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Yes but they're not spending $100 to "dodge taxes". They're spending the money on positive NPV projects. You're mistaking an effect for a cause. Companies in

Yes but they're not spending $100 to "dodge taxes". They're spending the money on positive NPV projects. You're mistaking an effect for a cause. Companies invest and expand and they pay less taxes as an effect. But in the future, they'll have to pay taxes on those revenue generating facilities they invested in. And if those investments go belly up then the company will LOSE more money than it ever gained by "dodging taxes".

runesoerensen 9y ago
> Yes but they're not spending $100 to "dodge taxes". They're spending the money on positive NPV projects. You're mistaking an effect for a cause. I don't think I am. The NPV projects are more likely to be positive if the alternative is to pay income tax on the profits, right? I don't necessarily mean to say they're doing it to avoid/dodge paying taxes (and I've edited my earlier response with a less loaded term), but taxes surely play a role in how they manage capital. > Companies invest and expand and they pay less taxes as an effect. Companies that are not paying income taxes do not pay less income taxes if they invest or expand.
heavenlyblue 9y ago
I don't see why Amazon is the only company privileged to grow. The only reason they are capable of operating right now (as in - on their low margins) is the sheer size they had reached by this time - and they are going nowhere but towards becoming the sole monopoly in the sector. That is - all of the power and a relatively low amount of taxes; given to their investors. Here's another bummer: why are citizens forced to pay for the social security that is provided by the government to Amazon? For example police, roads and the airports that are the key parts of the infrastructure that are making Amazon work? You could make a point that they are not making cash for the investors today. But the investors are making a fortune by having enough power to affect our living. I don't see why this should be in private hands and not a part of governmental institution in this case as they do not pay taxes for the same reasons. On the other hand - it would be interesting to see Amazon becoming that hugely low-margin business that is only allowed to stay afloat by keeping their monopoly on the market but also keeping the prices low because otherwise there would be another competitor soon enough.
- rukittenme 9y ago
  > Here's another bummer: why are citizens forced to pay for the social security that is provided by the government to Amazon? For example police, roads and the airports that are the key parts of the infrastructure that are making Amazon work? There is so much wrong with this statement. Amazon pays usage fees for everything you suggest. Roads? Amazon pays a tax on gasoline which pays for the roads. As do all citizens and businesses. The tax is a usage tax in that Amazon pays more if it uses more than you and I (which it does). Police? Amazon pays property taxes which funds local governments. Airports? Federal and local authorities levy usage taxes for air traffic control, security, and other airport functions. Next time you book a budget flight, look at the line item break down. I've had flights where the taxes were greater than the fare itself (CLT -> ORL). Amazon (and all businesses) bear the burden of collecting sales taxes. It doesn't magically go to the government. Amazon has to construct systems to collect, manage, and send sales taxes to their respective local governments. The government receives these taxes with no effort on their part. Bottom line... Citizens and companies pay usage taxes to maintain infrastructure. > I don't see why Amazon is the only company privileged to grow. The only reason they are capable of operating right now (as in - on their low margins) is the sheer size they had reached by this time - and they are going nowhere but towards becoming the sole monopoly in the sector. They're not, many companies could and many companies do invest heavily in themselves. You're on HN, you should notice these strategies being used by every startup. Side note: Amazon is not a monopoly power. They have many competitors across a lot of market segments.

runesoerensen 9y ago

> Yes but they're not spending $100 to "dodge taxes". They're spending the money on positive NPV projects. You're mistaking an effect for a cause. I don't think I am. The NPV projects are more likely to be positive if the alternative is to pay income tax on the profits, right? I don't necessarily mean to say they're doing it to avoid/dodge paying taxes (and I've edited my earlier response with a less loaded term), but taxes surely play a role in how they manage capital. > Companies invest and expand and they pay less taxes as an effect. Companies that are not paying income taxes do not pay less income taxes if they invest or expand.

heavenlyblue 9y ago

I don't see why Amazon is the only company privileged to grow. The only reason they are capable of operating right now (as in - on their low margins) is the sheer size they had reached by this time - and they are going nowhere but towards becoming the sole monopoly in the sector. That is - all of the power and a relatively low amount of taxes; given to their investors. Here's another bummer: why are citizens forced to pay for the social security that is provided by the government to Amazon? For example police, roads and the airports that are the key parts of the infrastructure that are making Amazon work? You could make a point that they are not making cash for the investors today. But the investors are making a fortune by having enough power to affect our living. I don't see why this should be in private hands and not a part of governmental institution in this case as they do not pay taxes for the same reasons. On the other hand - it would be interesting to see Amazon becoming that hugely low-margin business that is only allowed to stay afloat by keeping their monopoly on the market but also keeping the prices low because otherwise there would be another competitor soon enough.

rukittenme 9y ago
> Here's another bummer: why are citizens forced to pay for the social security that is provided by the government to Amazon? For example police, roads and the airports that are the key parts of the infrastructure that are making Amazon work? There is so much wrong with this statement. Amazon pays usage fees for everything you suggest. Roads? Amazon pays a tax on gasoline which pays for the roads. As do all citizens and businesses. The tax is a usage tax in that Amazon pays more if it uses more than you and I (which it does). Police? Amazon pays property taxes which funds local governments. Airports? Federal and local authorities levy usage taxes for air traffic control, security, and other airport functions. Next time you book a budget flight, look at the line item break down. I've had flights where the taxes were greater than the fare itself (CLT -> ORL). Amazon (and all businesses) bear the burden of collecting sales taxes. It doesn't magically go to the government. Amazon has to construct systems to collect, manage, and send sales taxes to their respective local governments. The government receives these taxes with no effort on their part. Bottom line... Citizens and companies pay usage taxes to maintain infrastructure. > I don't see why Amazon is the only company privileged to grow. The only reason they are capable of operating right now (as in - on their low margins) is the sheer size they had reached by this time - and they are going nowhere but towards becoming the sole monopoly in the sector. They're not, many companies could and many companies do invest heavily in themselves. You're on HN, you should notice these strategies being used by every startup. Side note: Amazon is not a monopoly power. They have many competitors across a lot of market segments.