Amazon Had Sales Income of $53 Billion in Europe in 2020 But Paid No Corporation Tax (theguardian.com) 305
Fresh questions have been raised over Amazon's tax planning after its latest corporate filings in Luxembourg revealed that the company collected record sales income of $53 billion in Europe last year but did not have to pay any corporation tax to the Grand Duchy. From a report: Accounts for Amazon EU Sarl, through which it sells products to hundreds of millions of households in the UK and across Europe, show that despite collecting record income, the Luxembourg unit made a $1.4 billion loss and therefore paid no tax. In fact the unit was granted $67.3 million in tax credits it can use to offset any future tax bills should it turn a profit. The company has $3.25 billion worth of carried forward losses stored up, which can be used against any tax payable on future profits. Margaret Hodge, a Labour MP who has long campaigned against tax avoidance, said: "It seems that Amazon's relentless campaign of appalling tax avoidance continues."
"Amazon's revenues have soared under the pandemic while our high streets struggle, yet it continues to shift its profits to tax havens like Luxembourg to avoid paying its fair share of tax. These big digital companies all rely on our public services, our infrastructure, and our educated and healthy workforce. But unlike smaller businesses and hard-working taxpayers, the tech giants fail to pay fairly into the common pot for the common good. President Biden has proposed a new, fairer system for taxing large corporations and digital companies but the UK has not come out in support of the reforms. The silence is deafening. The government must act and help to grasp this once-in-a-generation opportunity to banish corporate tax avoidance to a thing of the past."
"Amazon's revenues have soared under the pandemic while our high streets struggle, yet it continues to shift its profits to tax havens like Luxembourg to avoid paying its fair share of tax. These big digital companies all rely on our public services, our infrastructure, and our educated and healthy workforce. But unlike smaller businesses and hard-working taxpayers, the tech giants fail to pay fairly into the common pot for the common good. President Biden has proposed a new, fairer system for taxing large corporations and digital companies but the UK has not come out in support of the reforms. The silence is deafening. The government must act and help to grasp this once-in-a-generation opportunity to banish corporate tax avoidance to a thing of the past."
Income vs revenue? (Score:3, Informative)
Re:Income vs revenue? (Score:5, Informative)
Yes, but they use tax loopholes to shift what is normally considered profit, and shift that money into "expenses."
This becomes problematic when extremely large companies uses these "expenses" to expand their company to the point where they monopolize an industry by buying out the competition.
This could be good in a way that things like research and development expenses get a tax deduction. But then they start filing everything into research and development even though they aren't really researching and developing anything that is patented or gives back to society.
Some larger companies will buy up smaller companies purely for the sake of finding a way to spend/lose money to avoid taxes. They eliminate a future competitor and avoid paying taxes all in the same move.
Though trying to legislate ways to close the loopholes is a cluster. For every loophole you think gets closed, the creative minds on the other end will create new ways to craft loopholes into the legislation. They then fund lobbyists to talk lawmakers into including these loopholes into new tax laws.
The entire process seemingly has no end in sight.
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Didn't every single employee pay taxes on their income?
Re: Income vs revenue? (Score:2, Informative)
You can't sell stocks at a profit and neglect to pay taxes on it, it is a trivial matter to track such windfalls.
Stock options, once exercised and sold, generate income that that must be reported, and incurs tax obligations that must be paid.
Re: Income vs revenue? (Score:5, Insightful)
Re: Income vs revenue? (Score:4, Informative)
Who are the trustees and directors of the 501(c)3? They're not allowed to draw salary, and are legally required to ensure it supports the legitimate charitable causes that the IRS approved when granting 501(c)3 status to the nonprofit. There are minimum headcount requirements for them, and they can't all be related.
So, yes, if you ignore all the laws and enforcement mechanisms about non-profits, you can imagine a way to get the IRS to take you to their pet courts and get a slam-dunk tax evasion judgment against you. Congratulations!
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The charitable donation would not offset your salary from the charity, because you would have already deducted it in order to offset the money you were originally paid.
Re: Income vs revenue? (Score:5, Interesting)
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Or, get a loan usnig the value of the options as collatoral. Loans aren't considered taxable income. Interest paid on the loan is tax deductable. Make it an interest-only loan and you can seriously minimize taxes.
This realy only works for the super-wealthy, as most of us wage slaves are investing in deferred tax accounts like 401(k) and IRAs. Once you go beyond the limits of those in the way of contributions, you're into taxed investment accounts. The game is different up there.
https://www.fool.com/investin [fool.com]
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So, working as intended, then? The politicians get money from the corporations, the corporations get tax breaks from the politicians. Everyone (who counts) wins!
