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Let's say Amazon is about to make $1B in profits. Instead, they go on a hiring spree, and quickly pay out $1B in salary. Ha ha, they say, we have a profit of $0
by BraveNewCurency 9y ago
Let's say Amazon is about to make $1B in profits. Instead, they go on a hiring spree, and quickly pay out $1B in salary. Ha ha, they say, we have a profit of $0, so we don't get taxed!
But that's good. The employees all made lots of money (and will be taxed on it, often at a higher rate than the corporation would have paid!)
So run the same scenario again, but this time say "stock options" instead of salary.
- dustingetz 9y agoso what happens when you pay with options? they pay corp tax which ends up less?
- ambernightcrush 9y agoThe employees who get stock options, is the assumption here. Which of the warehouse runners have equity from Amazon?
- ksec 9y agoIf they spend it on their HQ2, let say it is $2B, do they wipe of the $1 Profits this year, ( Paid no tax ), and Net Operating Loss of $1B, which get deducted next year. Assuming they make the same $1B profits next year, that is No Tax again right? One of the problem I see is that many companies buy Asset like property asset to avoid taxes.
- matt_wulfeck 9y agoTheres an important distinction in deferring taxes versus avoiding taxes. Every time they buy a peice of property there’s taxes on the sale. Every year there’s property taxes (very high in WA), then finally there’s a sale and guess what?
- ksec 9y agoSorry it was a hypothetical question, didnt know there is property tax in US.