The politicians we vote in deliberately create laws that allow large companies to pay little to no tax. It is not an accident or a sneaky corporation that outwitted a dumb politician, it is by design.

My point is that it would be more productive to focus on fixing the system than just getting angry at companies for "cheating".

Its not like the corporations haven't been using their financial influence, particularly after Citizen's United, to influence the rules.

We need to start approaching more taxation rules at a trading/travel block level. E.g. G12 say minimum 25% corporate tax or any product/service that involves non-complainant countries has a X% duty type thing.... or something down that concept route.

I think the real rich person law they politicians have supported and can influence is capital gains tax. Capital gains at a certain point is income. There's a reason CEO's take a $1 salary, they are clearly not living on that.

The Section 482-7 regs were written by the IRS to control how intellectual property is shifted offshore. The valuation methods outlined in the article were questionable. I read the regs multiple times to understand them and made an Excel valuation model to follow their rules.

Don't think the IRS realized they created terrible, ridiculous theoretical models. Don't think it was intentional either. Just a few people that didn't understand the implications and congress that signed the code into law without being able to understand it. Tax code for valuing IP is highly complex.

The US government writes terrible tax code in my opinion, mainly because they're just not very good. They're not as good as top private sector tax lawyers.

I empathize with the "You make the tax laws @SenWarren; we just follow them. If you don't like the laws you've created, by all means, change them" sentiment. Multinational corporations have to comply with tax laws from multiple countries that are arbitrary and complex.

I don't think any of us here could come up with a tax code that cannot be exploited. And of course large companies will exploit any loophole, all of us do when filing our taxes.

Maybe the problem is the existence of such powerful companies. Once you have them, it's very hard for politicians to stay on top of them.

To be clear, I'm not saying that there's no corruption or politicians favoring large companies. But most loopholes used by companies tend to stem from good intentions. It's like in IT security, there are backdoors but most bugs still have a benign origin.

Good governance is hard. And megacorps are an advanced persistent threat that goes to great lengths to claim exceptions for itself.

Usually those are in there to be found and used. Your energy would be better spent being upset with the politicians for putting it in there than the lawyers for finding it.

i really don't think this is true, many big companies are hopelessly bureaucratic

It's also largely a question of what change is required? I've seen a parent company move itself to become a subsidiary of a holding company which is now landed in another nation. It had almost no effect on the day to day. It was paper work.

Megacorps are filled with paperwork. But that doesn't necessarily mean they are bad at it, slow at it.

> it is by design

It certainly wasn't "designed" for geographically flexible entities such as Amazon that didn't even exist 30 years ago.

When ever a new kind of entity fits in loop holes that weren't open one technological advance earlier it has any interest to lobby politicians to keep that niche/grey-area open. That can and should be called cheating.

We do not consider that bribery, yet when a group we dislike does the same thing, we’re supposed to see all lobbying as bribery or just that of opposing groups?

<Edited to add brevity.>

Lobbying is at least transparent in its intentions.

It's because Amazon has low profit margins compared to other companies its size - AWS is profitable but the retail business isn't very much, and investors don't want them to make more money because they like free shipping too much. The remainder is lost to R&D credits.

If people want Amazon to pay more taxes, then Washington state should have an income tax. Pretty straightforward.

He was ruthless and inhuman to his workers and we should never forget that.

For Bezos that could very well be true. Interestingly enough Amazon used to have a really positive public image until about 1-2 years ago. If he had quit any earlier, maybe his image would be much better now.

Unfortunately not only that, but ruthlessness is a main characteristic of most of his business practice. This peace is obviously yet another attempt at further increasing the size of his moat around his corporations. On top of that never forget he also has a substantial stake in mass news media itself.

The problem is they aren't cheating. They are hiring a lot of lawyers to find every single LEGAL mechanism in the book to allow them to pay no taxes.

I'm not saying I agree with it. But the problem here isn't with Amazon it's with the US tax code, which has been molded over decades of politicians and lobbyists to allow for this.

To fix the system you need to fix the tax code.

Even if you fix taxes on national level, you aren't going to catch multinationals. They keep moving just behind that inevitable race to the bottom.

