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Netflix Posted Biggest-Ever Profit in 2018 and Paid $0 in Income Taxes
- stuaxo 8y agoRight, I'm going to unsubscribe at end of this years sub, I'm not subsidising this business through tax.
- devy 8y agoRight, I'd follow suit except how do you watch your favorite Netflix original content though? :(
- atmosx 8y agoTorrents? I mean, by them not paying taxes, you're already "paying" for content indirectly.
- dingo_bat 8y agoI subscribe to Netflix but still torrent all shows because it is more convenient and higher quality.
- deleted 8y ago[deleted]
- ekun 8y agoJust go to duckduckgo.com and search for anything with the word stream on the end.
- ionised 8y agoPiracy. If they are okay paying no tax I'm okay not paying for their content.
- atmosx 8y agoWhere you able to read the post? I'm getting a DB connection error, guessing there's no cache.
- swarnie_ 8y agoSame issue here....
- m-p-3 8y agoI sent the article URL to Pocket, they seem to have it cached in their system. I made a copy of that through 2read, here's the IPFS cached copy https://ipfs.io/ipfs/QmWAz8WZsufXPJFCWaneCt4QsvxiYumUQjZgpt23vyBrwn/ https://ipfs.io/ipfs/QmWAz8WZsufXPJFCWaneCt4QsvxiYumUQjZgpt2...
- atmosx 8y agoGreat, thanks
- criddell 8y agoThe problem isn't really Netflix, it's our tax code. Is it different when Netflix takes advantage of the tax code to not pay taxes different than when I do it? For example, I'm married and file jointly because it lowers my tax bill compared to if my wife and I filed separately.
- jefurii 8y agoHow about supporting legislation that ensures these business pay their fair share?
- swarnie_ 8y agoSince this post has 37 points i presume the link is loading for some people? Any hints on how i get it to work?
- AdmiralAsshat 8y agoYou're very charitable in assuming that all people read the article before upvoting the link.
- deleted 8y ago[deleted]
- deleted 8y ago[deleted]
- t0astbread 8y agoI'm using a HN client called "Materialistic" and strangely it does load in reader mode there. I can't load it in a browser either.
- namuol 8y agohttp://webcache.googleusercontent.com/search?q=cache%3Ahttps%3A%2F%2Fitep.org%2Fnetflix-posted-biggest-ever-profit-in-2018-and-paid-0-in-income-taxes%2F&oq=cache%3Ahttps%3A%2F%2Fitep.org%2Fnetflix-posted-biggest-ever-profit-in-2018-and-paid-0-in-income-taxes%2F&aqs=chrome..69i57j69i58.6018j0j4&sourceid=chrome&ie=UTF-8 http://webcache.googleusercontent.com/search?q=cache%3Ahttps...
- SilasX 8y agoGetting a 404 for that too.
- shanehoban 8y agoCached [1] Edit: For those unaware, in Chrome, you can type "cache:" before the URL in the address bar (not with the quotes of course) to get a cached version from Google. [1] http://webcache.googleusercontent.com/search?q=cache%3Ahttps%3A%2F%2Fitep.org%2Fnetflix-posted-biggest-ever-profit-in-2018-and-paid-0-in-income-taxes%2F&oq=cache%3Ahttps%3A%2F%2Fitep.org%2Fnetflix-posted-biggest-ever-profit-in-2018-and-paid-0-in-income-taxes%2F&aqs=chrome..69i57j69i58.6018j0j4&sourceid=chrome&ie=UTF-8 http://webcache.googleusercontent.com/search?q=cache%3Ahttps...
- kachnuv_ocasek 8y agoNitpick: You can do this in Firefox or any other browser, as well. It's the Google search engine that provides this functionality, not the browser.
- shanehoban 8y agoWasn't aware, thanks friend!
- est31 8y agoIt's giving me 404 with the robot drawing.
- Semaphor 8y agoFor DuckDuckGo users, simply use the !cache bang.
