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Just for interesting discussion: What kind of reasonable activity would you suggest would fairly negate a corporation's tax obligation? I.e. What can corporatio

by jachee 8y ago

Just for interesting discussion: What kind of reasonable activity would you suggest would fairly negate a corporation's tax obligation? I.e. What can corporations do with their money—instead of giving it to the government—that would benefit the people as much or more than actually giving it to the government.

EpicEng 8y ago
Reinvesting in said company for one, which is why carry over debt is deductible.
- jachee 8y ago
  Sure, but how does that benefit the people of the U.S.?
  - EpicEng 8y ago
    How does growing a business benefit citizens? Jobs, economic stimulus, eventually larger taxes would be the obvious three. If you start disincentivizing reinvestment then, well... growth will slow. Same goes for losses. A calendar year is an arbitrary delineation of time. If your business loses $100 in one year and brings in $100 in revenue the next, do you really want them to pay taxes on said revenue? Seems a bit unfair, no? In a two year period they broke even, and that's not even considering what profits they may or may not have made. We want people to grow their businesses because it's generally good for everyone. Similarly, we tax profits, not revenue, because if we did the former companies would simply cut costs at every opportunity and never put money back in.
    - jachee 8y ago
      Sounds a lot like Trickle Down Economics, which has been disproven time and again. Also: if amazon’s profit is double what it was last year, shouldn’t that profit be taxed? If they never pay taxes and continue exploiting labor, aren’t they a net drain on society?
      - EpicEng 8y ago
        We're talking about specifics here though, not an overarching economic theory which is defined by political buzzwords. I agree that the idea of trickle down on the whole doesn't work, but that doesn't mean every one of its ideas are wrong (and I believe this specifically is related to Reagan era economics.) Companies investing revenue is, in general, a good thing. You can of course debate the specifics of what constitutes an investment. >if amazon’s profit is double what it was last year, shouldn’t that profit be taxed? If they never pay taxes and continue exploiting labor, aren’t they a net drain on society? Well they do pay taxes, so I don't know where you're getting "never" from. Heck, just look at the chart at the bottom of the article. This is the _first_ year they had a negative rate. If you're going to make statements (shrouded in questions) like "they're a net drain on society" you're going to have to come up with some numbers.
LanceH 8y ago
Paying employees to produce benefits many people. Possibly at a much more effective rate than giving it to the government (as they actually produce something in return). Investing in capital goods and means of production. Again, this has a return that giving to the government does not. Simple example of what is going on here. Someone buys a plot of land and materials in 2000 for $100000. They build a house and sell it in 2001 for $120000. What should they be taxed on? The "losses" from 2000 get carried over to 2001, and they are taxed on $20k. In virtually every one of these articles "OMG ABC Corp paid $0 in taxes this year!", the explanation is that losses (investments typically) are being carried forward. This is absolutely normal, expected, and necessary for long term planning and growth.
- jachee 8y ago
  How does “doubled profits” indicate any losses to carry forward? Aren’t profit and loss mutually exclusive?
rjplatte 8y ago
Would you agree that Amazon has bettered your life in some way? If so, then your argument loses most of its weight. Personally, I trust a corporation with money more than the federal government, for the simple reason of accountability. A business has a chance at failure if they're dumb about money. A government will always have more. It's simple, but a compelling argument.
- jachee 8y ago
  I don't understand your reasoning here. I've given amazon money for products and/or services, and I've paid my share of taxes on those transactions. It's not like they've ensured my roads are safe, my food is safe, my healthcare is taken care of, and that laws are enforced. Also, I'm not so selfish to think I'm the only one who should be helped here. The greater good of society matters more than me as an individual. Why shouldn't amazon pay their share of taxes for those things, (some) of which they're undoubtedly taking advantage?
  - candybar 8y ago
    From an economic perspective, there's no difference between the sales tax that is paid by the seller or by the buyer. So it's not correct for you to take credit for the taxes paid on the transactions between you and Amazon - the economic burden is shared by both parties. Likewise, Amazon pays the payroll tax and any income tax that is paid by its employees, effectively increases the cost of transaction between Amazon and its employees, making it a shared burden by both parties.
prepend 8y ago
Pay the capital investment of a huge data center that they depreciate and reduce tax liability over the term specified by the IRS. That seems pretty reasonable to me. I’m not a tax expert, but I think most capital investments work this way.
sjjshvuiajhz 8y ago
The best example is probably research. Research is the most valuable use of our resources. The more of our resources we put toward research, the more our productivity increases and the more sustainable resources we will have available to us. As a society, we spend too much effort on exploitation rather than exploration. The US government only puts about 1% of its budget toward research. It also offers the Research & Experimentation Tax Credit, which is a tax subsidy for companies that perform research. Software companies make extensive use of this credit. Since the US government only spends 1% of its budget on research, the amount of research done under the credit far exceeds the amount of research not done because of the credit’s impact on government finances. This seems like a clear-cut win for humanity.
candybar 8y ago
What tax obligations are being negated here? My assumption is that Amazon is not paying any taxes because they don't owe any - as in, they have no tax obligations.

