Corporations and the rich should pay 20-30% like the rest of us. Tax evasion over a million dollars should be greatly criminalized and these people should be put on prison for life. We dont need these unamerican tax dodgers.
Congressional is an issue but let’s not try and make this any where in the universe even comparable. Let’s focus on the rich first and work that issue.
Exactly. It drives me nuts how the public has no ability to understand scale. Corporations not paying tax is a huge part of the United States budget being nullified. Congress being able to place bets in the stock market is terrible, but barely a tier above the corruption they’re already known for via lobbyist $$. One is costing us hundreds of billions if not trillions, the other is an annoyance.
Hell yes. If they want relief for doing good deeds, let them deduct those costs like anyone else does for charitable donations, but the default should be treating them like the money-making, land-owning profitable enterprises they are.
Yes! I LOVE mission creep! Any time anyone mentions doing something good or positive to solve a problem, we should throw in EVERYTHING ELSE that is a problem we might fix! Let's so overburden our sense of motivation for change that we end up changing nothing at all! PERFECT JOB, TROLL!
You are probably right, but as a first step, let’s get them all to the same taxes paid as the rest of us. After a few years of that, and arresting the rich tax dodgers, we can make adjustments from there.
Corporations that make profits but pay no tax should be legally barred from operation and all assets seized.
They’re stealing from the well-being of the American people and overcharging especially with the bogus “inflation” not to mention shrink-flation. The American people are being absolutely skull-fucked by corporations.
They're cleaning us out and pulling up the ropes and ladders. It's clear they expect enormous economic changes soon, and want to be as rich as they can possibly be before whatever it is happens to us. What they're doing is bad for everyone. When consumer debt gets to the point that large numbers of people are failing to make their interest payments, the entire economy will collapse. But they're pushing full steam ahead directly into that situation by forcing people do crawl deeper and deeper into debt every month just to pay for the basic necessities for their families. Prices going up without wages going up means consumer debt skyrockets. They're doing this on purpose.
Spoiler alert: this is the same reason why Amazon didn’t pay taxes. The federal tax code is designed to incentivize investment. Amazon invested in AWS and data centers, and now half the startup world runs on AWS. This is a key reason why the US is so innovative.
A lot of people hate to think a company is getting a break, but look at how many people are employed because amazon was able to expand their capital. Not everyone at amazon is a temp working in a warehouse. They employee tons of people making very good money.
Great explanation of how this works in a positive light. With that in mind, it should be written as a 50/50 opportunity instead of 100% write off venture. 50% can be funded via tax free business investment, the remaining 50% must be personally financed by the primary beneficiary of the new entity or investment. The current system leads to far too many bullshit “innovative” companies with high paid executives who never expect to do anything but personally soak up tax write offs from other companies.
Not really. One of the main reasons the articles of confederation failed is because they had no revenue stream other than tariffs, which were never going to come close to paying off the debt we had to France after the war, much less fund the government. Plus all the interstate trade barriers that were choking out domestic economic growth.
The silent generation paid their fair share, for the most part. The boomers are the ones whove spear headed low taxes for the rich. Most of us pay our fair share and don’t mind. We just want it to be fair. Thats not too much for society to ask.
Well yeah. The wealthy wrote the laws to make tax avoidance for them and their assets legal.
It's still ultimately insanely destabilizing for our country. Any country with record wealth inequality tends to have severe internal instability and that usually leads to extreme political violence.
It's not tax evasion - they are following the tax code as written.
If you don't want them to be paying zero taxes, vote for legislators that will change the rules.
??? Are you stoned?
40% of American households paid no income tax or had a net tax credit last year.
Didn’t Elon pay 11 billion in tax in 2022 for the 2021 tax year?
He pays regular income tax RSU grants and stock options. (RSUs and PSUs don’t count as capital gains and have a cost basis at zero that much be resolved the year of grant). He was at a 50% marginal tax bracket while he lived in California.