Because in my country basically the governments hire law firms to write out legislation, and then those same law firms sell these types of services to circumvent the laws they draft.

So the feeling I get it's not much a taxes problem, but the public institutions are managed by lawyers, and are optimized by lawyers that leave enough margin so they can thrive.

And why should they ?? To quote Steve Eisman "incentives trump ethics every single time".

Here's a tax strategy that will greatly simplify all government efforts: any corporation with a market cap of 100bn+ is obliged to sign a privately negotiated deal with the gov to agree on a annual tax rate for the next X years. The minimum is set at 20% with no exceptions and can go up to 50% depending on the estimated negative social impact of the corporation. There are no write offs, no loopholes. Every year the tax bottomline is checked and enforced.

There is also a tax distribution enforced so that only a few can get the 20% one at any time. The goal of this to force a "bidding war" between them to get the lowest tax and the only way to do that is to reduce their negative impact to a bear minimum or stop existing altogether. Incentives.

Once that is set in place work on reducing the tax code complexity for everyone and everything below 100bn. Currently most if not all tax regimes try to shoehorn all entities under the sun under similar rules and then provide various kinds of tax write offs that create incentives to dodge tax and provides the biggest players with a massive advantage as they can hire specialists to focus on every single possible loophole to avoid paying anything.

I know I shouldn’t mix the individual with the public company he founded and I don’t want to be that person that says he only does it because the tax incentives. He is a person after all and I’m sure he deals with more social pressure as a result of his status and like all people has issues that strike a cord internally. Still there is something deeply troubling about people acquiring so much wealth that put them in that situation in the first place when he wouldn’t be there without his workers and yet significant numbers of them are on food stamps paid for by taxpayers...when his company paid $0 taxes.

Be it Billy Gates, Bezos, or one of the many Midwestern Financial Gurus—-their use of 901c3‘s are basically tax dodges.

Gates foundation gives back less than 1% of the wife’s fund to the nation that birthed him, and provided a comfy launching pad for that privileged life. (I get you need to help developing nations, but America is dying. I have never seen so many homeless.)

I don’t know Bezos charities, but if it’s related to his companies commercials in media, those are carefully selected to brainwash the masses. How much money did they spend so we knew their employees had soap to wash their hands this past year? And I guess Amazon warehouse workers chuckle fund was receiving hand sanitizer that looked like vodka bottles.

I see how Amazon is now worried about climate change now with his promise of electric vehicles, so he must be worried about something? Maybe he’s running short of tax write offs, and heavily federally subsided electric vehicles make sense fiscally? Not even taking into account the millions he will save on a depreciating asset? In a way, we are buying his gift to carbon neutrality? (I would bet in five years—he will take the Uber approach to deliveries more than he does now, even requiring workers to furnish their own electric vans). I could see the boys laughing over this at the catered hootenanny. It feels good to be a gangster bllly—huh?

I only know of a few charities that truly give back. Most of the big ones we all know through media are overfunded. I once heard there is a very popular children’s hospital who could operate for the next twenty years without another cent, even when taking into account inflation/tech costs.

I used to look up nonprofits on WayStar. They have now made looking at the free 1040’s complicated.

(Does anyone know of a truly selfless charity? I’ve always given Salvation Army a long rope. They have been feeding America’s hungry forever, and I know people who eat there.)

Do you mean 501c3? How are these a tax dodge? How does someone end up financially better off than just keeping and investing their wealth if they choose to donate it or deploy it in a donor advised fund?

> Gates foundation gives back less than 1% of the wife’s fund to the nation that birthed him, and provided a comfy launching pad for that privileged life. (I get you need to help developing nations, but America is dying. I have never seen so many homeless.)

If you think America is dying, boy do I have news for you about the state of most of the world. I also deploy most of my personal donations outside America, through GiveWell and Watsi (and more targeted donations independently).

America has a lot of problems. I live in NYC and can empathize with the dissonance of seeing the homeless sleeping in the cold on Madison Ave. I don't want to diminutize that, and this is something I also care about.

