Amazon paid just £15m in tax on European revenues of £19.5bn
theguardian.com
theguardian.com
This is going to sound pretentious as fuck, but I'm gonna say it anyway: I'm so tired of the hoards of people passively accepting whatever headlines reinforce their extremely simple, uniform bias / value set.
Maybe this is just a reflection of the bias / value set of the crowd here, but at least it's a different one. I hope it's an indication of a higher level of general critical thinking, though.
Though, depending on your interests, some days there may not be much on HR that tickles your attention.
That's fairly nit-picky, though. I'll take it.
True. Now, perhaps offtopic: why are individuals taxed on revenue (ie salary, benefits ect), but corporations are not?
Because it would be wholly disingenuous to presume the opposite. The article in general and the headline in particular is juxtaposing tax against revenue explicitly in order to elicit the response that there's something fishy. The article even goes so far as to have a quote about tax avoidance whilst carefully avoiding accusing Amazon of tax avoidance.
It would have been a much more informative article if they had said, say, that Amazon expect to make a small loss on 20bn revenue and then go on to explain Amazon's business model. This would, of course, have shed a different light on their share scheme as it's clearly very beneficial for their workforce.
But no, it's a large American corporation that doesn't pay much UK tax so let's bang out a low quality article that insinuates heavily but says not a lot.
Full disclosure: I'm British, have no relationship to Amazon (other than as a customer) and am no relation to Mr Bezos though we do rock similar hairstyles.
Lots of physical shopping chains aren't paying tax because they dont make money either.
The real question is will Amazon ever make money and at that time - will it pay taxes then?
Amazon is still primarily a retailer, one with historically horrific margins. The segment has notoriously bad margins in general (Costco & Walmart: typical ~2% net income margins, with very high income tax rates). Then there's Amazon, spending like crazy since its inception to fund growth.
It makes perfect sense that they wouldn't be generating much in the way of profit versus their revenue.
Same goes for Amazon et al. The business strategy is to crush every small retailer by operating at slim to no margins, purely to make it impossible for anyone else to compete.
Large retailers compete against each other. Small retailers can't do much anyhow. (Especially in heavily car based areas, if you have to go just a few more minutes and you can find more and cheaper products, why would you stop at a small shop?)
I would sacrifice economic justice for economic prosperity every day of the week. I simply don't care if someone is "exploiting" me if that exploitation actually increases my well-being in the most important ways, and while a lot of people might disagree with that in abstract, I'm willing to be 99% of adults would make the same decision if actually faced with that dichotomy.
The unbridled greed behind these bloggers really makes me question my faith in journalism. It's like they only worship money.
> Amazon is a hugely successful business but makes slim margins on the products its sells – the company recently warned it may report a loss in the third quarter – and with low profits comes a low tax bill.
Essentially, the title is clickbait. There is a good discussion in there about tax avoidance, but tying it to revenue doesn't illuminate the topic.
Capital gains are taxed at 20% at realization.
Tha articles (the site) makes the claim (by linking to an article on the same site) that capital gains are not counted as income. Yes, duh, because it counts as income when you close the position, sell the bond/stock/derivative/instrument/company/asset/capital and so on.
Surprise, surprise, dividends, (bond) coupon payments, interest and other yearly direct monetary (cash) payments do count as income.
And "some" economists don't ignore it: https://www.cbo.gov/publication/51361 (neither did Piketty as far as I can tell)
> Amazon Europe, which is based in Luxembourg and aggregates the billions of pounds of sales the retailer makes from individual countries across the continent, reported a pre-tax profit of €59.6m last year. As a result the company, which clocked up €21.6bn in sales across Europe last year, had a tax bill of just €16.5m.
> Amazon is a hugely successful business but makes slim margins on the products its sells – the company recently warned it may report a loss in the third quarter – and with low profits comes a low tax bill.
These are about the only lines in the article that really matter.
Amazon has always operated almost like a non-profit, non-taxable organization.
That's old news.
Bezo's has paid a huge amount of taxes on shares of stock he's actually sold. He shouldn't have to pay taxes on money he hasn't received or is even able to spend yet. What's best for Society is that both he and his capital remains in Amazon as long as possible as investment, not being turned into consumption (which would slow Amazon's growth rate down, slow it's ability to increase productivity and raise our standard of living).
