5 ms·

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 cos

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.
  - Nasrudith 5y ago
    Well yes, governments tend to like their industrial bases growing and are willing to wait for bigger gains over a longer time period. That isn't broken it is by design.
  - robertlagrant 5y ago
    How are they windfalls? For whom?
dahfizz 5y ago
> What's different about Amazon having a banner year? The big difference is that Amazon is a company. If Amazon decides to pay out large bonuses or dividends with its surplus, that gets taxed at the same rate as your lottery winnings. Before that happens, the income is Amazon's and not an individual's. There is no reason to expect the corporate income tax to behave the same way as individual's income tax.

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.
- Nasrudith 5y ago
  Well yes, governments tend to like their industrial bases growing and are willing to wait for bigger gains over a longer time period. That isn't broken it is by design.
- robertlagrant 5y ago
  How are they windfalls? For whom?

dahfizz 5y ago

> What's different about Amazon having a banner year? The big difference is that Amazon is a company. If Amazon decides to pay out large bonuses or dividends with its surplus, that gets taxed at the same rate as your lottery winnings. Before that happens, the income is Amazon's and not an individual's. There is no reason to expect the corporate income tax to behave the same way as individual's income tax.