- justhelpingman 8y agoTFA: Hugely profitable tech company provides first look at how corporations are faring under new tax law The popular video streaming service Netflix posted its largest-ever U.S. profit in 2018—$845 million—on which it didn’t pay a dime in federal or state income taxes. In fact, the company reported a $22 million federal income tax rebate. After a year of speculation and spin, the public is getting its first hard look at how corporate tax law changes under the Tax Cuts and Jobs Act affected the tax-paying habits of corporations. The law sharply reduced the federal corporate rate, expanded some tax breaks and curtailed others. The new tax law took effect at the beginning of 2018, which means that companies are just now closing the books on their first full year under the new rules. If Netflix’s earnings report is any indication, not much has changed. Many corporations are still able to exploit loopholes and avoid paying the statutory tax rate—only now, that rate is substantially lower. Netflix’s tax avoidance should come as no surprise to those who followed the debate leading up to the passage of the new tax law: A 2017 ITEP report identified Netflix as one of 100 profitable Fortune 500 corporations that paid a 0 percent federal income tax rate in at least one profitable year between 2008 and 2015. In fact, Netflix did it twice, and paid an average tax rate of 13.6 percent over the eight-year period, meaning that the company sheltered more than half of its profits from the 35 percent federal income tax rate in effect at the time. Leading up to the 2017 tax battle, the hope of reformers was that Congress would take a fiscally responsible approach and weed out loopholes that made Netflix’s tax avoidance possible. Instead, GOP leaders who championed the law and President Trump chose to focus on cutting the corporate tax rate as far as possible—from 35 to 21 percent—while leaving in place special breaks and loopholes. As more 2018 earnings reports begin to come in, we will see the results of this profligacy in real time. Netflix appears to be every bit as unaffected by corporate tax laws now as it was before President Trump’s “reform.” This is especially troubling because Netflix is precisely the sort of company that should be paying its fair share of income taxes. With a record number of subscribers, the company’s profit last year equaled its haul in the previous four years put together. When hugely profitable corporations avoid tax, that means smaller businesses and working families must make up the difference.
- brink 8y agoSite appears to be down. Here's a similar article: https://www.commondreams.org/news/2019/02/05/whatever-you-paid-watch-netflix-last-month-was-more-it-paid-income-taxes-all-last https://www.commondreams.org/news/2019/02/05/whatever-you-pa...
- 27182818284 8y agoGoogling that domain name there are a bunch of headlines like "Acme corportation paid 0 tax". It seems to be part of their usual shtick. The site loads, but really slowly. I feel like it has been slashdotted maybe.
- pankajkumar229 8y agoWhy not just increase sales tax? Or make sales tax sector by sector. Since they are almost a monopoly, it will come out of their own pocket mostly.
- dawnerd 8y agoSales tax is a tax to the consumer. I fail to see how that would affect Netflix at all.
- Brotkrumen 8y agoAll taxes are a tax to the consumer. Sales taxes are just less avoidable.
- yreg 8y agoAll tax gets paid by the consumer in the end.
- bencoder 8y agoIs there any difference? They would have to lower their prices in order to keep the same price to the end user (to keep the same number of users) and therefore get less profit. Is it because in the states you show the same price and local (state) sales taxes are added on top that makes it a tax to the consumer?
- dawnerd 8y agoCompanies here won’t lower prices, they’ll just hide the fact that there’s a tax until checkout. At least with income tax it directly comes from their books and forces them to either take the hit or be the ‘bad guys’ and raise prices.
- MatekCopatek 8y agoThe consumer just cares about the final price. They won't distinguish a price increase caused by taxes from one caused by corpo decisions. So assuming Netflix set their current prices optimally, they will be have to keep them and take the hit.
- res0nat0r 8y agoIt's because they're still carrying forward the massive amounts of debt they're spending in upping the count of their original programming.
