5 ms·

Amazon pays no 2018 federal income tax, report says

39 points by BallinBige 8y ago

deleted 8y ago
[deleted]
mikeq101101 8y ago
And that is a good thing.
- deleted 8y ago
  [deleted]
throwaway5752 8y ago
If this makes you mad, definitely don't look into the taxes of just about every other company in the US. Particularly don't look at defense, integrated oil E&P, agriculture, or residential construction. I bet those industries would love for you to be outraged about Amazon and it's 21% off a $10B base instead their total subsidies that probably are high tens of billions or greater.
- BucketSort 8y ago
  But it's ok because they create so much value for the economy, right?
- mikeq101101 8y ago
  I feel better about the money staying in the hands of people that actually (and efficiently) provide useful services and products to people, unlike bureaucrats in the government who have no incentive to do things well and be efficient (and in reality have the opposite incentives).
  - himlion 8y ago
    Luckily most people don't feel like that or we'd be living in a pretty bleak world.
    - mikeq101101 8y ago
      People having voluntary interactions instead of being forced, what a bleak world.
      - himlion 8y ago
        Negative externalities are best solved by a government.
        mikeq101101 8y ago
        That is at least a controversial statement, not a fact as you put it.
        majewsky 8y ago
        What other method exists for pricing in negative externalities? Honest question.
  - harrumph 8y ago
    >I feel better about the money staying in the hands of people that actually (and efficiently) provide useful services and products to people, unlike bureaucrats in the government who have no incentive to do things well and be efficient (and in reality have the opposite incentives). Right, because tax money, once collected, simply vanishes into thin air and never, ever shows up as the income of private companies, nor drives entire sectors of the economy. At least that's how it works under the purple skies of planet Libertaria.
    - mikeq101101 8y ago
      >Right, because tax money, once collected, simply vanishes into thin air and never, ever shows up as the income of private companies, nor drives entire sectors of the economy. What are you trying to argue? Taxes are good, because some part of them is redistributed back to private companies?
      - harrumph 8y ago
        >What are you trying to argue? Taxes are good, because some part of them is redistributed back to private companies? I'm arguing the fact that spending by government is literally the engine of our own and all other economies, and that libertarians are hilariously delusional about this bedrock fact. Without this spending/circulation there is zero facility nor security for the conduct of commerce nor is there income for the vast majority of the private enterprise. When you rebut, please use a privately-developed communications protocol stack to do so.
        mikeq101101 8y ago
        Can you list a few sectors of the economy that are driven entirely by taxpayer money through the government?
        harrumph 8y ago
        >Can you list a few sectors of the economy that are driven entirely by taxpayer money through the government? You can begin with a symbol -- the largest single private employer on the planet, the retailer named Walmart. A fully subsidized operation that, per its own filings, depends upon SNAP payments paid to its customers for its income. In addition to being dependent upon these payments the company depends on SNAP serving as payroll subsidy for its hundreds of thousands of workers who they choose to pay poverty wages. Then for sectors, you may move to the depth and breadth of the energy, R&D, defense, security, health care, package freight and construction sectors, who, without their single largest governmental customers, would be a