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Nobody is stopping them from wasting their time and resources. They are free to waste them as much as they want. It's just not a tax-deductible business expense

by imgabe 3y ago

Nobody is stopping them from wasting their time and resources. They are free to waste them as much as they want. It's just not a tax-deductible business expense to do so. There is a difference between "we won't allow you to do something" vs. "we won't subsidize you to do something". It's one thing to want to waste your resources, it's another thing to demand that everyone else pay you to do so. What's to stop the CEO from building a mansion with the company's resources and selling it to himself for $1? Then having the company write it off as a loss? Oops! It was just a bad business decision and the company lost money. Oh well! We can't stop them from wasting their resources if they want to!

s1artibartfast 3y ago
Fundamental to the whole premise of taxes is that they are applied to net profit. If a company spends $1 to make $10, they get taxed on $9. If they spend $8 to make $10, they get taxed on $2. Nobody is giving warner bros money. They arent getting a cash tax refund. They just spent more money and made less profit. If they wanted to make zero profit, and pay zero taxes, that is their choice! If a commpany wants to sell houses at a loss, that is legal, and happens all the time. If they are self dealing, the shareholders could have an issue with it, or the IRS if the CEO doesn't report it. Guess what, Companies DO give CEOs many millions of dollars of salary and stock. Every bit of that is tax deductible expense for the company. >Oh well! We can't stop them from wasting their resources if they want to! It is literally none of your business because they aren't your resources! It is like complaining your neighbors have fun on Sunday instead of working and paying more taxes.
- imgabe 3y ago
  > Fundamental to the whole premise of taxes is that they are applied to net profit. If a company spends $1 to make $10, they get taxed on $9. If they spend $8 to make $10, they get taxed on $2. Yes, the key word there is net profit, and the ways to calculate net profit for tax purposes are prescribed by law. Not every single penny a company spends is automatically a deductible business expense. Some things are, some things partially are, some have to be amortized over time, some are not deductible at all. There's thousands of pages of tax law delineating this and it is not in the slightest without precedent to declare a particular expense non-deductible.
  - s1artibartfast 3y ago
    So there is a moral argument for what an ideal world should be like, and legal argument for what the rules are. From the moral perspective, it is clear that WB clearly had real expenses. They spent money, bought rights, and tons of workers were paid good money. Now you pivot to the legal argument. The current law clearly supports what Warner Bros is doing, so that doesnt help you either. like I said before. It seems like this entire thing boils down to a control issue. you dont like how WB is running their company and doing with their property. It isnt you business, both figuratively and literally.
    - imgabe 3y ago
      > From the moral perspective, it is clear that WB clearly had real expenses. They spent money, bought rights, and tons of workers were paid good money. Yes, they had expenses. You seem to have a very very rudimentary understanding of accounting and have conflated expenses with losses. An expense is not a loss. If you buy a factory for $1 million, you didn't lose $1 million dollars. You now have an asset, a factory, that is worth approximately $1 million. You don't get to go to the IRS and say "I lost $1 million dollars this year because I bought a factory". The IRS will tell you, no you didn't. You still have your $1 million, it's just now in the form of a factory instead of cash. Likewise, WB spent money and created an asset, a film. That film has a market value. Maybe they don't like the film, but that doesn't change the reality that it's worth something. We know approximately how much it's worth because several other companies made offers to buy it. Instead WB wants to lie and say it isn't worth anything. So, no I don't like how they are running their company when they want to lie and cheat to get out of paying the taxes they owe. You can't buy a factory for $1 million and then turn around and say "yeah, it's not worth anything anymore", and you shouldn't be able to say a movie isn't worth anything when it very clearly is. We do not gain anything by enabling companies or anyone to deny reality.
      - s1artibartfast 3y ago
        The value of a destroyed movie is zero. How is that a lie?
- djur 3y ago
  Individuals certainly aren't taxed on their net profit, so I don't see how that could be "fundamental to the whole premise". If the tax code has effects that are noxious to the public, it's a public matter to revise the tax code.

by imgabe 3y ago

s1artibartfast 3y ago

Fundamental to the whole premise of taxes is that they are applied to net profit. If a company spends $1 to make $10, they get taxed on $9. If they spend $8 to make $10, they get taxed on $2. Nobody is giving warner bros money. They arent getting a cash tax refund. They just spent more money and made less profit. If they wanted to make zero profit, and pay zero taxes, that is their choice! If a commpany wants to sell houses at a loss, that is legal, and happens all the time. If they are self dealing, the shareholders could have an issue with it, or the IRS if the CEO doesn't report it. Guess what, Companies DO give CEOs many millions of dollars of salary and stock. Every bit of that is tax deductible expense for the company. >Oh well! We can't stop them from wasting their resources if they want to! It is literally none of your business because they aren't your resources! It is like complaining your neighbors have fun on Sunday instead of working and paying more taxes.

imgabe 3y ago
> Fundamental to the whole premise of taxes is that they are applied to net profit. If a company spends $1 to make $10, they get taxed on $9. If they spend $8 to make $10, they get taxed on $2. Yes, the key word there is net profit, and the ways to calculate net profit for tax purposes are prescribed by law. Not every single penny a company spends is automatically a deductible business expense. Some things are, some things partially are, some have to be amortized over time, some are not deductible at all. There's thousands of pages of tax law delineating this and it is not in the slightest without precedent to declare a particular expense non-deductible.
- s1artibartfast 3y ago
  So there is a moral argument for what an ideal world should be like, and legal argument for what the rules are. From the moral perspective, it is clear that WB clearly had real expenses. They spent money, bought rights, and tons of workers were paid good money. Now you pivot to the legal argument. The current law clearly supports what Warner Bros is doing, so that doesnt help you either. like I said before. It seems like this entire thing boils down to a control issue. you dont like how WB is running their company and doing with their property. It isnt you business, both figuratively and literally.
  - imgabe 3y ago
    > From the moral perspective, it is clear that WB clearly had real expenses. They spent money, bought rights, and tons of workers were paid good money. Yes, they had expenses. You seem to have a very very rudimentary understanding of accounting and have conflated expenses with losses. An expense is not a loss. If you buy a factory for $1 million, you didn't lose $1 million dollars. You now have an asset, a factory, that is worth approximately $1 million. You don't get to go to the IRS and say "I lost $1 million dollars this year because I bought a factory". The IRS will tell you, no you didn't. You still have your $1 million, it's just now in the form of a factory instead of cash. Likewise, WB spent money and created an asset, a film. That film has a market value. Maybe they don't like the film, but that doesn't change the reality that it's worth something. We know approximately how much it's worth because several other companies made offers to buy it. Instead WB wants to lie and say it isn't worth anything. So, no I don't like how they are running their company when they want to lie and cheat to get out of paying the taxes they owe. You can't buy a factory for $1 million and then turn around and say "yeah, it's not worth anything anymore", and you shouldn't be able to say a movie isn't worth anything when it very clearly is. We do not gain anything by enabling companies or anyone to deny reality.
    - s1artibartfast 3y ago
      The value of a destroyed movie is zero. How is that a lie?
djur 3y ago
Individuals certainly aren't taxed on their net profit, so I don't see how that could be "fundamental to the whole premise". If the tax code has effects that are noxious to the public, it's a public matter to revise the tax code.