“Morality” is a strange thing to call for here since a business aims to be amoral and would sooner default to immoral. There’s not a single principle of business that meets the standard to be called moral, and you yourself hit on this by saying a business could increase salaries of the people that need it to lose profit but won’t. Is NOL immoral? Not in a vacuum but it is certainly a system that can be used immorally, so at best it skirts the edge of amorality since there is a functional use to encourage economic growth by mitigating risk for large companies.
Amazon does what every business does. They also are large enough to influence politicians which is where the hate should be directed.
The real question is how many people who complain bitterly about Amazon buy their stuff? If no one shopped there, this would be a moot point. The public, in a sense, created Amazon.
The fundamental issue with income inequality is the fact that an astonishingly small number of individuals currently hold more wealth than half the planet combined.
It’s a simple thing really. A person with a billion+ dollars doesn’t need and can’t physically spend that much money in theirs or their children’s lifetimes, yet they continue to hoard as much as possible while a vast majority of people struggle to feed, clothe or house themselves. That’s the basic immorality of unregulated capitalism.
Progressive taxation is just one method to help balance the scales since those with means can afford to pay more without adversely affecting their lifestyle. We can debate what’s fair in terms of deductions and exemptions but the rules are stacked in favor of the already wealthy. NOL deductions for a company making billions in profits is just a slap in the face to all the hard working individuals who are struggling.
(I’m struggling to understand how Amazon can claim Net losses and Net profits at the same time. These two things should contradict each other.)
Yeah ! Leave Scrooge McDuck alone ! No fiction character deserve to be conflated to Jeff Bezos.
I have a business that is carrying forward a lot of ‘losses’ in the form of capital investment into the coming few years. If I wasn’t able to carry forward my costs then it wouldn’t be viable and the business wouldn’t happen. I have no issue with the idea of focusing on investment while building up your business then claiming those losses from future earnings, that is what allows many companies to grow from small beginnings.
I do have an issue with the concept of billionaires as a thing, and think that a wealth tax on money/holdings over something like $5million would be just fine. (For reference, $5million is enough to make ~$200k/year without working a single minute nor losing any of the nest egg).
Exactly. My argument isn’t that carrying losses forward is inherently bad. It’s that Amazon is using it to hack the system. It’s pretty obvious that they hid profit in several years in order to qualify for the forward-carrying losses.
I’m not sure it’s obvious that they were hiding profits, they were losing money for a long time. They were fairly explicit in their goal to become dominant before making any profits - and it worked.
That said, wealth tax is not a bad idea. Maybe 2% on wealth over $10m, but make it progressive as well - i.e. wealth over $1B could be taxed at 25%/annum without making anyone’s life worse at all ever.
we’d all start our own llcs, and taxes would plummet. right now, the paperwork isn’t often worth the savings - but there’d be whole industries devoted to this were we to give up corporate taxation.
obviously companies are making profits, which means that, no: taxes aren’t pushed off to consumers: pricing is determined by supply, demand, perceived value, and the cost the market will bear; taxes are one part - but it’s just a bad meme that every tax increase is paid by consumers.
corporations are not people. they are legal entities. we have the right to tax them in exchange for the legal protections we give them.
amazon probably shouldn’t be allowed to be as big as it is. that alone would help with the way it can massage what it owes we the actual people for the infrastructure it uses to make the big bucks.
edit:
im pretty sure people would just establish trusts and off shore shell companies. it’d be hard ( i think, but im no accountant ) to track a person’s true wealth of they wanted to hide it.
definitely could be worth doing as a statement of principle though. that and a big ol vat on luxury goods, mini-mansions, second homes, etc.
maybe we should tax them based just on stock price. it’d be like a corporate wealth tax, and impossible to hide.
Another example is,
“Businesses need CERTAINTY…, yada, yada…”
Which just means
“Bend over folks!”
For-profit businesses typically don’t, but non-profits do.
All we’re talking about here is timing with the NOL carry forwards. Over the long run, the company that has ups and downs and uses the carry forwards will pay the same amount of taxes as the company that made the same overall profits in a steady way.
If we’re going to fight the fight, there are so many better things that focus on- like actual tax avoidance schemes and foreign sub structures that are purely for the purpose of tax efficiency. The whole IP offshoring thing is a problem. Apple, Amazon, Google, Starbucks, and many others use some very complex international strategies to avoid our jurisdiction.
Doctorow… presumably you and/or BoingBoing is incorporated as an LLC, filing as an S-corp. What percentage of its revenue does the LLC pay in taxes, directly? What percentage of profit does the LLC pay in taxes? … its zero, isn’t it. But it pays a lot of salary and the employees pay tax (and pass-through profits that the owners pay taxes on), probably it pays the employer share of taxes, but amazon does that also, and it probably amount to tens of billions of taxes paid, but that isn’t included, right.?.
As with everything tax related, it’s reasonable - until people start taking advantage of the edge cases.
As people have pointed out, Amazon like Uber is a business whose path to profit relies on making massive losses in order to build up as close to a monopoly as it can get, then making money.
Should the tax system incentivise that? That’s a legitimate question.
Is there a way of stopping it in this sort of case, that doesn’t impact the mom & pop business doing its best to make profits but occasionally making a loss?
Who knows but that’s why tax laws always grow to take up whole shelves in accountants’ and lawyers’ offices.
I’ve always liked Morton’s Fork.
Prong A:
You seem to have a lot of assets, therefore you must be able to pay lots of tax.
Prong B:
You seem not to have many assets, therefore you must be stashing a lot of money away offshore so you can pay lots of tax.
it probably amount to tens of billions of taxes paid, but that isn’t included, right?
correct. and is generally part of employee compensation.
just cause you pay a property tax, a sales tax, gas tax, and road tolls, doesn’t mean you don’t owe federal income tax.
and a nicely progressive tax would mean you only pay a higher rate when you can afford it - just as amazon can clearly pay a fair share ( even though they’re not )
The refinement most companies in situations like this do is hire/fire cycles, where they lay off a chunk of their staff one year to reduce costs and then higher replacements a year or two latter when business picks up.
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