Re:Income vs revenue? (Score:5, Informative)
Not any longer. Ted Cruz has openly stated Republicans will no longer listen to corporations who have a problem with voter restrictions and will no longer do their bidding [businessinsider.com].
"This is the point in the drama when Republicans usually shrug their shoulders, call these companies 'job creators,' and start to cut their taxes. Not this time," Cruz wrote in the op-ed.
"This time, we won't look the other way on Coca-Cola's $12 billion in back taxes owed."
"This time, when Major League Baseball lobbies to preserve its multibillion-dollar antitrust exception, we'll say no thank you. This time, when Boeing asks for billions in corporate welfare, we'll simply let the Export-Import Bank expire."
As Ted said, "For too long, Republicans have allowed the left and their big-business allies to attack our values with no response."
And by values he means making sure the 1% get their tax breaks, businesses pay little to no taxes, and Republicans get to run roughsod over the people such as not raising the minimum wage or making sure all people have the same rights.
Re:Income vs revenue? (Score:5, Insightful)
Yes, but they use tax loopholes to shift what is normally considered profit, and shift that money into "expenses."
Reinvesting profits into development isn't a tax loophole.
Re:Income vs revenue? (Score:4, Insightful)
No, but sending all your European customers useless Luxembourg VAT invoices that they can't use in their own country is .
(Yes, I've got one of those...it only took me three weeks to get it out of Amazon and when it finally turned up I couldn't use it anyway)
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What's a VAT invoice?
Re:Income vs revenue? (Score:5, Informative)
What's a VAT invoice?
It's a document that allows you to reclaim sales tax on business expenses.
(VAT = sales tax)
The trouble is that if I buy something on amazon.es (ie. where I live) and the page says "sold by amazon.es" on it, I'd expect an invoice for that country. Amazon seems to think differently so they route everything through Luxembourg.
(and presumably keep my 21% sales tax for themselves)
Re:Income vs revenue? (Score:5, Informative)
VAT (Value Added Tax) is the European equivalent of Sales Tax. It works a bit differently, though - VAT is charged on every sale, not just to consumers. So when a company buys materials, they will pay VAT. They make a product, sell it to customers, and the customers pay VAT. Each company collects VAT and sends it to the tax authority. However, to avoid double-charging, they can deduct the VAT they paid on stuff they bought from the VAT they collected, and only send the difference to the tax authority. They're paying tax on the difference between the cost of materials and the sales price - in other words, on the "value added", hence the name of the tax. OK, in reality the rules are a lot more complex, but that's the basic idea. And you'll see that ultimately it's the end customer ends up paying the VAT, as they have no-one to charge it to - everyone else gets back what they paid when buying when they sell.
However, there's different rates of VAT, some items are exempt, and small companies don't have to register. But you need to be sure how much VAT you paid, so you know how much to deduct before you pay the taxman. And you do need to be sure, otherwise you'll be in a lot of trouble when you get it wrong. So any company registered for VAT has to provide certain information when you buy from them - mainly how much VAT they charged, and their registration details such as a VAT number. This is known as a "VAT invoice" as it's an invoice that shows all the information required for VAT compliance, as opposed to a regular invoice which may not. Some companies issue all invoices as VAT invoices automatically (after all, it's just a couple of extra bits of information - add the VAT number with the address and phone number, and include the VAT calculation you have to do anyway), others issue invoices missing some of this information and you specifically have to ask for a "VAT Invoice" to get one you can use for VAT.
I'm not sure why the previous poster says Amazon are issuing "useless Luxembourg VAT invoices" - in the EU VAT is explicitly cross-border, while the rates vary between countries the principle is the same - deduct VAT paid from VAT charged, whatever country it was in. A VAT invoice from any EU country should be as good as any other.
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Yes, but they use tax loopholes to shift what is normally considered profit, and shift that money into "expenses." This becomes problematic when extremely large companies uses these "expenses" to expand their company to the point where they monopolize an industry by buying out the competition.
Well to be fair, creating a soul-crushing monopoly, isn't cheap.
The CEO's active volcano lair? With these real estate prices?
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Its not really how it works though from a government revenue perspective. Whatever company A might write off as an expense purchasing company B; the owners of B will pay out capital gains on.
It shifts the tax liability but it does not eliminate it. B's owners know they will be paying taxes so that gets figured into the sale price they are willing to accept (in theory).
The real issue as you say is bigger companies have a lot more flexibility making investments which is already and economy of scale and the t
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(*) It seems like allowing pets to own pets.
