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On one hand: Good for him. I hear he also does a lot of charity work. On the other hand: Wait wasn't it Amazon who cheated on taxes like no other company (comp

On one hand: Good for him. I hear he also does a lot of charity work. On the other hand: Wait wasn't it Amazon who cheated on taxes like no other company (compared in size)? After the union shenanigans, his biasedness in the elections or well deserved PR desasters such as the contest for a new headquarter (what a surprise it went where it can influence policy most), I'm a bit allergic to being nudged to see his moves as all too altruistic. Increasing corporate taxes raises the burden across the board, for competitors and possible future ones. Meanwhile Amazon can afford to have its accounting adjusted to mitigate the impact more efficiently than any competitor could. It cements his position.

rllearneratwork 5y ago
they pay little tax because they re-invest into their growth. This is a desired behavior which we want - it fosters innovation and job creation.
- 0134340 5y ago
  Couldn't the same also be said at the human scale? Workers have to eat, sleep, often put back some money and gain some assets to grow and be more productive for their families and loved ones. Workers may use some of their money for rest and recreation but so do all companies have some degree of frivolity. This meme that gets passed around of corporations "fostering innovation and job creation" is a corporate apologist cop-out.
fartcannon 5y ago
This is just the first PR article in what will become a decades long attempt to restore his image, just like Bill G. He was ruthless and inhuman to his workers and we should never forget that.
- dx034 5y ago
  I don't see the parallel to Gates. Bill Gates wasn't always popular because many people hated Microsoft at the time. I don't think there was ever concern that he treated workers wrongly or abused the tax system to get rich. I don't buy that Gates set up the foundation just to improve his image. He is really invested in these topics. For Bezos that could very well be true. Interestingly enough Amazon used to have a really positive public image until about 1-2 years ago. If he had quit any earlier, maybe his image would be much better now.
  - fartcannon 5y ago
    Clearly Beso's should hire Gate's publicist.
- marto1 5y ago
  > ruthless and inhuman to his workers Unfortunately not only that, but ruthlessness is a main characteristic of most of his business practice. This peace is obviously yet another attempt at further increasing the size of his moat around his corporations. On top of that never forget he also has a substantial stake in mass news media itself.
astrange 5y ago
> On the other hand: Wait wasn't it Amazon who cheated on taxes like no other company (compared in size)? It's because Amazon has low profit margins compared to other companies its size - AWS is profitable but the retail business isn't very much, and investors don't want them to make more money because they like free shipping too much. The remainder is lost to R&D credits. If people want Amazon to pay more taxes, then Washington state should have an income tax. Pretty straightforward.
throwaway_kufu 5y ago
> I hear he also does a lot of charity work. I know I shouldn’t mix the individual with the public company he founded and I don’t want to be that person that says he only does it because the tax incentives. He is a person after all and I’m sure he deals with more social pressure as a result of his status and like all people has issues that strike a cord internally. Still there is something deeply troubling about people acquiring so much wealth that put them in that situation in the first place when he wouldn’t be there without his workers and yet significant numbers of them are on food stamps paid for by taxpayers...when his company paid $0 taxes.
chillfox 5y ago
I really wish people would stop seeing large companies paying low taxes as cheating and "loop holes". It is neither and it makes us blind to the cause of the problem. The politicians we vote in deliberately create laws that allow large companies to pay little to no tax. It is not an accident or a sneaky corporation that outwitted a dumb politician, it is by design.
- rektide 5y ago
  Deliberate allowances are created but big companies can hire legions of lawyers to reduce their tax burden, to find all sorts of minutia & excuses & readings of words to take advantage of every subclause they can. The aggregate effect feels enormously poisonous, totally toxic. Mega corporations can adapt far faster than anyone or anything else, including those charged with governing & regulating. Good governance is hard. And megacorps are an advanced persistent threat that goes to great lengths to claim exceptions for itself.
  - aeternum 5y ago
    It only takes one clever accountant to find a loophole. The right fix is to simplify the tax code.
    - idownvoted 5y ago
      Guess why most billionaires favor political parties that agitate against simplifying the tax code...
  - miemo23 5y ago
    > Mega corporations can adapt far faster than anyone or anything else i really don't think this is true, many big companies are hopelessly bureaucratic
    - rektide 5y ago