But the blunt fact of the matter is that America is far better off than the countries Gates focuses on. It's not even a fair comparison in terms of poverty and healthcare. Gates deploys his wealth primarily in regions that have never or only rarely "birthed" billionaires like Gates, in your words.

It is uniquely selfish to criticize billionaires for hoarding their wealth while also insisting they focus their charity on one of the richest countries in the world by median.

But the whole life of Bill and Melinda is about their work in the foundation. It's not a side gig for good press, they don't do anything else. I can understand criticism where billionaires have a charity next to their business. But there's no other business left for Bill.

But to be fair, Bill Gates is probably the only prominent example of a billionaire who quit the industry completely and dedicated his whole life towards charity.

James Simons has more or less done this for the past 15 years.

Alternatively, why should Gates spend charity money on America if that money would go have a greater impact on helping people and improving lives elsewhere?

My mom grew up in a village where some had to resort to cannibalism to survive. My grandfather was eaten after being beheaded by communists. I am blessed to be an American.

In 1997, as part of the Tobacco Master Settlement Agreement, the 4 major tobacco companies agreed to sweeping restrictions on cigarette advertising. This ensured that it was almost impossible for a new player to enter the market, because they had no way to create brand awareness.

This is a desired behavior which we want - it fosters innovation and job creation.

It seems to me that money can be used for two things: productive uses and unproductive uses. Unproductive uses can be taxed as much as we want - as a society we don't really care that much if people can't do unproductive things with their money like pay for foot massages and things like that. (Well, people who want to pay for unproductive things like foot massages and videogames care, but I think it's okay to take away some potential foot massages via taxation to pay for important public goods.) But we should take care when taxing productive things, because we're taking away opportunities from our future. If a masseuse wants to invest in some kind of robo-massager that will let them give twice as good foot massages for half the price, that's just a better use of everyone's time and money than continuing to do it the old way and not something we probably want to discourage.

Seen through that lens, a wealth tax (or better, a consumption tax like a VAT) makes more sense than a corporate tax to me. Imagine a chash-rich opportunity-poor corporation that has only one thing to do with its excess cash: invest it building new widget factories for 3% return on investment. And let's say there's a cash-strapped opportunity-rich second company that can build new factories for a 10% return on investment. What we would want to happen is for the owners of the first company to withdraw the excess cash, so they can invest it in the second company which has much better things to do with it.

With a corporate tax, that process is interrupted, because the first company can invest in itself tax-free but must pay taxes to return money to investors so they can put it to better use.

My thinking is that a wealth tax taxes nearly the same thing as a corporate tax, without this flaw. You can't really tax a "corporation", fundamentally everything is owned by someone so if you tax a corporation you really tax the owners of the corporation. Here's how that plays out: The price of a share of a company is usually modelled as the expected future earnings from posession of that share, discounted for time. So if you expect a company to pay dividends of $0.1/share/year forever and have a discount rate of 5%, you should be willing to pay $2.00/share. If a corporate tax of 50% reduces that to $0.05/share/year (since half the profits have been taxed so the dividends are half as large), the price will drop to $1/share. A wealth tax taxes the value of the shares directly, instead of messily taxing the profits and affecting the share price indirectly. But a wealth tax doesn't have the weird switching-over issue I mentioned earlier, so money would no longer be trapped in unproductive areas (or worse, trapped overseas waiting for a change in US corporate tax policy).

A VAT would be even better because it would incentivize people to keep their money in productive uses by taxing only unproductive uses (VAT doesn't apply to stocks or business expeneses or things of that nature). But that's kind of tangential.

Maybe a professional economist can correct me on this but that's my thinking.

there is no process interruption here. a tax on profit doesn't prevent corporations from investing in the highest npv projects available to it because capital expenditures and r&d investments occur before that taxation, and moreover the interest expense is deducted as well.

despite all the hand-wringing over corporate taxation, this maxim holds true in most cases. taxation has little effect on the investments a company chooses (or alternatively, the variance of choices gets lost in the error bars). they will still tend to choose the highest npv projects, even if that's negative.

In that case, it has to take that money as profits instead of reinvesting, and so is taxed.