Comment by eek2121 | Hacker News Reader

Comment by eek2121 | Hacker News Reader

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If stock buybacks were against the law, corporate taxes were higher, capital gains taxes were higher, and loopholes were closed, we wouldn't see this. The only way to earn more money in the environment I described would be to actively focus on growing your business, which means only letting people go you don't absolutely need.

In my area, Amazon has tripped up so bad I can't even have the basic necessities delivered to my house due to a staff shortage (they throw an error at checkout claiming multiple items can't be delivered to my address...items I've ordered for at least 4 years straight on a monthly basis without issue) so I am going to go from spending tens of thousands per year with Amazon to zero. I am in a city in the United States. Amazon will happily sell, ship, and deliver some no-name brand item from a third party seller within 2 hours of ordering, but they can't be bothered to do the same with the stuff I ordered.

If they weren't making money off me (which I doubt, I spent $23,967 on Amazon last year, and their products are only slightly cheaper than local stores...like CENTS), why were they willing to sell to me to begin with? I've switched to a combination of Costco/Walmart for most of my stuff, and will soon be independent from Amazon completely, all because they refuse to deliver my core products that they've delivered for years on a monthly basis without issue (toilet paper, a 12 pack of my favorite energy drink, my favorite brand of protein shakes, etc)

Really Amazon? (note the error I receive says that the item cannot be delivered to my address, and to select another. It is a residential address tied to a house and I've ordered the exact same item month after month. they also blocked subscribe and save.)

Sorry, this is a rant, please carry on.

"If stock buybacks were against the law, corporate taxes were higher, capital gains taxes were higher, and loopholes were closed, we wouldn't see this" ... we would see the same thing but only with dividends.

It doesn't change the decision whether it's better to reinvest in growth or pay out the profits to the owners; the primary reason for buybacks is that in the current tax law it's a slightly less tax-burdened way of paying out profits to shareholders as "dividends-that-technically-are-not-dividends".

I generally agree (and think stock buybacks are just better because they let investors time their tax realizations), but I'll point out that the way dividends are reported makes it more public when a company is not reinvesting in growth. Perhaps stock buybacks should be reported as prominently as dividends, rather than buried in cash flow statements.

> which I doubt, I spent $23,967 on Amazon last year,

Wow. Are groceries that expensive in America or are you buying for a family of 8? My family of 4 only spends about 8 to 10k on food stuffs.

> they refuse to deliver my core products that they've delivered for years on a monthly basis without issue

I've started to notice this too - they seem to be experimenting with trying to push people to different "stores" within Amazon that are not unified: Fresh (which is now gone?), same day vs not etc.

I already didn't order high-margin items from Amazon because of the risk of counterfeit products, and Prime no longer meaning "this will be shipped from Amazon inventory within this defined time Window" makes that a useless marker too.

I cannot be bothered with any of this, and got myself a Costco membership, so Amazon (.com) have effectively lost all my business as I try to extract maximum value from that at this point.

> If they weren't making money off me (which I doubt, I spent $23,967 on Amazon last year, and their products are only slightly cheaper than local stores...like CENTS), why were they willing to sell to me to begin with?

Because they are making money off you. You are forgetting what the end price does includes the store margin (while in America it doesn't include taxes, lol).

Not only they are making money, they do it regularly. Maybe profits aren't big per user, but there are hundreds of thousands of such users so ARPU is quite high.

The first line itself struck me as amazing! What is the purpose of a company? Do you think a company would exist/ be funded if the company did not pay back the investor in some way?

We may argue that this particular buyback was ill timed, but still, banning all buybacks is a very very strange idea

You might be surprised to learn that companies still existed/exist under communism, with not a single investor around ;)

Those were not actual companies that existed. They were just another part of the government with a different name.

no, there were worker owned coops.

starting a company allowed some pricing power, plus individuals could start their own entrepreneurship (but weren't able to hire anyone)

Do you have a specific example of country and company? I am curious about how worker-owned they were.

https://soviethistory.msu.edu/1985-2/cooperatives/

This is not secret knowledge

I did not claim it was secret, and you provide no explanation. The example you provide is 1985 Soviet economy, no coop names (for other readers).

I wanted to ask instead of assuming before making the following argument to the previous claims:

> You might be surprised to learn that companies still existed/exist under communism, with not a single investor around ;)

> Those were not actual companies that existed. They were just another part of the government with a different name.

> no, there were worker owned coops.

As I suspected, these "worker owned" cooperatives are completely dependent on the party (unlike current cooperatives). That is not my idea of "owning", since party members that are "workers" of the cooperative only in name would be deciding a lot of things in how the cooperative is run.

> Many cooperatives were vulnerable to exorbitant taxation by local officials, high interest rates on loans, and protection rackets run by criminals, the cost of which inevitably were passed onto consumers in the form of mark-ups. “Kooperativshchiki” (cooperative owners) thus became a term of abuse in ordinary Soviet speech.

So I agree with user nradov here: "Those were not actual companies that existed. They were just another part of the government with a different name. "

I must concede, at some point the lines can become blurred.

Hungary. No specific companies. These were always small. Think like 5-6 people.

The obvious problem with USSR-style communism was/is the authoritarian dictatorship, so everything had to be integrated into the power structure, so only very small companies were allowed to be independent.

If you became successful without the Party? That's a no-no, so thanks and the Party will take it from here.

If you became successful with the Party? Great, now here's a bunch of chinovniks to help you.

What pricing power? Under communism it was not about pricing at all - getting supply materials required hustling more than money. Buying things in bulk gave no discount at all - sometimes quite the opposite.

As for individuals starting their own entrepreneurship - only in certain specific, government allowed situations. And even then it was frowned upon both by the government and by the society.

Also, being entrepepreneur didn't make much sense anyway, because money didn't matter as much as talons for items. That's why used cars (not requiring talons) cost way more than new ones -- as in, the taxi corp could buy new cabs, drive them for a few years, and then sell with a profit.

Worker-owned coops were nothing like what we know under capitalism. They were huge semi-governmental structures filled with bureaucracy.

Even govt owned companies pay out dividends

Profit sharing or dividends - the concept that SV companies hate!

Profit sharing is pretty common among SV companies except the newest SaaS era. Chip companies and other tech businesses do pay out that way.

Dividends aren’t great tax wise but some big SV companies like Intel pay them out.

> Dividends aren’t great tax wise

Tax code can always be fixed if the gov wanted. For some reason, they don’t like profit sharing, only speculation. More tax payout I guess!

Blame regulatory capture.

The companies want it that way, so they buy the politicians who will want it that way.

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