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The government already gets first dibs through corporate income taxes. Buybacks aren't deductible from that.

by mrep 7y ago

jjoonathan 7y ago
Isn't corporate income tax the one that can be dodged by just shifting profit offshore? Or did they close that loophole?
- rayiner 7y ago
  Very few companies (mostly tech companies) can take advantage of those tricks. Exxon can’t assign all its oil fields to an Ireland subsidiary to inflate expenses and reduce profits in the US. The median effective tax rate for the S&P 500 in 2018 is 21%. That’s the same as or higher than the statutory tax rate in Canada, the U.K., Sweden, Norway, and Germany.
papito 7y ago
Yeah, Amazon paid $0 last year.
- ChrisLomont 7y ago
  Since 2019 is not yet filed I assume you mean 2018 as "last year". Here's Amazon's SEC filing for 2018 [1]. They paid 1+ billion on income taxes (page 37) on 11B in profits. They paid billions more in property taxes and other regulatory taxes. Note that annual taxes also are affected by previous year issues. This is why from the same document, same page, you see them paying 1.4B on 3.9B of profit. So getting upset about a year of no taxes with profits, when it truly does happen, is missing important nuance on what companies do pay. Check surrounding years, and read the SEC filings to see the reasons, which I've always found to be quite reasonable. It's not as bad as the pop press would have you believe when they cherry pick the outliers from one year or another. And the pop press usually ignores all the other taxes that corporations also pay, focusing solely on income taxes, as if that were the only tax. [1] https://ir.aboutamazon.com/static-files/ce3b13a9-4bf1-4388-89a0-e4bd4abd07b8 https://ir.aboutamazon.com/static-files/ce3b13a9-4bf1-4388-8...
  - appleiigs 7y ago
    Typical of HN on finance topics. You're downvoted for presenting facts and providing sources. And your source was audited by a 3rd party and accepted by the government who has their own auditors. On page 62, it says "Cash taxes paid, net of refunds, were $412 million, $957 million, and $1.2 billion for 2016, 2017, and 2018."
  - frockington1 7y ago
    Apparently facts don't matter when its against the narrative. Sadly, the corporations don't pay taxes meme appears to be well and alive in 2019
  - thebradbain 7y ago
    They paid $1+ Billion local, state, and international taxes. They paid $0 in federal taxes. Definitely worth noting, imo. https://www.google.com/amp/s/www.forbes.com/sites/stephaniedenning/2019/02/22/why-amazon-pays-no-corporate-taxes/amp/ https://www.google.com/amp/s/www.forbes.com/sites/stephanied...
    - ChrisLomont 7y ago
      Nothing in your link shows Amazon paying zero in federal income taxes, except the statement by the author. I trust SEC filings more than this article without supporting evidence. From the SEC filing, on page 22, they talk about US income taxes, and state over the three years covered that they paid out billions with exact amounts in the SEC filing. Care to provide a well sourced link with the zero federal income taxes claim supported by something legally binding like SEC filings or shareholder filings? I've never seen one to date.
      - thebradbain 7y ago
        Sure, and I would point my source to be the very SEC filings you linked. Head to page 62. Look at “US Federal” under “Current Taxes” — you will see “(129)”. What the “()” means is that they believe the government owes them 129 Million in tax REFUND. If you count deferred taxes they do owe money, but that’s money that hasn’t left their pockets in that tax year. Hence 0 federal taxes for tax year 2018. That is a hard fact. Snopes gives a further summary of how to calculate it, albeit for the tax year 2017, though equally applicable as it’s the same format as the SEC filing you linked. https://www.snopes.com/fact-check/amazon-federal-taxes-2017/ https://www.snopes.com/fact-check/amazon-federal-taxes-2017/
deleted 7y ago
[deleted]

The government already gets first dibs through corporate income taxes. Buybacks aren't deductible from that.

by mrep 7y ago

The government already gets first dibs through corporate income taxes. Buybacks aren't deductible from that.

Isn't corporate income tax the one that can be dodged by just shifting profit offshore? Or did they close that loophole?

rayiner 7y ago
Very few companies (mostly tech companies) can take advantage of those tricks. Exxon can’t assign all its oil fields to an Ireland subsidiary to inflate expenses and reduce profits in the US. The median effective tax rate for the S&P 500 in 2018 is 21%. That’s the same as or higher than the statutory tax rate in Canada, the U.K., Sweden, Norway, and Germany.

papito 7y ago

Yeah, Amazon paid $0 last year.

ChrisLomont 7y ago
Since 2019 is not yet filed I assume you mean 2018 as "last year". Here's Amazon's SEC filing for 2018 [1]. They paid 1+ billion on income taxes (page 37) on 11B in profits. They paid billions more in property taxes and other regulatory taxes. Note that annual taxes also are affected by previous year issues. This is why from the same document, same page, you see them paying 1.4B on 3.9B of profit. So getting upset about a year of no taxes with profits, when it truly does happen, is missing important nuance on what companies do pay. Check surrounding years, and read the SEC filings to see the reasons, which I've always found to be quite reasonable. It's not as bad as the pop press would have you believe when they cherry pick the outliers from one year or another. And the pop press usually ignores all the other taxes that corporations also pay, focusing solely on income taxes, as if that were the only tax. [1] https://ir.aboutamazon.com/static-files/ce3b13a9-4bf1-4388-89a0-e4bd4abd07b8 https://ir.aboutamazon.com/static-files/ce3b13a9-4bf1-4388-8...
- appleiigs 7y ago
  Typical of HN on finance topics. You're downvoted for presenting facts and providing sources. And your source was audited by a 3rd party and accepted by the government who has their own auditors. On page 62, it says "Cash taxes paid, net of refunds, were $412 million, $957 million, and $1.2 billion for 2016, 2017, and 2018."
- frockington1 7y ago
  Apparently facts don't matter when its against the narrative. Sadly, the corporations don't pay taxes meme appears to be well and alive in 2019
- thebradbain 7y ago
  They paid $1+ Billion local, state, and international taxes. They paid $0 in federal taxes. Definitely worth noting, imo. https://www.google.com/amp/s/www.forbes.com/sites/stephaniedenning/2019/02/22/why-amazon-pays-no-corporate-taxes/amp/ https://www.google.com/amp/s/www.forbes.com/sites/stephanied...
  - ChrisLomont 7y ago
    Nothing in your link shows Amazon paying zero in federal income taxes, except the statement by the author. I trust SEC filings more than this article without supporting evidence. From the SEC filing, on page 22, they talk about US income taxes, and state over the three years covered that they paid out billions with exact amounts in the SEC filing. Care to provide a well sourced link with the zero federal income taxes claim supported by something legally binding like SEC filings or shareholder filings? I've never seen one to date.
    - thebradbain 7y ago
      Sure, and I would point my source to be the very SEC filings you linked. Head to page 62. Look at “US Federal” under “Current Taxes” — you will see “(129)”. What the “()” means is that they believe the government owes them 129 Million in tax REFUND. If you count deferred taxes they do owe money, but that’s money that hasn’t left their pockets in that tax year. Hence 0 federal taxes for tax year 2018. That is a hard fact. Snopes gives a further summary of how to calculate it, albeit for the tax year 2017, though equally applicable as it’s the same format as the SEC filing you linked. https://www.snopes.com/fact-check/amazon-federal-taxes-2017/ https://www.snopes.com/fact-check/amazon-federal-taxes-2017/

deleted 7y ago

[deleted]