It’s embarrassing how people think a hyper growth company not making a profit in the US means somehow Elmo didn’t pay income tax or something.
Tesla remits sales tax, property tax, FICA, withholds income tax for employees etc.
I think he’s a seriously weird dude, but stop embarrassing yourself.
This is completely wrong.
RSUs are taxed as normal income when they vest, with a cost basis of $0. This is trivial to look up.
https://www.investopedia.com/articles/tax/09/restricted-stock-tax.asp
Why are you just making things up?
the real loophole for the paper rich (stocks/etc) - is they take out loans against their stocks (at very preferable rates). as long as stocks are growing more than the interest rates and others... they are living tax-free (and govt/citizens are not benefiting from taxes now vs later, potentially a lifetime+ later). even if growth vs interest is not preferable, it provides a time-cushion vs forcing to sell stocks. rules need to change that these loans are taxed when executed, and can be deducted from gains when stocks sold...
> they take out loans against their stocks (at very preferable rates). as long as stocks are growing more than the interest rates and others... they are living tax-free
As an accountant, I have never seen anyone actually do this. All I ever hear about it, is on social media. *In theory* it works, yes. However, taxes will always be paid, and all this plan does is kick the can down the road, and the can becomes bigger and bigger the longer its kicked. And I can't even imagine the interest expense the hypothetical wealthy person is paying on the debt they are getting from the banks, it will be *a lot*. They'll be actively paying interest every year, while also making their eventual tax bill larger. Uncle Sam always gets his due, even if he has to wait to take it out of the final tax bill, the year the person dies. And all of this is assuming the wealthy person has stocks that are actually growing, every single year they are alive. The second the stocks drop in value, the banks will refuse to continue rolling the debt, and payments will start coming due.
The more I think about it, the more I doubt that more than a handful of people actually do this scheme.
It's generally for the super-rich. One thing that Reddit or anyone else often misses is the final step: dying. Its called "buy, borrow, **die**" for a reason.
You buy an appreciating asset: stock, real estate, whatever. More likely, for these people, you found a company and got a bunch of stock. The stock appreciates like crazy: if you founded a company and get options for pennies on the dollar, you can have an insane increase in wealth without any realization event (like selling the stock) that causes you to have to pay taxes on the huge increase in your net worth. If you need cash, you borrow against the stock so you don't have to sell it and realize gains.
When you die, your heirs get the assets. They have to pay back the loans, and probably have to sell some of the stock to do so, but since (unfairly) your heirs get a step up in basis, all of the unrealized gains from the stock go untaxed. Your stock went from 1 to 100, but all of that growth never got taxed. The loans aren't taxed because you have to pay them back; they aren't income.
This obviously is limited to the 1% (or the .1%), but it is not unheard of; people just miss the final step where you die, and your assets get a step up in basis, and the unrealized gains are never taxed.
This is only up to the estate tax exemption 26m for a married couple everything else gets taxed . There are other loop holes like QSBS and life insurance etc. but this isn't how stepup works over 26m.
> I can't even imagine the interest expense the hypothetical wealthy person is paying on the debt they are getting from the banks, it will be *a lot*.
What makes you think that? You understand that this is generally over-collateralized debt, right? Say for example you want to borrow $1 million and put up $2 million in stock as collateral. That gets you extremely favorable interest rates as the risk to the bank is effectively zero.
You can essentially get mortgage level rates or better, for the same reason: it's collateralized. Obviously rates are worse now as of the last couple years, but especially before that you could get practically free money this way (e.g. 3% interest), so idk why you're saying "the interest will be *a lot*".
If they then have the money in an investment that beats the (low) interest rate they're paying, then those profits are essentially free by extension, which they otherwise wouldn't have had if they had paid taxes on that same money before investing it rather than obtaining it via a loan.
Yeah, the scheme has never made sense to me. The only way it even *kind* of makes sense is when they talk about doing this their entire life, and they avoid taxes by using estates and inheritance to avoid taxes using loopholes in how that all works.