- andrew_ 8y ago(read the cached version) I'd like to see figures on how much of that $22 million was re-invested in the workforce and economies which surrounded Netflix's productions. Those figures would be key in any personal judgement call I'd make on the report.
- mattferderer 8y agoThere is a lot of talk about increasing taxes on wealthy companies & individuals in the US as of late again. Whether that's a good or bad strategy I'm unsure. Either way it seems that well paid accountants are easily winning the arms race on how to avoid taxes. I'm curious if a government can actually win that race.
- kadendogthing 8y agoThere's no race. The tools and methods used to avoid taxes are apart of the well understood rules that were written for these companies. It's not a secret, there's no cleverness to what they're doing (except to the lay person). Everyone who needs to be, was and is well aware about how the tax code is written and how it works and why it's setup that way. The effects of the current tax laws were well known before they could even be observed. The government can easily put a stop to this. It's just about electing the right people, in the right party that aren't going to invoke visions of political and economic astrology. I think it goes without saying which party to NOT choose.
- deleted 8y ago[deleted]
- alkibiades 8y agooh no! we could use that money for bombs in yemen or for sending the troops to the border. how will the govt function without it :(
- mikece 8y agoSo they found/caught/exploited an opportunity to pay no taxes this year. Is it a permanent thing thanks to new tax laws? It's pretty easy to see that they have paid millions in income tax in previous years: https://www.marketwatch.com/investing/stock/nflx/financials https://www.marketwatch.com/investing/stock/nflx/financials
- 40acres 8y agoI assume this has something to do with the massive amount of debt that fuels Netflix original programming. That being said, our entire tax system is regressive, for both businesses and individuals, when it comes to dealing with it's complexity. A small or medium size business does not have the legal or accounting capability to navigate the tax code as successfully as a company like Netflix can. Similarly, even a high income individual can't stretch the tax code like billionaires can. On net it seems like the lower and middle income players subsidize the high income players both in business and personal taxes.
- refurb 8y agoRegressive? The top 1% of earners paid the highest tax rate of 27.1%. The bottom 50% had an average tax rate of 3.5%.[1] [1]https://taxfoundation.org/summary-federal-income-tax-data-2017/ https://taxfoundation.org/summary-federal-income-tax-data-20...
- moate 8y agoFrom your same report: "The share of reported income earned by the top 1 percent of taxpayers rose slightly to 20.7 percent in 2015. Their share of federal individual income taxes fell slightly, to 39.0 percent." This is the problem people are trying to point out. Yes, poor people pay a lower % of their income in taxes than rich people, because the real number is more important due to the static cost of goods across all income brackets. The problem is, everyone expects people to pitch in their share, and it feels like the ultra-wealthy and corporations frequently find or create new ways to pay less than "they're supposed to". What anyone is "supposed" to pay in taxes is obviously entirely subjective, but when you hear things like "rich people are making more money while also paying less in taxes" at the same time you're hearing about how our economy is funneling wealth away from the lower and middle classes and into the investor and upper classes, people get annoyed.
- deleted 8y ago[deleted]
- saberience 8y agoIt is absolutely regressive when the top earners, presumably earning millions more than I do, end up paying less tax than I do.
- driverdan 8y agoRather than being outraged at the headline, what are the actual details? Why were they able to pay no taxes? Was it due to carried losses or something like that? Anyone mad at a company for not pay taxes is misdirecting their anger. Companies follow the law. If you don't like the law elect different politicians. Don't get mad at companies that follow the law.
- ghostly_s 8y agoPlease point me to the people who are mad at the company. I'll wait.
- blackguardx 8y agoCompanies also lobby heavily for these tax laws. The laws may be directly responsible, but big companies share some blame as well.
- partiallypro 8y agoActually the biggest lobbyists for tax laws aren't companies but accounting firms.
- chanandler_bong 8y agoThe answer is to outlaw lobbyists, it would fix a lot of problems. That, and enact term limits for Congress. That will fix even more.