Re:Income vs revenue? (Score:5, Insightful)
Corporations are taxed on income, not revenue. Uber also pays no tax despite having billions of dollars of revenue because they lose money every year.
Mostly correct. There is a fundamental difference, though: Noone doubts that Uber loses money at this time. However, in the case of Amazon others like them politicians and the public don't see it as "OK, that giant company lost money. We can't tax them then" but more of a "this giant multinational giant is earning a lot of money, but is using tax avoidance and loopholes to avoid paying its fair share of taxes here. That's not fair to society, or to national competitors". Taxes is the price of society, and when someone pays less everyone else has to pay more. New rules are obviously needed, and if giant corporations continue to behave like this taxing that category of companies on revenue rather than income might be a possible solution. Having a "no tax" for multinationals just isn't a workable solution.
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Oh it has already started, expect the USA threw a hissy fit
https://www.gov.uk/government/... [www.gov.uk]
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Amazon doesn't lose money, they make piles of it. They just make it look like a loss on paper so they don't have to pay any tax.
If they accidentally do make a paper profit they write that off against previous years paper losses.
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We should just drop corporate tax all together or make a uniform flat tax.
Of course if we were to drop corporate tax, we would probably need to make sure that things like CEO mansions, and yachts or Stock options that are applied directly to them, are not flagged as a business expense but a personal expense to the individual.
If we were to have a flat tax, it would need to include value add tax, where every time a transaction is generated will be taxed.
The current progressive tax system, while seems good on
Re: Income vs revenue? (Score:5, Insightful)
If you tax businesses on revenues, not profits, you WILK force countless marginal companies out of business - many/most retail shop owners generate minimal profits, thus pay little in taxes - start taxing them on their receipts, they'll fold almost immediately.
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Flat taxes grossly benefit the wealthy and shift the tax burden to the middle class and poor.
Great idea for those that are poor at math.
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Corporations are taxed on income, not revenue. Uber also pays no tax despite having billions of dollars of revenue because they lose money every year.
Potatoes, potatoes ... There should be a limit on how long you can report losses to get out of paying taxes. There are companies who for tax purposes have supposedly been making losses for decades now and with no end in sight. I know companies can sometimes legitimately suffer losses and there is nothing wrong with that, but eventually a company should be forced to get itself in order, make money (i.e. generate income) and be taxed whether it wants to or not. I'm sick and tired of watching these corporation
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This should be the same for people then. Let me deduct all the money I spend on housing, food, clothing, transport, etc and I'll just pay tax if I have any left over at the end of the year.
Re: Income vs revenue? (Score:2)
Most young families have revenue but no income. Why can't individuals count their income against a mortgage and credit cards. Seems to be something of an inalienable right for corporations.
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Well, most people (at least in the US) do get a tax break due to their home mortgage.
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If you paid $20k a year in mortgage you don't get to take $20k off your taxes. Even if you paid $5k in interest you don't get to take $5k off your taxes, you only get to move your basis. Basically some tiny fraction of your debt's interest payment is non-taxable for this one category of debt. You don't get to do that with a car loan federally or in most states.
If I'm a business I get to take my revenue (before profits) and use them for expenses. If I buy a building as a headquarters instead of counting that
You can't "avoid" taxes -- nor do you want to (Score:5, Insightful)
Every year at tax time this same hoary old argument comes up. If a corporation doesn't pay taxes, it's precisely because it is following the rules that allows it to do so. There are so many loopholes in the world's tax codes and regulations, there's simply no need to do anything but hire your armies of tax attorneys and accountants and do things the good, old-fashioned -- and perfectly legal -- way.
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Every year at tax time this same hoary old argument comes up. If a corporation doesn't pay taxes, it's precisely because it is following the rules that allows it to do so. There are so many loopholes in the world's tax codes and regulations, there's simply no need to do anything but hire your armies of tax attorneys and accountants and do things the good, old-fashioned -- and perfectly legal -- way.
Sure. It's dishonest but not illegal.
Actually, it probably is illegal as well but it's so well covered up that it's impossible to prove.
I'm not really sure what point you were making anyway. So what if it's legal? They're still thieving bastards.
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The point is every year the same damn thing comes up, and every year people blame the tax-payer instead of the tax-collector. You want change? Blame the government.
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The point is every year the same damn thing comes up, and every year people blame the tax-payer instead of the tax-collector. You want change? Blame the government.
No, blame the voters.