      I hugely agree with your sentiment. But I think this case still stands. As opposed to the human "resources" that do the work, which management feels it must direct & organize & lead & regulate, the financial department often speaks the same business school language, is already aligned to the board-level/business-school goals of raking in barrels & barrels of money. It's also largely a question of what change is required? I've seen a parent company move itself to become a subsidiary of a holding company which is now landed in another nation. It had almost no effect on the day to day. It was paper work. Megacorps are filled with paperwork. But that doesn't necessarily mean they are bad at it, slow at it.
anchpop 5y ago
I think in theory corporate taxes don't add any burden, because they only apply to profits and not to overall income like personal taxes do. You could theoretically have a 99% corporate tax and corporations that don't make a profit like Uber would continue completely unaffected. (Although the only reason they have the money they need to operate is because their investors expect to be paid by future profits, and if you taxed all profit away investors would not be willing to buy equity, so really they would be affected.) It seems to me that money can be used for two things: productive uses and unproductive uses. Unproductive uses can be taxed as much as we want - as a society we don't really care that much if people can't do unproductive things with their money like pay for foot massages and things like that. (Well, people who want to pay for unproductive things like foot massages and videogames care, but I think it's okay to take away some potential foot massages via taxation to pay for important public goods.) But we should take care when taxing productive things, because we're taking away opportunities from our future. If a masseuse wants to invest in some kind of robo-massager that will let them give twice as good foot massages for half the price, that's just a better use of everyone's time and money than continuing to do it the old way and not something we probably want to discourage. Seen through that lens, a wealth tax (or better, a consumption tax like a VAT) makes more sense than a corporate tax to me. Imagine a chash-rich opportunity-poor corporation that has only one thing to do with its excess cash: invest it building new widget factories for 3% return on investment. And let's say there's a cash-strapped opportunity-rich second company that can build new factories for a 10% return on investment. What we would want to happen is for the owners of the first company to withdraw the excess cash, so they can invest it in the second company which has much better things to do with it. With a corporate tax, that process is interrupted, because the first company can invest in itself tax-free but must pay taxes to return money to investors so they can put it to better use. My thinking is that a wealth tax taxes nearly the same thing as a corporate tax, without this flaw. You can't really tax a "corporation", fundamentally everything is owned by someone so if you tax a corporation you really tax the owners of the corporation. Here's how that plays out: The price of a share of a company is usually modelled as the expected future earnings from posession of that share, discounted for time. So if you expect a company to pay dividends of $0.1/share/year forever and have a discount rate of 5%, you should be willing to pay $2.00/share. If a corporate tax of 50% reduces that to $0.05/share/year (since half the profits have been taxed so the dividends are half as large), the price will drop to $1/share. A wealth tax taxes the value of the shares directly, instead of messily taxing the profits and affecting the share price indirectly. But a wealth tax doesn't have the weird switching-over issue I mentioned earlier, so money would no longer be trapped in unproductive areas (or worse, trapped overseas waiting for a change in US corporate tax policy). A VAT would be even better because it would incentivize people to keep their money in productive uses by taxing only unproductive uses (VAT doesn't apply to stocks or business expeneses or things of that nature). But that's kind of tangential. Maybe a professional economist can correct me on this but that's my thinking.
habosa 5y ago
He’s actually more known for how little charity he does, relative to his wealth and his peers. As soon as he got divorced his ex-wife gave away billions which hints that he was blocking a lot of that.
hellbannedguy 5y ago
I’ve heard the Charity excuse a few times, and hope people look deeper. Be it Billy Gates, Bezos, or one of the many Midwestern Financial Gurus—-their use of 901c3‘s are basically tax dodges. Gates foundation gives back less than 1% of the wife’s fund to the nation that birthed him, and provided a comfy launching pad for that privileged life. (I get you need to help developing nations, but America is dying. I have never seen so many homeless.) I don’t know Bezos charities, but if it’s related to his companies commercials in media, those are carefully selected to brainwash the masses. How much money did they spend so we knew their employees had soap to wash their hands this past year? And I guess Amazon warehouse workers chuckle fund was receiving hand sanitizer that looked like vodka bottles. I see how Amazon is now worried about climate change now with his promise of electric vehicles, so he must be worried about something? Maybe he’s running short of tax write offs, and heavily federally subsided electric vehicles make sense fiscally? Not even taking into account the millions he will save on a depreciating asset? In a way, we are buying his gift to carbon neutrality? (I would bet in five years—he will take the Uber approach to deliveries more than he does now, even requiring workers to furnish their own electric vans). I could see the boys laughing over this at the catered hootenanny. It feels good to be a gangster bllly—huh? I only know of a few charities that truly give back. Most of the big ones we all know through media are overfunded. I once heard there is a very popular children’s hospital who could operate for the next twenty years without another cent, even when taking into account inflation/tech costs. I used to look up nonprofits on WayStar. They have now made looking at the free 1040’s complicated. (Does anyone know of a truly selfless charity? I’ve always given Salvation Army a long rope. They have been feeding America’s hungry forever, and I know people who eat there.)
