This is a great point but has me realizing I don't know how to square this with the idea that quite a few people are making enormous profits from unprofitable businesses.

It feels like there should be a way to tax these startups that exist as vehicles for cash grabs, but are not profitable.

Do you have examples of people making enormous profits you are thinking of?

If you literally mean people (as in employees, executives, ect), they already are being taxed on income.

Unprofitable businesses always have expenses for labor, materials, ect. The distinction is that the company and owners arent making money, so they dont pay taxes. Those that do make money naturally do pay taxes.

What is the hard part to square?

The individuals will get taxed on capital gains afaik. We could also tax unrealized gains (just like we do gains on property)!

> Startups like OpenAI don't pay income taxes because they don't have income.

Where is my $20/month for GPT-4 going then?

Taxes are payed on net income not on individual transactions (barring sales tax).

If I make $100 in a year and spend $1000 that year, my income is ($900). How can I spend $1000? Generally through loans and bonds. How do I secure said loans? Generally simply by showing how much VC and income comes in with a business plan that banks accept.

But that's the secret to the money flow. That's also partially why the collapse of SVB was such a blow to the tech industry. A LOT of loans were issued by them.

Ok got it got it, I was thinking revenue == income, and not income == profit. My bad, financially illiterate I guess.

Revenue. Your $20/month is going on the revenue line of accounting. The income line on the accounting can be negative despite your generous $20 donation.

To pay their expenses and salaries.

To the for-profit - which pays taxes on net income.

probably 2x that in GPU costs