Amazon Will Pay $0 in Federal Taxes on $11.2 Billion Profits (fortune.com)

Those wondering how many zeros Amazon, which is valued at nearly $800 billion, has to pay in federal taxes might be surprised to learn that its check to the IRS will read exactly $0.00. From a report: According to a report published by the Institute on Taxation and Economic (ITEP) policy Wednesday, the e-tail/retail/tech/entertainment/everything giant won't have to pay a cent in federal taxes for the second year in a row. This tax-free break comes even though Amazon almost doubled its U.S. profits from $5.6 billion to $11.2 billion between 2017 and 2018. To top it off, Amazon actually reported a $129 million 2018 federal income tax rebate -- making its tax rate -1%.

Comments

ridiculous

[NikeHerc]

I'm all for capitalism but it's ridiculous that Amazon gets money back from the government after those huge profits!

Re:ridiculous

[Anonymous Coward]

This is solely on Congress. They pass and modify the tax laws so that they are so riddled with loopholes that, if you make a great deal of money, either as an individual or a company, and can hire the best tax attorneys, no taxes are required.

Re:ridiculous

[jriding]

For more information on why this is on Congress. ITEP notes that its non-existent federal tax payment is a result of the Trump Administrationâ(TM)s corporation-friendly tax cuts. The think tank writes that the 2017 Tax Cuts and Jobs Act not only decreased corporate tax rates from 35% to 21%, but it also didnâ(TM)t close âoea slew of tax loopholes that allow profitable companies to routinely avoid paying federal and state income taxes on almost half of their profits.â According to The Week, Amazon ended up paying an 11.4% federal income tax rate between 2011 and 2016, which is a contrast to the -1% rate this year. http://fortune.com/2019/02/14/...

Re:ridiculous

[link-error]

    Didn't Amazon not make profits for like the first 10 years or so of their existence? How much money did they spend building out their infrastructure?
  Don't they get to write off all those loses from capital investments over that period?

      I haven't reviewed there financial statements, but I can see how this would easily be true...

Re:ridiculous

[Anonymous Coward]

Perhaps, but if they were "paying" taxes to the government, they'd just raise the price on their products and services by an appropriate amount until their profit margins were once again where they wanted them to be. Not all companies may be able to do that, but Amazon certainly can.

Taxes are expense items. Companies generally keep income >= expense or eventually they go under. Lots of that going around for what it's worth.

That's completely wrong. Taxes have no bearing on Amazon's prices or most other companies. It's all about market share and what the market will bear. Tax planning comes after.
And there is no way that taxes can make a company go under because the tax rate is less than 100%.

Re:ridiculous

[jellomizer]

The biggest issue is that Small Businesses who are trying to grow, normally have to pay the bulk of the corporate taxes.
We really need to get some bravery in government.
Either stand up and say, we are just not going to have corporate Taxes, and make it difficult to hide share holders living and luxury expenses under corporate spending. or say we are going to have Corporate Taxes, and make sure the Money they show to the share holders, is the same money they show to the IRS.

Oddly enough the biggest problem facing businesses isn't the amount of taxes, or cost of employees. But just how the system puts all the players on different playing fields. Small companies trying to get a foothold, have to pay a lot of tax, while if they become big, then they can avoid it all together.

Re:ridiculous

[Dragonslicer]

Perhaps, but if they were "paying" taxes to the government, they'd just raise the price on their products and services by an appropriate amount until their profit margins were once again where they wanted them to be.

If they could raise prices without losing customers, they would have done so already. Why would Amazon settle for a 20% profit margin when they could have a 25%* profit margin instead?

* Numbers invented to illustrate the point

Re:ridiculous

[MBGMorden]

That's completely wrong. Taxes have no bearing on Amazon's prices or most other companies. It's all about market share and what the market will bear.

Not exactly. The price only typically is set at "what the market will bear" for specialty items. For commodities, typically competition will drive the price of that commodity well below what the public is willing to pay because its a competitive market. While someone might be WILLING to pay $5.00 for a gallon of milk, if one store tries to sell it for $5 and another prices it at $4, people are naturally going to go to the lower price. Then the first store reduces their price to $3.75 to get the business back. Repeat until the prices are essentially be a bare minimum above their cost.

As such, if taxes go up, their costs go up, and the rock bottom price that they can charge must also go up - on commodities at least. Taxes won't have much impact on things like a Nintendo Switch or designer clothing, but on paper, razor blades, hand tools, etc, it certainly will.

Re:ridiculous

[hierofalcon]

My comment was that too many years of expenses exceeding income leads to bankruptcy. Taxes are merely one expense. For many companies, you are correct that tax planning must come after "market will bear" comparisons. Amazon is to the point that people go to amazon.com to the exclusion of shopping on other on-line places or local retail for many items. For amazon, tax planning can indeed be dealt with by price adjustments and no consumer would bat an eye. At any rate, taxes are paid out of income or reducing expenses in other areas (benefits and payroll among the top candidates). So either way, corporate taxes hurt someone - consumers or employees - the most. They don't bother the big shareholders much.

Re:ridiculous

[lgw]

Taxes are expense items. Companies generally keep income >= expense or eventually they go under. Lots of that going around for what it's worth.

That's true within reason. But still, something is clearly off with our tax code if under existing law Amazon owes nothing.

I don't blame Amazon at all for doing everything legal to pay no taxes - they have a duty to do so. The fault lies with the congresscritters who continue to enable the loopholes.

I'm not sure corporate income tax even makes sense in the first place, for the reasons you explain, but while we have one it certainly shouldn't penalize small companies at the expense of the biggest multinationals.

Re:ridiculous

[UnknowingFool]

To be clear, the Trump administration and the former Congress closed a lot of loopholes and exemptions just not for corporations or high-income earners. For middle-income earners, congrats, Trump has fulfilled his promise of "closing loopholes" namely yours and yours only.

Re:ridiculous

[BenJeremy]

You are a liar. I've done my taxes, and paid more this year. Lots of people have been complaining about this.

Re:ridiculous

[Joce640k]

This is solely on Congress. They pass and modify the tax laws...

The fatal flaw in this plan is that Amazon can buy a chunk of "Congress" for a few million dollars.

Re:ridiculous

[sdinfoserv]

What we have is no longer capitalism. Our elected "representatives" are owned and beholden to the oligarchy donor class who put and keeps them in office. If the elected ones don't keep the stream of payola flowing to the donor class, someone else gets elected who will. It's that simple. The only way to fix this is campaign finance reform.

Re:ridiculous

[liquid_schwartz]

And consumers pay all profits too, is that also a bad thing? Everyone knows that the tax scam is best played by multinationals and that's partly why smaller shops are closing down. Hard to compete with tax free. Taxes need to be more uniform or eventually the masses will get fed up and break out the guillotines.

Re:ridiculous

[Altus]

The average return has dropped 8% this year... maybe you got a cut but perhaps you are also taking advantage of things that are not available to most people. I haven't done mine yet but a lot of people that I know personally that have ended up with a worse return than last year despite similar earnings and deductions.

Re:ridiculous

[Rhipf]

I think when your profits go up $5,000,000,000+ in a year you can afford to absorb at least some income taxes without passing them along to the consumer.

Re:ridiculous

[Shaitan]

"ITEP notes that its non-existent federal tax payment is a result of the Trump Administrationâ(TM)s corporation-friendly tax cuts."

Uh huh

"The think tank writes that the 2017 Tax Cuts and Jobs Act not only decreased corporate tax rates from 35% to 21%,"

It doesn't look at those Amazon paid either rate so that isn't it.

"but it also didnâ(TM)t close âoea slew of tax loopholes that allow profitable companies to routinely avoid paying federal and state income taxes on almost half of their profits"

So that isn't on the 2017 Tax Cuts and Jobs Act then, that is on the previous tax bills that introduced the holes Amazon exploited. It also still doesn't add up. Half their $12 billion profits is $6 billion and 21% of $6 billion is still about $1.26 billion. I certainly doesn't explain where they got paid $129 billion and made a profit on filing their taxes. At least part of that I'm sure will turn out be green energy incentives.

These things never have enough detail to judge anything though. For instance, if amazon paid out 10 billion in dividends those taxes still get paid, they just get paid by the people who got the money rather than by amazon. When a corporation is involved a lot of the loopholes that seem so terrible are really about avoiding taxing the same profit in two places because the corporation is just a piece of paper, the point is to make the human beings pay their taxes and not to make them pay them on the paper entity and then again on their own taxes.

Re:ridiculous

[Pfhorrest]

That's not "no longer capitalism", that's a consequence of capitalism.

Re:ridiculous

[penandpaper]

Because of the SALT deduction cap. Mainly those in CA and NY. This tax cut actually raised the taxes on wealthy people because of this.

IMO, I think that salt deduction is unfair and crap. There is no reason why I should pay more federal taxes than another person just because they decided to live in a high tax sate and I wanted to live in a low tax state.

Re:ridiculous

[kenh]

Reminder, it's not Tax Attorneys that write the tax code, that's on the politicians we (collectively) re-elect year after year. All tax attorneys do is review the laws crafted by the politicians and look for ways to minimize tax liabilities.

As noted here, while income taxes weren't paid by Amazon (at the lower corporate tax rate), taxes were paid at the highest personal income tax rate AND subject to Medicare taxes by the employee exercising their stock options - a net win for the government, since the same money was taxed at a higher rate, and additional funds were generated to pay for Medicare.

Re:ridiculous

[mschuyler]

I saw a $3000 reduction this year and I'm solidly a middle income earner. This idea that because your REFUND is less that means you've paid more is ridiculous. All a big refund means is that you have given more money to the government for a year than you needed to. That's YOU mismanaging your own taxes.

Re:ridiculous

[reg]

So why should the Federal government come first? Surely under the US constitution one is a citizen of your state first and then of the union, since the states make up the Union? But instead the tax system works backwards with the federal government getting the first crack at your money, then the state, then the county and then the city. It should be the other way around - deduct all city taxes (including GST) from your income, then county taxes, then state taxes, and then the federal government gets a share of what remains.

Re:ridiculous

[lgw]

If they and their competition pay the same tax rate, they will all raise prices to match. But that's clearly not the case here. It's costs that affect all sellers that get passed on to buyers, including corporate tax rates, were those at all evenly applied.

Re:ridiculous

[sycodon]

No.

Large corporations have been paying little to no taxes for decades.

Control your butthurt.

Re:ridiculous

[meglon]

IMO, I think that salt deduction is unfair and crap. There is no reason why I should pay more federal taxes than another person just because they decided to live in a high tax sate and I wanted to live in a low tax state.

You get to live in your "low tax" states because those high tax states are donor states for your leeching. High tax states get back far less from the feds than the put in, while the "low tax" states leech far more money from the fed than they put in, that way they can have those "low tax" rates.

If you don't think so, then lets all push for a constitutional amendment that says no state can receive more than 1.05, nor less than .95, of what they put in back. Virtually every "low tax" state would have their state budgets decimated by that... which might teach them a little bit about responsibility. It might also teach all the people in those "low tax" states to have a little bit of gratitude towards all of the taxpayers in the rest of the states who've been subsidizing them for decades.

Re:ridiculous

[sycodon]

The pundits conveniently leave out the fact that the withholding tables were changed and people had less taken out of each check, therefore lowering refunds.

Re:ridiculous

[ShanghaiBill]

When corporations pay taxes, the cost is passed on to some combination of shareholders (lower dividends or less capital investment), customers (higher prices), and employees (lower wages).

It would be better to just eliminate corporate taxes, and tax these groups directly. If you think employees should pay more, then increase payroll taxes. If you think customers should pay more, then increase sales taxes.

If you think shareholders should pay more, which is where most people think the burden should fall, then indirectly taxing the corporation is a terrible way to achieve that. It means the stocks in grandma's pension fund are taxed exactly the same as a billionaire's holdings. I would make more sense to tax dividends or capital gains only once at the individual level, so grandma pays at the low income rate, while the billionaire pays a higher marginal rate.

Re:ridiculous

[Rhipf]

If they make no profit over their first 10 years then I wouldn't expect them to pay any income tax (since they had no net income). The problem is that they made $11b profit and didn't pay anything in taxes (they actually got a refund). Now I am not an accountant but from my understanding profits are the money left over after you have accounted for the money spent building infrastructure and other capital investments.

Re:ridiculous

[Anonymous Coward]

Lots of people have been complaining about this.

The only complaints I have heard come from people not understanding that a smaller refund is not the same thing as paying more in taxes. For instance, if this year the government withheld $10,000 and you got back $1,000, but last year they withheld $15,000 and you got back $4,000, the refund might be $3,000 less but you actually ended up paying $2,000 less in taxes this year.

Where did that $3,000 go you ask? If you are paid bi-weekly (so 26 pay periods), it went towards an extra $115 in every single one of your paycheques.

Of course all of this is speculation and without cold, hard, factual numbers we cannot say for sure what your situation might be.

Re:ridiculous

[hierofalcon]

Taxes are ultimately paid by people. Corporate taxes are merely expense items. And unfortunately, there aren't enough wealthy people to cover the cost of government even if you tax their income at a high rate.

We need to look at eliminating payment for services rendered in any form other than salary or wages. Skip the payments of the well off by stock options. There is too much manipulation there and too much of tax favorable treatment. Get over the delusion they've foisted on people that somehow paying in stock will give them greater incentive to do the right thing for the company. Pay them the equivalent in dollars and let the people get a true appreciation of the real disparity in wages from the top to the bottom of the ladder.

Then make sure everyone is paying taxes. Push the pain down to the masses. The only way to get the debt situation headed in a different direction is to give the masses a reason to vote for someone who will actually stop spending money the country doesn't have for everything under the sun. We don't really need that many more aircraft carrier groups! We don't really need to be the world's policeman (or if we do take the territory on as a commonwealth or territory when done). As long as people feel no pain due to federal taxes they'll keep re-electing the people who keep pouring money down rat holes (and $8B for a wall qualifies). The rich getting richer isn't really the problem. The government deficit spending is the problem which is really about to hit GDP limits. The only way to do that is to wake the people up with more taxes. Unfortunately, those who write the tax laws are the ones who need to get booted out - catch-22.

Re:ridiculous

[ShanghaiBill]

they'd just raise the price on their products and services by an appropriate amount

Not true. If they could charge higher prices, they would already be doing it.

An income tax increase would only raise prices if it applied to their competitors as well. Few of Amazon's competitors are paying 0%.

until their profit margins were once again where they wanted them to be.

They want them to be at infinity. Companies aim to maximize profits. They don't settle for a level that is "fair" or "good enough".

Taxes are expense items.

Income taxes are not an expense, because they are not part of COGS. VAT and excise taxes, and other taxes on revenue are expenses, but taxes on profit are not.

Re:ridiculous

[Shaitan]

Are you a middle income earner? You sure you don't live in CA or NY? Did you actually look at your taxes paid or did you look at the refund amount?

Withholding tables changed. For many they simply didn't overpay nearly as much so got a smaller refund but paid less.

Re:ridiculous

[sjames]

I'm sure they wrote it all off BACK THEN. How many times do you want to let them write that off though? The infrastructure is built and they are making billions in profits now.

I bought a pack of gum, how many million in write-offs am I now entitled to?

