
Amazon pays no 2018 federal income tax, report says - BallinBige
https://www.freep.com/story/money/2019/02/15/amazon-pays-no-2018-federal-income-tax-report-says/2886639002/
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sctb
Previously:
[https://news.ycombinator.com/item?id=19155655](https://news.ycombinator.com/item?id=19155655).

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throwaway5752
If this makes you mad, definitely don't look into the taxes of just about
every other company in the US. Particularly don't look at defense, integrated
oil E&P, agriculture, or residential construction. I bet those industries
would love for you to be outraged about Amazon and it's 21% off a $10B base
instead their total subsidies that probably are high tens of billions or
greater.

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mikeq101101
I feel better about the money staying in the hands of people that actually
(and efficiently) provide useful services and products to people, unlike
bureaucrats in the government who have no incentive to do things well and be
efficient (and in reality have the opposite incentives).

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jakeinspace
Teachers, road workers, federal engineers, soldiers, and federal law
enforcement aren't exactly bureaucrats. And while there may be a bloating of
bureaucracy in government, the private sector has plenty of accountants and
middle managers as well.

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pathseeker
>And while there may be a bloating of bureaucracy in government, the private
sector has plenty of accountants and middle managers as well.

The difference is that companies with too much bloat die. There is no concept
of that at all in the federal government because it just goes into more debt
or taxes more instead.

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darawk
They shouldn't. They have deferred tax assets from years of losing money. This
is perfectly reasonable. If you want to be mad about something, be mad about
Google and Apple domiciling their IP in Ireland and siphoning all their
profits there.

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jakelazaroff
Years of losing money on what? If I buy an expensive house, I can't write that
off even if my net income is negative for years when you include that
purchase. Why should they be able to write off e.g. an expensive office?

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isoskeles
Is that how it works? Do they get to write off debts to assets of which they
are still in possession, as if these are losses? Or are they writing off
expenses for things they are not in possession of in any sense (e.g. employee
salaries, goods sold)?

I am not an accountant, so I can't claim to fully understand what qualifies as
a gain or loss, but my assumption has always been that the accounting rules
are supposed to be sane and reflect the difference between these concepts (a
real loss vs. going into debt).

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darawk
They are probably depreciating the offices on a standard depreciation
schedule. They are also writing off things like interest on their debt, etc..

Depreciating capital assets though is an extremely important part of the tax
code. If you don't allow that businesses won't really be able to operate
effectively.

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isoskeles
What I usually don't understand is that when people bring something up like
this, the intent feels like it's to make me mad at Amazon. Did Amazon break
the law? No. At least not in this case, as far as I know.

If you see a problem with this picture, the problem IMO is an overly
complicated tax code that mostly benefits people/businesses with the resources
to navigate it.

That aside, if Amazon paying nothing in federal income tax largely has to do
with offsetting previous losses, what's the problem? That seems fair, and I
would really want someone who has a problem with this to explain why it would
be more fair to tax a business' gains one year by ignoring previous years'
losses.

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stefan_
Why on earth should you possibly be able to carry past losses into future
years? What is the possible utility or incentive of that?

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isoskeles
For the same reason we tax profit not revenue.

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stefan_
They made a profit, this year. All losses of the past are accounted in that.

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pathseeker
Making a profit in a single year absolutely does not offset losses of the last
years. If I record a loss of $10 every year for 10 years, I have lost $100
dollars. If I record a profit of $20 finally, I still have to make a profit of
$80 before I even break even.

Honestly, did you not understand that basic accounting or did you just type
quickly without thinking.

This is a really good example of why basic economics or even an intro to
business accounting needs to be mandatory in high school. Otherwise we end up
with people voting on economic policy based on complete ignorance and
clickbait like this headline.

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o10449366
Tax credits and stock-based compensation are the likely reason. Some people
will argue that with Amazon being one of the richest companies in the world
there should exist no scenario in which they don't pay federal income tax and
that the tax code should be simplified to close up these loopholes, but I just
want a tax code rewrite so politicians and the media can stop exploiting the
uneducated masses who don't understand what a tax break is.

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grzm
> _" Tax credits and stock-based compensation are the likely reason."_

From the second paragraph of the article:

> _" The Institute on Taxation and Economic Policy says the company is subject
> to a 21 percent tax rate on its U.S. income. However, through various tax
> breaks and credits, the company will receive a tax rebate of $129 million."_

