syrian forces launched an operation to clear Baghuz where, according to Ms Begum, Ms Abase and a fourth Bethnal Green schoolgirl, Sharmeena Begum, remain
Okay, jezz, I was like what in the hell is this guy talking about. It took me a while to find that chart (itâs way further down than my screen cap). I think itâs weird heâs ignoring state and international taxes ($900M) and all of the deferred taxes they owe, but thatâs his prerogative I guess.
Thatâs pretty silly though, right? First of all, itâs apples to oranges. Corporate income tax, a tax only C Corps are subject to, is levied on EBIT whereas individual income tax is levied on ordinary income. Not to mention, every single Amazon employee pays individual income tax on their ordinary income. In short, Amazon creates a bunch of jobs and through that employment tax revenue is produced (paid by employees) and on top of that, they have to pay a corporate income tax on EBIT, generally. That ignores all of the other taxes they pay.
Not to mention, the national average salary for a school teacher is $38,617 and assuming you did nothing to reduce your tax liability (401(k), IRA, etcâŚ) your effective rate is like 3%.
Imo, this is short-sighted. If a company is willing to spend $20M to build a new warehouse or buys another business with a loss carryforward, which allows them to reduce their federal income in the short term I see that as a good thing for everyone. Jobs are kept or create, other taxes are paid, and it makes an investment in capital projects easier/more likely.
*Ignore the bajillion grammatical errorsâŚ
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Why would that belong in the conversation of Amazonâs US taxes?
Agreed.
But does nothing to invalidate the criticism of a corporate giant being paid by the federal govt to operate right?
Thatâs why I said it. Itâs hilarious (and depressing) to me that even at 3% taxes, youâll still pay hand over fist more than Amazon
Imo ignoring the federal coffers is much more short sighted. Especially in the current world where Trump just slashed the shit out of their taxes and increased expenses.
Youâve gotta think of businesses as revenue streams to the govt. Soon when youâre working for them itâll be second nature
Sometimes I wonder if people realize that a billionaires net worth isnât because of their yearly salaries and bonuses, but tied to their equity in their company which has been taken public. Add in the fact that we have a global economy and their net worth exponentionally increases due to billions of people with availability to their product instead of just North America. I mean, FBâ stock lost like 30% and Zuck lost a perportional amount of his net worth.
Why would you wonder this? By the general conversation around billionaires the answer is usually no, they donât understand the wealth structure of a given billionaireâŚ
coupled with the fact they have/are providing (a) good(s) or service(s) that directly improve the lives of numerous peoples (worldwide) ⌠itâs pretty fuckin clear people donât have a strong understanding of economics, generally speaking.
True, but what does a Lizard King need with human wealth?
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We can talk specifically about US taxes, but I donât think it makes sense to focus solely on US taxes since theyâre a global business and cash can flows between territories regularly. Particularly considering, âThe U,S, Tax ActâŚimposing a mandatory one-time tax on accumulated earnings of foreign subsidiariesâŚchanging how foreign earnings are subject to U.S. tax.â
They really arenât being paid by the federal government to operate. Someone would need to take a deep dive into how they ended up with a negative federal income tax at year end, but there are a number of things at play here. The new tax law is one of them, ââŚextended the option to claim accelerated depreciation deductionsâŚâ They estimate this change alone was a benefit of $789 million. I donât know how the stock-based compensation deduction works; however, itâs entirely possible this created dividend income and capital gains tax. So, while it might have reduced corporate income tax for Amazon, it didnât necessarily reduce tax revenue in total. Cap gains tax is at 20% I believe.
Also, I donât see this as any different than a small pass-through entity or an individual using the tax code to their benefit. I donât understand why it angers people when a corporate giant does it? Amazon employes something like 2 million people in the US and their existence allows other business to exist / others to be employed.
Honestly, Iâve never understood why a corporate income tax exists in the first place. It penalizes C corps and is, imo, why the number of C corps has declined so much in the last few decades. The only real positive anymore is cheap capital generation (which is great donât get me wrong).
I donât see it as depressing at all.
For starters, Amazon does not normally have a net zero federal income tax liability. Secondly, corporate federal income tax is a classic example of double taxation. Corps pays federal income â Shareholders pay cap gains on after-tax income ie dividends. Ownership is hit twice. Plus, they pay every single tax an individual also pays. Sales tax, any use taxes, their portion of FICA, property taxes, etc⌠I canât even imagine how many tax dollars Amazon spends fueling their trucks⌠Third, they create jobs. Whatâs worse, earning $0 and paying $0 in federal income or earning $50k and paying an effective rate of 10% ($5k)? That doesnât happen without companies like Amazon, right? Not to mention they probably spend an additional 20% of payroll costs on benefits. At least thatâs roughly what our company spends.
The vast majority of taxes come from places other than C corp income tax.
I also think looking at tax revenue and not spending is way more short-sighted.
I think thatâs inaccurate and precisely the problem. The way our system is setup laborers are the ârevenue streamsâ to fund the government not corporations and I think government(s) should be viewed as cost centers for the American people not the people viewed as revenue streams for the government.
doubful.
Proof that lizard brains are more capable than human brains! Itâs on par with âso simple a caveman could do itâ commercials.
They ended with a net negative tax rate. Itâs no different from my sister in law, who is also paid by the federal government to work.