Re:ridiculous

[djinn6]

This is why we need election reform.

Re:ridiculous

[MooseTick]

That would be reasonable, but if that trend is seen across thousands of returns, it would seem like there is an underlying issue.

Re:ridiculous

[djinn6]

Well, good thing Amazon still have competitors who are paying taxes then. Their prices won't be affected the way Amazon's will.

Re:ridiculous

[Anonymous Coward]

Returns can be worse because people get to keep more of their money each paycheck and thus they did not overpay as much. My god this is just simple math.

Re:ridiculous

[Philotomy]

A difference in your return doesn't indicate anything about whether you paid more or less tax compared to earlier years. You may have paid less tax and also seen a lower return because your withholding changed.

My return dropped this year, so I'm part of that trend. But I also paid less tax this year.

Re:ridiculous

[crow]

First, there are different accounting standards. Wall Street uses GAAP ("generally accepted accounting principles," I believe) and sometimes non-GAAP (ignoring some non-cash costs like stock options). The IRS uses its own rules.

In the GAAP and non-GAAP rules, profits are for the given year (or quarter) only. So a loss in a previous period isn't subtracted from profits before reporting, just as profits from a previous period aren't added to the current report. Likewise with IRS rules, you can generally carry forward losses. So if they had a loss in the previous year, until they've realized that much profit, they won't pay taxes.

Now what is probably really going on is that much of the profits are realized by overseas subsidiaries, so they pay taxes in places like Ireland, but until those profits are moved back to the US, they don't pay US taxes on them.

Re:ridiculous

[cfalcon]

> The average return has dropped 8% this year

This is the most politically charged nonsense statistic I have heard in years.

Dude, ANY return just means you fucked up your withholding. Assuming you get paid like a salary, your return is just the government giving you back your own money that you overpaid. One year I owed 4000, the next I got back about 200. What changed? I had screwed up my settings in a web app that controlled the amount payed per check, and fixed it the next year.

If someone looks at lower taxes, goes through miles of data, and comes up with "8% lower refund" as the one bad thing they can say (with the implication that taxes have gone up, when they have gone down)....

Come on lol

Re:ridiculous

[penandpaper]

I think that people that make the same amount of money should have to pay the same federal taxes regardless where they live. I think that is unfair just like it is unfair Amazon paying 0 federal taxes.

I can vote with my feet for a high tax state or not. I cannot vote with my feet with the federal government. If you want high taxes then pay higher taxes but don't force me to pay more because of a loop hole.

Re:ridiculous

[GameboyRMH]

You seem to think the stock market is important to the average Joe's finanical wellbeing, when it's actually one of the main engines of worsening inequality. In the US, the top 10% of households own 84% of the stocks:

https://awealthofcommonsense.c...

It's also disingenuous to call Trump's massive transfer of wealth to the 1% with a little fiddling for mere mortals a tax break for middle and low earners. A lot of Americans are getting a nasty and expensive surprise thanks to Trump:

https://www.nytimes.com/2019/0...

Re:ridiculous

[dryeo]

OTOH, when one store raises the price of a gallon of milk to $5, the other stores may decide it is a good idea and also raise their prices. This happens a lot with businesses/products that have a high barrier of entry. Milk is actually a bad example as businesses happily sell it below cost to get you into the store.

Re:ridiculous

[jedidiah]

> yup the people that live in shithole states saw a boost.

You are working hard to make sure the rest of the country feels no guilt for their shadenfruede.

Re:ridiculous

[jedidiah]

You said it.

You mean Amazon is finally making a profit? That's the real news right there. ;-pppppp

Re:ridiculous

[Anonymous Coward]

Corporations ARE the economy for better or worse.

Saying it proudly does not make any one person's bias universal.

George Washington would've said corporations are what destroys an economy, because the whole point of a corporation is to prevent individual responsibility for actions.

The founding fathers hated corporations for very good and well documented reasons, but of course teaching actual real history isn't something Americans have ever been big on.

Re:ridiculous

[penandpaper]

You are making quite a few assumptions and simplify it as "low tax bad high tax good" when in reality it isn't that simple. Are you upset about welfare like medicare or medicaid? Or are upset about federal grants? Or army bases and national labs? There are many ways federal dollars go back to a state be specific on what you don't like.

those high tax states are donor states for your leeching

Nice language. Do you always hate the poor and underclass or just the ones that you can't see? I hate to break this to you but not every state has Hollywood, Silicon Valley, or Wallstreet. Nor does every state have the number of millionaires to pay for all the government services you are asking for. Alabama, for example one of the top "receivers" of federal dollars, is ranked 41st for number of millionaires with the 6th highest poverty rate in the nation. Who exactly should Alabama tax? CA can afford those services that you are bemoaning Alabama as "leeching" because the Feds force it?

You are conflating two things when you start talking about state tax contributions vs individual tax burdens. You are taking an average and forcing an individual to pay more because of an average. That isn't a good recipe for fair tax codes. If it was, then it is perfectly acceptable to have Amazon pay nothing. You are saying that someone in Alabama making the same as someone in CA should pay more because Alabama is poor and can't afford what CA affords. You're an ass hole.

Re:ridiculous

[fustakrakich]

this is on Congress

Yeah, so it is, and who's responsible for Congress? Who constantly reelects 95% of them despite all this?

This isn't on Congress. It's on the voters! Stop the goddamn blame passing!

Re:ridiculous

[fustakrakich]

No, the fatal flaw is the voters reelecting crooks into Congress. If you want to end corruption, you have to stop rewarding it.

Re:ridiculous

[Anonymous Coward]

What always annoys me about the rhetoric by (mostly Republicans these days) politicians when they talk about "tax cuts" and "Americans pay less taxes" is that they never talk about the corresponding cut in spending. (Probably because there are none.) Hence, all that means is that the government borrowed more money this year that will eventually have to pay back (with interest). Guess where the government gets the money to pay back that debt and interest? It's pretty telling that this rhetoric "works" on a good chunk of the American public. On the other hand, it also explains the prevalence of credit card debt.

Here's a thought... it might actually be a good idea to disenfranchise citizens who carry more than X% of their income in credit card debt.

Re:ridiculous

[dryeo]

Taxes are on profits. If expanses exceed income, the tax rate is zero and not an expense besides needing an accountant who is also deductible. Reducing expenses actually increase the tax burden as profits go up whereas increasing expenses has the opposite affect.
It is one of the arguments for high tax rates on successful businesses, rather then pay tax, the business will pay employees more and/or increase expenses in other ways such as expanding or modernizing equipment etc. OTOH. with low taxes, they may sit on the money, do tax buybacks etc.

Re:ridiculous

[Anubis IV]

For our part, our tax return is worse off this year by quite a wide margin. We've gotten back $1500-2000 at tax time for the last few years. Our life situation was unchanged in 2018 (e.g. no moves, no kids, etc.) and I withheld a tad more in 2018 to compensate for a pay raise, so I'd have expected a similar result this year. Instead, based on what I saw when I punched some quick numbers into my tax software, it looks like we'll owe about $200 this year, making for a $1700-2200 swing in an unfavorable direction.

I think we're getting hit especially hard because the increased standard deduction was designed to offset most of the damage people would have otherwise seen, but we don't benefit from that change because the new deduction is just a hair over what we'd have itemized anyway (i.e. what we've itemized for the last several years). We basically get the beating of having various tax credits removed without the soothing balm of a massively better deduction that most others received.

Fundamentally, I do like the idea of having taxes be easier for normal people (and hate that Intuit et al. lobbies to keep taxes complicated), and I like removing credits and deductions that create loopholes big enough to steer a cargo ship through them, but that doesn't mean I supported this tax plan or like where the rubber met the road this time around. No one I've talked to so far came out ahead. Perhaps if I ran in more affluent circles, I'd know some who benefitted.

Re:ridiculous

[apoc.famine]

Don't get me wrong, it is ludicrous that Amazon didn't pay anything but pretending there are no large scale economic benefits for the middle class in something like this and especially in increasing capital in corporations on the whole is disingenuous.

Then please demonstrate those benefits to the middle class. Wages are stagnant and not keeping up with inflation, and the middle class doesn't own much in the way of stocks. Large corporations like Amazon have driven lots of family owned business into the ground.

Please let us know where the economic benefit to the middle class is, because it's not really evident to most of us.

Re:ridiculous

[Tablizer]

That definition implies it's corrupt by design. Alternative definitions say something like, "controlled by the mutual interaction between buyers and sellers". Ownership is not a key factor in such, beyond owning money & goods to buy and sell with.

Re:ridiculous

[apoc.famine]

So that isn't on the 2017 Tax Cuts and Jobs Act then, that is on the previous tax bills that introduced the holes Amazon exploited.

So you don't think it's the job of a new tax bill to fix the problems with the old ones? Then why would we need a new one?

It's pretty hilarious that you're arguing that tax legislation shouldn't close tax loopholes. Seems like that's pretty much exactly what it should do, and the failure of a bill for a specific purpose to fix issues related to that thing is definitely grounds for criticism of those who wrote it and passed it.

Re:ridiculous

[slipped_bit]

I just completed mine. My refund was much lower. The total tax paid was higher, but I also had a higher taxable income. Doing the math, my effective tax rate (total tax divided by AGI) is about one percentage point lower than last year. The fact that my refund was lower is a good thing -- it means I gave the federal government a much smaller interest-free loan than I did last year, although there's still some room to fine-tune it as I'd prefer to not give out any interest-free loans. So, I could be mad that my refund is lower, or be mad that I'm paying more in tax, but I'm actually happy that a smaller slice of my income pie went to those idiots in Washington, DC.

I wonder how many people actually look at the whole picture? Most of the people I see complaining are only looking at the refund, which is nothing more than the end-of-year settling up of the difference between what was paid and what needed to be paid. To do a real comparison people need to compare line 11 of this year's 1040 with line 63 of last year's 1040, and take into account any differences in AGI.

Re: ridiculous

[terrycarlino]

According to Politifact California gets $.99 for every dollar of taxes taken in. That other bastion of political fairness New York state gets $1.23 per dollar of taxes taken in. So no they are not donor states.

States that receive less than they take in are Utah, Wisconsin, Nevada, Texas, Kansas, Illinois, Iowa, Nebraska, Indiana and Minnesota. All of those, with the exception of Illinois, are so-called Red States.

The fact is that about 40 of the 50 states receive as much or more than they contribute. If you take all of the contributions from all of the states you will find that the federal government pays out more than it receives. That's one of the reasons there is a deficit.

So let's stop promoting the fantasy that California, New York or any of the bastions of progressivism are donor states. They are not. (Illinois go ahead and claim it if you want. You've earned it.)

Re:ridiculous

[terrycarlino]

I can only speak to my personal situation. My withholding was reduced each paycheck and I got more money each month. The amount of my withholding was smaller and the amount of actual taxes I paid was less. Since the amount held by the IRS was smaller I got less back.

I use the standard deduction and have for years, since my house was paid off.

SInce one of the provisions of the tax reform was to reduce withholdings I'm not surprised people got less back. What I don't understand is people being pissed because the government gets to use less of their money for free for a year. I tossed the extra money in my savings and am getting interest off it that the IRS would not pay me.

Re:ridiculous

[ilsaloving]

Trickle down economics is the idea that if you give a break to the people at the top, then then will share the benefits of that break to the people under them, and so on.

Reality has demonstrated that this is absolutely NOT what happens. When you give the rich breaks, they keep it all for themselves and fuck everybody underneath.

Re:ridiculous

[cayenne8]

You are a liar. I've done my taxes, and paid more this year. Lots of people have been complaining about this.

Aside from the high tax states, where the Feds started dis-allowing you to write off those insanely high state taxes....most people will see a tax break.

From what I can see, the majority of people complaining about tax season this year, is not due to HIGHER taxes, but that companies didn't adjust correctly the W4 exemptions claimed...meaning the Feds didn't take out as much money from people's paychecks as they used to, to cover the annual tax debt.

People aren't getting back refunds, or may actually owe a bit of tax...

While in general, this is a good thing...you are keeping your own money throughout the year, rather than giving the federal government a year long interest free loan...and having them refund it back to you.

The bad thing about this, is that it seems most W2 employees were not informed about this so they would know to either adjust their W4's accordingly and not be surprised.

Re:ridiculous

[cayenne8]

That's a nice rant but for those of us who have already done their taxes you'll be happy to find massive cuts.

It appears that I'll be catching a break with the new tax cuts...I'm certainly not wealthy, but I am a small business owner with a S-Corp.

Re: ridiculous

[jbengt]

Wisconsin, Nevada, and Minnesota are not red states, though they may not be blue either, more or less purple.

Re:ridiculous

[del_diablo]

The intellectual dishonest presented is staggering. Foremost one of the big issues with discussing taxes with American's is that you get it segmented into Federal and State level, where very few people will be honest enough to elaborate.
So as a person, you might see benefits from Federal and State level. Some states end up being worth living in, and other people flee to Canada for more taxes and more benefits.

And if a corporation is only operating in its home state, then its only using the infrastructure in its local state to do economic enterprises. Or is it? Because without a cross continental railroad the entire mid north of USA would not be settled in any meaningful degree. East and west coast economics as they exist today would not exist without the Panama canal.
If we assume this argument is correct, the next question is far draftier: If the infrastructure is what allows corporations to make money and engage in economic activities, what happens when said corporation do not engage in maintenance or expansion of said infrastructure? Well, assuming the taxes would have been spent on maintenance or expansion? The corporations are doing long term harm to themselves by not paying taxes, as well as to the rest of society.

But the reason this is a complex and tricky topic is how US tax money is spent. A huge amount is tied up in tangible benefits of military R&D, fatting the partners of the green gun coats. Some is spent on bare minimum maintenance in case of war, some is spent as political horse trading. A good amount is tied up in running each state, for the sake of paperwork and whatever else.
Some isn't spent on infrastructure maintenance, some is spent on privatization of enterprises to fatten somebodies purses. And a whole other lot of activities, touching every shade under the sun.

And if we assume these arguments to be true, what happens to corporations that have had good benefit from operating in multiple states? Or entirely across America?
Thats a dishonest question, because its not really about the corporations: Its about how the everyman thinks of taxes, and how it impacts corporations. So if taxes go to things that isn't assumed to be beneficial, it lowers taxes reputation. And if issues are not explained properly by the media, the everyman can't understand what a reasonable use of taxes is.
So at this point we can ask ourselves: Is not taxing long term harmful to the American way of Life? Obviously.
But since the question is large, its extremely harmful to not pay tax to the state the corporation is operating in. Yet at federal level its perceived in a different way because the federal level is far more alien and removed than the state level.

But that isn't the question i wanted to ask or answer. What i wanted to elaborate on is something simple, again:
What is trickle down economics?
Trickle down economics is a very complex concept because we need to understand what the corporation is doing by not paying taxes: Mainly harming infrastructure, that might not have been maintained because state/federal government isn't particularly good at their job in that area.
So once we understand what not taxing is doing, we can discuss what the benefits of trickle down economics are. Mainly that corporations end up with marginally more money, which could be reasonably well spent. However the realities of imperfect information and management is that once you have money, you need to find out what to spend it on. So when you have more money, you can't spend it until you know what to spend it on.
And i find that to be the true terror of trickle down economics: The benefit will not happen until the corporation has adapted to the new tax scheme, which might get lost in investment of houses instead of economically beneficial activities some time after. So the corporation has gained no infrastructure, gotten more money, but can't spend said money because they need to figure out what to do with the spare cash.
Which then turns into a problem:
Stock company is not

Re:ridiculous

[Insanity Defense]

I'm all for capitalism but it's ridiculous that Amazon gets money back from the government after those huge profits!

