<story><title>Netflix Posted Biggest-Ever Profit in 2018 and Paid $0 in Income Taxes</title><url>https://itep.org/netflix-posted-biggest-ever-profit-in-2018-and-paid-0-in-income-taxes/</url></story><parent_chain><item><author>anigbrowl</author><text>There is no good reason investment income should be privileged over income from labor.</text></item><item><author>OrwellianChild</author><text>If the average worker has any stock or index fund investments, that worker absolutely &lt;i&gt;can&lt;/i&gt; take advantage of this (in the U.S.). It&amp;#x27;s called tax-loss harvesting - worth reading about here [1].&lt;p&gt;[1] &lt;a href=&quot;https:&amp;#x2F;&amp;#x2F;www.madfientist.com&amp;#x2F;tax-loss-harvesting&amp;#x2F;&quot; rel=&quot;nofollow&quot;&gt;https:&amp;#x2F;&amp;#x2F;www.madfientist.com&amp;#x2F;tax-loss-harvesting&amp;#x2F;&lt;/a&gt;</text></item><item><author>PurpleBoxDragon</author><text>&amp;gt;Over a reasonable horizon, you weren&amp;#x27;t profitable.&lt;p&gt;The average worker isn&amp;#x27;t allowed to do that even when they lose money in a given year.  Why is it so naturally assumed to be acceptable for a business to do it?  Maybe the time is to just remove the loopholes in general from both business and personal income taxes.</text></item><item><author>SilasX</author><text>It &lt;i&gt;is&lt;/i&gt; that simple (in the sense of the parent&amp;#x27;s post): you need to know the specifics of &lt;i&gt;why&lt;/i&gt; they were paying no taxes.  If, as in the comment, they were carrying over losses, then there&amp;#x27;s nothing really objectionable.  You lost $10 million last year.  You profited $10 million this year. Over a reasonable horizon, you weren&amp;#x27;t profitable.&lt;p&gt;Did they get a specific exemption against the public interest that no one else got? Great! Let&amp;#x27;s talk about that!&lt;p&gt;Did they deduct 100% of their costs for sham &amp;quot;IP licensing&amp;quot; from a foreign subsidiary? Great! Let&amp;#x27;s talk about that!&lt;p&gt;But you need to know the &lt;i&gt;why&lt;/i&gt; before you conclude there&amp;#x27;s something objectionable going on.&lt;p&gt;Edit: More generally, &lt;i&gt;every&lt;/i&gt; headline of this form comes with an implicit statement like &amp;quot;By my model, &amp;lt;company&amp;gt; should be regarded as having a profit of X dollars, but tax law views them as having a taxable profit of Y &amp;lt; X.&amp;quot; That necessitates a good explanation of why you think X is the right value.</text></item><item><author>otachack</author><text>It&amp;#x27;s not that simple. Companies lobby to keep, even coerce, laws that benefit them and allow these sorts of things to happen. What is the common person, or collection of persons, supposed to do when they are against that kind of force? I believe one way is to actually be involved in politics and get into the seats that govern and make the laws. But it&amp;#x27;s easier said than done.</text></item><item><author>driverdan</author><text>Rather than being outraged at the headline, what are the actual details? Why were they able to pay no taxes? Was it due to carried losses or something like that?&lt;p&gt;Anyone mad at a company for not pay taxes is misdirecting their anger. Companies follow the law. If you don&amp;#x27;t like the law elect different politicians. Don&amp;#x27;t get mad at companies that follow the law.</text></item></parent_chain><comment><author>smsm42</author><text>One of the reasons why it makes sense to have different rules for investment income is investment income tax (at least if you&amp;#x27;re investing in a corporative stock) is a double tax - the corporation you invest in is taxed on its profit (so your income from it is less than it would be) and then your income from it is taxed again. It kinda makes sense that parts of the double tax would be less than the single one.&lt;p&gt;Of course, there&amp;#x27;s a political component of it too - taxes are always political, and are used to promote or suppress certain actions. I guess the government does want to promote long-term investment and thus defines lower tax rates for this activity.</text></comment>