small fraction of what they are, employing a tiny fraction of historic levels. Then there are sectors that are utterly dependent upon government subsidy, such as pharma research, agra, and transportation. Add to this the rest of the economy: sectors that would grind to a halt if not for indirect dependence upon public goods -- courts, roads and communications capacity funded by taxes. Fact: taxpayers, uncompensated by any shares of stock, pay the bills and line the pockets of stockholders in most of really existing capitalism. Socialism exists and dominates for the rich while the market discipline that libertarians live to defend is in fact something that is reserved exclusively for the non-rich. Capitalist fables about the importance of incentives and market discipline fall on their faces the second you scrutinize flows of taxation as well as flows of appropriated value taken from workers under capitalism.
  - jakelazaroff 8y ago
    Who do you think builds and maintains the infrastructure Amazon uses to provide those useful services? How do you think it gets paid for?
    - pathseeker 8y ago
      Depends on the infrastructure you are referring to. Things like roads are paid for with gas taxes and commercial trucking taxes that Amazon pays automatically in their shipping costs. They aren't exempt from that.
  - jakeinspace 8y ago
    Teachers, road workers, federal engineers, soldiers, and federal law enforcement aren't exactly bureaucrats. And while there may be a bloating of bureaucracy in government, the private sector has plenty of accountants and middle managers as well.
    - mikeq101101 8y ago
      Teachers, road workers, and federal law enforcement do a terrible job, because of the incentives in the government jobs. The soldiers and the endless wars are the worst examples of what the government can do.
    - pathseeker 8y ago
      >And while there may be a bloating of bureaucracy in government, the private sector has plenty of accountants and middle managers as well. The difference is that companies with too much bloat die. There is no concept of that at all in the federal government because it just goes into more debt or taxes more instead.
- deleted 8y ago
  [deleted]
o10449366 8y ago
Tax credits and stock-based compensation are the likely reason. Some people will argue that with Amazon being one of the richest companies in the world there should exist no scenario in which they don't pay federal income tax and that the tax code should be simplified to close up these loopholes, but I just want a tax code rewrite so politicians and the media can stop exploiting the uneducated masses who don't understand what a tax break is.
- grzm 8y ago
  > "Tax credits and stock-based compensation are the likely reason." From the second paragraph of the article: > "The Institute on Taxation and Economic Policy says the company is subject to a 21 percent tax rate on its U.S. income. However, through various tax breaks and credits, the company will receive a tax rebate of $129 million."
darawk 8y ago
They shouldn't. They have deferred tax assets from years of losing money. This is perfectly reasonable. If you want to be mad about something, be mad about Google and Apple domiciling their IP in Ireland and siphoning all their profits there.
- benologist 8y ago
  The article refers to $11 billion in net profit. They haven't known what to do with all their money ever since convincing the tech industry AWS was cheap, this month AWS will net around $700 million in profit. It is simply their desire now to not pay taxes, not pay their workers well, to clone 3rd party vendor's products under their own brands, to copy the occasional SaaS hosted on AWS etc. The article actually says they received $129 million instead of paying taxes on $11 billion profit! https://www.zdnet.com/article/in-2018-aws-delivered-most-of-amazons-operating-income/ https://www.zdnet.com/article/in-2018-aws-delivered-most-of-... https://www.reuters.com/article/us-eu-amazon-com-antitrust/eu-regulators-want-to-know-if-merchants-hurt-by-amazon-copies-idUSKCN1M82IU https://www.reuters.com/article/us-eu-amazon-com-antitrust/e... https://www.theregister.co.uk/2013/03/08/amazon_copies_partner_products/ https://www.theregister.co.uk/2013/03/08/amazon_copies_partn...
