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I don’t get your point. If you run a business, money that you spend is subtracted from your earnings. Are you alleging that they made the money for fun? That

I don’t get your point. If you run a business, money that you spend is subtracted from your earnings. Are you alleging that they made the money for fun? That they never intended to release it? That’s they spent 10 dollars to save 3 dollars in taxes? And then you pay taxes on earnings. That’s not cheating and it makes a lot of sense if you think about it.

hyperhopper 3y ago
> That’s they spent 10 dollars to save 3 dollars in taxes? Yes, exactly. You're forgetting Hollywood accounting. Spending 1 dollars to somebody, 9 dollars to your other companies and saving 3 dollars later is netting you 2 dollars.
- konschubert 3y ago
  Well, those other companies paid taxes as well. Plus you can only save taxes if you’re paying taxes in the first place. A company that only loses money isn’t going to get paid. I’m not sure that scheme works work out another trick.
  - hyperhopper 3y ago
    > Well, those other companies paid taxes as well. How do you know? At this scale tax avoidance schemes often completely prevent this.
  - DannyBee 3y ago
    "Well, those other companies paid taxes as well." This is a bad assumption. Those other companies are often either incorporated in tax havens, or they have a ton of companies with various forms of tax breaks/incentives. So where I live, for example, they get transferrable Georgia tax credits during the making of the film. Doesn't matter if you lose money, go bankrupt, etc. It's based on expenses. Because they are transferrable, they sell the tax credits (They sell for 80-90 cents on the dollar, so buying them lowers the cost of paying your taxes). So to your middle point, they can in fact, pay no taxes but end up with plenty of tax credits to sell. Before you ask, earning state tax credits is not federally taxable - it is treated as a reduction in your state tax liability, not as income to the companies that earn them. (It's a bit more complex than that, but ...)

hyperhopper 3y ago

> That’s they spent 10 dollars to save 3 dollars in taxes? Yes, exactly. You're forgetting Hollywood accounting. Spending 1 dollars to somebody, 9 dollars to your other companies and saving 3 dollars later is netting you 2 dollars.

konschubert 3y ago
Well, those other companies paid taxes as well. Plus you can only save taxes if you’re paying taxes in the first place. A company that only loses money isn’t going to get paid. I’m not sure that scheme works work out another trick.
- hyperhopper 3y ago
  > Well, those other companies paid taxes as well. How do you know? At this scale tax avoidance schemes often completely prevent this.
- DannyBee 3y ago
  "Well, those other companies paid taxes as well." This is a bad assumption. Those other companies are often either incorporated in tax havens, or they have a ton of companies with various forms of tax breaks/incentives. So where I live, for example, they get transferrable Georgia tax credits during the making of the film. Doesn't matter if you lose money, go bankrupt, etc. It's based on expenses. Because they are transferrable, they sell the tax credits (They sell for 80-90 cents on the dollar, so buying them lowers the cost of paying your taxes). So to your middle point, they can in fact, pay no taxes but end up with plenty of tax credits to sell. Before you ask, earning state tax credits is not federally taxable - it is treated as a reduction in your state tax liability, not as income to the companies that earn them. (It's a bit more complex than that, but ...)