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+1 to that
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Tax is a business expense (Score:3, Insightful)
Expenses get passed to customers in the form of prices. If you want customers to pay more, raise the corporate income tax collection. Or be honest about it and replace income taxes with use (sales) taxes.
Re:Tax is a business expense (Score:5, Insightful)
LOL. No.
If the company could charge more they would already be charging more. They are not charities running a thin as possible profit margin. They maximimize profits, and charges as much as they possible can. Increased expenses cuts into profits until they might have to drop unprofitable products, but they can't just pass it on.
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You're partially correct. Any company can also reduce the workforce, reduce hours, reduce benefits, cut corners on safety and enviromental issues, automate and robotize the warehouses and job functions, outsource to low cost countries and I'm sure many more things I haven't thought of. About all they won't do is cut the total take home pay of the officers. But the bottom line remains that no company stays in business if they aren't making a profit. So if you raise taxes on them - any type of taxes - and the
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You have to remember corporations compete with private citizens for many goods especially real estate, if you let them live tax free and put the entire burden on real people, you have just created a new aristocracy.
Also keep in mind any person can incorporate themselves, and thus gain the same benefits if you make the rules THAT silly.
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Provide you are not a monopoly; what you can charge depends on what you competition is willing to sell for. Presumable competitors have somewhat similar cost structure to your own business.
The supply curve is shifted by the tax burden in some fashion. if you increase or decrease the tax burden the competitions willingness to supply shifts, and when it does yours can as well. The result of raising taxes on business will either be that prices go up - for things where the demand is inelastic, or the amount o
Re: Tax is a business expense (Score:2)
You don't pay taxes on losses (Score:5, Insightful)
Accounts for Amazon EU Sarl, through which it sells products to hundreds of millions of households in the UK and across Europe, show that despite collecting record income, the Luxembourg unit made a $1.4 billion loss and therefore paid no tax. In fact the unit was granted $67.3 million in tax credits it can use to offset any future tax bills should it turn a profit. The company has $3.25 billion worth of carried forward losses stored up, which can be used against any tax payable on future profits.
Amazon had losses of $1.4BN, therefore it owed no taxes. Even if Amazon had booked several billion in profits, they would have simply applied some or all of their carried-forward losses to offset the profits and pay no taxes.
The fundamental issue is that companies like Amazon, General Electric, and others simply have better accountants than the politicians that draft the tax laws. A few years ago, in America, we had a politician that was the head of the Ways snd Means Committee in Congress, which, among other things is responsible for writing the tax code. This individual, the literal person responsible for creating the tax codes claimed he had no idea that he owed US taxes on income earned from foreign rental properties. (This same politician had several rent-controlled apartments in a housing project in Harlem, violating several regulations. His name was Charlie Rangel, congressman from Harlem, NYC.
https://www.nytimes.com/2008/0... [nytimes.com]
If you want better tax codes, elect better politicians.
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It's not that politicians don't understand it, at least in Europe. They understand very well, the issue is that these loopholes exist because of differences between international tax laws (e.g. the famous "Double Irish") or because one of the involved countries is a tax haven (in this case Luxemburg).
The EU knows how to fix it and is working on doing it, but it takes a lot of agreement from a lot of people. That's why some EU countries have tried to force the issue, like France with its digital retailer tax
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Which is why a number of countries in Europe are introducing taxes based on turnover in their country. Much harder to hide.
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there's no reason old losses should be allowed to be carried forward
Not sure where you learned accounting and finance, but carrying losses forward is good taxpolicy. If you start a restaurant you'll probably lose money the first year. That's an investment in the future and it makes perfect sense to allow those expenses to be applied to future profits. The goal is to encourage entrepreneurship.
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there's no reason old losses should be allowed to be carried forward
Not sure where you learned accounting and finance, but carrying losses forward is good taxpolicy. If you start a restaurant you'll probably lose money the first year. That's an investment in the future and it makes perfect sense to allow those expenses to be applied to future profits. The goal is to encourage entrepreneurship.
I understand the reason; I just don't agree that it's a good enough reason for allowing billions to be sucked out of people's pockets and into those of the richest people in the world.
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Wrong. Why should governments receive taxes yearly anyway? How about only collecting taxes once per decade, when all of the profits/losses do finally cancel each other out,
You think that would be hard to work around, do you?
why the hell cannot a company use the profits from better years to survive through tougher years?
They can already.
There shouldn't be any corporate, income or wealth taxes in the first place.
Sure. We could all live in the 14th century. It would certainly give us a different perspective on Covid; we'd be missing it.
he infrastructure is built to correspond to economic activity, it shouldn't be built just because some politician got a free vacation from some corporation and decided to grant them a contract to 'repair roads and bridges', it is ridiculous.