- briandear 8y agoI’m not sure what we are mad about here, that companies and individuals want good tax laws? I am not sure how Netflix’s alleged tax rate hurts anyone. Remember, 45% of Americans pay no federal income tax at all! How about we complain about that first assuming the goal is that everyone pay their fair share. There is no argument that is logical that can justify the top 20% of earners paying 70% of all income taxes. Nobody’s fair share is zero.
- 8y ago
- d--b 8y agoNow here's a problem whose fixing would truly make the world a better place! Why is there no YC/SV initiative to help make tech companies freaking pay their goddamn taxes? Sounds easier than basic income experiments, robocars and going to Mars.
- ghouse 8y agoThey do pay their taxes. This is a problem with the tax code, not the company.
- Judgmentality 8y ago> Sounds easier than basic income experiments, robocars and going to Mars. I genuinely wonder which is harder. One is a problem of politics and capitalism, the others are largely technical hurdles and one where you're giving away money instead of trying to take it from giant corporations with armies of lawyers.
- sakisv 8y agoBecause both basic income and robocars and going to Mars are either directly or indirectly targeting to increase the profits of tech company X. This combined with the lobbying power that the said company X has, takes away any incentive someone might have to do something. Limiting the lobbying should probably be the first step.
- tvanantwerp 8y agoI wish the post went into detail about how it is Netflix paid no taxes in 2018. It's not like a company that size just decides to not pay any tax--they are following a specific strategy to accomplish that, and not discussing that strategy in favor of the "big bad corporation" trope makes for an insubstantial blog post.
- mattsfrey 8y agoIt's called historical net operating loss, they can avoid taxes until all their past losses are accounted for.
- patio11 8y agoNetflix has, in fact, paid $100 million in income taxes in 4 of the last 5 years and $80 million in the 5th. They just paid most of last year’s outside the US, to the tune of $130 million. For more details, see annual report.
- clarkmoody 8y agoPopulist clickbait headline is clickbait. I'm sure Netflix paid tons in employer contributions to employee income taxes, social security taxes, etc. They probably paid a bunch in sales taxes where they made purchases. Property taxes for data centers, office buildings, etc. So there are many more taxes that everyone pays beyond the income tax. As others have pointed out, the tax code is immensely complex, but you probably don't need a deep explanation for a $0 income tax bill: previous years' financial performance can carry over into the current year. As someone once told me: with complexity comes opportunity. Simplifying the tax code, regulations, and laws removes the opportunity for well-funded operations to exploit the existing complexity.
- vkou 8y ago> I'm sure Netflix paid tons in employer contributions to employee income taxes, social security taxes, etc. I pay sales taxes, and my landlord pays property taxes, and I gave $500 to charity last year. Does that excuse me from paying any income taxes on $300,000 of salary, or do I need to structure that compensation through a double Irish sandwitch, first? Alternatively, if a shoplifter steals $500 of goods, but pays $50 for some cigs, and a bottle of wine, do we shrug our shoulders, and say: 'At least he paid for the wine!'
- kaolti 8y agoThat's a separate discussion. Individuals have all their obligations deducted and we can spend the rest. Companies spend first and pay obligations on the remaining.
- skh 8y agoI'm sure Netflix paid tons in employer contributions to employee income taxes, social security taxes, etc. This situation should not be viewed as Netflix paying tax. An employee's benefits, pay, time off, etc. are all part of the compensation of an employee. If Netflix did not pay this on behalf of the employee then the employee would have to pay it. For instance, for contractors they (the contractor) pay the full FICA and not half. This is partly why contractors generally get paid more in terms of hourly rate. The FICA that Netflix pays on behalf of employees is an expense. Corporations don't pay tax on expenses. They pay tax on profits. It is a bit unseemly for some corporations to have large profits but pay no income tax.
- jakelarkin 8y agotl;dr we are upset GAAP net income does not equal taxable income.