S.O.P. the rich have things arranged to redistribute wealth - to themselves of course.

Re:ridiculous

[Rolgar]

Have you calculated the change in your pay check from 2017 to 2018, multiplied it by 26 (or 12, 13, or 52 depending on pay frequency) and compared to your previous?

The Republicans had the IRS analyze the withholding tables, and make the withholding align more closely with reality to reduce the size of refunds, but increase the size of your paycheck throughout the year. If you'd like a larger refund, you can modify your W2 to have more withheld so they government can hold your money for you until next winter. Or just have your bank divert the funds to a savings account and transfer it back to your checking account next February when your refund check comes back. Or you know, spend it all year like you probably did last year.

Re:ridiculous

[jeff4747]

but those figures do not enter into the equation of the argument that "high tax states" do not receive their money back.

Whether or not those are included depends on which study you're talking about.

Shifting what counts and what does not count moves the edge cases a bit, but the major trend remains - the "blue" states are subsidizing the "red" states.

Which is fine. We're all one union. It just gets annoying when the folks from the "taker" states whine about the feds not helping them enough or preach about self-reliance.

Re:ridiculous

[jeff4747]

Who exactly should Alabama tax?

Alabamans.

We blue states don't begrudge sending you money. What we begrudge is your complaints about our people are moochers while claiming your people are self-reliant uber-Randian supermen.

Re:ridiculous

[jeff4747]

since so many people don't seem to understand the incredibly simple concept of w-4 withholding and your ultimate Federal tax burden/refund being intertwined.

The W-4 instructions say I should be claiming 4 allowances.

I'm up to 12 allowances and still getting a significant refund.

It's not at all a simple concept.

Re:ridiculous

[jeff4747]

Reminder, it's not Tax Attorneys that write the tax code, that's on the politicians we (collectively) re-elect year after year

Those politicians turn to Tax Attorneys to actually write the tax code that they pass.

Re: ridiculous

[Anonymous Coward]

According to the same Politifact article (I assume) you're probably citing, California may not be much of a donor by ratio but the national average is getting back $1.22 per dollar paid. Comparatively, they contribute much more than they take. Also don't forget that California has a lot more people than other states so there's also a difference there.
https://www.politifact.com/california/article/2017/feb/14/does-california-give-more-it-gets-dc/

BTW: What the hell is wrong with Virginia?

Re:ridiculous

[penandpaper]

Let me make sure I understand the full situation. Rich states, that campaign for more federal welfare, are upset that poor states campaign for less federal welfare and contribute less.

Is your contention that poor states are poor? Or that they believe in a different role for the government? Or should the poor states be grateful that the rich states can force their "help" on the poor states whilst individually paying less because of SALT deductions?

Re:ridiculous

[markdavis]

>"A difference in your return doesn't indicate anything about whether you paid more or less tax compared to earlier years"

That is true. But those of us who do their own taxes AND understand that witholdings has nothing to do with what taxes you actually pay, DO know how much less tax we paid for 2018.

>"You may have paid less tax and also seen a lower return because your withholding changed."

Exactly. In my case, it was about 6% less than taxes I paid last year (and I have no deductions or other changes- I took the standard deduction). This is despite having the smallest refund I have ever had.

Re:ridiculous

[Anonymous Coward]

Poor states work on the premise that the job of the federal government is to take money from rich (usually blue) states and give it to the poor (usually red) states. That's how charity works, especially as implemented by Robin Hood. Rich states are usually rich because they're nice places to live and work, so people want to live there and work there, and have a government structure that promotes the good things for people and business (which does cost money). Sorry if I prefer the weather and opportunities in California, for instance, to those in Mississippi.

Re:ridiculous

[Gavagai80]

Taxes on profits are passed on to shareholders... but never to employees or customers, obviously. If there was more money to be made from charging customers more or paying employees less, they'd be doing it already for more profit. Corporations do not ever leave profit on the table and decide to be philanthropic just because they've hit a particular profit target already.

A 100% tax on corporate profits would be ideal if it weren't for the need to encourage capital investment by shareholders for growth. Corporations are legal constructs designed by government, required by their charters required to theoretically serve the public interest. Shareholders have not earned money in the way in the way employees (and most customers) have, so they should only be allowed to keep it to the extent that proves beneficial to society as a whole (via a growing economy).

Re:ridiculous

[PopeRatzo]

When corporations pay taxes, the cost is passed on to some combination of shareholders (lower dividends or less capital investment), customers (higher prices), and employees (lower wages).

No. There is no data that corporations pass on taxes to consumers or employees.

As for shareholders, they should be taxed twice: once when the corporation pays taxes and again when they sell their stock. The capital gains tax should be at least that of the highest tax bracket. There is no evidence that this would have any negative effect on investment or capitalization. The entire notion that "taxes on profits are passed on to...X" is a great lie that is used to excuse the worst excesses of capitalism.

Re:ridiculous

[Chas]

My taxes.
Made about $1300 less than I did last year.
Paid about $1200 less in federal taxes.
Got about $500 less back from my federal return.

So I made less, gross.
My net take-home was virtually identical.
But because my total withholding was less, I got less back.

Re:ridiculous

[kaatochacha]

This. I like having to now pay, and realize that larger withholding will result in this. I also realize it's a free loan to the feds, but with interest rates ( until recently) being absurdly small I didn't care.
So I generally declared 0 on my deductions, they took a bit more out, and I made sure I didn't pay at the end of the tax year.

Re:ridiculous

[Anonymous Coward]

I want independence. Fuck high tax states and the federal government.

Re: ridiculous

[unimacs]

Minnesota

Governor: Democrat
5 of 8 Congress Members: Democrats
Both Senators: Democrats
Minnesota House: Solidly Democrat
Minnesota Senate: Republicans hold a one seat majority.

Has not gone Republican in a Presidential election since Nixon in 1972.

How is this a red state?

Re:ridiculous

[_Sharp'r_]

Taxes on profits which are specific to a company or industry are passed on to shareholders, which in turn drives investors to invest in other companies/industries with a better return on capital.

Taxes which are universal in application to all companies (like the corporate income tax) in a country with at least semi-free trade are primarily passed on to employees, then a little bit to customers and the even smaller remaining to shareholders.

From the Harvard Business Review:

If a country allows free capital flows and free trade and has a corporate tax rate much higher than that of its neighbors, investors can choose to buy shares in companies elsewhere that face a lower tax, and corporate management can choose to move operations abroad. Consumers, meanwhile, can buy from foreign suppliers. By comparison, workers are pretty immobile. It’s hard for them to switch employers, let alone countries. So the tax lands on them, in the form of lower wages and/or skimpier benefits. And as those at the top of today’s corporate hierarchies seem to have done a pretty great job of keeping their paychecks from being adversely affected, the impact is presumably greatest on those farther down in the organization.

So yeah, if your goal is to tax working people more, then increase the corporate income tax is great for that. Otherwise, it's just a stupid double-tax which is useful to politicians for disguising to people that they're getting taxed extra.

Re: ridiculous

[astrofurter]

"Let them eat cake!"

Re:ridiculous

[piojo]

I'm not sure that is relevant, given that we're complaining the "low tax" states have a low tax rate, not lower taxes in an absolute sense. And no, the GP's point about tax flow from some states to others isn't entirely relevant either. In other words, we've all gotten onto the wrong track. An oversimplified story.

It's okay for Alabama to need more federal aid. What's not so nice is for it to get more federal aid AND to tax proportionally lower. (Of course, a better analysis would also analyze the differing effect of tax rates on the economy, which I'm glossing over.) That's why it makes sense for the fed to tax Alabama residents higher. Because Alabama is not taxing as it should be, considering not only its own budget shortfalls, but the wealthy people and companies it is not taxing comparably to other states. Yet there is no obligation for Alabama to be fully self sufficient, because as you said, there is no Alabaman Silicon Valley.

Re:ridiculous

[Shaitan]

Noi that's fine. But what you pay your state shouldn't reduce what you pay the feds. Or else you are paying less than your fair share and expecting people in the other states to pay more to make up for it.

I'm actually all for the feds to get less and the state to get more but generally the politics in the states that want more indicate more federal power and initiatives, not less. People in other states should never pay higher taxes because you liver in a high tax state.

Re:ridiculous

[Shaitan]

"Why do you think you have to pay more because he pays less?"

Because the deficit has to be balanced somewhere.

"We don't have a balanced budget, so there is no zero-sum game."

But we do, it merely a question of where it is balanced. Is it at zero debt, no, but there IS a threshold before we miss a payment or drop in credit rating just as you can float far beyond someone who will accept no debt but will eventually hit a hard limit.

Re:ridiculous

[Shaitan]

"taxes on profits are passed on to shareholders... but never to employees or customers, obviously."

The difference between what you said and what he said is that what he said is actually true. When it is time to offset costs corporations look to payroll an expenses, when it is time to pass profits they look to shareholders. Why? Because employees are liabilities and shareholders are the bosses. It is that simple.

"A 100% tax on corporate profits would be ideal if it weren't for the need to encourage capital investment by shareholders for growth."

What a silly thing to say, corporate profits mostly feed retirement accounts and investors and stock increases go to major shareholders who certainaly have a say in how the company is run. Essentially the only time stock purchases help the company directly is the IPO after that you are just buying stock from other people who bought then, not the company.

"Shareholders have not earned money in the way in the way employees (and most customers) have, so they should only be allowed to keep it to the extent that proves beneficial to society as a whole (via a growing economy)."

If you mean sweat and personal effort you are right. It will never quite be the same. But they have risked losing their money, a wall street broker might be distressed but his family is likely fine since he profits whether his investor wins or loses but Grandma loses her retirement money she accumulated from working for 40years in the glove factory if the stock goes down. Is that your intention here?

Re:ridiculous

[Shaitan]

"Taxes which are universal in application to all companies (like the corporate income tax) in a country with at least semi-free trade are primarily passed on to employees, then a little bit to customers and the even smaller remaining to shareholders."

Well you are quoting theory and for the most part across the fortune 500 the reality is they just paid most of it out to executives who while technically employees aren't exactly what anyone means by employees. You can point to a dozen exceptions and it won't change the reality of what just occurred. Theory is a poor substitute for demonstrated reality. IMHO the big problem is unbudgeted funds and greed. Trying to pretend capitalism works as well as it does for any reason other than greed is an attempt to mislead and there is little to no greed incentive to do otherwise. Second these were unanticipated and unbudgeted funds. If given a chance to decide how to invest them in their business companies might have chosen otherwise but they'd already chosen investments and this was free bonus money above what they already decided departments needed.

Re:ridiculous

[Shaitan]

"Trickle down economics is the idea that if you give a break to the people at the top"

Which is not what you do with corporate tax breaks. Bob the janitor at IBM benefits when you give corporate tax breaks even if IBM doesn't cut him in or lays him off and insteads pays a bg dividend to shareholders because bob has a retirement account and gets discounted IBM stock. Corporations are not the top, they aren't even players, the people who own them are players and may or may not be the top. Remember when Disney Corp was thwarted firing disney by sharholders? The people who own a company may be entirely composed of lower to middle class individuals and/or combined investment funds (mutual funds) representing that class of investor. Not just in theory, in the disney case it was true in practice.

Re:ridiculous

[Shaitan]

"You get to live in your "low tax" states because those high tax states are donor states for your leeching. High tax states get back far less from the feds than the put in"

But they've been paying in far less per dollar earned than those low tax states. They've been using high state taxes combined with a deduction to keep more money in the state and effectively become federal income tax evaders. Look, if your state programs are so expensive but so prosperous you should be able to pay an equal amount of federal tax to those in states with no state taxes. The benefits of your programs should be enough alone to make it a wash.

The states you are talking about which take more than they give in federal tax aren't at issue here and you know it. We aren't talking about a handful fo depopulated western states you'd use as examples or impoverished southern states. We are talking about roughly 47 out of 50.

Re:ridiculous

[Shaitan]

And the states that are neither Alabama nor CA have a bone to pick about you just paying you fair goddamn share of the taxes because we dont leech like Alabama or dodge like CA.

Sorry, we may send our tech people to CA but you sent their goddamn share of the income taxes right back to pay for Ohio roads.

Re:ridiculous

[Shaitan]

"In the US, the top 10% of households own 84% of the stocks"

Uh huh and you have to go to the top 1% to get out of the working class so what is your point?

"It's also disingenuous to call Trump's massive transfer of wealth to the 1% with a little fiddling for mere mortals a tax break for middle and low earners. A lot of Americans are getting a nasty and expensive surprise thanks to Trump:"

You are linking to a story about a change in withholding tables. As in people got lower refunds because they paid less overall tax and therefore paid less excess tax. They saw bigger paychecks all year because the withholding tables were changed! They paid the IRS less money overall!

Re:ridiculous

[Shaitan]

"What always annoys me about the rhetoric by (mostly Republicans these days) politicians when they talk about "tax cuts" and "Americans pay less taxes" is that they never talk about the corresponding cut in spending. (Probably because there are none.) Hence, all that means is that the government borrowed more money this year that will eventually have to pay back (with interest). Guess where the government gets the money to pay back that debt and interest?"

Well lets pretend that interest is significant enough to note (hint, it isn't) if the cut is for working class citizens some are able to invest it and who couldn't before. Some are able to pay off debt and have more working capital. Some just blow it which generates both corporate and shareholder taxes and also stimulates jobs which may pay taxes.

These are not hard gains which are easy to quantify but that it is disingenuous to pretend they don't exist. They also quantifiable which means it is disingenuous to claim they magically offset the spending. Still, by and large tax cuts in the US go right back in the US economy which means that long term they are likely a wash outside a greater opportunity potential.

Re:ridiculous

[Shaitan]

"George Washington would've said corporations are what destroys an economy"

Woah boy, I didn't say it was a good plan. I just said it is where we are.

Re:ridiculous

[GameboyRMH]

The top 10% are hardly "working class," those are people making clean into the 6-digits. It's also cherry-picking to suggest that everyone who got a smaller refund paid less overall:

https://www.pbs.org/newshour/p...

Re: ridiculous

[dougdonovan]

good for amazon. remember...the one with the most toys ( $ ) Wins. its called being $ smart.

Re:ridiculous

[jeff4747]

My contention is that leaders in the "poor" states have created a false narrative that their states are rugged individualists who do not rely on the help of others in order to further their efforts to maintain power and, much more importantly, their own personal fortune.

They accomplish this by insulting those of us who live in the donor states.. Which then leads to people like you attempting to re-cast the reaction to the insults as some sort of larger-scale political discussion, when it's entirely "At least we're not those people!!".

IOW, it's way simpler than you're trying to make it out to be. Holding power and wealth in those states requires making enough of the poor believe that someone else is worse off, and any attempt to shift the dynamic would make these believers fall.