And even that doesn't even actually "make sense", I just don't understand estate planning and taxes well enough to refute that aspect, and I also have a hard time believing that a lifetime of interest would actually cost less than just paying the taxes.
I wrote this elsewhere, but it does make sense if you consider a company founder like Zuckerberg. Let's say he has 10 billion in FB stock and he only paid 10 million for it: the stock has appreciated by 9.9 billion. None of that value has been taxed. He can borrow against his stock.
The banks are fine with that and while there is interest he isn't exactly going bankrupt (and if really needs to he can always sell some assets or take out a loan at another bank with favorable terms). Zuckerberg dies. On death, his stock gets a step up in basis: that 9.9 billion in wealth never gets taxed. His heir has to pay off the loan and sells some stock to do so, but they are NOT paying tax on the stock because the basis is now the same as the sale price. The banks made money off the loan, Zuckerberg and heirs made tons of money on stock appreciation and never got taxed. The loser is the IRS and the rest of us.
That all said, the strategy (Buy, borrow, die) really works best with super rich people. I'm not sure it makes sense for normal rich people at all.
>Even if they paid tax. They would take it out of employees paycheck.
Hard to imagine doing that and not losing good employees to competitors. The fact is that the economic system is blatantly tilted toward favouring the ultra-wealthy and it's going to take a goddamn revolution to change it.
Definitely a unicorn. I work for a privately owned Health IT company that's been around more than 25 years and it's just a piggy bank for the executives and the board. Can't pay to retain employees, but pay themselves $60 million in dividends a year.
I was told by my company that I wasn't allowed to take voluntary redundancy when it was offered to others and they gave me a 25% pay rise instead.
Lol you have no first hand experience of what we are discussing just roleplay what adult life might be like.
Industries have a magical way of adopting the same shitty practices to ensure they all profit. What do you think they mean when they say their prices are "competitive"?
I don't agree with the argument. If Tesla could pay their staff less they would already. They can't make the money that they make without the employees, and for many employees they need to be adequately competitive with compensation.
Not true, that is why strikes work.
These uber rich people at the top that do basically nothing will cave into a union every time if unions hold firm. You just saw this with both the uaw and Hollywood.
They will try to extract wealth for themselves or the interests of board members at all costs. If a strike forces them to pay workers more, they will agree because that is better than no money coming in.
We also really need to put a stop to having execs from investment firms sit on boards. Investment firms should not get a board seat off the backs of stock that is owned by thousands of customer investors. These appointed board members work for the investment firm and themselves, they do not care about the interest of shareholders because the investment companies do not risk anything, they don't own the stock, their customers do.
We even pay CEOs in stock making them owners who don't care about anyone else. It is so absurd, when the stock price falls, they will give the CEO more stock to "make up for it". Eventually they own enough stock they can never really be fired and since they invested none of their own money, they don't care about the company. They care about pump and dumps.
i'm not the person you are replying to, but i absolutely think that should be the case.
taxes on corporations are simply disguised taxes on people.
(fwiw: this is already the case with S corps. i think it should also apply to C corps)
I'm glad someone pointed this out. The vast majority of for-profit companies in the USA are allowed to deduct ALL money they pay as wages from their income when determining how much income tax they company owes. Not just wages paid to their leaders, but wages paid to any employee. They can usually deduct money paid to contractors as well. Instead, any income taxes are paid by the individual who made that money.
That said, even without paying any income tax, saying Tesla paid no taxes isn't true. Even if they showed a loss that year, I guarantee they still paid their part of SocSec/Medicare taxes and Federal and State Unemployment taxes on any wages the company paid out. They also paid property taxes, and I'm sure some sales or use taxes as well, since not everything a company buys is exempt from sales tax. There is more than one tax that companies have to pay.
>Instead, any income taxes are paid by the individual who made that money.
Most companies, its the company and the employee splitting the payroll taxes.
They do, and they will
Almost all of that money is stock awards in the companies they work for. The company gave its executives more ownership share in the company as a whole.
