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"Utter nonsense" is a bit harsh. I think the (poorly articulated) issue behind this article is that some companies (and some rich people) have arranged their af

by foxylad 10y ago

"Utter nonsense" is a bit harsh. I think the (poorly articulated) issue behind this article is that some companies (and some rich people) have arranged their affairs to reduce the tax they pay. This increases the burden on other taxpayers, and those people feel this is unfair. I see society as a resource that my company exploits to generate revenue - most companies would fail miserably if we didn't have education, the rule of law, roads and national security to provide a stable market for our goods and services. So we celebrate paying our taxes, because we're helping the thing that makes us money. So why doesn't Amazon and it's ilk? OK, Amazon is huge enough that your argument that society in general benefits as much from their zero-profit policy as it does from the taxes is tenable. But Amazon deciding how it will best benefit society is exactly like a billionaire arguing that only she should say where her tax goes. That just doesn't work - relying on philanthropy alone would give us awesome animal sanctuaries, with raw sewerage and mentally ill people running down the street outside.

cperciva 10y ago
Amazon deciding how it will best benefit society is exactly like a billionaire arguing that only she should say where her tax goes. Ah, but that's not how it works. It's not a $1 for $1 tradeoff -- you can avoid paying 35 cents of tax by contributing $1 to a charity (or, in the case of Amazon, subsidizing consumers by $1).
AnthonyMouse 10y ago
> So we celebrate paying our taxes, because we're helping the thing that makes us money. So why doesn't Amazon and it's ilk? Because they have competitors who don't and it isn't reasonable to compete with them on uneven terms. The problem isn't corporations paying no taxes by following the law, the problem is that the law allows them to pay no taxes. The shell game is very simple in principle. Microsoft Offshore owns the copyright to Office. When Microsoft US sells a copy of Office, they collect money from the customer and then pay Microsoft Offshore almost that much for the right to sell it, so Microsoft US makes no profit. The solution is equally simple. Replace corporate income tax with VAT. Then when Microsoft US sells a copy of Office, they pay VAT on the full purchase price and can deduct any US VAT already paid. Since Microsoft Offshore doesn't pay US VAT there is nothing to deduct and they have to pay their taxes. Though Amazon in particular is actually a different case -- they don't pay taxes because they spend all their revenue expanding their business. They're not diverting profits offshore, they legitimately don't have any. This is completely unproblematic and meritorious, because as long as it continues they're creating jobs and growing the economy, and the instant they stop and actually turn a profit they owe taxes.

by foxylad 10y ago

cperciva 10y ago

Amazon deciding how it will best benefit society is exactly like a billionaire arguing that only she should say where her tax goes. Ah, but that's not how it works. It's not a $1 for $1 tradeoff -- you can avoid paying 35 cents of tax by contributing $1 to a charity (or, in the case of Amazon, subsidizing consumers by $1).

AnthonyMouse 10y ago

> So we celebrate paying our taxes, because we're helping the thing that makes us money. So why doesn't Amazon and it's ilk? Because they have competitors who don't and it isn't reasonable to compete with them on uneven terms. The problem isn't corporations paying no taxes by following the law, the problem is that the law allows them to pay no taxes. The shell game is very simple in principle. Microsoft Offshore owns the copyright to Office. When Microsoft US sells a copy of Office, they collect money from the customer and then pay Microsoft Offshore almost that much for the right to sell it, so Microsoft US makes no profit. The solution is equally simple. Replace corporate income tax with VAT. Then when Microsoft US sells a copy of Office, they pay VAT on the full purchase price and can deduct any US VAT already paid. Since Microsoft Offshore doesn't pay US VAT there is nothing to deduct and they have to pay their taxes. Though Amazon in particular is actually a different case -- they don't pay taxes because they spend all their revenue expanding their business. They're not diverting profits offshore, they legitimately don't have any. This is completely unproblematic and meritorious, because as long as it continues they're creating jobs and growing the economy, and the instant they stop and actually turn a profit they owe taxes.