Re:ridiculous

[jeff4747]

No, poor states work on the premise that a small number of wealthy and powerful should have as much as the wealth as possible. They maintain this by casting others as worse off than their own people, and apply fear of becoming one of those people if anyone attempts to alter the status quo.

Really don't care in the long run. Y'all gonna either move to the donor states or die from opiates, and then your leaders can rule over a wasteland, whining about not getting enough tax money from us. That doesn't mean we have to be particularly fond of being insulted in the meantime.

Re: ridiculous

[jeff4747]

In fairness, the so-called "blue" states _produce_ almost nothing of value

You have an odd definition of "value". Especially considering you're using a computer on a network to communicate to a web site.

Re: ridiculous

[jeff4747]

Yet you insult them along with everyone else in the state.

Re:ridiculous

[jeff4747]

Protip: When you want people to send their goddamn share of the income taxes right back to pay for your roads, and be happy about it, insults are not helpful.

Re:ridiculous

[Local ID10T]

So why should the Federal government come first? Surely under the US constitution one is a citizen of your state first and then of the union, since the states make up the Union?

Based on this, we should pay state taxes only. The states should then pay a portion of their income to support the federal government.

Of course this logic would also require that states appoint senators so as to represent the states in congress (in order to avoid the "no taxation without representation" issue..)

Re:ridiculous

[ilsaloving]

That is by far the stupidest thing I've heard in a very long time.

You honestly think that because shareholders were outraged over the firing of the single most influential figurehead of Disney, that a random janitor at IBM is going to benefit from these tax breaks?

I have some news for you. The world isn't as happy-rosy as you think it is. Those fantastic tax cuts that go to publically traded corporations go nowhere except the top people, and as dividends to the shareholders. I would be shocked if a corporation even gave their employees a one time small bonus for those savings. And anyone who is a contractor will get jack all.

Re:ridiculous

[CanadianMacFan]

Bob the janitor works for minimum wage at another company that won the contract to do the cleaning at the IBM office. He doesn't get the chance to buy stocks at a discount. Next year he'll be out of a job because another company will put in a lower bid when the cleaning contract comes up for renewal.

Re:ridiculous

[ChrisMaple]

What do you think the rich do with their saved money, put it in their money vaults and swim in it? Reality is not a Disney cartoon.

If the rich want a benefit from the money they've saved, they have to spend it on goods and services. The providers of goods and services earn a living by their work, and that's how it "trickles down", not by any charitable impulse on a part of the rich.

Your paranoid portrayal of simple economics displays your malice, not the malice of the rich.

Re:ridiculous

[ChrisMaple]

Surprise! California has recently become the state with the highest poverty rate. Occasionally it takes a long time for the affects of bad policy to become apparent.

Re:ridiculous

[Shaitan]

"No. There is no data that corporations pass on taxes to consumers or employees."

Uh huh, and where pray tell is it you think the money comes from that they use to pay those taxes? A magical money tree?

The money comes from revenues and either you have to cut costs (employees) to make it up from existing revenues or increase revenues (aka pass on to consumers) or some combination of the two.

Re:ridiculous

[Shaitan]

There is some truth but it depends on the type, the timing, etc of the dividend. There absolutely is double taxation under many circumstances and for many transactions.

"Please stop perpetuating a myth that only benefits corporations."

There is no reason not to benefit corporations. There is reason to close certain kinds of loopholes and stop pretending corporations are anything more or less than a collection of partners, in some cases, at large scale. The mom and pop convenience store on the corner is a corporation as well.

Re:ridiculous

[Shaitan]

"You're right. Instead of taxing the corporations, there should be a tax on the executives (executhieves) who make salaries that are 100s of times greater than the average employees salaries"

No, there should be a tax on the stock holdings which will also target the biggest compensation for executives in most cases. That guy who is sitting on $10 billion in stock, cashed in a few million and gave several times that to charity to offset the capital gains on the few million he cashed in, should instead be charged a tax on the $10 billion, he should also be charged annually on his 4000 acre ranch.

Re:ridiculous

[cheesybagel]

It is a miracle!
It seems negative tax rates, as proposed by Milton Friedman, now commonly reffered to as the Universal Basic Income, exists already. For Amazon at least. Poor Amazon.

Re:ridiculous

[PopeRatzo]

Uh huh, and where pray tell is it you think the money comes from that they use to pay those taxes?

From profits, dumbshit. If you'd ever taken a first-year economics course, you would know that prices are not dependent on profits. Just because a company decides they want to make more profit doesn't mean they can just raise prices, since there are other companies selling the same product. Remember, companies don't pay taxes on revenues, but on profits.

The marketplace sets the price. Whether or not the company can make a profit is dependent upon whether they can make the product for less than they sell it for.

Taxes come later. After the product has been sold, and after the employees have been paid and after the cost of making the product.

The money comes from revenues and either you have to cut costs (employees) to make it up from existing revenues or increase revenues (aka pass on to consumers) or some combination of the two.

I can't believe you don't see the other option: Just accept a little less after-tax profit. Do you think Amazon would go out of business if after taxes they had $8 billion instead of $11 billion? Remember, "profits" is what's left over after expenses are paid. You think they'd say, "No, we don't want to make the $8 billion"?

No, they wouldn't say that because a competitor would come along and say, "Yeah, $8 billion in annual after-tax profits sounds pretty good to us".

Re:ridiculous

[Memnos]

No. Just, no. What matters is the amount you gave the government relative to the amount you earned, both as an absolute amount and as a percentage of your earnings. Your refund only represents a loan that you gave the government that they are now paying back.

If looking at your refund amount is the sole metric you use to determine whether you are "worse off" or not as far as taxes, then I'm sorry, there is literally no way anyone can make it simple enough for you.

Re:ridiculous

[Anubis IV]

No. Just, no. What matters is the amount you gave the government relative to the amount you earned, both as an absolute amount and as a percentage of your earnings. Your refund only represents a loan that you gave the government that they are now paying back.

If looking at your refund amount is the sole metric you use to determine whether you are "worse off" or not as far as taxes, then I'm sorry, there is literally no way anyone can make it simple enough for you.

You really should try to make it further into someone’s post before you rush to snap judgments, especially so if you’re going to put your screen name to something that’s clearly inapplicable. You clearly either stopped reading by the third sentence, or else failed to understand what I meant by it, since I precluded everything you just pointed out by—in as many words—saying that I kept my withholding fixed as a percent.

If reading just the first two sentences of someone’s comment is your sole metric for determining whether they’re wrong, then I’m sorry, there is literally no way anyone can make it simple enough for you (particularly on Slashdot, where many of us are fond of nuanced arguments).

Re:ridiculous

[ilsaloving]

No, my portrayal comes from reality, whereas yours is breathtakingly naive.

Sitting on that money is EXACTLY what the rich do. Why? Because they consider it "keeping score", trying to having a bigger number than their other rich friends and acquaintances. Don't believe me? Google it. It's a direct quote.

I mean, seriously... there is SO much evidence out there that you are wrong that I am in awe that you have the nerve to even make the claim. Panama papers? Trump being sued *repeatedly* for refusing to pay contractors and whhatnot? Hell, the wealthy even have a specific technique of declaring bankruptcy just so they can renege on their debts. They openly laugh about it, calling it "good business practice".

Re:ridiculous

[Dread_ed]

This is not capitalism. It's corporatism or disguised fascism.

Re:ridiculous

[Shaitan]

"From profits, dumbshit. If you'd ever taken a first-year economics course, you would know that prices are not dependent on profits."

Strawman. Ad hominem. Plea to authority. The seller and more importantly all the sellers are PART of the marketplace, if their costs go up across the board the prices go up across the board to compensate and keep profits level. Companies do not just eat profits long term. If they can't raise profits they cut costs and for the most part that comes from staff.

"The marketplace sets the price. Whether or not the company can make a profit is dependent upon whether they can make the product for less than they sell it for."

We live in a time of pseudo monopolies due to widely accessible communication. A CEO can collude via open letters and press statements as well as twitter and a plumber colludes via forums and publication. If you apply a tax to an industry you adjust the market for all of them. With common business practices and a common interest collusion doesn't even require communication anymore.

What is less certain is that a REDUCTION in tax burden or costs will ever get passed back to consumers. If a company is successfully selling a product for X there is no particular reason to reduce the price or necessarily to increase staff.

"I can't believe you don't see the other option: Just accept a little less after-tax profit. Do you think Amazon would go out of business if after taxes they had $8 billion instead of $11 billion? Remember, "profits" is what's left over after expenses are paid. You think they'd say, "No, we don't want to make the $8 billion"?

No, they wouldn't say that because a competitor would come along and say, "Yeah, $8 billion in annual after-tax profits sounds pretty good to us"."

No, they wouldn't because it would cost that competitor even more than it would cost Amazon to take those profits from Amazon and Amazon has already established there is $11 billion to be had in that market. Why would an investor fund that competitor when Amazon is already doing a better job in that segment and they can just invest in Amazon? Why would they charge lower prices when Amazon has already established people will happily pay what Amazon is charging?

Bidding wars happen but for the most part the business world is aware of the work of John Nash, there is more profit in cooperation among competitors than cut-throat competition and competing on price is bad for business in the long run, everyone's business.

Re:ridiculous

[Shaitan]

Are you under the impression that six figures is somehow outside the working class?

Kid grows up a trailer park, works hard in school, gets into state college and takes on a mountain of debt going to school, becomes a (doctor/lawyer/engineer/professional/broker). He can easily make a top 1% income and is definitely working class but then income isn't an indicator of the working class. $1 salaries are common among executives and $0 is common the board.

Wealth is the indicator of people who are outside the working class. Specifically having enough wealth to not need to work (even if you choose to). The average return rate of the S&P 500 with increases and dividends combined is around 15%. So you are looking for people who can passively make that 250k that denotes the top 1% by income purely on that passive 15%. That would be about $1.7 million in liquid assets. But realistically, you'd eat into principle without a buffer so make it about 20% higher and you'd also eat into principle because only half of that is dividends you can spend so make that 7% instead of 15. So $3.57m + 20% + 3% to cover inflation gives $4.4 million dollars in liquid wealth. If you are married you need to at least double that to $8.,8m and if you give the average of two children you'll need to double that again to $17.6m to assure they aren't in the working class. But those extra individuals don't change the $4.4m figure, they just mean you don't look at $4.4m for a household, purely individual basis.

Re:ridiculous

[MBGMorden]

This virtually never happens without one of them deciding to go just a little lower to get all the business. The only way to sustain this is for all of them to agree to not go below a certain price point, which is "collusion" and is indeed illegal.

Re:ridiculous

[dryeo]

Should tell that to the telecom's, who all seem to raise there prices in lockstep. Same with the gas stations though there occasionally one will put it up and others don't follow along so the first lowers it again. Over a dozen gas stations in town, spread over perhaps 1/2 a dozen companies and their prices move in lockstep. Government investigation never does actually find collusion but especially in the case of the telecom's, profits go up very fast.

Re:ridiculous

[penandpaper]

Which then leads to people like you attempting to re-cast the reaction to the insults as some sort of larger-scale political discussion,

Maybe you need to reread the thread. I said it was my opinion that SALT deductions on federal taxes are inherently unfair. People choosing to have higher SALT is not a good reason to pay less federal taxes than someone that lives in a state with lower SALT. Federal law should be applied equally and it should not be different because states have different laws.

The whole "donor state" is a dumb excuse for those benefiting on paying less while claiming they have the moral high ground because they live in the same state as Bill Gates or Bezos and chose to have higher taxes. "Those other states should just tax more like where I live to pay for services I pay for in SALT even though I pay less federal taxes than someone else because I chose higher state taxes.".

Do you ever apply an average to an individual? Because the "donor state" excuse is exactly that. "Well the average here means it's ok for the individual to be treated different".

What about the states that have lower taxes and do have the government services to help and are middle of road of federal receiver? Only a few states are net contributors and that leaves a large swathe of citizens paying more federal taxes because CA and NY tax their citizens more. That is inherently unfair.

Raising taxes doesn't always raise revenues. People have more control over SALT. Those welfare services were originally supposed to be paid for by the states and local communities and not the federal government. You are using the "at least we're not those people" more than me. If we moved Federal welfare to the states my guess would be those states would try and develop their own solution.

Re:ridiculous

[penandpaper]

What's not so nice is for it to get more federal aid AND to tax proportionally lower.

I see. So every state must be exactly the same and averages must be applied to individuals. It doesn't matter if a state can afford those taxes you want them to pay in SALT (raising taxes doesn't always raise revenues) or not. It doesn't matter that individually you pay less federal taxes. What matters is that you want to stick it to poorer states because you chose to have higher SALT. You're an ass hole.

Re:ridiculous

[piojo]

I suspect you know more than me about this. But it seems you are not interested in the type of discussion that is elucidating for both sides. Plus, you ignored my fact that complex economic realities should be taken into account, though (I assumed) that was beyond the scope of this discussion. That is not how productive arguments work.

Cheers.

Re:ridiculous

[penandpaper]

>you ignored my fact that complex economic realities should be taken into account,

Economic realities do not excuse a fundamentally unfair tax dedication that primarily benefits the wealthy. The point in SALT is that you can vote with your feet and they are easier to change than federal law. CA choosing to have higher SALT isn't a valid excuse, regardless of what federal law benefits other states, for CAnians to pay less federal taxes.

Re:ridiculous

[Shaitan]

Even not working for IBM and getting discounted stock Bob may well own IBM stock because Bob will have a retirement account of some kind. And the janitor isn't the point, thousands of people do work for IBM and they are all working class with some possible exceptions at the executive level and Janet in accounting who is a trust fund baby that just loves numbers and husband who wants her out of the house all day.

Re:ridiculous

[Shaitan]

"You honestly think that because shareholders were outraged over the firing of the single most influential figurehead of Disney, that a random janitor at IBM is going to benefit from these tax breaks?"

"Those fantastic tax cuts that go to publically traded corporations go nowhere except the top people, and as dividends to the shareholders."

Right, your second statement mirrors my assertion and the actual mechanism by which the working class benefits. Dividends to shareholders is money to everyone with a 401k, IRA, or bonds. Considering the corporate cuts were across the board maybe you don't work for IBM and get a discounted share price but your retirement money is almost certainly invested directly (stocks, bonds) or indirectly (mutual fund, composite ETF, etc) invested in corporations and you received the benefit of those dividends.

Why does everyone have so much trouble with concepts like this? Life is very grey and complex not black and white and resolved in a single move. When Joe does X to Sally or gives X to Sally and then Sally does something that benefits Dave you all get lost asserting Joe didn't do shit for Dave. Believe it or not, Joe could well have done/given to Sally rather than Dave because he anticipated what Sally would do and benefited both.

Re:ridiculous

[Shaitan]

Irrelevant to the point. Bob the janitor will still have a 401k or retirement plan unless Bob the janitor is actual Juan and not legally working in the first place. In which case Susan who owns that little cleaning company will be the middle class worker who has stock in her retirement account. In that case Susan will also benefit because those tax cuts on her corporation mean she can place lower bids or possibly even survive when she comes under too much scrutiny and actually has to hire real US workers.