- rayvd 8y agoWhy is it desirable to transfer money from job-producing companies and investors to the government? In any case, Netflix is still cash flow negative and probably carrying forward previous losses. If that's undesirable, change the tax code, but still would rather Netflix have the money than Uncle Sam.
- smileysteve 8y agoContrary to the reflex; this is more reason to eliminate corporate income tax; and at the same time, eliminate the extreme dividend and capital gains tax discounts.
- fredgrott 8y agowe use to have an amt alternative minimum tax in the United States...sounds like we need to bring it back asap
- djschnei 8y agoDrastically simplify the tax code. Boom. Done.
- deleted 8y ago[deleted]
- cpursley 8y agoMeh, corporations don't pay income taxes anyways even when they do; their consumers pay the tax (it's just another expense). A national sales tax is a better way to collect.
- EpicEng 8y agoA consumption tax would all of a suddenly increase prices by a large margin for the poorest among us.
- deleted 8y ago[deleted]
- simplecomplex 8y agoThis disingenuous rage bait doesn’t belong here. Carryover is a pretty basic aspect of corporate taxes, and it makes sense. Previous years' financial performance (losses, debt) can carry over into the current year.
- zaroth 8y agoThe “profit” Netflix is reporting on the one hand is an entirely different number than the taxable net income that Netflix reports to the IRS. Take a look at Netflix’s free cash flow for a better understanding of what a SaaS-type business experiencing hyper-growth looks like. Their customer acquisition cost in this case is spending on content. That content will be consumed (and hence “paid for”) by subscribers primarily over the next 1-3 years. So as they ramp up their subscriber count, and likewise ramp up their production spending, they are constantly outspending “Year 0” (today) to create content which will earn back that money, and then some, over the next 1-3 years. Netflix is able to report financial metrics which show “Net Income” I think (and I haven’t dug into their statements to confirm this) because they spread/amortize the cost of licensing the content over the timeframes they expect it to be used. Whereas for tax purposes, the money they are spending on content can be deducted fully in the year it is spent against income for that year. As long as Netflix grows the amount they spend on content each year, they will have negative free cash flow and pay little to no taxes. If they grow their subscribe base at 20-30% YoY it means they can spend 20-30% more on content this year than they would typically be able to spend based on their current subscription revenue. E.g. if they spend 60% of revenue on content, and content is consumed over 3 years, they can spend closer to 80% of this year’s subscription revenue on content, and in theory over the next 3 years they earn it back. By doing this, as far as the IRS is concerned their cash flow and net income is truly negative. Eventually a company will flatten out its growth curve and the weight of servicing all that debt will require spending on content to fall below the subscriber revenue, and in the long run cash flow must be positive for a company to survive. Keep in mind income taxes are just one for of tax revenue that is generated by a company like Netflix. There is a tremendous amount of tax revenue generated overall by Netflix, everything from taxes on the internet connectivity people are buying to use Netflix, to sales taxes and employment taxes.
- jjallen 8y agoThere can be a huge difference between "income tax expense", which will be the numerator for any headline income tax rate and "income taxes paid". For Netflix this is true for 2018. In fact they paid $131 million for income taxes, which, as a percent of their income is way higher than "$0" which the original article claims in its. Also, the article makes no mention of R&D tax credits, which saved NFLX $141 million in state and federal income tax credits (the second biggest component). It would not have been difficult to find this in NFLX's 10-K. Netflix says the Tax Cuts and Jobs Act of 2017 _cost_ them an additional $79 million [0] "In accordance with the Act, we recorded $79 million as additional income tax expense in the fourth quarter of 2017"; https://www.sec.gov/Archives/edgar/data/1065280/000106528019000043/form10k_q418.htm#s207D2AE00AD558F2B1F131B519593779 https://www.sec.gov/Archives/edgar/data/1065280/000106528019...