Roads and bridges should all be private and only be built and repaired when there is enough economic activity to allow for such an expense.
Tried that. It was a fucking disaster. Actually, it was many different fucking disasters.
You haven't a clue, have you? Your idea is a recipe for economic stagnation, population boom, and societal collapse. Go find an island somewhere and try it; the rest of us could use a laugh.
Addendum (Score:2)
It used to be "no taxation without representation" for the citizenry.
Maybe now we need "no market access without taxation" for the corporations.
In effect, governments should charge corporations for access to consumers as a new form of tax. Weighted heavily towards hitting the pockets of purely digital services that can relocate a server farm on a whim.
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I would settle for no-representation without taxation toward the citizenry as a first step.
That goes for people - didn't pay any net taxes this year - then you don't get a vote
and corporations -
didn't pay taxes (as a some minimal amount vs your book value) then you are not allowed to make any campaign contributions, and expressly forbidden to speak with any elected official or anyone outside their statutory reporting structure - ie you can talk someone at the DAs office about the vandalism to your equipment
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>That goes for people - didn't pay any net taxes this year - then you don't get a vote
Did you just suggest making the poor 2nd class citizens without a voice in the government that is controlling their lives?
That's a really, really bad idea. Unless you like slavery.
VAT? (Score:2)
Can Europeans please explain? I thought VAT solved this problem.
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Of course, in general, corporations should not be paying tax on income. Jurisdiction is intangible, I imagine my company's profits are all on the moon... so no tax. Sales are tangible, they happen in a specific jurisdiction, and we have mechanisms in place to track the movement of things across borders. So sales tax is the only feasible solution... so I'm surprised Europe isn't working
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Can Europeans please explain? I thought VAT solved this problem.
VAT is the most unfair of taxes and should be phased out.
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amazon pays VAT like any other business that operates in the EU. They pay VAT on the things that they buy and collect it on the things that they sell. They pass the difference to the respective governments. That's how an 'End User Sales Tax works'.
What Amazon doesn't pay is any tax on their profits. They also scam the property taxes. The corner shop in my town probably pays more in property taxes than the giant amazon warehouse outside of town. That's Bezos for you. Nickle and diming everyone.
This isn't Amazon's "fault" (Score:4, Insightful)
...stop acting like it is. (Assuming they are legally following the rules.)
How much extra taxes did YOU pay to your government, voluntarily, above what you were required to?
Amazon is no more obligated to pay more than you are.
If you're pissed about this, if this seems unfair, then talk to your legislators WHO WRITE THE RULES.
Stop fucking bitching that successful companies somehow have this "special moral obligation" ... that nobody feels they themselves have, by the way.
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It is very much Amazon's fault because Amazon doesn't naturally exist as a couple of companies which pretend to bill each other in a way that just so happens to minimize profit in the countries where Amazon generates all its revenue and maximizes profits where Amazon doesn't do any work but pays no taxes on profits. To anyone who isn't a piece of shit tax lawyer or lobbyist, it is completely obvious that they are lying about their profits to evade taxes.
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Yeah, when I'm in the position to bribe Senators and Congressmen the way corporations do, I'll get back to you on that. And maybe you've noticed that state and federal electoral districts are so thoroughly gerrymandered that even legislation supported by seven or eight out of ten voters doesn't even get discussed. Do you think "talking to legislators who write the rules" will have any effect?
Are you really that fucking stupid?
Re:This isn't Amazon's "fault" (Score:5, Insightful)
...stop acting like it is. (Assuming they are legally following the rules.)
How much extra taxes did YOU pay to your government, voluntarily, above what you were required to?
Amazon is no more obligated to pay more than you are.
If you're pissed about this, if this seems unfair, then talk to your legislators WHO WRITE THE RULES.
Stop fucking bitching that successful companies somehow have this "special moral obligation" ... that nobody feels they themselves have, by the way.
There's a difference between not paying extra tax for no reason and hiring an army of accountants to exploit every loophole imaginable, including moving your headquarters to another country.
And do understand this is a bad thing. For a small business to spend $1,000,000 on accounting fees to save 0.5% of tax would be ridiculous, for Amazon it's a bargain. Having the funds to exploit the tax code is one of the things that makes rich companies and individuals richer for no other reason than the fact they're already rich.
Now yes, the best solution is getting the legislators to write better laws. But companies already do a lot of "good" actions because of public pressure, environmental cleanups, minority hiring, supporting of voting rights, charitable donations, etc, etc. Why is it suddenly illegitimate for us to demand responsible use of the tax code as another social norm they should adhere to?
