Amazon entered into a 10 year deal with the City and State of New York, and over those ten years they would have paid an estimated $30 BN in various taxes and fees. Instead, NY City and State agreed to 90 cents on the dollar, AKA $27 BN over the next ten years to lure Amazon to Queens. So AOC & Friends didn't "save" NY city and state $3 BN, she cost them $27 BN in new tax revenue.
25,000 new jobs for a 10% discount on taxes, seems like an OK deal to me, but then again, I'm not an economics major like AOC is.
Amazon pays every penny it is required to, by the current tax code as written by your elected representatives - I'm sorry if the actual tax code doesn't match your imagined version of the tax code. If you want to eliminate corporate deductions, be prepared for the fallout.
Do you understand how they did that? With deferred tax credits from previous years AND credits for executives exercising their stock options. Every dollar in corporate taxes saved due to Executives exercising stock options is more than offset by the personal income taxes paid at the much higher rate of 37% as opposed to the much lower corporate income tax rate.
Sorry, but all major corporations do this - tell me about all the taxes Facebook pays, GE, etc.
Amazon negotiated a 10% discount on an estimated $30 BN tax bill over the first ten years of the new HQ2/2, while the economics major AOC focused on the loss of $3 BN in tax revenues, she completely missed the net $27 BN in new tax revenues the project would bring to NY State, NY City and the residents of Queens.
Congratulations, now the Democrats are railing against Job Creation!
I like how Mayor De Blasio has decided to try and insult Amazon into returning to Queens.
As Amazon said, they were looking for a partner, they found arguments, and lost interest - they went to Plan B, which is to further build-out their Virginia and Tennessee locations instead. If De Blasio has a problem with Amazon pulling out, he should take it up with Notorious A.O.C., the new face of the Democrat Party (according to the head of the DNC).
Amazon got a 10% discount on projected taxes - paying $27BN in taxes instead of $30BN, but the Economics major from Long Island, Notorious A.O.C. Didn't understand that, and thought the state was paying Amazon $3BN, rather than Amazon paying $27BN over the next ten years.
AOC now has Democrats railing against good-paying jobs, tens of thousands of them. Next thing you know she'll be arguing to give plants Brawndo!
Open a produce stand then. Driving out the dollar store won't bring back the grocery store. The investment in a supermarket is immense, and unsupportable in many/most poor/low-income neighborhoods.
A produce stand would have to accept SNAP benefits to survive, and even then, I don't think the demand exists, it's the outside SJW looking for a solution to a problem only they perceive. Prove to me there's a demand, and dollar stores will expand to offer produce, until then let the market work.
9 years ago, my local grocery chain implemented "loyalty cards". I was always forgetting my card. But it used a Bar code, so I made a photocopy backup. One day my grocery store decided they would no longer accept photocopies. They sent me out, into a winter snowstorm, sick as a dog, I had stopped to buy cold medicine, into an unplowed parking lot, walking through 3+ inches of unplowed snow on the parking lot, with all 3 of my kids, the oldest had just started kindergarten a few months earlier, I was trying to get back in time to get him off to school on time, all for the original loyalty card from my glovebox. That's the American grocery store experience for you right there
No, there's a guy that puts 'loyalty points' ahead of health and personal safety. Did the store refuse to sell you the medicine without your loyalty card? Or were you he'll-bent I'm getting some loyalty points or savings? You are an idiot, and you deflect blame by finding fault in others for your stupid, selfish choice.
They shop at Whole Foods and probably feel it would be best for all concerned if those with SNAP benefits went to a neighborhood grocery store - you know, because the prices are lower there. Also, it would free up parking spaces closer to the store.
The summary for this article clearly states dollar stores undercut supermarkets, you are completely wrong - you just have an axe to grind unrelated to the story here.
One of the most jaw-dropping moments I ever saw on television was then-Senator Chris Dodd excoriating bank executives because, and I quote, his 'research' turned up the startling 'fact' that the vast majority of 'insufficient funds/overdraft' fees were being paid by - can you guess - poor/low income people!?!? He demanded that this be changed!
Apparently this "Friend of Angelo" failed to understand that people with money don't overdraw their bank accounts nearly as often as poor/low-income people because, well, they aren't poor/low-income?
Dollar stores rarely sell fresh produce or meats, but they undercut grocery stores on prices of everyday items, often pushing them out of business...
So Safeway, Acme, Wegmans, Kroger, etc can't compete with the dollar store? Of course they can, they choose not to.
I've noticed Aldi opening grocery stores in lower-income areas, reduced selections, lots of house brand over name brand goods, and fresh friuit and vegetables - all at lower prices. Back in the day we called them 'grocery stores', as opposed to 'supermarkets' that carry every blessed food item imaginable.
The reality is that if the vast majority of low income families really wanted the fresh fruits and vegetables these people claim, why doesn't someone take out an SBA loan and open up a produce stand? The rent is low, wages are low, and apparently the demand is great - according to people that live outside the community and shop at Whole Foods.
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.
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.
(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.
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.
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.
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%.
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...
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.
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.)
Slashdot Mirror
Amazon entered into a 10 year deal with the City and State of New York, and over those ten years they would have paid an estimated $30 BN in various taxes and fees. Instead, NY City and State agreed to 90 cents on the dollar, AKA $27 BN over the next ten years to lure Amazon to Queens. So AOC & Friends didn't "save" NY city and state $3 BN, she cost them $27 BN in new tax revenue.