- gammateam 8y agoFrom the article > "In fact, the company reported a $22 million federal income tax rebate." So if they paid 131 in income taxes, and received 141 in tax credits, then that accounts for $10 million of the $22 million the article mentions. That's pretty cool, I was assuming their earnings were just debt fueled. Therefore spending more money than they made, which is always a fun way of not sending that money to the government but on something you feel is more productive.
- briandear 8y agoIt is more productive. Taxes always result in some amount of deadweight loss. $10 million spent in the private sector is mathematically more productive than $10 million paid to the government. https://www.investopedia.com/terms/d/deadweight-loss-of-taxation.asp https://www.investopedia.com/terms/d/deadweight-loss-of-taxa...
- clairity 8y agoin theory (mathematically) it's more productive (in operating businesses that can put the capital to good use quickly), but in practice, that's not necessarily true. markets are not perfectly efficient, and have hidden losses as well (e.g., productive asssets being sidelined due to competition). governments are capable of putting capital to good use (hoover dam --> california expansion, at the expense of the environment, a hidden cost). neither markets nor governments are perfect, and such superficial arguments are at best misleading. you can't just compare idealized markets to practicing governments to reach substantive understanding.
- burp3141 8y agoI can't access the article or the cache but here is Netflix's latest annual filing at the SEC https://www.sec.gov/cgi-bin/viewer?action=view&cik=1065280&accession_number=0001065280-19-000043&xbrl_type=v# https://www.sec.gov/cgi-bin/viewer?action=view&cik=1065280&a... They made 1.2 billion in 2018 income before taxes compared to 485 million last year. The corporate tax rate was brought down from 35% to 21% in 2018. So they should have paid 257 million in Federal, 33.6 in State and 63 million in foreign taxes With the Federal and California R&D tax credits (140.7 million) and tax benefits on stock based compensation (191 million) and other odds and ends they brought it down to 15 million for an effective 1% tax rate. "In 2018, the difference between our 1% effective tax rate and the Federal statutory rate of 21% was primarily due to the recognition of excess tax benefits of stock-based compensation, Federal and California research and development credits (“R&D”), and updated adjustments related to U.S. tax reform as a result of the U.S. federal tax return filing, partially offset by state taxes, foreign taxes, non-deductible expenses and the international provisions from the U.S. tax reform enacted in December 2017." Netflix has also deferred tax assets - easiest to think of as tax prepaid but could also include taxes paid to foreign countries, losses from previous years, etc.) of 689 million. So they counted the taxes against it. In the cash flow stateemnt the supplemental disclosure is 131,069 for Income taxes paid. So there was actual cash tax payments made.
- frgtpsswrdlame 8y agoNice, thanks for the digging. >Federal and California research and development credits (“R&D”) How is an entertainment company receiving R&D tax credits? I understand the case for pharmaceuticals, not sure I get it here.
- frebord 8y agoCan someone explain to me why businesses pay any tax at all. It makes no sense to me that we want to restrict the flow of money through a business. Maybe we could tax cash holdings of a company, but why would you tax any income that ultimately goes to expansion, shareholders, employees? People see these "tax evading" corporations as so evil, but why? Do they really even remotely understand what is going on? I suspect they don't. Or maybe I don't get it. Edit: Maybe what I fail to realize is that income for a company is essentially what I'm thinking of as cash holdings, anything else would be an expense that would be deductible?
- joefourier 8y agoGross income isn't taxed, but profits are. However, I do agree that the annual basis of corporate taxation creates odd incentives - if on December 31st a company finishes the year with $10 million in cash, and on January 1st they spend $9 million, they will still pay tax on the $10 million, while if they spent it just a few hours before, they would have just paid tax on $1 million. Estonia's corporate tax system seems more sensible to me; profits are untaxed until distributed to shareholders, therefore a company can accumulate as much as needed for more long-term spending. The $9 million in spending will be deducted for the year's taxation period of course, but that leads to the situation of the company paying say, $3 million in tax one year, then $0 in tax for the next period, which seems similar to Netflix's case as per the article.
