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> This is simply because companies pay money to individuals who then pay taxes. This is a feature not a bug as taxing companies is less efficient from just havi

> This is simply because companies pay money to individuals who then pay taxes. This is a feature not a bug as taxing companies is less efficient from just having employee pay as a deduction that gets taxed downstream. So if a company has a large revenue that it mostly reinvests and pays low salaries, very little tax would be paid on this revenue, and that seems okay to you? > People who complain about “companies not paying taxes” are like the “47% don’t pay taxes” people in that they don’t understand the principles behind taxation very well Are you sure about that? Amazon paid a federal income tax of 1.2% in 2019 on 13B of U.S. income. I think this is what people complain about when they talk about companies not paying taxes.

irrational 6y ago
13B in revenue or profit? That is, after paying their employees, the cost of buildings and equipment, capital costs, etc. how much was left over? What percentage of that did they pay in taxes?
- akiselev 6y ago
  Are you suggesting that Amazon's revenue from customers in the United States was $13 billion in all of 2019? That's a fraction of AWS revenue, let alone their retail business.
  - irrational 6y ago
    How should I know? It could be anywhere between $13 million and $13 trillion for all I know. I’m not even sure how much I have in my own bank account.
prepend 6y ago
> So if a company has a large revenue that it mostly reinvests and pays low salaries, very little tax would be paid on this revenue, and that seems okay to you? Certainly, of course. If they reinvest then they are spending capital on something so that company so taxes are eventually paid. This is meant, I think, to encourage growth with the intent that there will be an eventual taxable event at a higher amount than if tax was paid earlier in the stream. I think this is why tax revenues continue to grow. The intent is to maximize tax revenue. There’s no reason to worry about companies like in your scenario because it doesn’t negatively impact taxes. What might be good is to setup thresholds for deductible expenses to prevent corporate expense that are clearly luxuries. For example, meals are only 50% deductible. I could see setting up different classifications for private jets over commercial, country club dues, luxury hotels, etc. It doesn’t seem fair that taxpayers subsidize corporations claiming expenses and offsetting taxes on country club dues and whatnot. Pretty bizarre and there are lots of setasides that clearly benefit rich people who work for corporations.

irrational 6y ago

13B in revenue or profit? That is, after paying their employees, the cost of buildings and equipment, capital costs, etc. how much was left over? What percentage of that did they pay in taxes?

akiselev 6y ago
Are you suggesting that Amazon's revenue from customers in the United States was $13 billion in all of 2019? That's a fraction of AWS revenue, let alone their retail business.
- irrational 6y ago
  How should I know? It could be anywhere between $13 million and $13 trillion for all I know. I’m not even sure how much I have in my own bank account.

prepend 6y ago

> So if a company has a large revenue that it mostly reinvests and pays low salaries, very little tax would be paid on this revenue, and that seems okay to you? Certainly, of course. If they reinvest then they are spending capital on something so that company so taxes are eventually paid. This is meant, I think, to encourage growth with the intent that there will be an eventual taxable event at a higher amount than if tax was paid earlier in the stream. I think this is why tax revenues continue to grow. The intent is to maximize tax revenue. There’s no reason to worry about companies like in your scenario because it doesn’t negatively impact taxes. What might be good is to setup thresholds for deductible expenses to prevent corporate expense that are clearly luxuries. For example, meals are only 50% deductible. I could see setting up different classifications for private jets over commercial, country club dues, luxury hotels, etc. It doesn’t seem fair that taxpayers subsidize corporations claiming expenses and offsetting taxes on country club dues and whatnot. Pretty bizarre and there are lots of setasides that clearly benefit rich people who work for corporations.