Bob the janitor wasn't really the point here and neither was the discounted stock. The cut was across all corporations and if you have a retirement account, big or small, you benefited even if they just dump the money out in dividends. Next year they'll actually be budgeting based on those funds because they can expect them and that is when you'll start seeing expansions and changes. Yes some of those changes will actually cut workers, they will be doing whatever they think is best for business but in some cases that will be expanding at home because the tax benefits and american English speaking workers now outweighs the increased labor cost. The companies doing that will result in more services and reduced costs here and the following year that will make the proposition a little better for companies revisiting the question at that point and so on.

The corporate tax cut and payout gave an immediate boost to retirement investments and most everyone has to have seen that. Actual serious and lasting economic adjustment takes years to bake in, you won't see the full extent until the end of the second term or possibly the next President who will take the credit or the blame even though his policies likely won't be felt until after he's gone. People who don't like that president will claim it's the last guy, people who do like him will pretend it's him making a difference. The people claiming immediate benefit will be wrong no matter who it actually is with the notable exception of something like this, a giant dump of cash across a large group. It's a parlor trick but it is nearly immediate and at least Trump dumped a huge chunk where it will end up in retirement funds and benefit people later in life.

And don't quote anything talking about stock mostly being owned by the top 10%, the top 10% are still middle class and definitely working class. The top 0.1% and above by wealth not income are the wealthy, not high earning workers.

Re: ridiculous

[Shaitan]

I live in one of the other 47 states. There are no personal income taxes in this state and there aren't taxes on businesses unless they made better than a million that year.

We have a cost of living comparable to the rural midwest with California level incomes and all enjoyed a massive tax cut. We also have some of the lowest utility rates you can find unless you are lazy and don't shop. Currently I pay 3.7 cents/kwh all in on fully renewable energy delivered directly from the grid. Our state is on track to be fully renewable by 2020 even though we have incredibly low priced gas. How are you looking in California/New York?

Re:ridiculous

[Shaitan]

Why? It is their own politics that created the situation and their politics that mean the gestapo will come after them if they don't do it. I can just sit back and watch their own dogs chew on them as they finally pay their own bill.

Why should I have sympathy for people who put in a loophole to avoid paying their fair share of the taxes for the federal programs they support? There is a whole lot more than just roads in the budget but infrastructure investment boosts the economy as a whole and if it is going somewhere the pays it's full and fair share of income tax it comes back with interest over time.

Re:ridiculous

[Shaitan]

Also... did you actually LOOK at your own article? Red indicates an increase, very few saw an increase and the biggest increase is at the top. Are you obsessing over the green bars? Of course the amount of increase grows with income level, the amount of taxes paid grows with income level. The top 10% pay 60% all taxes so any cut is going to impact them the most. If you only pay a couple thousand in taxes did you think there was going to be a giant >$500 boost to your refund or something?

Those lower tiers hardly pay taxes. In 2018 the top 1% (by income) paid 37.3% it becomes 69.4% when extended to the top 10% meaning the upper middle class (people who earn "6-digits") pay 32.1% of all taxes or the difference between those figures. That is 9% of tax payers footing that bill and 100% working class. That is a mere $139k+ which is barely enough to have a middle class lifestyle on a single income in the suburbs. This is where a district manager of a handful of restaurants sits. Or a couple making about $70k which is pretty much standard for "professionals" which isn't actually the upper middle class anymore an experienced restaurant manager falls here, it's just two middle-middle class people. Anyone making $40-60k that is entry level in tech or management, you are in the lower end of the middle class. Less than that and you aren't middle class at all though with two people working you can earn a middle class living. But all of these people are solidly working class. It doesn't matter if you are a doctor or a janitor, you are working class. Less than $30k and you are poor. Less than $15k and you are destitute.

Re:ridiculous

[CanadianMacFan]

The idea of the tax break for the large corporations was that they would invest the money into their business. They could have expanded their manufacturing lines, performed upgrades to become more efficient, increased their R&D, etc. Instead most firms just took the money and either performed a stock buy back or they increased the dividends to shareholders. Both are completely useless if you want to improve the economy, especially when you are financing it with government debt.

Supply side economics doesn't work. It's been tried for approximately 40 years and there's no reason to think that it would work this time around.

Re: ridiculous

[BootNinja]

Thats generally the way it already works. Any state and local taxes paid can be deducted from your federal taxes owed

So who is paying for their employees' SS & SSI

[dgatwood]

Q: So who is paying for their employees' Social Security and SSI disability?

A: We are.

I'm more than a little bit tired of the wealthiest corporations and individuals paying proportionally less in taxes than even people in the bottom tax bracket. Giving tax breaks to help small businesses grow makes sense. Giving huge tax breaks to help one of the largest businesses in the world grow does not.

It's time for a tax revolution at the ballot box. Vote only for politicians who declare a willingness to make our tax code more fair and less protective of the wealthy. Raise capital gains taxes. Phase out corporate tax exemptions for companies earning more than 100M annually or add a business version of the alternative minimum tax. Make our tax system fair.

Thanks, Republican tax reform!

[Locke2005]

Thanks, Trump!

Re:Thanks, Republican tax reform!

[kenh]

This has nothing to do with the Trump tax reform, it is from previously earned tax credits and executives exercising stock options, see my fuller comment here to understand this is based on tax "loopholes" that pre-date the Trump administration (it describes how Facebook earned $1BN in profit in 2012 and got a tax REFUND of over $400M - the Trump Tax Breaks weren't in effect in 2012...

Is this just because of previous years losses?

[presidenteloco]

It is common for companies that made several years of losses to not pay tax until those losses are zeroed from current profits.

Maybe nothing to see here?

Re:Is this just because of previous years losses?

[mjperson]

No, the chart at the bottom of TFA shows they've made profits for several years and except last year and this year, used to pay (very small) taxes on those profits. they've just been getting better at playing the system as their profits are rising.

Re:Is this just because of previous years losses?

[Anonymous Coward]

You can always carry forward losses, and depreciate assets. Additionally, some types of investments in innovation, development, employee training can receive tax credits. Sophisticated corporations know how to leverage the tax law to reduce their tax exposure, and it's a good thing. These laws are usually setup to incentivize companies to invest in areas that result in more jobs.

Re:Is this just because of previous years losses?

[kenh]

Partly, and partly from executives exercising stock options - see my Slashdot comment explaining this based on a Forbes article from 2013

Re:Is this just because of previous years losses?

[msauve]

Shhh. You'll spoil the narrative. The ITEP "report" has no real factual detail, only conjecture and biased opinion. It's nothing but a "hit" piece.

Re:Is this just because of previous years losses?

[Anonymous Coward]

This case was largely driven by a change that allowed Amazon to expense capital improvements all at once. It didn't forgive them of any taxes, they just opted to take advantage of it all at once. Companies that anticipate a massive expansion that could lead to near term losses would see this as an attractive option. In the long run, it doesn't actually cut their tax bill.

But hey, let's screech about profits because it makes me feel better about my life situation, particularly when said company is expending business, hiring more people and literally growing the economy.

Re:Is this just because of previous years losses?

[MooseTick]

Isn't that what many speculate that Trump has done for 20 years?

Re:Is this just because of previous years losses?

[Shotgun]

I worked at a contractor for GE. Their HR department requires you to answer a questionnare. What they were looking for is to see if I was a member of any "underprivileged category", which would give them tax benefits for letting me work there.

If you want this stuff to stop, then have your Congressman vote against all of the "incentive" programs that they spew out. They like these programs, because they narrative goes that they're helping the poor. But, this is the actual result.

Re:Is this just because of previous years losses?

[Anonymous Coward]

And what they SHOULD have shown is why. The Majority of the Profits were paid out as stock options to employees. These are deductable as expense and show up either now or at time of cashing as employee pay which is then taxed at the Income rate of the employee.

Re:Is this just because of previous years losses?

[gravewax]

There is actually PLENTY to see here. Those laws were intended for companies that made "real" loses to recoup some of it through tax credits. Not for companies that manufacture artificial loses through huge investments to claim them against future profits.

Re:The Wrong Question

[Locke2005]

Government provides services. Those services have to be funded. Yes, theoretically we could probably run a government on just a Value Added Tax, if we weren't trying to be the policeman for the entire world.

No businesses really pay taxes

[anvilmark]

They are a business expense and are passed directly to the consumer of their goods and/or services.
So actually, you pay their taxes.

Re:No businesses really pay taxes

[Anonymous Coward]

No, they (typically) pay taxes on revenue above their business expenses - AKA their profit. Just like you do. That said, taxes are complicated, and there may be very legal, valid, and even moral reasons a person or business might not pay taxes on a given years' profit. If you don't like that, then perhaps you should investigate a flat tax or "fair" tax system.

Re:No businesses really pay taxes

[smoot123]

They are a business expense and are passed directly to the consumer of their goods and/or services. So actually, you pay their taxes.

Basically true and there are other ways a corporation can react. In theory, business can also depress wages and benefits, reduce profits, buy cheaper supplies, and probably other things. Depending on elasticities in the markets, some of these might not be very practical. However, it seems unlikely to me that 100% of the tax cost will go to higher prices 100% of the time.

That doesn't change your deeper point that the business will pass the tax burden on to real humans somehow. The business itself doesn't feel any actual pain from the tax.

Before we bash Amazon...

[skam240]

Before we bash Amazon it's important to note the following from the linked to article.

"...ITEP notes that its non-existent federal tax payment is a result of the Trump Administration’s corporation-friendly tax cuts. The think tank writes that the 2017 Tax Cuts and Jobs Act not only decreased corporate tax rates from 35% to 21%, but it also didn’t close “a slew of tax loopholes that allow profitable companies to routinely avoid paying federal and state income taxes on almost half of their profits.”

According to The Week, Amazon ended up paying an 11.4% federal income tax rate between 2011 and 2016, which is a contrast to the -1% rate this year."

Re:Before we bash Amazon...

[shess]

Before we bash Amazon it's important to note the following from the linked to article.

"...ITEP notes that its non-existent federal tax payment is a result of the Trump Administration’s corporation-friendly tax cuts. The think tank writes that the 2017 Tax Cuts and Jobs Act not only decreased corporate tax rates from 35% to 21%, but it also didn’t close “a slew of tax loopholes that allow profitable companies to routinely avoid paying federal and state income taxes on almost half of their profits.”

According to The Week, Amazon ended up paying an 11.4% federal income tax rate between 2011 and 2016, which is a contrast to the -1% rate this year."

Wow, that's terrible, it must have pushed them close to bankruptcy to pay such an onerous tax burden for those years.

Re:Before we bash Amazon...

[ItsJustAPseudonym]

No, AC. skam240 thinks the 2017 Tax Cuts and Jobs Act was specifically needed. The history of Amazon's federal tax payments is evidence for that.

Re:Before we bash Amazon...

[guruevi]

Just because Trump didn't close the loopholes doesn't mean it's his fault. The loopholes were there already, whoever implemented them is at fault.

Re:Before we bash Amazon...

[skam240]

You didn't read what I posted at all did you?

Yes, the loopholes have been there the whole time. What Trump did was introduce a tax plan that has Amazon paying 0% in taxes after using the loopholes that exist instead of the 11% it was paying in the past using the same loopholes.

In other words, it's incredibly clear it is Trump's fault that Amazon now pays nothing in federal taxes.

Re:So who is paying for their employees' SS &

[kenh]

Q: So who is paying for their employees' Social Security and SSI disability?

A: We are.

No, Social security and SSI disability are paid by both the employee and the employer, and are not "Income Taxes".

Your ignorance of the topic undercuts and invalidates your argument.

Re:Where can small businesses get this deal?

[kenh]

Talk to the folks that write the tax code, they structured it this way for a reason, and we (collectively) keep re-electing them.

Hate the system or change the system!

[Anonymous Coward]

Can't fault people or companies from paying as little tax as legally possible.

You can hate the people or companies for this, it's the political system that is to blame. Yes, I know companies lobby for this, but it's the system that allows them to lobby.

Hate the system or change the system!

When will leftsists learn

[Anonymous Coward]

For all of the calls for the Rich to pay for this and that, when will people on the left learn that the wealthy have enough money to practice really good asset protection? i.e. they end up paying very little in taxes because, asset protection often means own nothing, control everything. Calls to tax the rich more result in nothing, because there is nothing to tax. All you will end up doing is jacking up taxes for the middle class.

Re:When will leftsists learn

[jeff4747]

If your claim was actually true, the wealthy wouldn't be working so hard to cut taxes. Taxes would be irrelevant because the wealthy dodge them all.

Almost like they can't actually dodge them all.....

I eagerly await your reply that conflates tax rate with tax bracket.

Oh no!

[Comboman]

if they were "paying" taxes to the government, they'd just raise the price on their products and services

Oh no! Then customers would be forced to support local, brick-and-mortar, small businesses instead (the ones that actually DO pay taxes and create real jobs).

Re:Oh no!

[hierofalcon]

Regardless of the size of the business, taxes are an expense item. And customers make that calculation all the time. Do I go drive around to 10 different local stores, try to find parking, walk to them in the wind and rain, see if they even carry an item I'm looking for, and then pay the same or higher price that Amazon is selling something for - or just click on amazon.com. Amazon is winning this battle for many things short of groceries and their purchase of Whole Foods gives them a entry there. And by the way, Amazon creates real jobs as well.

Re:Oh no!

[hierofalcon]

It's all in where you live and the local choices you have. If you're in a big city with lots of choices - perhaps clustered in one of many malls - then no, shopping locally isn't a big issue (if you have transportation and time). For many smaller towns - throughout the fly-over states in particular - it is. Walmart has pretty good representation across the country - even in small towns. Sears and K-Mart - staples of yesterday - couldn't keep up and are mostly history. They weren't put out of business primarily by Amazon. They were put out of business by local brick and mortar Walmart stores (just like most mom and pop stores the writers here are championing were). Walmart, in turn, is facing competition with Amazon. Around and around it goes.

Re:So who is paying for their employees' SS &

[cascadingstylesheet]

Q: So who is paying for their employees' Social Security and SSI disability?

A: We are.

Um ... no.

Re:So who is paying for their employees' SS &

[Anonymous Coward]

Don't just vote for those who say they will make taxes fairer. Vote for those who VOTE for fairer taxes and not just tax breaks for corporations. Conversely, vote against those who voted for tax breaks for the corporations.

Re: So who is paying for their employees' SS &

[Anonymous Coward]

Well technically he is right. Social Security is called Social for a reason. Technically we are paying for their benefits in our payroll taxes (assuming you are normally employed) with the expectation that future generations will pay for ours. Now here is where he makes a good point. Legislators "borrowed" money from SS to fund things that should have been funded by other taxes like income tax. Since they have no intention on paying SS funds back we pay for it in the form of later retirement and less benefits when we get ready to retire.

Re:Tax Returns..

[dbrueck]

Well, it's not average, but maybe close enough? 44% of the people pay $0.00 in federal income taxes:

https://www.marketwatch.com/st...

Re:Thanks, TRump - NOT QUITE YOU HATER

[DewDude]

Yet...he did absolutely NOTHING to make them pay tax. If anything, the tax plan made sure they paid even less in taxes.