- airstrike 8y agoThat's not how this works. You pay taxes on what you earn, not on your cash balance. The company will always pay taxes on the $10 million, regardless of when it spends the $9. Also GAAP taxes are different from cash taxes paid to the IRS.
- ivalm 8y agoBusiness expenses are deductible. For example, if you are a reseller, you can spend before the end of the year to increase your inventory (and decrease your profits for that year).
- glglwty 8y agoEven if you do a good job closing the 'loopholes' they can just operate with bitcoin. Stop charging taxes on profit/income and the problem will be solved.
- dmode 8y agoIs this due to loss carry over ? The original link is timing out. Can someone explain the rational behind carrying over your loss ? I understand you had a loss in one year and you didn't pay taxes. But why is the business allowed to spread that loss across multiple years and lower their taxes ? That seems a little questionable to me.
- deleted 8y ago[deleted]
- war1025 8y agoPaid $0 in taxes always seems a bit disingenuous to me, since they pay labor and equipment costs that are all indirectly taxed. These companies may not pay taxes in the ways we would like them to, or naively expect them to, but the government still ends up with a lot of money in their coffers on account of them.
- beat 8y agoThis seems to be a good place for my own take on taxes... 1. Abolish corporate income tax. 2. Tax capital gains (and dividends) as ordinary income. The corporate income tax is absurd. It doesn't generate a lot of revenue, but it has a bazillion highly specific loopholes, supporting a whole cottage industry of lobbyists and accountants. It's an unfair advantage to large corporations that can afford the tax-cutting power (like Netflix). The capital gains rate is the source of our most gruesome wealth inequality. It's absurd that Mitt Romney pays half my effective tax rate on 200 times my income. The justification for low capital gains rates is "double taxation" due to corporate income tax. Abolishing corporate income tax eliminates that. If the rich don't want to pay taxes, then they need to not liquify their investments. If corporations don't want to pay taxes, they need to reinvest their profits in growth.
- sabalaba 8y ago"Double taxation" refers to taxation at the corporate income tax level and then again at the personal income tax level when dividends are paid out to shareholders. "Double taxation" and capital gains don't have anything to do with each other.
- beat 8y agoAbout a million internet commenters would disagree with you. Double taxation has been a stock justification for the lower capital gains rate as long as I can remember.
- airstrike 8y agoGood luck taxing all the foreign citizen who happen to own US stocks
- CharlesColeman 8y agoI agree with you on #2, but not on #1. I think the correct reform of the corporate income tax is to abolish the "bazillion highly specific loopholes." If it was abolished entirely, I think you'd very quickly see corporations being set up and used purely to evade individual income tax, especially among the extremely wealthy. That said, I do think it makes sense to not tax money at the corporate level that's remitted as dividends that would be taxed individually.
- equalunique 8y agoIf everyone who is an employee of the company must pay taxes on their income anyways, then what's the point of taxing companies themselves - so they can be taxed for the company income on top of the taxes already paid on operating costs on top of more taxes for employee salary? What rationale is there besides wanting to give the government more revenue? Shareholders might have gained a lot, but whatever they make on their investment gets taxed anyway, so what's the big deal?
- mbar84 8y agoThe point is to get as much money as possible duh. The fact is, a company is a fiction and the idea that you can tax a fiction is just...fiction. But if the state didn't do it, then one or all of the following might notice that in reality they are paying quite more taxes than is actually leaving their account: employees, investors/owners/shareholders, suppliers.
- calkuta 8y agoHow much taxes did Netflix employees and executives pay?
- exabrial 8y ago> is precisely the sort of company that should be paying its fair share of income taxes This greatly annoys me. We have a massive federal budget already. Personally 30 cents of every 100 cents I own is taken from me forcibly.