- dx034 5y ago
  I do agree that charity is often overplayed and many billionaires give away so little that they barely notice. But Bill Gates definitely is an exception. Of course they don't spend all their money in a few years, that wouldn't allow them to continue their work afterwards. But the whole life of Bill and Melinda is about their work in the foundation. It's not a side gig for good press, they don't do anything else. I can understand criticism where billionaires have a charity next to their business. But there's no other business left for Bill. But to be fair, Bill Gates is probably the only prominent example of a billionaire who quit the industry completely and dedicated his whole life towards charity.
vmception 5y ago
Corporations and executives don't have strong opinions on anything. Its all easier when a) you understand that and b) you don't have strong opinions on anything either.
- dx034 5y ago
  Because as an executive it's not your place to have a strong opinion. You're hired by the owners (i.e. shareholders in case of public companies) to make money, not to voice your opinions. There's a strong case that ethical behavior is not only the right thing but leads to long term success so of course you should act ethically. But the success of the company outweighs personal opinions. Even if you as a CEO think high taxes are fair, if low taxes benefit the company this is what you'll have to advocate. That's just the reality of working for others.
  - vmception 5y ago
    I was informing to make them as relatable as they are to me. I also don’t have strong opinions on anything and am content with this reality. As in, I don’t find this controversial and I know why corporations act how they do and didn’t need it explained ( others may have needed that though). The data changes and so too does the reaction, more people should be less worried about irony or perceived hypocrisy.
EMM_386 5y ago
> Wait wasn't it Amazon who cheated on taxes like no other company The problem is they aren't cheating. They are hiring a lot of lawyers to find every single LEGAL mechanism in the book to allow them to pay no taxes. I'm not saying I agree with it. But the problem here isn't with Amazon it's with the US tax code, which has been molded over decades of politicians and lobbyists to allow for this. To fix the system you need to fix the tax code.
- libertine 5y ago
  I was going to ask this question: why aren't big corporations paying more taxes NOW? Because in my country basically the governments hire law firms to write out legislation, and then those same law firms sell these types of services to circumvent the laws they draft. So the feeling I get it's not much a taxes problem, but the public institutions are managed by lawyers, and are optimized by lawyers that leave enough margin so they can thrive.
  - marto1 5y ago
    > why aren't big corporations paying more taxes NOW? And why should they ?? To quote Steve Eisman "incentives trump ethics every single time". Here's a tax strategy that will greatly simplify all government efforts: any corporation with a market cap of 100bn+ is obliged to sign a privately negotiated deal with the gov to agree on a annual tax rate for the next X years. The minimum is set at 20% with no exceptions and can go up to 50% depending on the estimated negative social impact of the corporation. There are no write offs, no loopholes. Every year the tax bottomline is checked and enforced. There is also a tax distribution enforced so that only a few can get the 20% one at any time. The goal of this to force a "bidding war" between them to get the lowest tax and the only way to do that is to reduce their negative impact to a bear minimum or stop existing altogether. Incentives. Once that is set in place work on reducing the tax code complexity for everyone and everything below 100bn. Currently most if not all tax regimes try to shoehorn all entities under the sun under similar rules and then provide various kinds of tax write offs that create incentives to dodge tax and provides the biggest players with a massive advantage as they can hire specialists to focus on every single possible loophole to avoid paying anything.
toomanybeersies 5y ago
Bezos has taken a page straight out of Big Tobacco's regulatory capture handbook. In 1997, as part of the Tobacco Master Settlement Agreement, the 4 major tobacco companies agreed to sweeping restrictions on cigarette advertising. This ensured that it was almost impossible for a new player to enter the market, because they had no way to create brand awareness.
- reducesuffering 5y ago
  Ah yes, Altria masterminded their share price growing from 40 to 50 over only 24 years...
  - toomanybeersies 5y ago
    That same Altria Group has a >6% dividend yield.

