Just for interesting discussion: What kind of reasonable activity would you suggest would fairly negate a corporation's tax obligation? I.e. What can corporations do with their money—instead of giving it to the government—that would benefit the people as much or more than actually giving it to the government.

Would you agree that Amazon has bettered your life in some way? If so, then your argument loses most of its weight. Personally, I trust a corporation with money more than the federal government, for the simple reason of accountability. A business has a chance at failure if they're dumb about money. A government will always have more. It's simple, but a compelling argument.

I don't understand your reasoning here. I've given amazon money for products and/or services, and I've paid my share of taxes on those transactions.

It's not like they've ensured my roads are safe, my food is safe, my healthcare is taken care of, and that laws are enforced. Also, I'm not so selfish to think I'm the only one who should be helped here. The greater good of society matters more than me as an individual.

Why shouldn't amazon pay their share of taxes for those things, (some) of which they're undoubtedly taking advantage?

From an economic perspective, there's no difference between the sales tax that is paid by the seller or by the buyer. So it's not correct for you to take credit for the taxes paid on the transactions between you and Amazon - the economic burden is shared by both parties. Likewise, Amazon pays the payroll tax and any income tax that is paid by its employees, effectively increases the cost of transaction between Amazon and its employees, making it a shared burden by both parties.

Paying employees to produce benefits many people. Possibly at a much more effective rate than giving it to the government (as they actually produce something in return).

Investing in capital goods and means of production. Again, this has a return that giving to the government does not.

Simple example of what is going on here. Someone buys a plot of land and materials in 2000 for $100000. They build a house and sell it in 2001 for $120000. What should they be taxed on? The "losses" from 2000 get carried over to 2001, and they are taxed on $20k.

In virtually every one of these articles "OMG ABC Corp paid $0 in taxes this year!", the explanation is that losses (investments typically) are being carried forward. This is absolutely normal, expected, and necessary for long term planning and growth.

How does “doubled profits” indicate any losses to carry forward? Aren’t profit and loss mutually exclusive?

Pay the capital investment of a huge data center that they depreciate and reduce tax liability over the term specified by the IRS. That seems pretty reasonable to me.

I’m not a tax expert, but I think most capital investments work this way.

What tax obligations are being negated here? My assumption is that Amazon is not paying any taxes because they don't owe any - as in, they have no tax obligations.

Reinvesting in said company for one, which is why carry over debt is deductible.

Sure, but how does that benefit the people of the U.S.?

How does growing a business benefit citizens? Jobs, economic stimulus, eventually larger taxes would be the obvious three. If you start disincentivizing reinvestment then, well... growth will slow.

Same goes for losses. A calendar year is an arbitrary delineation of time. If your business loses $100 in one year and brings in $100 in revenue the next, do you really want them to pay taxes on said revenue? Seems a bit unfair, no? In a two year period they broke even, and that's not even considering what profits they may or may not have made.

We want people to grow their businesses because it's generally good for everyone. Similarly, we tax profits, not revenue, because if we did the former companies would simply cut costs at every opportunity and never put money back in.

Sounds a lot like Trickle Down Economics, which has been disproven time and again.

Also: if amazon’s profit is double what it was last year, shouldn’t that profit be taxed? If they never pay taxes and continue exploiting labor, aren’t they a net drain on society?

We're talking about specifics here though, not an overarching economic theory which is defined by political buzzwords. I agree that the idea of trickle down on the whole doesn't work, but that doesn't mean every one of its ideas are wrong (and I believe this specifically is related to Reagan era economics.) Companies investing revenue is, in general, a good thing. You can of course debate the specifics of what constitutes an investment.

>if amazon’s profit is double what it was last year, shouldn’t that profit be taxed? If they never pay taxes and continue exploiting labor, aren’t they a net drain on society?

Well they do pay taxes, so I don't know where you're getting "never" from. Heck, just look at the chart at the bottom of the article. This is the _first_ year they had a negative rate. If you're going to make statements (shrouded in questions) like "they're a net drain on society" you're going to have to come up with some numbers.

Turning a large profit and not paying taxes? That part?

They're following the code, it's written in law. If they didn't take advantage of it, their stockholders would be pissed.

thatsthepoint.jpg

The problem is that our tax laws allow immense, profitable corporations to pay nothing in federal taxes despite using massive amount of federally funded infrastructure in their course of doing business. How much burden do all those delivery trucks put on our federally funded roadways, bridges, and environment? And that's just the start of it...

Which specific sections of the tax code do you think should be repealed or amended?

The entirety of the tax code that allows them to pay under 20% of their profit in taxes.

Can you cite any specific sections? Just one example!

The deductibility of employee stock compensation would be the obvious answer here.

Actually I am being serious, not trolling.

To make my point more clearly -- I think accounting is too complicated to reduce to simple populist sound-bytes like "companies with X income should pay Y tax". I also think it's plausible that there are good reasons for some or all of the deductions Amazon is taking advantage of. That might not turn out to be the case, but it's impossible to know in advance without knowing what those deductions are.

Corporate income tax accounts for a whopping 9% of federal taxes for 2017. It's projected at 7% for 2019. Pathetic. Historically, this tax as a percentage of GDP is pretty low: https://www.taxpolicycenter.org/statistics/corporate-income-....

Those "good reasons" appear to be "because our representatives like to keep their paychecks coming and fashion the tax code in a way favorable to corporations". You can complain about "populist sound-bytes" all you'd like, but it's absurd for a company to use so many public resources and pay nothing.

I think the very fact that it is complicated is unfair.

I want one of the following

1. An education system so absurdly stellar that our 18 year old high school graduates have the legal and fiscal expertise to navigate the tax code as expertly as a HSBC financial advisor, or

2. A tax code so simple it can be read and understood, verbatim, by every US citizen.

> 2. A tax code so simple it can be read and understood, verbatim, by every US citizen.

Not possible considering one-fifth of adults don't understand percentages.

https://www.theguardian.com/education/2016/mar/07/a-fifth-of...

Yeah, the article refers to adults in the UK, but considering how terrible the education system is in the USA, do you think it'd be any better?

Asking for an example isn't trolling, and claiming otherwise is uncivil.

If I knew the answer to that, I would also be paying 0 in tax.

I'm allowed to be upset at the fact that it's possible, without knowing how they do it.

So, given that you admit to not understanding the details of Amazon's accounting practices, how can you be so sure that what they're doing is wrong or bad?

We're in the thread I started, where I lauded them for taking advantage of tax loopholes to not pay any tax. So, I'd be interested in why you believe I think what Amazon is doing is wrong.

What I don't like is that companies are allowed to do this at all - I support more government sponsored measures such as universal healthcare and education, far greater investment in sciences, etc, and I believe corporations paying higher tax rates is a fantastic way to pay for these things.

Well approximately 45% of Americans pay no federal income tax.

The 45% that are disabled, retired, unemployed, or who make barely enough to live? Who cares that they pay nothing. How many citizens have $10B in annual income and pay nothing in taxes? The effective tax rate for the top 1% of citizens is about 30%... what do you think it is for the top 1% of corporations?