4 ms·

I think the meme is "Amazon pays no federal taxes on it's profits", and that is a correct statement.

sneak 5y ago
If that were the meme, I wouldn't be trying to dispel it.
dahfizz 5y ago
Even that is not really true. They paid no federal income tax in 2017 and 2018, but have before and since. I'm no fan of Amazon, but you have to admit there is a pretty large distance between "Amazon pays no tax" and "Amazon pays billions in tax, but they didn't pay this one specific kind of tax a couple years ago". https://www.cnbc.com/2020/02/04/amazon-had-to-pay-federal-income-taxes-for-the-first-time-since-2016.html https://www.cnbc.com/2020/02/04/amazon-had-to-pay-federal-in...
- spaceribs 5y ago
  I think income tax is the most impactful and expensive tax we have in the US, it's the one everyone thinks of when someone says "doing your taxes". The fact that Amazon just this year after not paying for 2 years had to pay a measly 1.6% in taxes does not really negate the argument. Edit: 4 years -> 2 years
  - dahfizz 5y ago
    It really feels like you're twisting reality. Amazon went 2 years without paying _income_ tax, not 4. Amazon paid $3.5 billion in taxes in 2019 (some of which was differed, but still owed). That is over 25% of their income that year. Their federal income tax rate came out to 1.6%, but its borderline lying to say "they paid a measly 1.6% in taxes". Amazon is an awful company. There is no reason to bend the truth to try and show how awful they are. Being disingenuous only makes your argument weaker.
    - spaceribs 5y ago
      I misread the article, and I'll correct the 4 to 2 years now. Income is income though, not sales or payroll which are the expected and manageable operating costs of overhead and human resources. If I win the lottery, almost 50% of my winnings go back to the state, and I haven't even bought anything with those winnings. What's different about Amazon having a banner year?
      - robertlagrant 5y ago
        Because that's how lotteries work in the US. Companies don't have to be behemoths to pay no tax on income. They just have to post no profits by spending all the money they make on opex and capex.
        spaceribs 5y ago
        I understand the system, I just want to be clear how broken this is. Both are windfalls, one gets taxed immediately, the other gets taxed if they don't use up all their profits reinvesting in themselves by the end of the year.
        tick_tock_tick 5y ago
        I don't see how you can think this is broken. Think about the implications if it wasn't like this. Bankruptcy would be rampant and R&D investment would be impossible for everyone but the largest companies.
        spaceribs 5y ago
        I disagree, as these companies already calculate how much they need to spend to prevent having to pay taxes.
        robertlagrant 5y ago
        That doesn't matter. They're still spending it, rather than keeping it as profit.
- cycomanic 5y ago
  This is quite pendandic. When you calculate your tax rate do you also include GST(VAT)? Because this is essentially the same thing.
  - deleted 5y ago
    [deleted]
  - dahfizz 5y ago
    I guess it depends on the context. When I am filing my income tax, I am focused on that. But when budgeting or discussing tax liability in general, I certainly don't forget about the tens of thousands of dollars I pay in local, sales, SS, etc taxes. I would certainly not make the claim "I paid no taxes this year" if I managed to skirt only federal income tax.
Manuel_D 5y ago
Isn't that also incorrect? It would presumably pay the normal corporate tax on it's profits. It's just that Amazon reinvests it's revenue and thus has no (or little) profit.

If that were the meme, I wouldn't be trying to dispel it.

Even that is not really true. They paid no federal income tax in 2017 and 2018, but have before and since. I'm no fan of Amazon, but you have to admit there is a pretty large distance between "Amazon pays no tax" and "Amazon pays billions in tax, but they didn't pay this one specific kind of tax a couple years ago". https://www.cnbc.com/2020/02/04/amazon-had-to-pay-federal-income-taxes-for-the-first-time-since-2016.html https://www.cnbc.com/2020/02/04/amazon-had-to-pay-federal-in...

spaceribs 5y ago
I think income tax is the most impactful and expensive tax we have in the US, it's the one everyone thinks of when someone says "doing your taxes". The fact that Amazon just this year after not paying for 2 years had to pay a measly 1.6% in taxes does not really negate the argument. Edit: 4 years -> 2 years
- dahfizz 5y ago
  It really feels like you're twisting reality. Amazon went 2 years without paying _income_ tax, not 4. Amazon paid $3.5 billion in taxes in 2019 (some of which was differed, but still owed). That is over 25% of their income that year. Their federal income tax rate came out to 1.6%, but its borderline lying to say "they paid a measly 1.6% in taxes". Amazon is an awful company. There is no reason to bend the truth to try and show how awful they are. Being disingenuous only makes your argument weaker.
  - spaceribs 5y ago
    I misread the article, and I'll correct the 4 to 2 years now. Income is income though, not sales or payroll which are the expected and manageable operating costs of overhead and human resources. If I win the lottery, almost 50% of my winnings go back to the state, and I haven't even bought anything with those winnings. What's different about Amazon having a banner year?
    - robertlagrant 5y ago
      Because that's how lotteries work in the US. Companies don't have to be behemoths to pay no tax on income. They just have to post no profits by spending all the money they make on opex and capex.
      - spaceribs 5y ago
        I understand the system, I just want to be clear how broken this is. Both are windfalls, one gets taxed immediately, the other gets taxed if they don't use up all their profits reinvesting in themselves by the end of the year.
        tick_tock_tick 5y ago
        I don't see how you can think this is broken. Think about the implications if it wasn't like this. Bankruptcy would be rampant and R&D investment would be impossible for everyone but the largest companies.
        spaceribs 5y ago
        I disagree, as these companies already calculate how much they need to spend to prevent having to pay taxes.
        robertlagrant 5y ago
        That doesn't matter. They're still spending it, rather than keeping it as profit.
cycomanic 5y ago
This is quite pendandic. When you calculate your tax rate do you also include GST(VAT)? Because this is essentially the same thing.
- deleted 5y ago
  [deleted]
- dahfizz 5y ago
  I guess it depends on the context. When I am filing my income tax, I am focused on that. But when budgeting or discussing tax liability in general, I certainly don't forget about the tens of thousands of dollars I pay in local, sales, SS, etc taxes. I would certainly not make the claim "I paid no taxes this year" if I managed to skirt only federal income tax.

Manuel_D 5y ago

Isn't that also incorrect? It would presumably pay the normal corporate tax on it's profits. It's just that Amazon reinvests it's revenue and thus has no (or little) profit.