25,000 new jobs for a 10% discount on taxes, seems like an OK deal to me, but then again, I'm not an economics major like AOC is.
Amazon is doing nothing unethical. Period.
Amazon pays every penny it is required to, by the current tax code as written by your elected representatives - I'm sorry if the actual tax code doesn't match your imagined version of the tax code. If you want to eliminate corporate deductions, be prepared for the fallout.
Do you understand how they did that? With deferred tax credits from previous years AND credits for executives exercising their stock options. Every dollar in corporate taxes saved due to Executives exercising stock options is more than offset by the personal income taxes paid at the much higher rate of 37% as opposed to the much lower corporate income tax rate.
Sorry, but all major corporations do this - tell me about all the taxes Facebook pays, GE, etc.
Amazon negotiated a 10% discount on an estimated $30 BN tax bill over the first ten years of the new HQ2/2, while the economics major AOC focused on the loss of $3 BN in tax revenues, she completely missed the net $27 BN in new tax revenues the project would bring to NY State, NY City and the residents of Queens.
Congratulations, now the Democrats are railing against Job Creation!
I like how Mayor De Blasio has decided to try and insult Amazon into returning to Queens.
As Amazon said, they were looking for a partner, they found arguments, and lost interest - they went to Plan B, which is to further build-out their Virginia and Tennessee locations instead. If De Blasio has a problem with Amazon pulling out, he should take it up with Notorious A.O.C., the new face of the Democrat Party (according to the head of the DNC).
Amazon got a 10% discount on projected taxes - paying $27BN in taxes instead of $30BN, but the Economics major from Long Island, Notorious A.O.C. Didn't understand that, and thought the state was paying Amazon $3BN, rather than Amazon paying $27BN over the next ten years.
AOC now has Democrats railing against good-paying jobs, tens of thousands of them. Next thing you know she'll be arguing to give plants Brawndo!
Open a produce stand then. Driving out the dollar store won't bring back the grocery store. The investment in a supermarket is immense, and unsupportable in many/most poor/low-income neighborhoods.
A produce stand would have to accept SNAP benefits to survive, and even then, I don't think the demand exists, it's the outside SJW looking for a solution to a problem only they perceive. Prove to me there's a demand, and dollar stores will expand to offer produce, until then let the market work.
9 years ago, my local grocery chain implemented "loyalty cards". I was always forgetting my card. But it used a Bar code, so I made a photocopy backup. One day my grocery store decided they would no longer accept photocopies. They sent me out, into a winter snowstorm, sick as a dog, I had stopped to buy cold medicine, into an unplowed parking lot, walking through 3+ inches of unplowed snow on the parking lot, with all 3 of my kids, the oldest had just started kindergarten a few months earlier, I was trying to get back in time to get him off to school on time, all for the original loyalty card from my glovebox.
That's the American grocery store experience for you right there
No, there's a guy that puts 'loyalty points' ahead of health and personal safety. Did the store refuse to sell you the medicine without your loyalty card? Or were you he'll-bent I'm getting some loyalty points or savings? You are an idiot, and you deflect blame by finding fault in others for your stupid, selfish choice.
They shop at Whole Foods and probably feel it would be best for all concerned if those with SNAP benefits went to a neighborhood grocery store - you know, because the prices are lower there. Also, it would free up parking spaces closer to the store.
The summary for this article clearly states dollar stores undercut supermarkets, you are completely wrong - you just have an axe to grind unrelated to the story here.
One of the most jaw-dropping moments I ever saw on television was then-Senator Chris Dodd excoriating bank executives because, and I quote, his 'research' turned up the startling 'fact' that the vast majority of 'insufficient funds/overdraft' fees were being paid by - can you guess - poor/low income people!?!? He demanded that this be changed!
Apparently this "Friend of Angelo" failed to understand that people with money don't overdraw their bank accounts nearly as often as poor/low-income people because, well, they aren't poor/low-income?
Dollar stores rarely sell fresh produce or meats, but they undercut grocery stores on prices of everyday items, often pushing them out of business...
So Safeway, Acme, Wegmans, Kroger, etc can't compete with the dollar store? Of course they can, they choose not to.
I've noticed Aldi opening grocery stores in lower-income areas, reduced selections, lots of house brand over name brand goods, and fresh friuit and vegetables - all at lower prices. Back in the day we called them 'grocery stores', as opposed to 'supermarkets' that carry every blessed food item imaginable.
The reality is that if the vast majority of low income families really wanted the fresh fruits and vegetables these people claim, why doesn't someone take out an SBA loan and open up a produce stand? The rent is low, wages are low, and apparently the demand is great - according to people that live outside the community and shop at Whole Foods.
"Company Stores" existed mainly in communities where the workers were paid in 'company script', which could only be spent at the company store.
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.
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.
(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.
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.
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.
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%.
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...
Partly, and partly from executives exercising stock options - see my Slashdot comment explaining this based on a Forbes article from 2013
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.)
Talk to the folks that write the tax code, they structured it this way for a reason, and we (collectively) keep re-electing them.
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.
People leave CA every year, a lot of them - just ask the folks in Washington state, Oregon, Arizona, New Mexico and Texas.