- m0zg 8y agoThe outrage at Netflix is misplaced. If you don't throw in an extra $20K with your taxes yourself (which you can do, btw), then you'd be a hypocrite if you're mad at Netflix for not doing the same. Rather, you should be mad at your elected representatives at the federal level and in the state of California in particular that they passed the laws that make this possible. Stop electing the same idiots for decades, force them to pass term limits, and _maybe_ something will change. Until then, enjoy Netflix's free ride.
- decebalus1 8y agohttps://imgur.com/gallery/tMpZo https://imgur.com/gallery/tMpZo <- this comment section
- acd 8y agoWhen Corporations pay zero in tax there is no schools being built, no healthcare being paid, no roads being paved. Yet these companies reap the benefit of other tax payers through educated labor and paying subscribers. They do not pay for the fire department, the police department and hospitals. One word to describe it is Leeching. Just because you could do something does not mean you have the right to do so. Here is the Golden rule https://en.wikipedia.org/wiki/Golden_Rule https://en.wikipedia.org/wiki/Golden_Rule "One should treat others as one would like others to treat oneself (positive or directive form)."
- dawhizkid 8y agoThe $10k cap on SALT (state and local tax) deductions starting with the 2018 tax year will be shocking to many people on here living in high tax blue states like CA or NY/NJ. If you have a very average wage and modest property in these states you'll almost definitely pay more this year than in previous years.
- ashray5 8y agoPutting aside the accounting/tax rules, why should a corporation be taxed heavily? So the government can decide to squander the tax money? I'd rather have the money go in the pocket of shareholders (pension funds, individuals, index fund holders, etc.) and give people a choice on how to spend those corporate tax savings. Wait, these individuals get taxed at a reasonable rate when they sell the stock or when they pay sales tax on purchases made from the stock winnings.. Hmmm, maybe government is not losing on taxes after all?
- p33p 8y agoThe article also is not true. Netflix paid 15 million in taxes in 2018. It says so right in the 10K: https://www.sec.gov/Archives/edgar/data/1065280/000106528019000043/form10k_q418.htm#s6B83C108310859E180A5F42564D76A74 https://www.sec.gov/Archives/edgar/data/1065280/000106528019...
- objektif 8y agoPeople I know pay their taxes how is NFLX people?
- anonymous5133 8y agoThe headline is flat out false. You can see Netflix financials here: https://s22.q4cdn.com/959853165/files/doc_financials/quarterly_reports/2018/q4/Q418-Website-Financials.xlsx https://s22.q4cdn.com/959853165/files/doc_financials/quarter... They paid 15 million in tax for 2018.
- mortdeus 8y agoJust because a corporation doesnt pay any corporate tax, that doesnt mean the Government doesnt get paid their fair share when their employees pay an income tax on the salary thats paid to them by the corporation. Having a 35% corporate tax AND a 35% income tax on all earners who make more than 120k/year, means the Government would essentially recieve %70 of all of Netflix's revenues, assuming inbound revenue and outbound expenditures are maintained at a 1:1 rate of growth. Netflix doesn't pay (nor should they be paying any) taxes right now because they invest heavily in producing original content using borrowed money. When that original content flops they still have to pay back all that money they lost plus interest. Netflix might have made a ton of profit this year but im pretty sure they are still heavily in debted (in the billions last i checked). To tax netflix at 35% now that they are finally starting to see a return on their investment would only cripple the corporation from maintaining their upwards momentum of growth. You only want to start taxing a corporation when they are completely self reliant on their own revenue when funding their day to day operations and investments towards R&D.
- m463 8y agoAnd the customers pay for Netflix with post-tax currency. I wonder where all this falls on the laffer curve: https://en.wikipedia.org/wiki/Laffer_curve https://en.wikipedia.org/wiki/Laffer_curve
- blumenko 8y agoJust to be clear, Netflix has been profitable every year since 2008, so it is not using deferred losses. I also would like to know how it did it.