Yet, people are up in arms over it.
If company A experiences actual results (and reports) -50 two years ago, 0 last year, and +50 this year in operating profits, in my view, they should owe no taxes on their profits, as they have had none. There's nothing gaming or scamming about that in my view. If your method suggests they should report -50, 0, 0, (or 0, 0, 0) I think that's actually obscuring their true results.
In that specific case, what would you suggest they report for each of those years?
They don't begin to explain the decades of major US corps, including the FAANG group, of paying zero-to-trivial US taxes.
It is the long-term sum of all the evasion, even if it is technically legal, that amounts to theft.
Even if it is technically legal, the net result is theft. There are many tax dodges that are -in practice- available only to large corporations simply because the costs of the setup and/or the costs of the army of financial experts and tax attnys is so high that it only works at scale. So FAANGs can take advantage of it, and leave the tax bill to all the small startups.
If you have a better solution, by all means, propose it.
Stop making single-point excuses about the trees when the forest is the problem.
https://www.cnbc.com/2019/04/03/why-amazon-paid-no-federal-i...
Report them to both the IRS and to public stock markets.
Yes, it will reduce your publicly reported earnings, as it should. Smart investors & analysts will quickly learn to account for that. In fact they already do with constructs that are bogus from an actg point of view, like EBITDA, but useful from an investing POV.
Indeed, it will be very useful for investors to see that Company X and Company Y both report $100 of earnings, but Co_Y is reporting that number after taking $50 in loss carry-forwards.
Again, paying on the greater of SEC-reported earnings or tax-filing earnings hurts only companies that are trying to scam the system and their investors. It helps everyone else, including you and me.
You want the capital market benefits of reporting big profits? Fine, pay the commensurate taxes. Letting them have it both ways is literally telling the thieves to have a nice day as they walk out the front door with the contents of your family safe in their bags and your electronics on their carts.