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This article fails to mention the obvious reason for not taking profit: taxation. Why would any company take a profit when it can invest in it’s own future suc

This article fails to mention the obvious reason for not taking profit: taxation. Why would any company take a profit when it can invest in it’s own future success and defer taxation? Anyone paying out a dividend is saying that the shareholder is a better capital allocator by the marginal tax rate. Philosophically should companies be allowed to do this? Analogous to similar loop holes where individuals use their own wealth to raise debt for cash and avoid showing paper gains to minimize tax.

WoahNoun 5y ago
The non-taxation side of that argument is that Bezos can invest better than I can and he can leverage those investments more than I can due to the technology that exists within the company,
jollybean 5y ago
"Why would any company take a profit when it can invest in it’s own future " 1) Because it's almost never the opportunity. 'Super High Growth' over a couple decades is a rare thing. Imagine if AMZN had not invented AWS? It would be a different story. 2) The term you are looking for is 'Cost of Capitol'. Which varies between various parties for different situations. If ABC Corp. can't yeild returns past a threshold, investors will want it back to do elsewhere. Think another way: If you had $1M to invest, what are the odds that it makes more sense to invest it in your own business vs. any other business? Why would amazing 'Bet Everything' on AMZN instead of any number of other companies? If a company is making decent profits, and a lot of powerful companies do, then it may be difficult for them to find other ways to get the same return.