When a politician enacts a policy that ignores some big tail risk, they won’t be in office when it eventually blows up. Who foots the bill in that case? Certainly the politician and maybe their party won’t suffer election losses from it.
I think this is the reason politicians all around the world have been so ill-equipped to deal with Covid - they are used to their decisions having 10 / 20 year repercussions, by which time they're well out of the blame-zone.
This is one reason why having well managed, capable institutions matters so much. Don't get me wrong, democracy is vital to ensure accountability, but it often worries me when elected politicians interfere in the management of specialist institutions unless they are clearly mismanaged. These things can take generations to develop but only a few months years to cripple.
The thing that I find surprising about the US government is that everything is a bill/law. Like instead of the transportation agency deciding to build a bridge, Congress has to pass a law to build a bridge. Does anyone know exactly why it’s set up this way?
The short answer is your idea of how things work in the US is incorrect. Building a bridge certainly doesn't require an act of Congress. Explaining transportation funding in the US is complicated because the responsibility for road building is mostly a state and local government issue and there is a variety of systems from state to state.
Federal funding to help states usually involves two methods. The first is transportation block grants where the federal government gives states money to use towards transportation at their discretion within certain constraints. The other is funding for specific projects. This funding generally involves the state applying to the federal department of transportation for funds toward a specific project. The department of transportation provides these funds out of a pool of money allocated by Congress each year. Congress plays no formal role in how these funds are disbursed. The department of transportation decides using defined set of criteria.
In the past Congress would sometimes earmark funds toward specific projects. This is rare these days as most earmarking of funds is against current congressional rules.
It's funding. If the transportation agency had money in their budget, they could just build it as far as I'm aware. Most transportation agencies don't have enough slush money to randomly build a bridge. Taxes are unpopular, people don't want to spend that much. It also means the cost is localized, so the tax increase would be higher since it's over fewer people.
The way I rationalize it is that despite the fact that it might be a bridge in Nowhere, West Virginia, it will likely have wide-reaching impacts. More trucking routes helps almost everything. If I'm a visitor, I'm going to use the bridge, so I should pay some part of that.
You are ignoring the profit part.
Public company = maybe profits, maybe losses for the taxpayer
Private company = maybe losses, never the profits for the taxpayer.
Is 2008 already forgotten?
"After two straight years of paying $0 in U.S. federal income tax, Amazon was on the hook for a $162 million bill in 2019"
"$162 million is still just a fraction of the $13.9 billion in pre-tax income Amazon reported for 2019 — roughly 1.2%"
How much is your income tax rate?
According to their 2019 annual income statement[0], Amazon paid a total of $2.374B of foreign and domestic income tax on pre-tax income of $13.976B. That's 16.9%, not 1.2%. Is the author perhaps comparing US taxes with global income? (Or perhaps just whatever was left over after paying estimated taxes?) That certainly looks to be the case since they cited US federal income tax while the $13.9B pre-tax income figure is global, and even the domestic portion of the income taxes was $1.360B (9.73% of global pre-tax income), not $162M.
Given the federal corporate tax rate of 21%, the domestic tax numbers work out nicely if we assume approximately 46% of pre-tax income was from the US and the remaining 54% was foreign. Which seems plausible to me, though that is obviously a vast over-simplification and ignores a lot of details. In particular, the distribution of foreign and domestic deductible business expenses may not be the same as the distribution of revenues.
The division between the North America and International segments is based solely on which web site was used (e.g. amazon.com vs. amazon.co.uk), not the tax jurisdiction. The AWS segment is global, and the North America segment includes income from the Canada and Mexico sites. In sort, you can't infer much about what portion of the income is taxable in the US from those operating income figures.
Even considering all North America + AWS income together, since they paid $1.360B in domestic US income taxes that year (not $162M) the percentage would still be 8.37%, not 1.2%. That's ignoring all foreign taxes and the losses from the International segment. Do you consider a minimum 76% error margin to be "pretty accurate"? I sure don't.
Keep in mind, too, that losses from prior years can be carried forward and deducted from current income. That's part of the reason that there were no taxes paid in the two previous years; the current-year income is only part of the story. This is perfectly reasonable when you consider that $3B in losses one year followed by three years with $1B in annual profits equals no net income for that four-year period. Why should there be any income tax liability when there is no income? The alternative to carrying forward losses would be a refundable tax credit for the years with negative income to offset the taxes collected in profitable years, but that would be very easy to game.
At least it was accurate. I don't think anyone here is cheering tax evasion on or denying there are problems There clearly are. Let's at least be honest about it though.
What you can tell from that source is that most of the income is attributable to AWS—which is global—with most of the remainder being from sales at amazon.com, amazon.ca, and amazon.com.mx. Even if we simplify and assume that revenue from sales at amazon.com is strictly domestic, and the sales from the Canada and Mexico web sites are negligible, that says nothing about pre-tax income for the purpose of calculating US income taxes. For that you would need to know what fraction of their business expenses are related to their US operations.
"losses" and expenses like the double dutch irish sandwich the used in earlier years.
We all know that before Trump's tax reform the big players parked their money in Europe to evade the US taxes, but since the reform and Europe's shift in tax regulation companies like Amazon and Apple transfer their money to the US, to pay less taxes.
So the companies count these money as domestic income.
Measured in terms of the amount of money involved, there are huge differences compared to the working population.
Ever heard of progressive tax?
This is the opposite.
Does the fact that some people game their personal income tax make your income tax contributions worthless or irrelevant? I'm not clear what point you're making.
Corporate income tax is the third highest source of tax revenue in the US, at $230bn in 2019. Shareholders also pay capital gains taxes, and companies pay other taxes as well or collect taxes for the government as well like sales taxes.
State expenses have to be paid and if the wealthy don't pay, who is? I guess the one who can't afford an account in places like the Caimans.
And of course Corporate income tax is a hight source of tax money. The larger the share in profits, the higher the share in tax revenue. The question is why isn't it the highest source of tax income?