rllearneratwork 5y ago

they pay little tax because they re-invest into their growth. This is a desired behavior which we want - it fosters innovation and job creation.

0134340 5y ago
Couldn't the same also be said at the human scale? Workers have to eat, sleep, often put back some money and gain some assets to grow and be more productive for their families and loved ones. Workers may use some of their money for rest and recreation but so do all companies have some degree of frivolity. This meme that gets passed around of corporations "fostering innovation and job creation" is a corporate apologist cop-out.

fartcannon 5y ago

This is just the first PR article in what will become a decades long attempt to restore his image, just like Bill G. He was ruthless and inhuman to his workers and we should never forget that.

dx034 5y ago
I don't see the parallel to Gates. Bill Gates wasn't always popular because many people hated Microsoft at the time. I don't think there was ever concern that he treated workers wrongly or abused the tax system to get rich. I don't buy that Gates set up the foundation just to improve his image. He is really invested in these topics. For Bezos that could very well be true. Interestingly enough Amazon used to have a really positive public image until about 1-2 years ago. If he had quit any earlier, maybe his image would be much better now.
- fartcannon 5y ago
  Clearly Beso's should hire Gate's publicist.
marto1 5y ago
> ruthless and inhuman to his workers Unfortunately not only that, but ruthlessness is a main characteristic of most of his business practice. This peace is obviously yet another attempt at further increasing the size of his moat around his corporations. On top of that never forget he also has a substantial stake in mass news media itself.

astrange 5y ago

> On the other hand: Wait wasn't it Amazon who cheated on taxes like no other company (compared in size)? It's because Amazon has low profit margins compared to other companies its size - AWS is profitable but the retail business isn't very much, and investors don't want them to make more money because they like free shipping too much. The remainder is lost to R&D credits. If people want Amazon to pay more taxes, then Washington state should have an income tax. Pretty straightforward.

throwaway_kufu 5y ago

> I hear he also does a lot of charity work. I know I shouldn’t mix the individual with the public company he founded and I don’t want to be that person that says he only does it because the tax incentives. He is a person after all and I’m sure he deals with more social pressure as a result of his status and like all people has issues that strike a cord internally. Still there is something deeply troubling about people acquiring so much wealth that put them in that situation in the first place when he wouldn’t be there without his workers and yet significant numbers of them are on food stamps paid for by taxpayers...when his company paid $0 taxes.

chillfox 5y ago

I really wish people would stop seeing large companies paying low taxes as cheating and "loop holes". It is neither and it makes us blind to the cause of the problem. The politicians we vote in deliberately create laws that allow large companies to pay little to no tax. It is not an accident or a sneaky corporation that outwitted a dumb politician, it is by design.

rektide 5y ago
Deliberate allowances are created but big companies can hire legions of lawyers to reduce their tax burden, to find all sorts of minutia & excuses & readings of words to take advantage of every subclause they can. The aggregate effect feels enormously poisonous, totally toxic. Mega corporations can adapt far faster than anyone or anything else, including those charged with governing & regulating. Good governance is hard. And megacorps are an advanced persistent threat that goes to great lengths to claim exceptions for itself.
- aeternum 5y ago
  It only takes one clever accountant to find a loophole. The right fix is to simplify the tax code.
  - idownvoted 5y ago
    Guess why most billionaires favor political parties that agitate against simplifying the tax code...
- miemo23 5y ago
  > Mega corporations can adapt far faster than anyone or anything else i really don't think this is true, many big companies are hopelessly bureaucratic
  - rektide 5y ago
    I hugely agree with your sentiment. But I think this case still stands. As opposed to the human "resources" that do the work, which management feels it must direct & organize & lead & regulate, the financial department often speaks the same business school language, is already aligned to the board-level/business-school goals of raking in barrels & barrels of money. It's also largely a question of what change is required? I've seen a parent company move itself to become a subsidiary of a holding company which is now landed in another nation. It had almost no effect on the day to day. It was paper work. Megacorps are filled with paperwork. But that doesn't necessarily mean they are bad at it, slow at it.