You must be a special kind of stupid if you believe anything that liar says. Mexico was supposed to pay for the wall; instead he's had to rob the treasure for it. TWO YEARS of a Republican controlled house and senate that would have given him whatever he wanted....but he had to wait until there was a conflict. He had to wait until it looked like he had a reason to start the transformation to dictator.

Sure...he complained about Amazon. Then he did nothing.

Seriously...you must be a real special kind of stupid if you actually believe anything that asshole says.

Re:Transport

[cascadingstylesheet]

Yet I'm sure Amazon isn't kind to go lightly on their employees who find public transport inadequate to get into work reliably.

What does (or should) federal income tax have to do with public transportation?

Re:So who is paying for their employees' SS &

[Dragonslicer]

Raise capital gains taxes. Phase out corporate tax exemptions for companies earning more than 100M annually or add a business version of the alternative minimum tax. Make our tax system fair.

I've started suggesting the following ideas to try to make the tax system more fair:

1. 1. Eliminate all taxes on corporate profit
2. 2. Increase taxes on individuals who receive shares of corporate profits to compensate (along with increasing the tax rate on the highest regular incomes, as necessary)
3. 3. Close loopholes that allow executives/managers to avoid taxes by using company-owned property in lieu of regular wages

Maybe if corporations don't pay taxes, we can get closer to overturning the stupid idea that corporations are people.

Unlike the Federal Government

[Kohath]

Amazon actually spends their money to help bring people good things.

Re:Unlike the Federal Government

[ndykman]

I always find it a bit odd when people mock the Federal Government for being useless via a website on the Internet. The government which funded all the foundational research to create the internet. Software, hardware, you name it. Companies like Google, Cisco, Sun, etc. all got their start from research grants and funding from the federal government.

And yet, when people suggest that companies that exist solely because of federal investment and infrastructure should pay taxes to support the next generation of new ideas and (gasp), a functioning society, people scoff.

We will pay either way

[Nkwe]

Since apparently Amazon pays little or no income tax, the rest of us end up paying a bigger share in our income taxes. However if we forced Amazon to pay income taxes, Amazon would just raise prices to cover that cost - and we end up paying anyway. Granted the "we" in the first case is most everyone (in the US) and is just Amazon customers in the second case. Either way Amazon is not likely to make less money over all.

Re:We will pay either way

[djinn6]

So if we could tax Amazon without the cost being passed to everyone else, would you support it?

Re:We will pay either way

[Nkwe]

So if we could tax Amazon without the cost being passed to everyone else, would you support it?

I am not against taxing Amazon, I am just saying that if we make a "simple" change to the tax law and require companies like Amazon to pay income taxes, there will be side effects such as price increases. There are no "simple" fixes to our taxing structure because things are complex and interrelated. I don't know how you would craft tax code to say "we are going to tax you more and you can't raise prices to compensate". To answer your question if there was a way to ensure companies like Amazon paid a fairer share taxes with no negative side effects, sure I would be for that - I don't see how it would be done though.

Tax

[ledow]

If only they weren't 100% compliant with all applicable laws, and there was an obvious way to change those laws to mean that they do have to pay tax!

I mean... who'd ever live in such a world!

So much better to let them - or anyone else - do it, completely legitimately, then try to invoke ire that they decided it was a good thing to do, not pay any tax that they weren't required to.

I tell you now, if the taxman gave me an option to not pay any tax, completely legitimately, with no comeback, I'd damn well exercise it. So I don't see why Amazon should be singled out for having done so.

The problem is... how did they manage this, and why aren't the taxation authorities and law doing anything to close whatever "loophole" (read: crappily written law) they utilised.

The UK and EU have been cracking down on this, ever since Apple paid some pathetic percentage in Ireland and tried to claim that covered ALL their EU tax. Even *Ireland* protested and basically fought Apple's corner for Apple NOT to pay more tax to Ireland... Ireland literally talked themselves out of billions in tax that the EU *FORCED* Apple to pay them - because they knew they their little backhanders and "favours" were supposed to happen in lieu of Apple paying tax, so Apple would get pissed off and move out of Ireland if they were made to pay *the actual amount they should have owed*.

Amazon used an antique tax law in Guernsey (Channel Islands, sorta-belongs to the UK) to ship DVDs without paying VAT... that law was designed to cover tulip shipments to make the Guersney flower industry thrive. It got misused such that Amazon posted ALL their DVDs and CD from Guernsey for nearly a decade.

Because not one fool thought "Maybe that tax exception should only apply to the flowers we don't want to tax, not every single thing under the sun of a similar value"

Explan Please

[kenh]

The fine print of Amazon’s income tax disclosure shows that this achievement is partly due to various unspecified “tax credits” as well as a tax break for executive stock options.

In researching what "a tax break for executive stock options" means, I found a Forbes article from 2013, that described it this way:

The option break,which Sen. Carl Levin (D-MI) calls an “unjustified corporate loophole,” works like this: A company issues options to executives to buy stock at a certain, usually low price. (For example, Facebook’s Mark Zuckerberg had options to purchase 120 million shares for just 6 cents a share when the company went public last May at $38 per share.) Then, when the executive exercises those options, the company gets to deduct the difference between the executive’s exercise price and the shares' higher market value, even though the company hasn’t actually paid the exec that large amount of cash. As a result, while Facebook reported $1.1 billion in pretax U.S. profits for 2012, it owed no corporate income taxes and in fact qualified for $429 million in refunds. (One key here is that companies report their earnings to shareholders and the SEC under different rules than they use to report taxable income to the IRS.)

It went on to explain:

Defenders of this tax treatment for executive options point out that it’s not like Uncle Sam is getting stiffed. That's because the executive must report the same amount deducted by the company as ordinary income. So while corporations avoid a 35% corporate income tax, wealthy executives pay individual income taxes (after this year's fiscal cliff tax deal) at a top 39.6% rate. Plus, the whole amount is considered compensation subject to Medicare taxes at a 3.8% rate. (That’s the normal 2.9% Medicare rate, equally split between employer and employee, plus a 0.9% Medicare surcharge on highly paid employees that was part of ObamaCare.) And, of course, the exec has state individual income taxes to pay too. (In California, the top rate on income above $1 million is now a whopping 13.3%.) Some companies such as Facebook, “net settle” options. As Forbes contributor Robert Wood, a tax lawyer, explains here, that means Facebook made tax payments to Uncle Sam on employees’ behalf (essentially, it withheld taxes the workers owed), giving them only the shares they would end up with, after tax. (Note that the tax treatment of executive stock options—also called nonqualified stock options--is entirely different than the tax treatment of the "qualified" or "incentive" stock options typically handed out to rank and file employees.

So taxes were paid, mainly by the employee exercising the stock options, but also to an extent by the corporation as well - the article sums it up thusly:

To tax geeks, the treatment of executive stock options makes perfect sense: A tax deduction on the corporate side is balanced by taxable income to the employee.

Source: Stock Options Meant Big Tax Savings For Apple And JPMorgan, As Well As Facebook

The takeaways - rather than tax the income at corporate tax rates (21.5%) the income is taxed at the highest individual rate (39.6%) AND Medicare at 3.8% and state tax rates, and the source of these deductions predate the Trump administration, since the above article is from during the Obama Administration. The origins of the tax break are left as a research project for the reader, I've done my part by showing the taxes are still paid by the employee that got the tax break, and paid at a higher rate than the corporation would have paid. (All tax rates described are from the 2103 article, the concerned reader is invited to substitute in post-Trump tax break rates if they like, the principle remains the same.)

Re:Explan Please

[cordovaCon83]

Good research. This really tempers what was a sensational story. No news is good news. Or is no news just fake news in this case? Haha

Re:Explan Please

[djinn6]

We are getting stiffed. If taxes worked properly, they would pay a business income tax, and then when someone is paid by that business, they pay individual income tax on top of it.

If that doesn't make sense, remember that corporations are people. If Joe makes $2000 from his job, he pays income tax on it. When he hires me to fix his water heater, I receive $1000 from Joe. Now I pay income tax on $1000. Am I getting double taxed? Or is the tax system working as it should?

Now replace Joe in my example with Amazon.

Re:Explan Please

[smoot123]

To tax geeks, the treatment of executive stock options makes perfect sense: A tax deduction on the corporate side is balanced by taxable income to the employee.

So at the risk of spoiling all the entertaining outrage, you're correct the vast majority of the time. I'm married to a tax accountant so she explains this all to me all the time. I've concluded that the tax code is an awful lot like software. You're constantly engineering the code to ensure that any income eventually gets taxed at the right rate and that there aren't any corner cases which allow income to leak out. So when you look at some goofy seeming provision, there's often a pretty plausible rationalization behind it.

Let me temper that. For provisions which apply to people in general, there's often a plausible reason. For specific tax breaks for, say, Amazon HQ2, it might be a pure giveaway.

Re:Explan Please

[raftpeople]

Thank you, excellent info. I went to the ITEP website and to fact check web sites to find out if the story was really telling the entire and accurate story. I found that, while ITEP tends to be highly factual, they are not unbiased in their presentation of the facts.

You just confirmed that bias and at the same time filled in the additional piece of the puzzle showing that taxes were paid but by a different party. Thanks again.

Re:Explan Please

[Anonymous Coward]

A tax deduction on the corporate side is balanced by taxable income to the employee.

Nice story and good research. But your conclusions are off. (yes I know, quote above isn't yours). It's not simply trading a tax deduction for a tax liability.

The executives are very probably not paying the base tax rates. At that level, they have personal accountants exploiting every possible loophole and tax dodge to make sure they pay as little as possible. That CEO may be "officially" a resident of TX where there is no income tax. Or the Bahamas. Or he carries over "losses" from previous years to offset his income and pay zero tax (see Donald Trump). You can't assume the trade from corporate to personal income is a net win for the tax collector.

Further, it's bad policy - even if it brings in more tax revenue. Do we really need to incentivize higher pay for executives? They don't rape and pillage companies enough already? Why should we make it easier for executives to pat themselves on the back with multimillion dollar reach-arounds while they dribble a few crumbs down to the masses?

Just another example of how the rich get richer. They rig the system in their own favor.

Re:Explan Please

[Goldsmith]

Great research and explanation.

It would have been nice if ITEP wrote this and then went on to explain their views on whether double taxation in this case would be better (there's a good argument that it could be) or perhaps that the tax code should be simplified so that this kind of research isn't necessary for the average person to understand the system.

Re:Explan Please

[kenh]

except of course many of these executives ALSO have tax havens and writeoffs to shield the income from those options from the IRS

You literally made that up. How does a corporation give employees stock options, and then the employees turn around and "hide" (in "tax havens and writeoffs") that very same income from the IRS? This reminds me of the kerfuffle over Mitt Romney having foreign investments and their very existence was seen as "proof" he didn't pay his income taxes... Except the way his opponent learned about those foreign investments was because they were reported on his tax paperwork! - apparently Romney was simultaneously reporting AND hiding his income from the IRS.

or simply have place of residences not in the US for income tax purposes.

A US Citizen can't escape US taxes owed on US-derived income by "simply (having a) place of (residence) not in the US.

Re:Explan Please

[kenh]

That CEO may be "officially" a resident of TX where there is no income tax.

This is a Federal tax deduction, and even Texans pay Federal Income Taxes.

Or he carries over "losses" from previous years to offset his income and pay zero tax (see Donald Trump).

This very same deduction benefits literally millions of "non-CEOs" each year. Losses are "earned" (I know, a perverse turn of phrase).

 

You can't assume the trade from corporate to personal income is a net win for the tax collector.

Yet you seem to be able to "assume" it is a net loss for the tax collector...

Further, it's bad policy - even if it brings in more tax revenue. Do we really need to incentivize higher pay for executives?

It isn't higher pay, it's a reward for an increased stock price - they got stock options at trivial prices, had to remain with the company for years and cause explosive growth, and only years later could they "cash in" their stock options.

Re:Explan Please

[_Sharp'r_]

First of all, corporations aren't people, although they do represent people, which is why they are treated that way in certain circumstances (as a pass through for a person's rights, for example).

Second, Amazon's shareholders didn't "make" a real profit over time for their shareholders (the owners), despite whatever their public numbers about profit said. Their shareholders lost money by giving a bunch of it to Amazon employees via stock options, then the employees (who did actually get money in the deal) paid taxes on the value of those stock options. The stock options were only valuable because they dilute the value of the existing shareholders' stock, which is where the money for the options came from.

It would be the same if Amazon demanded stockholders give them cash as a capital contribution, then gave that cash to their employees. It's done with stock options because the shareholders and managers believe employees who can see their options will be more valuable in the future if they contribute to the company's bottom line will have their incentives aligned with what the shareholders (who also profit from the same thing) want.

Re:Explan Please

[WindowsStar]

Great research but unfortunately the wealthy person doesn't pay the tax either. My wife who works for a huge accounting firm that does taxes for the wealthy continuity sees wealthy people who make 100 million to billions of dollars a year and they only pay 6,000 to 70,000 in taxes. It is disgusting the amount of taxes they avoid and they just get richer and richer. While their taxes should be 39.6% plus 3.8% and state tax they are always able to use tax loopholes and tax law to avoid paying them. Going over the tax laws with my wife you soon learn they are passed and created for the wealthy because there would be no way we would ever come close to take advantage of any of those tax laws and avoid paying taxes.

Re:Explan Please

[djinn6]

First of all, corporations aren't people, although they do represent people, which is why they are treated that way in certain circumstances (as a pass through for a person's rights, for example).

Ah of course, they're not people when it comes to responsibilities. But they totally are when it comes to rights and privileges. I'm still surprised that Citizens United didn't make false advertising legal, given how advertisement is speech and corporations apparently have a right to free speech.

As for the rest of your comment, I'll just say this: Giving employees stock options in exchange for their labor and paying a plumber to fix a water heater are both transactions involving an exchange of value for services. Amazon's financial gymnastics does not change the fact that what would've been double taxed had Amazon been an individual is now taxed only once.

Re:Explan Please

[_Sharp'r_]

For your plumber example, the money was taxed in the same way before it was given to Amazon by a purchaser, then it was taxed as income for the employees getting the stock options. Same situation, same result.

If you don't think a corporation can exercise free speech on behalf of individuals, then you need to start by shutting down the NY Times, the ACLU, CNN, etc... all corporations who do exactly that.

Re:Explan Please

[djinn6]

Are you really saying home owner -> plumber is the same as consumer -> Amazon -> Amazon employee? Does the fact that there's an extra hop in there make any difference to you?

If you think businesses should not pay taxes, then just say that. I can think of legitimate arguments for it. Don't pretend that they're actually paying it the same way people are, because they're not.

Re:Tax Returns..

[Anonymous Coward]

It's true. You can't get money from people who don't have it. You can't jail them because you need more money to do that as well. Bleeding turnips and all that jazz. What you do is, you focus on world domination through oligarchy, so you need your corporations to have little or no liabilities with unlimited funding. The problem is the race to the bottom virtually eliminates the pool of money from which to pull profits from so other drastic measures need to be taken. Since the government can print money and the dollar is used in world trade, it uses that power in tandem, resulting in death, war, greed, and..Donald Trump as president, honestly. I mean..c'mon. Not that Hillary would have been great, but..Donald Trump. Say it with me. "Donald Trump is the leader of the free world." Yep.

Isn't that what they are supposed to pay.