<story><title>Netflix Posted Biggest-Ever Profit in 2018 and Paid $0 in Income Taxes</title><url>https://itep.org/netflix-posted-biggest-ever-profit-in-2018-and-paid-0-in-income-taxes/</url></story><parent_chain><item><author>anigbrowl</author><text>There is no good reason investment income should be privileged over income from labor.</text></item><item><author>OrwellianChild</author><text>If the average worker has any stock or index fund investments, that worker absolutely &lt;i&gt;can&lt;/i&gt; take advantage of this (in the U.S.). It&amp;#x27;s called tax-loss harvesting - worth reading about here [1].&lt;p&gt;[1] &lt;a href=&quot;https:&amp;#x2F;&amp;#x2F;www.madfientist.com&amp;#x2F;tax-loss-harvesting&amp;#x2F;&quot; rel=&quot;nofollow&quot;&gt;https:&amp;#x2F;&amp;#x2F;www.madfientist.com&amp;#x2F;tax-loss-harvesting&amp;#x2F;&lt;/a&gt;</text></item><item><author>PurpleBoxDragon</author><text>&amp;gt;Over a reasonable horizon, you weren&amp;#x27;t profitable.&lt;p&gt;The average worker isn&amp;#x27;t allowed to do that even when they lose money in a given year.  Why is it so naturally assumed to be acceptable for a business to do it?  Maybe the time is to just remove the loopholes in general from both business and personal income taxes.</text></item><item><author>SilasX</author><text>It &lt;i&gt;is&lt;/i&gt; that simple (in the sense of the parent&amp;#x27;s post): you need to know the specifics of &lt;i&gt;why&lt;/i&gt; they were paying no taxes.  If, as in the comment, they were carrying over losses, then there&amp;#x27;s nothing really objectionable.  You lost $10 million last year.  You profited $10 million this year. Over a reasonable horizon, you weren&amp;#x27;t profitable.&lt;p&gt;Did they get a specific exemption against the public interest that no one else got? Great! Let&amp;#x27;s talk about that!&lt;p&gt;Did they deduct 100% of their costs for sham &amp;quot;IP licensing&amp;quot; from a foreign subsidiary? Great! Let&amp;#x27;s talk about that!&lt;p&gt;But you need to know the &lt;i&gt;why&lt;/i&gt; before you conclude there&amp;#x27;s something objectionable going on.&lt;p&gt;Edit: More generally, &lt;i&gt;every&lt;/i&gt; headline of this form comes with an implicit statement like &amp;quot;By my model, &amp;lt;company&amp;gt; should be regarded as having a profit of X dollars, but tax law views them as having a taxable profit of Y &amp;lt; X.&amp;quot; That necessitates a good explanation of why you think X is the right value.</text></item><item><author>otachack</author><text>It&amp;#x27;s not that simple. Companies lobby to keep, even coerce, laws that benefit them and allow these sorts of things to happen. What is the common person, or collection of persons, supposed to do when they are against that kind of force? I believe one way is to actually be involved in politics and get into the seats that govern and make the laws. But it&amp;#x27;s easier said than done.</text></item><item><author>driverdan</author><text>Rather than being outraged at the headline, what are the actual details? Why were they able to pay no taxes? Was it due to carried losses or something like that?&lt;p&gt;Anyone mad at a company for not pay taxes is misdirecting their anger. Companies follow the law. If you don&amp;#x27;t like the law elect different politicians. Don&amp;#x27;t get mad at companies that follow the law.</text></item></parent_chain><comment><author>prostoalex</author><text>During low-inflation years - no.&lt;p&gt;The lenient rates were introduced during high-inflation years. If somebody was pursuing a long-term project spanning over several years (let&amp;#x27;s say, building a new apartment complex), high punitive tax rates at liquidity time (let&amp;#x27;s say, 5 years down the road) combined with decreased buying would obliterate any real profitability.&lt;p&gt;The 12-month cut-off window, though, seems completely arbitrary.&lt;p&gt;The argument is kinda moot anyways, as capital gains are completely voluntary - one sells when they want to sell. If they don&amp;#x27;t want to sell, but need liquidity, they can access a bunch of asset-backed loans (HELOCs, PALs, cashout refinance, etc.) Ken Fisher in his book &amp;quot;Debunkery&amp;quot; (and I&amp;#x27;m sure the data exists elsewhere) shows how total revenue figures collected by US government do not change over decades, regardless of the actual capital gains rates.</text></comment>