No one should have to pay taxes ideally, but the government needs money to provide basic services, keep us safe, etc. I don't think it is better to tax salaried people some of who can barely make ends meet before taxing someone who is sitting on $70 on unrealized capital gains just because he chooses not to sell.
It bugs me that you understand the gains are "unrealized" but still use it as an argument to tax him. What part of "unrealized" do you not get?
I value your HN username at $10 billion. Pay a tax of $4 billion you greedy jerk.
I don't think you understand any part of what "unrealized" means. "unrealized" as it relates to taxation simply means that the asset has not beed sold.
> I value your HN username at $10 billion
What you might personally value my username and what the market values AMZN stock at bear no similarity
Besides 40% percent is a insane amount, most wealth tax systems are well under 2%.
No shit... At what point did I allude to it being otherwise?
> What you might personally value my username and what the market values AMZN stock at bear no similarity
Most people don't value Amazon at its current price. The majority of people value it lower or higher. A thin margin of people trade within their sliver of acceptable prices setting the current day trading price. To tax someone at the value a small third party ascribes is so insanely stupid it beggars belief.
The "market cap" of a company has NO BASIS in reality. That's why stock prices fluctuate like crazy for all but the biggest and most well known companies.
> Besides 40% percent is a insane amount, most wealth tax systems are well under 2%.
When do you pay this 2% tax? Every year? Say you own a $500,000 home -- not unreasonable in California. They're going to have to pay $10,000 every year for that home, even if they have no income. Even if they're living off their savings or they're retired and on fixed income.
Let's say some couple bought their home in the 50's for $30k. Today the value of the home is $500k. They're on a fixed income and can't afford to pay $10k in taxes. Are you going to evict them for being "wealthy"? Just because the market values their house at $500k as of this moment?
Boy, I can't wait for people to pump and dump stocks on tax day. It's going to be great... Or I can't wait for people to trash their homes to decrease the value and lower their tax burden.
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Let's take a step back. I just made an offer on your username for $10 billion. Because no one else made an offer the current market value is $10 billion. It will remain $10 billion until someone else makes an offer. At which point, how you calculate the tax burden is up to you. Average? Weighted average? Moving weighted average? Ascending triangle? Support and resistance? Any of the other batshit technical analysis methods? What about the time period? Are you taxing the wealth of the past day, month, year, decade?
"But!", you'll say, "You're just one guy, you don't get to determine the market value of my username". And sadly for you, that's exactly what I get to do. Houses have market values even though a single digit number of people actually bid on them within a 20 year time period. Small cap stocks may only trade a few shares a day.
Your username has had more offers in the past 10 years than my parents house has. Their house has a market value, and now, so does your username. Pay your taxes.
Or estate (inheritance) tax which could be considered a special form of wealth tax.
Never mind the 65,000 employees in Europe who presumably do pay income taxes, sales taxes, property taxes, and more based on the fact that they have their income from their employer.
If someone wants to argue for a 1% or 2% revenue tax rather than a much higher rate but only on profits, that's the argument to make. Don't blame the players for playing by broken rules.
2016 pre-tax income: $3.89 billion
2016 income tax: $1.43 billion
2016 income tax rate: 36.7%
That's one of the highest rates on earth.
2015: $1.57b pre-tax income. $950m income taxes. That's a 60% rate.
They don't generate much taxable income. What exactly are they supposed to be paying substantial taxes on other than that?
Should they be paying £30m (£50m?) in taxes on that £19.5 billion in European revenue instead? Ok, let's go with that, they're both meaningless figures. How is that a substantial matter to nail Amazon for (of all things) given the epic scale of tax schemes throughout Europe?
What you're missing is that the UK has been going through years of austerity. The UK public know some large companies have weird dodgy tax arrangements, and while there's some acceptance that no-one pays the real tax rate there's growing unrest about the very low rates paid by eg Starbucks or Google or Amazon.
These companies can chose to pay a bit more tax, or face tighter regulation.
The current EU VAT laws are proof the EU is happy to make onerous laws about tax
For the 2016 reporting period, cash taxes paid was recorded at $412 million, not the $1.43 billion you noted above. Given that, their effective cash tax rate was 10.6%, not the 36.7% you quoted.
Source: Page 22, AMZN 2016 10-K (https://www.sec.gov/Archives/edgar/data/1018724/000101872417...)