[mt2mb4me]

I thought that all corporations were basically supposed to pay 0% taxes, All the taxes are there to create pressure to do things that help the overall economy. Hire people for work, build public works, etc. So basically, it's like this. Spend the money on the public good, or we will take the money and spend it for public good. Just to be clear, I am not an advocate of corporate welfare, but I would like to see what they did to qualify for 0% taxes, most likely not enough.

Your 401-K is happy now

[magarity]

From the CNN Finance summary: "Institutional investors hold a majority ownership of AMZN through the 57.75% of the outstanding shares that they control. This interest is also higher than at almost any other company in the Internet Retail industry."

Just eliminate corporate taxes...

[reg]

Besides the unfortunate loss in employment opportunities for unscrupulous accountants and lawyers, I think the US would be better off if they eliminated all corporate income taxes. There are so many loopholes and handouts that it is impossible to make companies pay an equitable amount.

To compensate for the loss of federal income, personal taxes should be raised, especially taxes on capital gains, and loopholes closed so that corporate resources cannot be used for personal gain without taxation.

Most US states/counties/cities would also be much better off with a (lower rate) VAT rather than GST, so they could get income from a broader range of economic activity (especially lawyers fees). But Americans seem to as blind to the concept of VAT as they are to so many other modern ideas.

Fake News

[Hillie]

When it comes to stuff like this believe nothing you see from mainstream media of any kind. (Fortune = Mainstream media)

Here's the problem with this:

Amazon just pulled out of NY after democrats don't want to work with them.
Democrats start projecting calling Amazon a "petulant child," despite this: https://www.youtube.com/watch?v=hlMIyae9-ZU
Now mainstream magazines posting triggering articles bashing Amazon saying they will pay no taxes.

F the MSM. God save Donald Trump.

Re:Fake News

[sdinfoserv]

The deal was chased, brokered and accepted by the Governor of NY, Andrew Quomo.. who is a democrat. Stop being a paranoid FauxNoise zombie..

Re:Tax Returns..

[hierofalcon]

Or less than 0 with refundable tax credits.

Re:Tax credits

[kenh]

Why do you assume Amazon doesn't get audited? Being audited and subsequently being found to have complied with the tax code results in no change - the issue here is the tax code that allows corporations to deduct employee stock options (see here), something which pre-dates the Trump administration.

For example, in 2012 Facebook reported $1BN in profit and yet received a $400M+ tax refund - "For those that don't have a pocket calculator handy, that works out to a tax rate of" over negative 40%.

Re:So who is paying for their employees' SS &

[Anonymous Coward]

Your ignorance of the topic undercuts and invalidates your argument.

The speaker's ignorance never invalidates an argument.

A person who does not understand English stating "The cube root of nine is three." does not change the truth-value of the statement.

Re:So who is paying for their employees' SS &

[liquid_schwartz]

Q: So who is paying for their employees' Social Security and SSI disability?

A: We are.

I'm more than a little bit tired of the wealthiest corporations and individuals paying proportionally less in taxes than even people in the bottom tax bracket. Giving tax breaks to help small businesses grow makes sense. Giving huge tax breaks to help one of the largest businesses in the world grow does not.

It's time for a tax revolution at the ballot box. Vote only for politicians who declare a willingness to make our tax code more fair and less protective of the wealthy. Raise capital gains taxes. Phase out corporate tax exemptions for companies earning more than 100M annually or add a business version of the alternative minimum tax. Make our tax system fair.

I'd love to but both parties are bought and paid for. The Democrats have a few fringe players who talk about reform they are not in power and are marginalized. Those types also typically hate me as a cis-gendered white male so why would I support them? The reason aggrieved groups are given such a microphone by media is that it keeps the spotlight off declining standards of living, wages going down, etc. BLM doesn't cost companies a thing after all.

Tax them to help fund the military

[k6mfw]

Since Amazon products are shipped all over the world, 70% covered by water and US Navy is to keep ocean commerce free of pirates, they should help pay for that service. Also other military services allows commerce of US products that also allows Amazon to ship their sales stuff around. Unless Bezos gives up Blue Origin to fund his own military services to allow undisturbed shipment of products, he should pay taxes. Yikes a private military of Amazon, now that's a scary concept.

Re:The Wrong Question

[jellomizer]

The progressive tax system, runs under the idea, the more you make the higher percentage you pay. This is because the percent is just a stupid way of taxing.
Because to survive you may need $25,000 a year, a 2,500 in taxes cuts into your ability to survive. while if you make $250,000 25,000 in taxes is manageable and you still would have a good quality of life.
However the problem is the system is so complex, that the richer you are, the more resources you have to move your money into tax free methods.

A sales tax, is currently way to complex to fit in a progressive tax system, so it will normally need to be fixed, independent of ones income. A value add tax, will often offload the tax in terms of more expensive products, and encourage companies to make products with less purchased items.

A good tax system, needs to be reasonable, so people are putting in what they really can, and not hinder growth.

Re:Answer

[dgatwood]

No, you misunderstand. Instead of paying the government their corporate income tax, they're getting money BACK. They're actually paying NEGATIVE income tax. That means we're literally paying for some portion of their other tax liability.

Re:Tax Returns..

[djinn6]

The average taxpayer doesn't buy billions of dollars worth of depreciating assets that incentivize economic growth through myriad other mechanisms than a simple income tax return.

The average tax payer spends a thousand dollars a month. There's a few hundred million of them, and combined they spend tens of billions on the economy. Yet we tax them just fine.

Re:Why should government get that money, anyway?

[sdinfoserv]

It's not a way to organize a society, it's a way to fund things of public benefit. Even the found fathers recognized the need for taxation to fund the Continental Army.
There's allot of people who want no taxes, but that is in effect saying you don't want first responders, public schools, jails or infrastructure - roads, bridges, etc. It's cheaper and safer to pay for public schools than to deal with the hoards of uneducated, unemployable hoodlums that would be rampant in society.

Re:Answer

[110010001000]

There are other taxes than the corporate income tax. Amazon is paying those taxes.

Re:The Wrong Question

[lgw]

Government provides services. Those services have to be funded. Yes, theoretically we could probably run a government on just a Value Added Tax, if we weren't trying to be the policeman for the entire world.

Meh, our defense budget is only $676 B out of a total budget of $4 T. It's not the cold war any more.

Actual government services, such as roads and courts, are even less, down around 10% IIRC. Those probably could be funded with some other form of tax, but the form of the tax isn't some much the point. Mostly our government is a pension system these days, and for some reason free Americans are hostile to the idea of alternatives to systems like Social Security and Medicare, which give the government the power to eliminate undesirables by simply not mailing them a check.

That's surprisingly low

[Headw1nd]

So the thing I'm amazed at is given the stranglehold Amazon seems to have on its market, they only made 11.4 Billion for the year. From what I can see, Apple posted a 14.1 Billion profit on Q4 alone.

Re:That's surprisingly low

[raftpeople]

And 90% of that profit is from AWS, not from selling merchandise.

Always been like this

[sycodon]

" In 2016, the company earned $10 billion but recorded a tax benefit of $400 million for a 12-month tax rate of -4.5%, according to Forbes."

"GE was one of 18 Fortune 500 companies that paid no net federal income taxes between 2008 and 2015"

https://www.thestreet.com/stor...

Re:Always been like this

[GameboyRMH]

I was also reminded of the furor over GE's year of paying no taxes. That was seen as being remarkably bad back then, and now it's set to be the new normal. Congrats.

Re:Always been like this

[sycodon]

It always has been the, "New Normal"

Re:Always been like this

[GameboyRMH]

If by "always" you mean "mostly since the '80s and especially since the turn of the century" and by "normal" you mean "an uncommon phenomenon occurring mostly within a handful of specific megacorporations." The numbers and history don't lie:

https://itep.org/the-35-percen...

Tic Tock

[Stan92057]

The ONLY reason i buy from amazon is free shipping which i do NOT pay for whatsoever. See many of us can game amazon just as they game the tax system. And when i cant free shipping is the day i stop using amazon. Its only a matter of time till free shipping ends. BTW i do pay taxes as much as i don't like to they are necessary.

Re:Transport

[fluffernutter]

Corporations are against paying taxes in general. Look at the pullout from NY. They don't pay their way in society.

Re:So who is paying for their employees' SS &

[Solandri]

No, Social security and SSI disability are paid by both the employee and the employer, and are not "Income Taxes".

1. The employer's share of payroll taxes are paid for by the employee, in the form of a lower wage. If the employer hired you knowing they'd be paying you a salary of $50,000/yr plus $3825/yr in their share of your payroll taxes, then they hired you knowing you would cost them $53,825/yr. So absent the payroll taxes, they would've hired you at a salary of $53,825/yr. Since you are receiving only $50,000/yr instead of $53,825/yr, you are paying the employer's share of payrolll taxes in the form of a lower wage.

2. While they are not technically "income taxes", any tax which reduces the disposable income available to the wage-earner functions identically to an income tax. This includes sales taxes and value added taxes (which decrease the purchasing power of your disposable income). This is pretty obvious once you realize that the entire point of taxation is to divert some of the country's productivity into the government's coffers so the government can decide how the money is spent instead of you. Since the only source of productivity is people (the productivity of a corporation is just the sum of the productivity of its employees), every tax functions the same as an income tax.

Surprisingly, this includes corporate taxes. Corporate taxes are assessed as a percentage of a corporation's profit. Corporate profit goes to shareholders as distributions. So a corporate tax functions the same as an income tax on those shareholder distributions. The only difference is that one tax sends the money to the government before it changes hands from the corporation to the shareholder, the other sends the money to the government after it changes hands.

Basically, the massive tax code we have is an enormous shell game to try to hide taxes from the people who are paying for it all - wage earners. It would be a whole lot easier, cheaper, and more transparent if we just combined all the taxes into one, single tax. And if you believe in a progressive tax code (higher incomes pay higher tax), then the obvious single tax to keep is the income tax. All other taxes could be eliminated in lieu of an income tax. (Though you'd probably want to keep behavior-modifying taxes, like fuel taxes, property taxes, cigarette taxes, etc.) This would have the additional benefit of eliminating corporate tax dodging, since that's only made possible because corporations can exist simultaneously in multiple tax jurisdictions. People can only exist in one place at a time, so they can't dodge an income tax.

Re:So who is paying for their employees' SS &

[Rhipf]

Or you could make the corporations pay all the taxes and the people pay no taxes. This would also be a step closer to overturning the idea the corporations are people. 8^)

Re:Answer

[dgatwood]

Doesn't matter unless those other taxes are higher as a result of them paying less corporate taxes and that increase is enough to more than offset the negative corporate income tax. We're still effectively paying those other taxes because Amazon is paying negative income tax.

Re:Answer

[hierofalcon]

And the only reason they got money back was they did something in previous tax years that the government wanted them to do (build and grow) and in return for doing that got to depreciate assets (probably) over x years of taxes possibly leading to refunds if the credits and depreciation exceeded income. Have we benefited from Amazon getting as big as it has and thus having a negative income tax rate at certain times. Most would argue yes.

Should single mothers with kids get refundable tax credits (money back even with 0 tax liability)? The tax code says they can. They have a NEGATIVE income tax. Is it bad to help them or as a society are we OK with that? What's the difference?

Both the poor and the rich are making use of the tax code that Congress passed to the best of their ability. If you don't like it, stop re-electing your Representatives and Senators to Congress. Elect someone who will write a different tax code. There are many options. And while you're at it, elect some Congressmen and Presidents that don't spend as much money.

Re:So who is paying for their employees' SS &

[parkinglot777]

I'm not sure how your post is related to what you quoted from the parent post...

What the parent post talking about is that the money that goes into SS fund is coming out from each employee and employer at the rate of 6.2% of the employee's salary. The amount is calculated separately from (or in addition to) federal/state taxes. If you look at your W2, you should be able to figure it out.

Re:Transport

[Shotgun]

What does (or should) the federal government have to do with most of the meddling they're involved in?

Re:Answer

[dgatwood]

And the only reason they got money back was they did something in previous tax years that the government wanted them to do (build and grow) and in return for doing that got to depreciate assets (probably) over x years of taxes possibly leading to refunds if the credits and depreciation exceeded income. Have we benefited from Amazon getting as big as it has and thus having a negative income tax rate at certain times. Most would argue yes.

No, I don't think we have benefitted. What we basically have created is a single company, Amazon, as a near-monopoly on all online sales of everything. Their next competitor, I believe, is Wal-Mart, whose online sales are less than a tenth that of Amazon. We have benefitted from letting Amazon become a broad company that sells everything, but at some point, those benefits started being matched by equal downsides, and that happens at about ten or fifteen percent of a given market. Amazon is now at 49.1% of all online sales. They are simply way, way too big.

More importantly, the sheer market power resulting from that online dominance means that traditional retail is basically dying en masse, with Sears, K-Mart, J.C. Penney, and Macy's all just barely surviving, if that. It won't be long before 49.1% of online sales become 49.1% of all sales. And at that point, it will be too late to fix the problem.

Tax incentives to encourage good behavior are fine. But for personal income tax, there are limits to how much you can do that. If you get below a certain threshold and you're a high wage earner, you get hit with an alternative minimum tax that effectively caps nearly all of those deductions. And the threshold has crept further and further into middle-class territory in parts of the country that have a high cost of living. Meanwhile, there is no equivalent for the richest corporations, which are principally responsible for causing that high cost of living. This is ethically and morally wrong.

We need to bring back the corporate AMT, raise the individual AMT so that it reflects current cost of living, and index it to the consumer price index or some other sensible metric. We also need to treat personal capital gains above... let's say $100k per year as ordinary income, taxed in the usual way. We need to bring back income tax deductibility, because right now, people are being effectively taxed by the federal government on money that was never theirs to begin with (because it was owed to the state), and the result is that people in high-income areas are now demanding even higher income, creating even more income disparity between rich and poor parts of the country, solely to try to make up for the colossal tax increase that President Trump passed last year (which was actually the largest personal income tax increase in American history, despite being billed as a tax "cut").

Re:So who is paying for their employees' SS &

[smoot123]

No, Social security and SSI disability are paid by both the employee and the employer

A philosophical nit but when the dust settles, corporations don't pay taxes. They may write the check but "the corporation" is just a middleman.

Eventually the tax burden will fall on real flesh and blood humans. It may be the employees (through lower wages and benefits), the customers (through higher prices), the investors (through lower profits), or the suppliers (through buying cheaper or fewer inputs). There are probably other ways the tax gets passed along. In any real situation, the corporation will react in some mix of all these ways and the specifics will depend on many details.

When the burden gets to that human, they have to make a choice about what not to buy because they now have less money to buy things with. That's who feels the pain of the tax. And by the way, that's the ultimate cost of the tax: what that human had to give up because they were paying a tax instead.

Amusing

[nehumanuscrede]

Even though ( via Citizens United ) Corporations are now " people " too, not all citizens are equal apparently. Especially when it comes to paying their share of taxes. :|

Whereas the vast majority of us pay somewhere between 20-30% in Federal Taxes every year, it seems most corporations pay no where near this amount. With some, like Amazon, not paying anything at all.

How do we fix this ?

Can it be fixed ?

