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> If companies reinvest the money into their businesses, that's good. This is a bit of a side issue, but if a company really does reinvest the money into its b
by _delirium 6y ago
> If companies reinvest the money into their businesses, that's good.
This is a bit of a side issue, but if a company really does reinvest the money into its business, in most cases that reinvestment will be spent on things that are deductible as a business expense, so that portion of revenue won't be profit and not subject to corporate income tax. That's one reason Amazon pays close to zero corporate income tax: they book very little in profit, since they reinvest most of the their revenue into qualifying business expenses to expand the business.
- zdragnar 6y agoWhich is intentional- Amazon grew as a company, and we want companies to grow. Growing companies hire more people, and pay the people they hire more.
- game_the0ry 6y agoThat's a good point. You think most of corporate america would notice Amazon and try to do similar, instead they buy back stock. Buying back stock is a less risky short term strategy to improve stock performance. Maybe tax stock buy backs?