  - darawk 8y ago
    >It is simply their desire now to not pay taxes, not pay their workers well, to clone 3rd party vendor's products under their own brands, to copy the occasional SaaS hosted on AWS etc. It's "simply their desire" not to pay taxes? You think the IRS accepts that? Do you think they just write in "sry guys, we'd rather not pay"? No, they aren't paying taxes on this money because it's offsetting prior losses. This is a perfectly reasonable way to structure the tax code, and it only seems like malfeasance to you because you haven't bothered to understand it.
    - benologist 8y ago
      I think they invest massively in accounting and legal and corrupt arrangements to avoid taxes, so it must simply be their desire. Their tax paperwork didn't accidentally end up $129m up instead of $3b down. https://www.cnbc.com/2017/10/03/eu-to-fine-amazon-millions-in-back-taxes--report.html https://www.cnbc.com/2017/10/03/eu-to-fine-amazon-millions-i... It's a while since they didn't make a profit, in large part because of AWS growing to currently north of a million an hour net profit on margins their retail side can't replicate. https://www.recode.net/2017/4/27/15451726/amazon-q1-2017-earnings-profits-net-income-cash-flow-chart https://www.recode.net/2017/4/27/15451726/amazon-q1-2017-ear... Suggests Q3 2015 was the last time they lost money... and lost can mean anything with enough accounting.
sctb 8y ago
Previously: https://news.ycombinator.com/item?id=19155655 https://news.ycombinator.com/item?id=19155655.
isoskeles 8y ago
What I usually don't understand is that when people bring something up like this, the intent feels like it's to make me mad at Amazon. Did Amazon break the law? No. At least not in this case, as far as I know. If you see a problem with this picture, the problem IMO is an overly complicated tax code that mostly benefits people/businesses with the resources to navigate it. That aside, if Amazon paying nothing in federal income tax largely has to do with offsetting previous losses, what's the problem? That seems fair, and I would really want someone who has a problem with this to explain why it would be more fair to tax a business' gains one year by ignoring previous years' losses.
- stefan_ 8y ago
  Why on earth should you possibly be able to carry past losses into future years? What is the possible utility or incentive of that?
  - isoskeles 8y ago
    For the same reason we tax profit not revenue.
    - stefan_ 8y ago
      They made a profit, this year. All losses of the past are accounted in that.
      - isoskeles 8y ago
        I don't understand what you mean by "all losses of the past are account in that." My understanding is they made a profit this year means the difference in the money they earned and the spent, starting January 1st 2018 and ending January 1st 2019, was greater than $0.
      - pathseeker 8y ago
        Making a profit in a single year absolutely does not offset losses of the last years. If I record a loss of $10 every year for 10 years, I have lost $100 dollars. If I record a profit of $20 finally, I still have to make a profit of $80 before I even break even. Honestly, did you not understand that basic accounting or did you just type quickly without thinking. This is a really good example of why basic economics or even an intro to business accounting needs to be mandatory in high school. Otherwise we end up with people voting on economic policy based on complete ignorance and clickbait like this headline.