Why is the majority of the tax burden sitting on the shoulders of the individual tax payer instead of the multi-billion dollar shoulders of Mega-Corp ?

Re:Amusing

[kaatochacha]

It can be fixed.
Sliding scale flat tax, NO deductions of any sort. Everyone pays the same rates.

Personally, I refuse to buy anything from Amazon, but for different reasons.

Re:Amusing

[bandwannabe]

As noted by another commenter. 44% of Americans don't pay any income taxes, so the "vast majority" is already eliminated. I'd also question your assertion about paying 20-30% taxes. On 30% on $100,000 (not the actual rate, just an example) would be taxed this year as 30% on $76,000 which is only 22.8% effective tax rate.

The actual tax rate for $100,000 gross would be at the 12% tax bracket for tax year 2018 (for couples filing jointly) after the 24,000 standard deduction is applied.

Without doing the additional math, I suspect anyone subject to a 30% effective tax rate is already making enough money to pay the accountants to make that number not happen (as is what this whole story is about).

https://www.marketwatch.com/st...

Re:Amusing

[_Sharp'r_]

The top 1% of income earners pay 39.48% of federal income taxes (2x their share of gross income), the top 10% cover 70.88% of them and the top 50% pay 97.25%. So it's not like people with a higher than average income aren't covering the vast majority of income taxes.

Yeah, there are some super-wealthy who have an ownership model which minimizes their taxes to a certain extent, but when the bottom 50% of income earners are the ones who only pays 2.75% of the total income taxes, it's going to be tough to make an argument that the "rich" aren't paying much income tax.

That said, federal corporate taxes are just passed down on employees (who can't either invest in a different country's capital market, nor buy from an out of country supplier like a consumer can). In the specific case of Amazon, their taxes are low because they've lost money (ignore the pretend accounting "profit" reported) for their shareholders by taking some of the shareholder's value in the form of stock options and giving it as an expense to their employees, which makes the shareholders' shares less valuable, but has the side benefit of aligning employee incentives better with the incentives shareholders would like them to have.

Re:So who is paying for their employees' SS &

[Anonymous Coward]

    If the employer hired you knowing they'd be paying you a salary of $50,000/yr plus $3825/yr in their share of your payroll taxes, then they hired you knowing you would cost them $53,825/yr. So absent the payroll taxes, they would've hired you at a salary of $53,825/yr.

Bullshit. They would have hired you at $50k/yr and pocketed the rest because you agreed to hire in at $50k/yr. Nobody gives a shit what their employer pays when agreeing on a salary, and the employer isn't going to give you a dime more than they have to. If I don't think the job is worth it at a certain rate, I'm not going to take it. Your expenses aren't my problem any more than my expenses are yours. The notion that if taxes were to drop the employer would pass the savings on to the employee is ridiculous.

Same company different numbers

[ardmhacha]

Their accountants report huge profits to Wall Street and losses to the IRS and their auditors sign off on both

Re:Same company different numbers

[_Sharp'r_]

And Congress long ago made the rules where they can claim stock options aren't an expense to Wall Street, but are an expense to the IRS. Back in reality, they're an expense directly to shareholders, by diluting the value of their stock.

And while pocketing those tax cuts

[rsilvergun]

they're, like all major corporations, gearing up for a recession. A recession partly _cause_ by said tax cuts. We pumped too much money into one side of the economy (the top 1%), so to prevent a bigger slowdown later the fed's jacking interest rates and slowing down other forms of stimulus (on the demand side, always on the demand side).

Meanwhile my taxes went up substantially this year. Thanks Obama^XTrump.

I saw a bunch of Fox news hosts

[rsilvergun]

argue with straight faces that the reason for the 8% decrease was people didn't withhold enough.

While technically true, these same sumabitches spent the last 2 years promising everybody big fat tax cuts.

I'd like to think that even somebody watching Fox News can figure out that their taxes went _up_ under Trump.

Re:I saw a bunch of Fox news hosts

[kaatochacha]

You do understand how withholding and what you end up receiving/paying are related, correct?

Amazon is not the problem....

[rwrife]

Amazon followed the law and it worked out in their favor, good for them. If you don't like it, change the law or get good at understanding out you, too, can pay $0 in taxes.

Re:Amazon is not the problem....

[Patent Lover]

Sorry, we don't have millions to spend on lobbyists.

Re: So who is paying for their employees' SS &

[kenh]

Amazon writes big quarterly checks as their portion of the SS insurance/SS disability obligations, based on employee salaries, that is not their 'income tax' and those programs were funded as required by law.

The original poster conflated payroll deductions with income tax.

SOCK PUPPET ALERT!

[Anonymous Coward]

udachny is a sock puppet of roman_mir. the latter uses the former to try to convince more people that the foundational principles of his cult are righteous and sane. they both often post at -1 (and have their postings limited here on slashdot) because they have poor karma scores here as a result of repeated abusive behavior and their consistent religious proselytizing that is seldom on topic with the discussion thread. don't let him convince you that his doctrine would actually benefit you, or even result in him being less offensive.

I know this is not much but...

[Gabest]

Amazon payed no tax in my country either, even though I bought two things last year.

Re: Because No One Else Has Bills

[Locke2005]

Moran State Park? Yeah, it's nice... but you're kind of a moron yourself!

Re:Where can small businesses get this deal?

[jeff4747]

I don't remember there being a line for "Board Member of H&R Block" on my ballot.

Politicians don't write the tax code. They pass tax code that is given to them by lobbyists.

If morons would stop opposing flat tax

[kaatochacha]

This wouldn't happen with no deduction flat taxes, or even a sliding scale no deduction tax system.

At least we know why you didn't post the link

[cahuenga]

Cherry picking

That study ranked California 42nd among the fifty states and the District of Columbia for the amount of federal per capita expenditure ($9,172).

...

The LAO also cites figures from a March 2016 report by the Pew Charitable Trusts. It found the federal government spent nearly $356 billion in California in fiscal year 2014, for salaries and wages, grants, contracts, retirement benefits and other benefits. That same year, California paid about $369 billion in total federal tax -- or about $13 billion more than it received -- according to the Internal Revenue Service Data Book, 2014.

https://www.politifact.com/cal...

Re:Thanks, TRump - NOT QUITE YOU HATER

[Bender0x7D1]

Yet...he did absolutely NOTHING to make them pay tax. If anything, the tax plan made sure they paid even less in taxes.

This just shows you have no idea how the Federal Government works. The President isn't the one who sets taxes. That would be Congress. Also, as for the wall, that's ALSO Congress. In fact, the wall was authorized in 2006 with the Secure Fence Act (which Obama and Biden both voted for.)

So, instead of reveling in your hatred of all things Trump, watch some Schoolhouse Rock, read the Constitution, or do something to be informed about how things work instead of complaining about the wrong person.

Also, the whole "Dictator" thing is laughable. It reminds me of the "OMG! He will have The Button and kill us all!" when he was first elected. It is full of sound and fury but, in the end, signifies nothing.

Re:So who is paying for their employees' SS &

[Magius_AR]

It's time for a tax revolution at the ballot box. Vote only for politicians who declare a willingness to make our tax code more fair and less protective of the wealthy.

So nobody then? I've yet to see a politician tackle tax code loopholes. They just move the deck chairs around. Even the democrats target the middle class instead of the wealthy. The latest bout of tax hikes under Obama hit upper middle class and small business. Rich people got off scot free via loopholes. I mean the Medicare ACA 1% tax hike hit joint incomes of 250k. Deductions and exemptions were also phased out at that level. Setting the bar there is a hell of alot different than setting it at 100M.

So basically, the Republicans don't want to tax anybody, and the Democrats want to tax the upper middle class. Pick one.

Politifact?

[Anonymous Coward]

Since you did not provide a source, I found an article on Politifact's site which contained a few of these numbers here. It seems to ramble, and appears to be an opinion piece.

There are some better statistics that you can examine from the Associated Press, The Atlantic, and WalletHub, and The Tax Foundation

The Tax Foundation tracks the numbers back to 1981.

https://people.howstuffworks.com/which-states-give-the-most-the-federal-government-which-get-the-most.htm

After reading all of these, I am inclined to believe that you were fishing for something that would reinforce your opinion.

You can't fool all the people, all the time.

Re:So who is paying for their employees' SS &

[kenh]

(Using your distinction of upper case and lower case income taxes and Income Taxes)

There's no evidence Amazon didn't pay every "income tax" it owed, which likely was in the hundreds of millions, both it's portion and collected from employee paychecks.

This article is about "Income Taxes", and that Amazon didn't pay any last tax year.

The original poster obviously conflated the two.

haha

[Zehsi]

just fine them like the good bitch they are...

Re:Where can small businesses get this deal?

[_Sharp'r_]

Right... politicians aren't in the least bit responsible for how they vote in Congress, so it doesn't matter which ones are running things.

Has nothing to do with electing people and allowing them to have the power over us to decide which economic interests to favor or not.

Re:So who is paying for their employees' SS &

[_Sharp'r_]

Vote only for politicians who declare a willingness to make our tax code more fair and less protective of the wealthy.

When "the rich" top 1% of income owners pay 2x their share of income in taxes, then the only way to make the tax code "more fair" would be to lower taxes on the rich, not to increase them. When the top 50% of income owners pay 97.5% of income taxes, then the bottom 50% who pay only 2.5% of the taxes aren't in a position to declare that's "not fair". I'm not sure you understand what "fair" means. It'd be fair if everyone contributed in taxes exactly what they got back in benefits over their lifetime, but we left that behind a long time ago in the name of envy and greed.

Re:Answer

[_Sharp'r_]

Less than 50% of the online market can't credibly be described as a "near-monopoly". Amazon doesn't even make much on their e-commerce sales. From a financial perspective, they're a cloud services provider who also does a little e-commerce on the side.

You information about the recent tax cuts is also completely wrong, so I suppose it shouldn't surprise me you aren't aware of anything you weren't able to hear in a hard-left-wing information bubble.

Re:Tax credits

[_Sharp'r_]

And there's nothing wrong with the stock option deduction. Any stock given to employees dilutes the value of the stock of the current shareholders. The shareholders are effectively paying the employees directly, rather than through a check from the company's bank account, but they're definitely paying them, the same as if the company purchased their own stock with cash and then gave that stock to the employee. The company's money and assets are just a pass through for the shareholders in this case.

My bro had a good year this year

[rsilvergun]

landed a nice contract. It'll end though. Next year is probably going to be way worse. Doesn't mean he won't be paying taxes next year. He'll pay less, but no 0.

Enough of this crap where we let companies go without paying taxes because they lost money ten bloody years ago. Not paying taxes while you're not making money? Cool. Once the money comes in it should be the same as me: Pay your damn taxes.

This is bullshit!

[WindowsStar]

They have the f'n money and we don't. Pay the f* up Amazon!!!

I dispute your finding

[onepoint]

I dispute your finding
http://www.governing.com/week-...

and
https://rockinst.org/wp-conten...

with the data to support it from
https://www.govinfo.gov/conten...

NY and NJ pay a lot of taxes and don't get it all back.
and Politifact California, can't find your reference, cite your source

Flat tax anyone?

[misnohmer]

All those against a simple, flat tax; how is the complex, loophole ridden tax system working out for you?

Reminder

[bistromath007]

This kind of thing doesn't happen in a system you can vote your way out of. Buy a rifle. You're probably right in thinking you won't solve the problem with it, but "live free or die" is the only way anyone ever lived free.

More greed hurts everyone

[nensondubois]

Amazon should really just subsidies the nearby housing area so people are not outpriced from their homes. Amazon can afford this motif easily. It will bring them a better reputation for investors and local business and would still bring them the same amount of jobs.

Re:Where can small businesses get this deal?

[jeff4747]

Right... politicians aren't in the least bit responsible for how they vote in Congress

No, politicians defer to "experts" because no politician can be an expert in everything they vote on. Those experts don't always come with pure intentions.

Re:Answer

[dgatwood]

Less than 50% of the online market can't credibly be described as a "near-monopoly".

Barely less than 50%. Amazon gets the bulk of the traffic, and all the other companies are left fighting over the scraps.

Re:Answer

[_Sharp'r_]

From the Encyclopedia of Economics:

A monopoly is an enterprise that is the only seller of a good or service.

50% isn't anywhere near a monopoly on something.

Amazon barely breaks even on the retail side. Until very recently, it lost money every year. If it was anything like a monopoly, it'd be hugely profitable instead.

Amazon is a cloud services provider with a marketplace business on the side, not a "near-monopoly" on e-commerce sales.

Re:Answer

[dgatwood]

50% isn't anywhere near a monopoly on something.

It does when network effects come into play. Besides more customers tending to result in more customers inherently, there's a secondary effect whereby having more products available tends to result in more customers, and having more customers lets them afford to carry more products. When you get to the point where you can buy essentially anything you want at a single store, other stores start having serious trouble competing with that level of convenience unless you can somehow undercut them on price. Amazon is basically at that point, and their volume means that they're big enough to have their own logistics service, which drives down costs to a point where other stores have trouble undercutting them on price as well.

Amazon barely breaks even on the retail side. Until very recently, it lost money every year.

If by recently, you mean 2003, then yes. Amazon has had some bad quarters since then, and I think one whole year where they were down, but this was mostly because of capital expenditures to increase their potential profitability in the future, plus some expensive product failures like the Fire Phone. If you limit yourself to looking at only the retail part of their business, I don't think that they have been truly unprofitable in a very long time.

If it was anything like a monopoly, it'd be hugely profitable instead.

If you're implying that they would take advantage of their market position to raise prices, that can't happen for two reasons.

First, although Amazon, as a selling platform, is a near-monopoly, Amazon as an individual seller on that platform competes on roughly equal footing with independent sellers. If Amazon raised prices too much, they would get undercut by third-party sellers on their own platform, and they would likely make less profit. Of course, they could raise the percentage that they charge on third-party marketplace sales, but this would cause an exodus to one of the other platforms, and again, they would make less profit. And without those third-party vendors, Amazon wouldn't be able to offer nearly the breadth of merchandise that they do, and thus would stop being the go-to place for finding things, which would mean losing market share.

Second, there are still a few too many competitors whose platforms still have some potential to become viable competitors. Although they are dwindling, that's not the same thing as not existing. Move too fast to raise profits, and they would run the risk of erasing their rapid gains of late.

Re:So who is paying for their employees' SS &

[liquid_schwartz]

Both sides are not the same. Stop it with that stupid trope. Obama and the democrats let the Bush tax cuts expire and raised the taxes on the rich. They're doing exactly what you asked. So go support them. Don't wait for your soulmate to be on the ballot box.

It's not a stupid trope, it's quite accurate. Here's a whole list of reasons why: I'm in the middle class. Do Democrats help me? No. They might help the welfare recipients or illegals but not me. I'm a tax payer far more than a tax recipient. Do Republicans help me - no so much either, but at least they don't hate me because of my skin color, gender, or religion. I'm very much in favor of a workers party but we don't really have one in this country.

Re:So who is paying for their employees' SS &

[liquid_schwartz]

I hit send before adding links: Obama has many failures but the ones I am most against are: - National debt more than doubled (>120% increase) - Identity politics set country back decades Citation: https://www.debtconsolidation.... Fun reading: https://www.bostonglobe.com/id...