4 ms·

It's a tax write-off.

by tills13 5y ago

avalys 5y ago
What do you imagine that means exactly?
- deleted 5y ago
  [deleted]
- woah 5y ago
  Kramer: It's a write off for them. Jerry: How is it a write off? Kramer: They just write it off. Jerry: Write it off of what? Kramer: They just write it off! Jerry: You don't even know what a write off is, do you? Kramer: No. Do you? Jerry: No I don't!! https://www.youtube.com/watch?v=XEL65gywwHQ https://www.youtube.com/watch?v=XEL65gywwHQ
  - throwawayboise 5y ago
    Ah so tempted to post the punch line which is the best part of the bit. But I won't be the spoiler.
kstrauser 5y ago
I'll explain why that comment almost never makes sense. Let's say your tax rate is 50% and your taxable income is $1,000,000, so you'll owe $500,000 in taxes. If you donate $100,000 to charity as a "tax write-off", now your taxable income is only $900,000 and you'll only owe $450,000 in taxes, but you lost $100,000 to save that $50,000. At the end of the day, you'll have $50,000 less than if you didn't donate anything. Before anyone starts with "but what if it drops you into a lower tax bracket!": a) that's not how marginal taxes work, and b) the top tax bracket starts at $518,400 in the US in 2021, and I'm pretty sure Bezos made many times that amount. "It's a tax write-off" doesn't make sense mathematically. It's not a thing. There's not a plausible way where giving away money can improve your bottom line over not giving it away without having tax rates above 100%, which we don't have.
- omegaworks 5y ago
  Bezos' taxable income isn't $1,000,000. Only an idiot billionaire would structure their day to day processes in ways that were taxable. He likely operates like other extremely wealthy people do[1]: take a small salary to cover the interest on extremely low-interest loans made possible with his massive stock holdings as collateral. 1. https://www.propublica.org/article/the-secret-irs-files-trove-of-never-before-seen-records-reveal-how-the-wealthiest-avoid-income-tax https://www.propublica.org/article/the-secret-irs-files-trov...
  - missedthecue 5y ago
    Your own article literally says Jeff Bezos paid almost a billion dollars in federal income tax on $4.2 billion in income last year. Nothing about crazy schemes to minimize or offshore tax liability.
    - omegaworks 5y ago
      >In 2007, Jeff Bezos, then a multibillionaire and now the world’s richest man, did not pay a penny in federal income taxes. He achieved the feat again in 2011. From 2014 to 2018 his wealth grew by 99B, and he paid under 1B in taxes. Would love a sub 1% effective tax rate.
      - missedthecue 5y ago
        It's a real curiosity how not having any income will result in not paying any income tax. Jeff Bezos did not sell any Amazon shares in 2007 or 2011. https://www.secform4.com/insider-trading/1018724-25.htm https://www.secform4.com/insider-trading/1018724-25.htm https://www.secform4.com/insider-trading/1018724-18.htm https://www.secform4.com/insider-trading/1018724-18.htm And a stock you own going up in value is not income. It does not trigger tax liability. If he doesn't sell shares right now, he is simply deferring tax liability to a future date. He is not cheating the tax man. His tax rate is not less than 1%.
        5y ago

It's a tax write-off.

avalys 5y ago

What do you imagine that means exactly?

deleted 5y ago
[deleted]
woah 5y ago
Kramer: It's a write off for them. Jerry: How is it a write off? Kramer: They just write it off. Jerry: Write it off of what? Kramer: They just write it off! Jerry: You don't even know what a write off is, do you? Kramer: No. Do you? Jerry: No I don't!! https://www.youtube.com/watch?v=XEL65gywwHQ https://www.youtube.com/watch?v=XEL65gywwHQ
- throwawayboise 5y ago
  Ah so tempted to post the punch line which is the best part of the bit. But I won't be the spoiler.

kstrauser 5y ago

I'll explain why that comment almost never makes sense. Let's say your tax rate is 50% and your taxable income is $1,000,000, so you'll owe $500,000 in taxes. If you donate $100,000 to charity as a "tax write-off", now your taxable income is only $900,000 and you'll only owe $450,000 in taxes, but you lost $100,000 to save that $50,000. At the end of the day, you'll have $50,000 less than if you didn't donate anything. Before anyone starts with "but what if it drops you into a lower tax bracket!": a) that's not how marginal taxes work, and b) the top tax bracket starts at $518,400 in the US in 2021, and I'm pretty sure Bezos made many times that amount. "It's a tax write-off" doesn't make sense mathematically. It's not a thing. There's not a plausible way where giving away money can improve your bottom line over not giving it away without having tax rates above 100%, which we don't have.

omegaworks 5y ago
Bezos' taxable income isn't $1,000,000. Only an idiot billionaire would structure their day to day processes in ways that were taxable. He likely operates like other extremely wealthy people do[1]: take a small salary to cover the interest on extremely low-interest loans made possible with his massive stock holdings as collateral. 1. https://www.propublica.org/article/the-secret-irs-files-trove-of-never-before-seen-records-reveal-how-the-wealthiest-avoid-income-tax https://www.propublica.org/article/the-secret-irs-files-trov...
- missedthecue 5y ago
  Your own article literally says Jeff Bezos paid almost a billion dollars in federal income tax on $4.2 billion in income last year. Nothing about crazy schemes to minimize or offshore tax liability.
  - omegaworks 5y ago
    >In 2007, Jeff Bezos, then a multibillionaire and now the world’s richest man, did not pay a penny in federal income taxes. He achieved the feat again in 2011. From 2014 to 2018 his wealth grew by 99B, and he paid under 1B in taxes. Would love a sub 1% effective tax rate.
    - missedthecue 5y ago
      It's a real curiosity how not having any income will result in not paying any income tax. Jeff Bezos did not sell any Amazon shares in 2007 or 2011. https://www.secform4.com/insider-trading/1018724-25.htm https://www.secform4.com/insider-trading/1018724-25.htm https://www.secform4.com/insider-trading/1018724-18.htm https://www.secform4.com/insider-trading/1018724-18.htm And a stock you own going up in value is not income. It does not trigger tax liability. If he doesn't sell shares right now, he is simply deferring tax liability to a future date. He is not cheating the tax man. His tax rate is not less than 1%.
      - 5y ago