39 points by BallinBige 8y ago

deleted 8y ago

[deleted]

mikeq101101 8y ago

And that is a good thing.

deleted 8y ago
[deleted]

throwaway5752 8y ago

If this makes you mad, definitely don't look into the taxes of just about every other company in the US. Particularly don't look at defense, integrated oil E&P, agriculture, or residential construction. I bet those industries would love for you to be outraged about Amazon and it's 21% off a $10B base instead their total subsidies that probably are high tens of billions or greater.

BucketSort 8y ago
But it's ok because they create so much value for the economy, right?
mikeq101101 8y ago
I feel better about the money staying in the hands of people that actually (and efficiently) provide useful services and products to people, unlike bureaucrats in the government who have no incentive to do things well and be efficient (and in reality have the opposite incentives).
- himlion 8y ago
  Luckily most people don't feel like that or we'd be living in a pretty bleak world.
  - mikeq101101 8y ago
    People having voluntary interactions instead of being forced, what a bleak world.
    - himlion 8y ago
      Negative externalities are best solved by a government.
      - mikeq101101 8y ago
        That is at least a controversial statement, not a fact as you put it.
        majewsky 8y ago
        What other method exists for pricing in negative externalities? Honest question.
- harrumph 8y ago
  >I feel better about the money staying in the hands of people that actually (and efficiently) provide useful services and products to people, unlike bureaucrats in the government who have no incentive to do things well and be efficient (and in reality have the opposite incentives). Right, because tax money, once collected, simply vanishes into thin air and never, ever shows up as the income of private companies, nor drives entire sectors of the economy. At least that's how it works under the purple skies of planet Libertaria.
  - mikeq101101 8y ago
    >Right, because tax money, once collected, simply vanishes into thin air and never, ever shows up as the income of private companies, nor drives entire sectors of the economy. What are you trying to argue? Taxes are good, because some part of them is redistributed back to private companies?
    - harrumph 8y ago
      >What are you trying to argue? Taxes are good, because some part of them is redistributed back to private companies? I'm arguing the fact that spending by government is literally the engine of our own and all other economies, and that libertarians are hilariously delusional about this bedrock fact. Without this spending/circulation there is zero facility nor security for the conduct of commerce nor is there income for the vast majority of the private enterprise. When you rebut, please use a privately-developed communications protocol stack to do so.
      - mikeq101101 8y ago
        Can you list a few sectors of the economy that are driven entirely by taxpayer money through the government?
        harrumph 8y ago
        >Can you list a few sectors of the economy that are driven entirely by taxpayer money through the government? You can begin with a symbol -- the largest single private employer on the planet, the retailer named Walmart. A fully subsidized operation that, per its own filings, depends upon SNAP payments paid to its customers for its income. In addition to being dependent upon these payments the company depends on SNAP serving as payroll subsidy for its hundreds of thousands of workers who they choose to pay poverty wages. Then for sectors, you may move to the depth and breadth of the energy, R&D, defense, security, health care, package freight and construction sectors, who, without their single largest governmental customers, would be a small fraction of what they are, employing a tiny fraction of historic levels. Then there are sectors that are utterly dependent upon government subsidy, such as pharma research, agra, and transportation. Add to this the rest of the economy: sectors that would grind to a halt if not for indirect dependence upon public goods -- courts, roads and communications capacity funded by taxes. Fact: taxpayers, uncompensated by any shares of stock, pay the bills and line the pockets of stockholders in most of really existing capitalism. Socialism exists and dominates for the rich while the market discipline that libertarians live to defend is in fact something that is reserved exclusively for the non-rich. Capitalist fables about the importance of incentives and market discipline fall on their faces the second you scrutinize flows of taxation as well as flows of appropriated value taken from workers under capitalism.
- jakelazaroff 8y ago
  Who do you think builds and maintains the infrastructure Amazon uses to provide those useful services? How do you think it gets paid for?
  - pathseeker 8y ago
    Depends on the infrastructure you are referring to. Things like roads are paid for with gas taxes and commercial trucking taxes that Amazon pays automatically in their shipping costs. They aren't exempt from that.
- jakeinspace 8y ago
  Teachers, road workers, federal engineers, soldiers, and federal law enforcement aren't exactly bureaucrats. And while there may be a bloating of bureaucracy in government, the private sector has plenty of accountants and middle managers as well.
  - mikeq101101 8y ago
    Teachers, road workers, and federal law enforcement do a terrible job, because of the incentives in the government jobs. The soldiers and the endless wars are the worst examples of what the government can do.
  - pathseeker 8y ago
    >And while there may be a bloating of bureaucracy in government, the private sector has plenty of accountants and middle managers as well. The difference is that companies with too much bloat die. There is no concept of that at all in the federal government because it just goes into more debt or taxes more instead.
deleted 8y ago
[deleted]

o10449366 8y ago

Tax credits and stock-based compensation are the likely reason. Some people will argue that with Amazon being one of the richest companies in the world there should exist no scenario in which they don't pay federal income tax and that the tax code should be simplified to close up these loopholes, but I just want a tax code rewrite so politicians and the media can stop exploiting the uneducated masses who don't understand what a tax break is.

grzm 8y ago
> "Tax credits and stock-based compensation are the likely reason." From the second paragraph of the article: > "The Institute on Taxation and Economic Policy says the company is subject to a 21 percent tax rate on its U.S. income. However, through various tax breaks and credits, the company will receive a tax rebate of $129 million."

darawk 8y ago

They shouldn't. They have deferred tax assets from years of losing money. This is perfectly reasonable. If you want to be mad about something, be mad about Google and Apple domiciling their IP in Ireland and siphoning all their profits there.