by jachee 8y ago

EpicEng 8y ago

Reinvesting in said company for one, which is why carry over debt is deductible.

jachee 8y ago
Sure, but how does that benefit the people of the U.S.?
- EpicEng 8y ago
  How does growing a business benefit citizens? Jobs, economic stimulus, eventually larger taxes would be the obvious three. If you start disincentivizing reinvestment then, well... growth will slow. Same goes for losses. A calendar year is an arbitrary delineation of time. If your business loses $100 in one year and brings in $100 in revenue the next, do you really want them to pay taxes on said revenue? Seems a bit unfair, no? In a two year period they broke even, and that's not even considering what profits they may or may not have made. We want people to grow their businesses because it's generally good for everyone. Similarly, we tax profits, not revenue, because if we did the former companies would simply cut costs at every opportunity and never put money back in.
  - jachee 8y ago
    Sounds a lot like Trickle Down Economics, which has been disproven time and again. Also: if amazon’s profit is double what it was last year, shouldn’t that profit be taxed? If they never pay taxes and continue exploiting labor, aren’t they a net drain on society?
    - EpicEng 8y ago
      We're talking about specifics here though, not an overarching economic theory which is defined by political buzzwords. I agree that the idea of trickle down on the whole doesn't work, but that doesn't mean every one of its ideas are wrong (and I believe this specifically is related to Reagan era economics.) Companies investing revenue is, in general, a good thing. You can of course debate the specifics of what constitutes an investment. >if amazon’s profit is double what it was last year, shouldn’t that profit be taxed? If they never pay taxes and continue exploiting labor, aren’t they a net drain on society? Well they do pay taxes, so I don't know where you're getting "never" from. Heck, just look at the chart at the bottom of the article. This is the _first_ year they had a negative rate. If you're going to make statements (shrouded in questions) like "they're a net drain on society" you're going to have to come up with some numbers.

LanceH 8y ago

Paying employees to produce benefits many people. Possibly at a much more effective rate than giving it to the government (as they actually produce something in return). Investing in capital goods and means of production. Again, this has a return that giving to the government does not. Simple example of what is going on here. Someone buys a plot of land and materials in 2000 for $100000. They build a house and sell it in 2001 for $120000. What should they be taxed on? The "losses" from 2000 get carried over to 2001, and they are taxed on $20k. In virtually every one of these articles "OMG ABC Corp paid $0 in taxes this year!", the explanation is that losses (investments typically) are being carried forward. This is absolutely normal, expected, and necessary for long term planning and growth.

jachee 8y ago
How does “doubled profits” indicate any losses to carry forward? Aren’t profit and loss mutually exclusive?

rjplatte 8y ago

Would you agree that Amazon has bettered your life in some way? If so, then your argument loses most of its weight. Personally, I trust a corporation with money more than the federal government, for the simple reason of accountability. A business has a chance at failure if they're dumb about money. A government will always have more. It's simple, but a compelling argument.

jachee 8y ago
I don't understand your reasoning here. I've given amazon money for products and/or services, and I've paid my share of taxes on those transactions. It's not like they've ensured my roads are safe, my food is safe, my healthcare is taken care of, and that laws are enforced. Also, I'm not so selfish to think I'm the only one who should be helped here. The greater good of society matters more than me as an individual. Why shouldn't amazon pay their share of taxes for those things, (some) of which they're undoubtedly taking advantage?
- candybar 8y ago
  From an economic perspective, there's no difference between the sales tax that is paid by the seller or by the buyer. So it's not correct for you to take credit for the taxes paid on the transactions between you and Amazon - the economic burden is shared by both parties. Likewise, Amazon pays the payroll tax and any income tax that is paid by its employees, effectively increases the cost of transaction between Amazon and its employees, making it a shared burden by both parties.

prepend 8y ago

Pay the capital investment of a huge data center that they depreciate and reduce tax liability over the term specified by the IRS. That seems pretty reasonable to me. I’m not a tax expert, but I think most capital investments work this way.

sjjshvuiajhz 8y ago

The best example is probably research. Research is the most valuable use of our resources. The more of our resources we put toward research, the more our productivity increases and the more sustainable resources we will have available to us. As a society, we spend too much effort on exploitation rather than exploration. The US government only puts about 1% of its budget toward research. It also offers the Research & Experimentation Tax Credit, which is a tax subsidy for companies that perform research. Software companies make extensive use of this credit. Since the US government only spends 1% of its budget on research, the amount of research done under the credit far exceeds the amount of research not done because of the credit’s impact on government finances. This seems like a clear-cut win for humanity.

candybar 8y ago

What tax obligations are being negated here? My assumption is that Amazon is not paying any taxes because they don't owe any - as in, they have no tax obligations.