This wonât be possible, as companies arenât required to disclose it. But they also had a negative fed tax rate last year
The new tax law wasnât in place last year when Amazon also didnât pay federal income taxes and got a net negative rate
Wot? Because they feel deductions to the effect of negating hundreds of millions in taxes shouldnât exist? Itâs pretty straightforward to think highly profitable companies shouldnât have negative tax rates
They have the last 2 years (including pre new tax bill). And iirc thereâs no govt plan to strike down the deductions thatâll make it possible again next year
Does your company also have a net negative federal tax rate? The imbalance seems to be the issue
Is that supposed to mean we should ignore situations like this?
Them being cost centers doesnât change the fundamentals principle that they need funding. Funding via taxes
You underestimate the govts power. Just you wait. Youâll be single for AOC in under a year. Mwahaha
On top of that, in 2018 individual income tax receipts were higher than ever before (more employment, wage growth etcâŚ). So a cut in rates resulted in an increase in receipts (Laffer call your office).
Corporate receipts were down about $70B, or like 5 days of government spending. I would guess it was mostly due to the one time accelerated depreciated allowance. Everyone took expense and carry-forward losses from before.
One important thing to remember: no corporation is ever the one who pays the income tax. The employees, customers, investors all pay those taxes. A corporation is a pile of papers at the bottom of a drawer.
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No. Not at all. That would presuppose the Feds had a claim on all production of a company and allows them to keep what they can. The Feds didnât hand cash to Amazon.
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Sure it is. They only ended up with a net negative tax rate because they built a bunch of building (property taxes) or had a loss carryforward (from buying other business or failed business ventures), employed people (pass-through income taxes), and something related to their stock-based compensation (pass-through capital gains tax).
Your sister just didnât make enough money or offset her earnings enough to have offset any federal tax liability.
Iâm aware so we donât even know how much their rebate or liability really is⌠Our discussion is based on their SEC disclosure (GAAP) and not their actual return (tax code).
There are lots of reasons a company might not pay federal income tax.
Theyâre employing MILLIONS of people and spending 10s of millions of dollars on capital projects⌠Everyone else has to show up to work on time, do a bit fo work, and then leave.
It might be straightforward, but itâs based on ignorance of the tax code.
So? Loss carryforward can be for like 20 year iirc.
No, because we restructured into an LLC a while ago.
Itâs a fundamentally different perspective. A cost center needs to justify the dollars they spend. In other words, they have to prove spending dollar $1 is valuable to the division or organization at large. As it stands, taxpayers are seen as ârevenue streamsâ to fund any and all pet projects of management with the difference being management, in this case, doesnât have to make a profit. They donât even have to breakeven.
Lol.
And in the case of my sister in law, she ended up with a negative tax rate because she had a bunch of kiddos (legal deductions).
Their sec disclosure wonât allow for the dive youre talking about either. That was the basis of my comment. No system except internal access to company financials will allow you to see exactly how they reached a negative tax rate.
Iâm aware. I think the number of reasons should be zero
The same is said of tons of businesses that didnât have negative tax rates?
Itâs based on disagreeing that the tax code should exist like this
Okay, so whatâs the problem? Amazonâs tax accountant read the new law and applied it resulting in a net negative tax rate. It appears the majority of it came from the change to accelerated depreciation. Your sister did essentially the same (Iâm hoping having kids wasnât a tax planning strategy, butâŚ). Are you just against deductions? Do you think there are too many deductions for c corps?
Correct. I wasnât suggesting someone actually do it if I wasnât clear. I meant it needed to be done to know exactly how (or if) they ended up with a net negative federal income tax liability. We and the author of your link are relying on SEC disclosures, which are not the same as the actual IRS filings obviously. Itâs two different sets of rules.
Why? Letâs assume Microsoftâs video game division has been operating at a loss for 5 years and Sony offers to buy that division for $5B lets say. The deal goes through, most of the employees get to keep their jobs, Sonyâs video game division acquires a bunch of new IP, Microsoft recognizes either a gain or loss on the sale of the division, and Sonyâs balance sheet goes up due to Goodwill and asset acquisition, and they get to use a loss carryforward to reduce their income tax liability. Who is harmed in this transaction or rather who doesnât benefit? A lot of employees get to keep their jobs (still generating tax revenue for the fed), Sony invests $5B with the goal of growing sales (sales tax revenue), consumers continue to get what they want, Microsoft gets relief from a failing business, Sony gets relief on current operations for gambling on a failing business in the hopes of future gain, and hopefully Sony shareholders see an increase in their stock prices / dividend payout (cap gains tax).
I donât see the downside?
They didnât do x, y, or z to reach a negative tax rate. Thereâs nothing stopping a pass-through entity from investing a capital project that results in zero tax liability. THereâs nothing stopping Mom and Pop A from buying failing Mom and Pop B and using the loss carryforward as a way to reduce their tax liability. Itâs awfully risky, though.
Thatâs fine, but business is complex and the people that write the tax code or, generally, not very intelligent and/or donât understand existing code, to begin with. Or, theyâre playing favorites, ie crony capitalism.
I wouldnât trust the current Congress to fix the tax codeâŚ
Half of the population doesnât even pay federal income tax. The vast majority of taxes are paid by the ultra-wealthy (something like 25% of total tax revenue comes from the .01%). Something like 85%-90% comes from the top 10% of earners. Pretty much everything comes from the top 80% of earners.
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That negative tax rates are a joke and unsustainable.
He was able to do the same thing with the old law.
I think thereâs too many deductions period. C Corp or otherwise
Because itâs unsustainable
Agreed.
Not sure if we have another choice.
Yup. I know