benologist 8y ago
The article refers to $11 billion in net profit. They haven't known what to do with all their money ever since convincing the tech industry AWS was cheap, this month AWS will net around $700 million in profit. It is simply their desire now to not pay taxes, not pay their workers well, to clone 3rd party vendor's products under their own brands, to copy the occasional SaaS hosted on AWS etc. The article actually says they received $129 million instead of paying taxes on $11 billion profit! https://www.zdnet.com/article/in-2018-aws-delivered-most-of-amazons-operating-income/ https://www.zdnet.com/article/in-2018-aws-delivered-most-of-... https://www.reuters.com/article/us-eu-amazon-com-antitrust/eu-regulators-want-to-know-if-merchants-hurt-by-amazon-copies-idUSKCN1M82IU https://www.reuters.com/article/us-eu-amazon-com-antitrust/e... https://www.theregister.co.uk/2013/03/08/amazon_copies_partner_products/ https://www.theregister.co.uk/2013/03/08/amazon_copies_partn...
- darawk 8y ago
  >It is simply their desire now to not pay taxes, not pay their workers well, to clone 3rd party vendor's products under their own brands, to copy the occasional SaaS hosted on AWS etc. It's "simply their desire" not to pay taxes? You think the IRS accepts that? Do you think they just write in "sry guys, we'd rather not pay"? No, they aren't paying taxes on this money because it's offsetting prior losses. This is a perfectly reasonable way to structure the tax code, and it only seems like malfeasance to you because you haven't bothered to understand it.
  - benologist 8y ago
    I think they invest massively in accounting and legal and corrupt arrangements to avoid taxes, so it must simply be their desire. Their tax paperwork didn't accidentally end up $129m up instead of $3b down. https://www.cnbc.com/2017/10/03/eu-to-fine-amazon-millions-in-back-taxes--report.html https://www.cnbc.com/2017/10/03/eu-to-fine-amazon-millions-i... It's a while since they didn't make a profit, in large part because of AWS growing to currently north of a million an hour net profit on margins their retail side can't replicate. https://www.recode.net/2017/4/27/15451726/amazon-q1-2017-earnings-profits-net-income-cash-flow-chart https://www.recode.net/2017/4/27/15451726/amazon-q1-2017-ear... Suggests Q3 2015 was the last time they lost money... and lost can mean anything with enough accounting.

sctb 8y ago

Previously: https://news.ycombinator.com/item?id=19155655 https://news.ycombinator.com/item?id=19155655.

isoskeles 8y ago

What I usually don't understand is that when people bring something up like this, the intent feels like it's to make me mad at Amazon. Did Amazon break the law? No. At least not in this case, as far as I know. If you see a problem with this picture, the problem IMO is an overly complicated tax code that mostly benefits people/businesses with the resources to navigate it. That aside, if Amazon paying nothing in federal income tax largely has to do with offsetting previous losses, what's the problem? That seems fair, and I would really want someone who has a problem with this to explain why it would be more fair to tax a business' gains one year by ignoring previous years' losses.

stefan_ 8y ago
Why on earth should you possibly be able to carry past losses into future years? What is the possible utility or incentive of that?
- isoskeles 8y ago
  For the same reason we tax profit not revenue.
  - stefan_ 8y ago
    They made a profit, this year. All losses of the past are accounted in that.
    - isoskeles 8y ago
      I don't understand what you mean by "all losses of the past are account in that." My understanding is they made a profit this year means the difference in the money they earned and the spent, starting January 1st 2018 and ending January 1st 2019, was greater than $0.
    - pathseeker 8y ago
      Making a profit in a single year absolutely does not offset losses of the last years. If I record a loss of $10 every year for 10 years, I have lost $100 dollars. If I record a profit of $20 finally, I still have to make a profit of $80 before I even break even. Honestly, did you not understand that basic accounting or did you just type quickly without thinking. This is a really good example of why basic economics or even an intro to business accounting needs to be mandatory in high school. Otherwise we end up with people voting on economic policy based on complete ignorance and clickbait like this headline.