> This is a very misleading statement that I see thrown around a lot. Either it's done in bad faith, or it's ignorant of how corporate taxes work (and why).

So when people disagree with you, they are either malicious or stupid? There's 0% chance that you're wrong, even though you're in the minority of everyone who looks at this and thinks, "Wow, Amazon should pay more in taxes"?

> If you don't earn a profit, there's nothing to tax. Amazon has been (to the credit of their extremely patient investors) funneling their revenue back into growing the company instead of giving it to investors and the government.

No, they haven't. They have been turning a profit. If you reinvest your money in your company, it doesn't show up in your income statement as profit.

The reason Amazon doesn't pay taxes is because of friendly tax law. Part of the proposal from the left in the US is to tax Amazon based on the numbers in their actual financial statements, instead of playing lots of games with depreciation, stock compensation, and carry-forward losses.

So your argument here is somewhat orthogonal to the actual discussion, which is how to tax corporations, not whether corporations are acting within the law. We already know that what they're doing is legal, we just don't want it to be legal anymore.

We know (in general) that Amazon makes no profit. However, there should still be a way to make Amazon pay for the value it gains from being based in a modern society.

Amazon is a legally fictitious straw man created as a mechanism for millions of shareholders to employ thousands of workers to deliver goods and services to paying customers. Every Amazon shareholder and employee who makes enough money through this arrangement pays income taxes, or perhaps capital gains taxes.

If you want to uphold the principle that Jeff Bezos should pay more taxes than Grandma, don’t tax Jeff Bezos and Grandma’s pension fund at the same rate. That’s what corporate taxes effectively do.

Thing is capital gains literally never have to be realized. You can borrow against your equity position on margin (currently 0.75% for large withdrawals) and pay off the interest with dividends.

Source: i do this.

That seems like a much fairer and easier loophole to fix than trying to tax unprofitable corporations to penalize them for reinvesting in themselves.

Good luck passing a wealth tax, but I'm all for it.

That value is taxed as capital gains when shareholders sell their shares.

This seems really basic in that society already has a way for Amazon to pay. And we’ve had it for decades.

It’s curious to hear statements like this that make me think there’s some problem to be solved.

Do you think capital gains should be higher? Do you want to shift the method of taxation from personal income taxes to somewhere else?

I'm not a deep expert in these areas, but one current problem seems to be money slowing down -- what often happens is people buy Amazon stock and sit on it. Amazon makes more sales, their stock price goes up, those with Amazon stock get richer (which they can often leverage into things like loans, without ever selling the stock), and at no point is some of that money taken to help fund general government.

When the rules were set up this wasn't the intention, and there might have to be changes. To be fair to Amazon, their problems are not as serious as many other companies which make it look like they make zero profit in some countries by "paying" themselves in another.

I’m not a tax expert either but I think the rules were set up exactly with the intention as you describe.

My understanding is that capital gains taxes are intended to grow capital with the goal of a larger payout in the future as capital is reinvested. It’s purposely not intended to be a real-time tax on gains because future taxes will be greater.

For example, if there’s $100 in profit today and it’s paid out as a dividend then that’s $15 in tax revenue. But if that $100 is invested in the company, it compounds at some rate (say 5% although this varies by company and Amazon is much more efficient) so in 10 years that $100 becomes $162 (1.05^10*100) and if cashed out then as dividend results in $24.3 in tax revenue.

Theoretically if you think the government can invest and get a return greater than within individual companies then capital gains doesn’t make sense, but that’s an argument for economists.

But wanted to share that the goal of capital gains is to maximize tax revenue through efficient incentives.

Exactly how much money the government needs, and how it uses, is I realise a massive issue going back thousands of years, but I feel the government at some level can "invest better", in that they pay for schools, police, roads, (in my case in the UK) a national health service, etc.

Of course, it might be they could spend more efficiently, but if all purchases move online, and online companies manage to avoid paying tax to most governments, these basic utilities are in trouble.

You may feel that, but there’s a ton of research on this.

But I suppose that’s where you can try convince governments to do away with capital gains and tax very differently. I don’t think you’ll find any countries that do this or do it efficiently. The growth of capital is really important to long term improvement, and even pretty “socialist” countries like the Scandinavian nations encourage capital growth through their tax policy.

How about the value modern society gains from having Amazon in it?

I'm willing to bet Amazon gains a lot more value from society than society gains from Amazon.

Let’s bet then. I think society gains more because of secondary effects that multiply up and down the supply chain.

I think the difference is that the value for Amazon is focused on one company while the value for society is spread across 7 billion people.

I think we might be using different definitions of words.

In my mind, without 'society', there would be no police, no hospitals, no public education, no roads. In my mind, these are all part of what we get by being in a society. Amazon is welcome to try to function in countries with no functioning government, but I suspect they would have limited success.

I agree with you there in that Amazon needs society and government provided functions in order to operate.

But I think that the main benefit of society is that it provides an environment that allows members to contribute and make it better. So while society provides safety, etc people and companies add to it with additional value. This value gets taxed (to support society) and the remaining value builds and compounds.

So at a macro level any persisting organization contributes more to society than they gain or society would crumble. By definition the growth in society is driven by people making it better. And people work on stuff like corporations.

On the micro level, it’s hard to figure out the exact net contribution from individual persons and companies, but Amazon is obviously a huge company paying out returns and the second order effects from how they’ve driven e-commerce, cloud, and logistics make me think they’ve helped many others beyond just customers and shareholders.

That being said, maybe taxes should be changed. But they are currently paying everything required of them and monetarily generate lots of revenue for government (eg, corporate income taxes, sales tax, property tax, tariffs, capita gains paid by shareholders, and income tax paid by employees, etc)

Amazon's competitors get those benefits too, so they can't make profit from it. They have to cut their prices relative to what they'd charge in that hypothetical anarchy where they need to provide everything themselves in order to operate. For example they can use clean water provided by their city, so that may save them the price of producing clean water themselves. But the competition gets that city water too, so amazon can't profit from the savings of not cleaning water, or competition will undercut them. They have to pass the savings on to customers.

The only benefits they can really profit from are things no one else can get, which generally only amount to corruption for anything I can think of. I'm sure there's some, of course.

If it makes no profit, what value is it gaining?

There's value in the stock, but that's taxed as stockholders sell and realize the capital gains.