If nothing else it would help give the legislators political cover to fix the tax code.
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You conveniently forget that companies are more likely to spend that $100,000 bribing legislators to write laws that allow them to cheat the system legally. Oh, sorry, I meant to say "making campaign contributions to foster good candidates and good government".
Average people, of course, are completely free to engage in a bidding war with the corporations for the damned-to-hell souls of these creatures.
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Corporate Tax (Score:3)
Taxes on corporate profits are dumb. They are difficult to estimate, especially in large, sprawling companies. It's easy to craft taxes that are both too large and too small, depending on what kind of business you are and how you make your money.
VAT is the way to go. Tax all money moving through the corporation. The silly thing is that most EU countries have VAT ON TOP of corporate taxes. Just get rid of corporate taxes, which are difficult to collect, and crank up the VAT, which is easy to collect.
VAT is far from perfect, but it is relatively simple, and Occam's Razor and all.
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Pretty much this. Honestly we should replace the entire federal tax code in the US with something like:
1) A national sales tax - this needs to apply to just about every transaction buyer always pays. That needs to include purchases of securities etc! (get rid of capital gains).
2) Create some exceptions for retail purchases of certain goods like non-prepared food items, clothing that is not considered luxury (x% cotton or synthetic ), public transit, municipal fees.
3) Make it a little more progressive by al
And the truth is... (Score:2)
That first, corporations don't pay taxes, they treat taxation as an expense, and it becomes a cost of doing business. EBITDA being one expression of that reality.
But given that, governments use a variety of means to acquire revenue and redistribute wealth, such as VAT, pure sales tax, inheritance taxes, property taxes. license fees, etc. We can ignore the validity or proper use of these finds, and move on to considering relative fairness, right?
Perhaps, in the US, since there is such a thing as a personal i
Revenue != Income, especially for retailers. (Score:2)
Taxable income is revenue minus cost of goods sold.
Everybody forgets the COST of Corporations (Score:3)
Corporations do not limit liability. They transfer liability from the investor class to the rest of society.
Most of society can have no benefit from LLCs, they can't afford to invest in one. "LLC", "Limited Liability Corporations" work like this:
Bill Gates, Jeff Bezos, and Mark Zuckerberg see an exciting new fracking technology, invest $10M each into an LLC to test it out. The $30M corporation drills some new wells and try out, umm, "superfracking". It gets way out of hand and fracks a kilometre above the drill zone, causing natural gas and oil to percolate up into the water table, and do $30B in damage to the water table. Whole towns have to start shipping in water, until long pipelines can be built. One town shrinks until it folds up.
Bill, Jeff, and Mark are on the hook for exactly $30M, or whatever money is left in the corporate coffers after the drilling. They actually have the money, personally, to compensate the public for the $30B in damages, but that's not their personal problem. All blame, all bucks stop at the LLC.
Society frequently suffers financial loss from LLCs, of many kinds, mostly in the area of reduced public health and damaged environment, but courts every single day leave members of the public with a few cents on the dollar of losses inflicted upon them by LLCs. (One of the biggest is wage theft, basically the investor class stealing from the working class: it's the largest form of theft in dollar terms, bigger than burglary, car theft, etc.)
To compensate society for its losses, special taxes heaped upon corporations, on top of the income taxes the investors bear, are completely morally justifiable, because of this phenomenon.
Re:If it's not illegal, then it's legal (Score:5, Insightful)
If you don't like tax loopholes, then pass new laws and treaties to close them.
Yes, stories like this exist for the purpose of generating support for passing new laws and treaties to close tax loopholes. You get a cookie!
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If you don't like tax loopholes, then pass new laws and treaties to close them.
Yes, stories like this exist for the purpose of generating support for passing new laws and treaties to close tax loopholes. You get a cookie!
Bullshit.
Stories like this exist for the purpose of creating the illusion that some elected person somewhere gives a shit about fixing tax law.
Go ahead. Hold your breath and wait for those loopholes to close. Any decade now...
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Yet fails to mention that for every 100 people pushing to close loopholes, you have corporations paying millions to politicians to create loopholes. Ted Cruz wrote an opinion piece about this just the other day.
https://www.wsj.com/articles/y... [wsj.com]
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This is literally a lawmaker complaining that people are following the law, phrased to imply they should be punished for their lawfulness and explicit in that they are immoral for meeting their legal obligations. This is absurd. It is an insult to Law and Reason to treat the lawful as criminals because she thinks the law is flawed. She is not criticizing the law, she is attacking its foundations because
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"Why has it taken so long?"
