We honestly need a better company to scapegoat than Amazon for the tax issue. Companies don’t pay enough taxes, but Amazon not paying taxes is an aberration resulting from the rules of tax accounting in the US. Companies are taxed on profits (revenue less their expenses, simplistically) and for many years Amazon’s expenses exceeded its revenues (I.e. it didn’t make money and in fact lost a lot of money). Amazon only became profitable in the last few years (shocking, I know). When a company has years of losses, they are permitted to carry forward those past losses to offset future profits in assessing your tax bill (with certain limitations). The principle (and it is a sound one) is that a company should only be taxed on its profits and so on those occasions where companies don’t turn a profit they should get some commiserate relief in taxes (helps struggling companies offset loss making years, amongst other things).
Amazon has had a very small tax bill because those carried forward losses from the last 15 years exceeded the profits they’ve had in the last couple years. Amazon is a very odd case because their stock price (which reflects how investors value the overall business, not necessarily how profitable Amazon is right now) has been sky high for many years despite Amazon’s losses. This is based on investors’ expectation that Amazon will be massively profitable in the future, but not necessarily right now.
The short story is that in a year or two once they’ve worked off their credits for past losses, Amazon is going to start paying full federal taxes or very close to the statutory 25% rate, which will make the ‘Amazon doesn’t pay taxes’ argument moot.
Most companies go abroad to avoid taxes. Amazon found a way to stay and still pay little to nothing. It’s not amazon’s fault it’s the US tax code. But even if we fix it, we’d still lose money abroad. Look into tax havens like Ireland. It’s honesty a really complex problem and raising taxes doesn’t fix it.
Prob6 on December 26th, 2019 at 13:18 UTC »
The countries with universal healthcare have the highest life expectancy and quality of life
burnshimself on December 26th, 2019 at 14:03 UTC »
We honestly need a better company to scapegoat than Amazon for the tax issue. Companies don’t pay enough taxes, but Amazon not paying taxes is an aberration resulting from the rules of tax accounting in the US. Companies are taxed on profits (revenue less their expenses, simplistically) and for many years Amazon’s expenses exceeded its revenues (I.e. it didn’t make money and in fact lost a lot of money). Amazon only became profitable in the last few years (shocking, I know). When a company has years of losses, they are permitted to carry forward those past losses to offset future profits in assessing your tax bill (with certain limitations). The principle (and it is a sound one) is that a company should only be taxed on its profits and so on those occasions where companies don’t turn a profit they should get some commiserate relief in taxes (helps struggling companies offset loss making years, amongst other things).
Amazon has had a very small tax bill because those carried forward losses from the last 15 years exceeded the profits they’ve had in the last couple years. Amazon is a very odd case because their stock price (which reflects how investors value the overall business, not necessarily how profitable Amazon is right now) has been sky high for many years despite Amazon’s losses. This is based on investors’ expectation that Amazon will be massively profitable in the future, but not necessarily right now.
The short story is that in a year or two once they’ve worked off their credits for past losses, Amazon is going to start paying full federal taxes or very close to the statutory 25% rate, which will make the ‘Amazon doesn’t pay taxes’ argument moot.
alphamike98 on December 26th, 2019 at 14:15 UTC »
Most companies go abroad to avoid taxes. Amazon found a way to stay and still pay little to nothing. It’s not amazon’s fault it’s the US tax code. But even if we fix it, we’d still lose money abroad. Look into tax havens like Ireland. It’s honesty a really complex problem and raising taxes doesn’t fix it.