anchpop 5y ago

I think in theory corporate taxes don't add any burden, because they only apply to profits and not to overall income like personal taxes do. You could theoretically have a 99% corporate tax and corporations that don't make a profit like Uber would continue completely unaffected. (Although the only reason they have the money they need to operate is because their investors expect to be paid by future profits, and if you taxed all profit away investors would not be willing to buy equity, so really they would be affected.) It seems to me that money can be used for two things: productive uses and unproductive uses. Unproductive uses can be taxed as much as we want - as a society we don't really care that much if people can't do unproductive things with their money like pay for foot massages and things like that. (Well, people who want to pay for unproductive things like foot massages and videogames care, but I think it's okay to take away some potential foot massages via taxation to pay for important public goods.) But we should take care when taxing productive things, because we're taking away opportunities from our future. If a masseuse wants to invest in some kind of robo-massager that will let them give twice as good foot massages for half the price, that's just a better use of everyone's time and money than continuing to do it the old way and not something we probably want to discourage. Seen through that lens, a wealth tax (or better, a consumption tax like a VAT) makes more sense than a corporate tax to me. Imagine a chash-rich opportunity-poor corporation that has only one thing to do with its excess cash: invest it building new widget factories for 3% return on investment. And let's say there's a cash-strapped opportunity-rich second company that can build new factories for a 10% return on investment. What we would want to happen is for the owners of the first company to withdraw the excess cash, so they can invest it in the second company which has much better things to do with it. With a corporate tax, that process is interrupted, because the first company can invest in itself tax-free but must pay taxes to return money to investors so they can put it to better use. My thinking is that a wealth tax taxes nearly the same thing as a corporate tax, without this flaw. You can't really tax a "corporation", fundamentally everything is owned by someone so if you tax a corporation you really tax the owners of the corporation. Here's how that plays out: The price of a share of a company is usually modelled as the expected future earnings from posession of that share, discounted for time. So if you expect a company to pay dividends of $0.1/share/year forever and have a discount rate of 5%, you should be willing to pay $2.00/share. If a corporate tax of 50% reduces that to $0.05/share/year (since half the profits have been taxed so the dividends are half as large), the price will drop to $1/share. A wealth tax taxes the value of the shares directly, instead of messily taxing the profits and affecting the share price indirectly. But a wealth tax doesn't have the weird switching-over issue I mentioned earlier, so money would no longer be trapped in unproductive areas (or worse, trapped overseas waiting for a change in US corporate tax policy). A VAT would be even better because it would incentivize people to keep their money in productive uses by taxing only unproductive uses (VAT doesn't apply to stocks or business expeneses or things of that nature). But that's kind of tangential. Maybe a professional economist can correct me on this but that's my thinking.

habosa 5y ago

He’s actually more known for how little charity he does, relative to his wealth and his peers. As soon as he got divorced his ex-wife gave away billions which hints that he was blocking a lot of that.

hellbannedguy 5y ago

I’ve heard the Charity excuse a few times, and hope people look deeper. Be it Billy Gates, Bezos, or one of the many Midwestern Financial Gurus—-their use of 901c3‘s are basically tax dodges. Gates foundation gives back less than 1% of the wife’s fund to the nation that birthed him, and provided a comfy launching pad for that privileged life. (I get you need to help developing nations, but America is dying. I have never seen so many homeless.) I don’t know Bezos charities, but if it’s related to his companies commercials in media, those are carefully selected to brainwash the masses. How much money did they spend so we knew their employees had soap to wash their hands this past year? And I guess Amazon warehouse workers chuckle fund was receiving hand sanitizer that looked like vodka bottles. I see how Amazon is now worried about climate change now with his promise of electric vehicles, so he must be worried about something? Maybe he’s running short of tax write offs, and heavily federally subsided electric vehicles make sense fiscally? Not even taking into account the millions he will save on a depreciating asset? In a way, we are buying his gift to carbon neutrality? (I would bet in five years—he will take the Uber approach to deliveries more than he does now, even requiring workers to furnish their own electric vans). I could see the boys laughing over this at the catered hootenanny. It feels good to be a gangster bllly—huh? I only know of a few charities that truly give back. Most of the big ones we all know through media are overfunded. I once heard there is a very popular children’s hospital who could operate for the next twenty years without another cent, even when taking into account inflation/tech costs. I used to look up nonprofits on WayStar. They have now made looking at the free 1040’s complicated. (Does anyone know of a truly selfless charity? I’ve always given Salvation Army a long rope. They have been feeding America’s hungry forever, and I know people who eat there.)