Where is the power?
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What happens is Amazon "lobbys" for favorable loopholes to be created. The politician who pushes the law through then suddenly retires and ends up with with a sweet job on Amazon's board.
Uber and Lyft spent $200 million influencing the outcome of proposition 22, all so they didn't have to pay employees, oh excuse me, "independent contractors" more.
https://www.businessinsider.co... [businessinsider.com]
Now think just how fucked up that is. $200 million down the drain for advertising and lobbying when they could have done somethin
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It's very much harder to lobby the EU for that kind of thing. Power is too distributed, and not split into the standard 2 party system that facilitates that kind of corruption.
The downside is that also means that the EU takes a long time to agree how to fix these kinds of tax loopholes because so many people have to get behind the proposal.
Re: If it's not illegal, then it's legal (Score:2)
What happens is Amazon "lobbys" for favorable loopholes to be created. The politician who pushes the law through then suddenly retires and ends up with with a sweet job on Amazon's board.
Bullshit.
Cite one 'loophole' Amazon lobbied for, name one politician that 'pushed the law through and then suddenly retires'.
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Does an employer really owe something to society for hiring people and paying them wages?
Yes.
If you think you owe nothing to society then you are a freeloading psychopath.
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Calm down with the vitrol. I think chispito really meant to say: "Does an emploer really owe something *more* to society for hiring people and paything them wages?"
The employer is already providing society a great benefit by hiring people and paying them wages, the employer does this by taking on a substantial amount of risk for the chance to earn some kind of profit. The employee, on the other hand, takes on relatively minimal amount of risk, accepting the job, doing the work and getting paid regularly.
Our
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That ain't true anymore. It just to be, maybe 50 years ago.
Today, the risks employes take are considerable, with all the weakening of employee protection laws and social security. Companies, on the other hand, have a lot of safety nets to fall on, especially large companies. They all found out during the financial crisis that if you are "too large to fail", the government will safe you.
Re:Close the loophole but what kind of argument... (Score:4, Insightful)
Yes, the profit of a corporation, especially if it wants to be treated like it has personhood, must be taxed like other profits, because its profits depend on the infrastructure that is paid for through taxes. It is not enough to tax the personal income that the corporation gives to its investors through dividends or capital gains, because the investors (at best) pay taxes where they live, not where the corporation profits from the taxes paid by other people.
It is a straight up lie that another corporation in a tax haven makes all the profit while the corporation that does all the work and performs all the revenue generating interactions outside the conglomerate ends up earning nothing. The people who create these constructs need to go to jail and they need to be barred from representing corporations ever again.
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BUT....a corporation just passes on their increa
Re:Close the loophole but what kind of argument... (Score:5, Insightful)
No, the corporation charges what the market will bear. A corporation which doesn't pay taxes does not charge less. It pockets the difference and gains an unfair competitive advantage over other businesses which do pay taxes.
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It is a straight up lie that another corporation in a tax haven makes all the profit while the corporation that does all the work and performs all the revenue generating interactions outside the conglomerate ends up earning nothing.
No, it is not, and if you think this you don't know how the game is played.
What international corporations have done is string together a bunch of legal business transactions that are necessary and reasonable.
Licensing technology to another company so they can produce your goods is not some crazy scheme. You've got the tech but not the capacity, they have the capacity but not the tech, you both join forces to produce something that people want to buy. And companies can value their IP at whatever they want.
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Look, I already said that I understand it's legal to pretend that that isn't Amazon paying itself to avoid taxes, but anyone with half a brain knows it's not really three companies in a trench coat. There's just one big Amazon lying about making a profit in Europe. We should probably do the environment a favor and shut their European operations down if all that churn amounts to nothing. They can keep their Caribbean hyper profit center for all I care and you can play stupid or be stupid. Doesn't make Bezos
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Well let's see, Amazon benefits from tax funded education, healthcare, legal system, infrastructure, police, and of course having a huge first world market of relatively affluent consumers to fleece. So yeah, I'd say that Amazon does owe society.
There are no equivalent of human rights for corporations, and we, the electorate, are supposed to be in control. Corporations exist to serve us first and foremost, and we choose to let them do that within the framework of capitalism. Of course it doesn't work that w
Re:Why is this a problem? (Score:4, Insightful)
Amazon is using all the benefits of society while contributing nothing. Their trucks get to ride on nice roads because while you pay for it. Their employees get government healthcare and you pay for it. See a trend here? You're being fucked over with a smile on your face.