dx034 5y ago
I do agree that charity is often overplayed and many billionaires give away so little that they barely notice. But Bill Gates definitely is an exception. Of course they don't spend all their money in a few years, that wouldn't allow them to continue their work afterwards. But the whole life of Bill and Melinda is about their work in the foundation. It's not a side gig for good press, they don't do anything else. I can understand criticism where billionaires have a charity next to their business. But there's no other business left for Bill. But to be fair, Bill Gates is probably the only prominent example of a billionaire who quit the industry completely and dedicated his whole life towards charity.

vmception 5y ago

Corporations and executives don't have strong opinions on anything. Its all easier when a) you understand that and b) you don't have strong opinions on anything either.

dx034 5y ago
Because as an executive it's not your place to have a strong opinion. You're hired by the owners (i.e. shareholders in case of public companies) to make money, not to voice your opinions. There's a strong case that ethical behavior is not only the right thing but leads to long term success so of course you should act ethically. But the success of the company outweighs personal opinions. Even if you as a CEO think high taxes are fair, if low taxes benefit the company this is what you'll have to advocate. That's just the reality of working for others.
- vmception 5y ago
  I was informing to make them as relatable as they are to me. I also don’t have strong opinions on anything and am content with this reality. As in, I don’t find this controversial and I know why corporations act how they do and didn’t need it explained ( others may have needed that though). The data changes and so too does the reaction, more people should be less worried about irony or perceived hypocrisy.

EMM_386 5y ago

> Wait wasn't it Amazon who cheated on taxes like no other company The problem is they aren't cheating. They are hiring a lot of lawyers to find every single LEGAL mechanism in the book to allow them to pay no taxes. I'm not saying I agree with it. But the problem here isn't with Amazon it's with the US tax code, which has been molded over decades of politicians and lobbyists to allow for this. To fix the system you need to fix the tax code.

libertine 5y ago
I was going to ask this question: why aren't big corporations paying more taxes NOW? Because in my country basically the governments hire law firms to write out legislation, and then those same law firms sell these types of services to circumvent the laws they draft. So the feeling I get it's not much a taxes problem, but the public institutions are managed by lawyers, and are optimized by lawyers that leave enough margin so they can thrive.
- marto1 5y ago
  > why aren't big corporations paying more taxes NOW? And why should they ?? To quote Steve Eisman "incentives trump ethics every single time". Here's a tax strategy that will greatly simplify all government efforts: any corporation with a market cap of 100bn+ is obliged to sign a privately negotiated deal with the gov to agree on a annual tax rate for the next X years. The minimum is set at 20% with no exceptions and can go up to 50% depending on the estimated negative social impact of the corporation. There are no write offs, no loopholes. Every year the tax bottomline is checked and enforced. There is also a tax distribution enforced so that only a few can get the 20% one at any time. The goal of this to force a "bidding war" between them to get the lowest tax and the only way to do that is to reduce their negative impact to a bear minimum or stop existing altogether. Incentives. Once that is set in place work on reducing the tax code complexity for everyone and everything below 100bn. Currently most if not all tax regimes try to shoehorn all entities under the sun under similar rules and then provide various kinds of tax write offs that create incentives to dodge tax and provides the biggest players with a massive advantage as they can hire specialists to focus on every single possible loophole to avoid paying anything.

toomanybeersies 5y ago

Bezos has taken a page straight out of Big Tobacco's regulatory capture handbook. In 1997, as part of the Tobacco Master Settlement Agreement, the 4 major tobacco companies agreed to sweeping restrictions on cigarette advertising. This ensured that it was almost impossible for a new player to enter the market, because they had no way to create brand awareness.

reducesuffering 5y ago
Ah yes, Altria masterminded their share price growing from 40 to 50 over only 24 years...
- toomanybeersies 5y ago
  That same Altria Group has a >6% dividend yield.