Re: Why is this a problem? (Score:4, Insightful)
I thought roads were paid for by taxes on gasoline, are you claiming Amazon somehow manages to buy its fuel tax-free?
Amazon employees that work 20 or more hours/week are eligible to participate in the company's healthcare plans.
https://www.amazondelivers.job... [amazondelivers.jobs]
Any other imaginary argument you want to use against Amazon?
As a reminder, Amazon's minimum wage in the US is $15/hr - the so called "living wage" many critics demand for hourly workers.
https://www.aboutamazon.com/ne... [aboutamazon.com]
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I thought roads were paid for by taxes on gasoline, are you claiming Amazon somehow manages to buy its fuel tax-free?
Well, you were mistaken: https://uspirg.org/sites/pirg/... [uspirg.org]
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Gas taxes are often assumed to be dedicated to road maintenance/construction/etc., but with improving fuel economy we're going to have to change that paradigm a little.
Since the real minimum wage is zero, we ought to think of this minimum wage thing as minimum marketable wage. Some places you can't get anyone off the couch for that wage. Other places people compete for a fraction of that. Market.
Economics sucks, because it defeats lies. Reality is truth, and economics is either truth or lie. Truth is useful
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But if you're an amazon customer or depend on AMZN shares for retirement it's a good deal.
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And if you do believe that they are taking money out of people's wallets then that just shows your naivete of economics. An economy is not a zero-sum-gain system. Amazon is paying VAT applied surcharges to the appropriate governments as well as the salary taxes so they aren't stealing. Your issue is that you just want them to pay more which is fine, but using the context of them "stealing" is foolish.
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The problem actually runs a few levels deep. Since the Maastricht treaty, the European union is also largely a monetary union.
"So what?" you may ask. So is the united states. But there is an important difference. Not all states are equal in financial possibilities, and European countries are also quite different. The main difference is that the united states correct for the differences to keep the states united, whereas the European countries must compete with each other without many means to do so. They ca
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If the govt creates laws that result in entities being able to avoid paying taxes, that's the govt's fault.
Regarding fault, you have to first determine if that was by design. Government, may see nothing wrong here. Based on their actions, they're quite accepting of the status quo.
Those that aren't as accepting, are the taxpayers who find it unfair that they can't claim 90% of their life costs as an "expense".
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Why is it considered such a problem for an entity to keep its own money? As if "untaxed income" is some kind of mortal sin that must be eliminated at all costs?
It's not a sin. Especially if the entity is following all applicable laws. If the govt creates laws that result in entities being able to avoid paying taxes, that's the govt's fault.
You're mixing two terms here... "sin" is an ethical, not a legal construct. Optimising your business to avoid taxes is something I certainly see as unethical, even if it might be following the letter of the law.
A theoretical example: A national coffee chain has revenue of $1 billion, profits of $200 million and pays a tax rate of 25%: 50 million. An international coffee chain owns a local subsidiary in the same country. It has the same revenue and the same real profits on operations, $200 million. However
Re: Why is this a problem? (Score:2)
Change the laws then, if that is the problem, then either tax Amazon the same as a brick-and-mortar store or drop the tax altogether.
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Change the laws then, if that is the problem, then either tax Amazon the same as a brick-and-mortar store or drop the tax altogether.
Part of the problem is that Amazon are allowed to lie. If a London shop owner said that their place of business was in Luxemburg s/he would not get away with it. But Amazon is. The same law that prevents the shopkeeper from lying about where their business is should be applied to Amazon. An empty room in a portacabin is absolutely and obviously not Amazon's place of business. There's no need to change the law, really.
Amazon's place of business is at the buyer's address and tax should be levied accordingly -
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If a London shop owner said that their place of business was in Luxemburg s/he would not get away with it.
If the person who owns a retail location in London has their business officially based in Luxemburg, why wouldn't they?
In the US, it's perfectly routine to base your business in a state that has attractive tax laws, even if that means having to operate the business in multiple locations for retailing, shipping, etc. A storefront in Maryland owned by a company incorporated in Delaware isn't - in real terms that matter - any different than a warehouse/delivery operation owned by a business based in Luxemb
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Taxation is a form of paying a share of costs of providing services that we all use. It is a moral system. How it is implemented in practice is open to debate.
Careful what you wish for...
Personally I'd like to see how Amazon (and others) would cope if a rule were enforced along the lines of "you haven't paid your share => you can't drive on our roads" / "Oh so you were burgled? shame you haven't paid for police to investigate" / "your warehouse is on fire? I suggest you ship the water from Luxembourg, t