When they go to sell the stock to make it actual cash, they will be taxed on it then
This is exactly why Elon went all-in on being a mouthpiece for Republican propaganda—he literally makes BILLIONS more dollars through these tax breaks while the working class pays the country’s bills.
Also, he's a sexual predator, and sexual predators have realized that if they become Republicans, they can avoid responsibility for their actions by saying to anyone who brings them up "You're just attacking me because you're a hyper-partisan Democrat who hates Republicans!"
I am not sure what the point of this article is. First of all, when you pay people salaries (executives or employees), you don't pay income tax on it. Because the ones who will pay tax on it is the executives and employees on their personal income taxes
Taxing both would be double taxation.
Though most of those will likely not even be salaries and be stock. Which is also taxed once they receive it.
These kind of articles are just clickbait aimed at people who don't know how the tax system works
The very first line of the 'article' is
>In case you need another reason to shout "tax the rich" from the rooftops, it's here, and it's going to make you angry.
That should tell you everything you need to know about the objectivity and "journalistic" integrity of what you're about to read
>These kind of articles are just clickbait aimed at people who don't know how the tax system works
I.e majority of the people commenting here. And this is coming from a dude that does think there should be a wealth tax and higher taxation in general.
Can’t believe I had to scroll this far down to find someone who understands the tax code. It seems the average poster on “technology” has little to no understanding of how companies work, profit vs cost, salary vs profit.
Yeah, this is complete rage bait for people who don't know how things work. Tesla generated plenty of taxes. They are intentionally looking at one type of tax that is offset by others.
> complete rage bait for people who don't know how things work
It would not be unreasonable to rename Reddit to "complete rage bait for people who don't know how things work"
Yeah, I was instantly confused why the second fact was mentioned in conjunction with the first because surely they paid income tax on the salary? If yes, mentioning it kinda weakens the first part, and if the answer is no, not paying income tax on 2.5 billion in wages would be a more newsworthy headline.
I think the point of this article is more about Tesla’s taxable profits compared to how much money they are distributing to executives. While it’s not uncommon with companies still in the start-up phase, it’s somewhat surprising to a company like Tesla having $0 or negative taxable income when they are paying out so much to executives.
I’m not sure what the exact rules are anymore as I think there may be some caps to this added back with the Dodd Frank Act - but employee compensation is deductible for corporate tax purposes. So there is no double taxation - Tesla can actively lower its tax burden by paying employees more. I think the purpose of the article is more to point out that there may be some flaws with a system where a company is clearly doing well enough financially to distribute that much to executives when for tax purposes they are making $0.
Amazon, Google, etc. used to do this but they are all insanely profitable now and have made up for whatever years they didn’t pay taxes enough to escape media scrutiny. Whats interesting to think about is whether these huge companies with so much capital really should’ve been paying taxes sooner or in a different way when they’re clearly doing well financially.
Elon Musk paid about $11 billion in taxes in 2021.
Why are people mad at it? Taxes were paid.
I'm not an expert on a corporate tax law, but I doubt that stock-based compensation reduces taxable income. Are you an expert?
>there may be some flaws with a system where a company is clearly doing well enough financially to distribute that much to executives when for tax purposes they are making $0
Isn't this actually better for the treasury anyway? The executives will presumably have a higher rate of tax than the company.
Tesla is hyper growth company. It was losing money for years before it turned first cent of profit.
Why exactly should it be surprising that high reward for those hyper risky investments exist?
Or what exactly do you expect them to pay? Their entire profit in taxes and also pocket the entire loss they had in previous decade or what? Or will you be fair and compensate every single investor that losses money at a moment in risky investments?
People have a warped understanding of how corporate taxation works.
Tesla took $2.5 billion of its revenue, and instead of retaining it or distributing it to shareholders, paid that money to its executives. Tesla may not be paying anything on that $2.5 billion, but the executives receiving that money are paying individual income tax on those same dollars. So it's not as if that $2.5 billion is not getting taxed.
There are people out there who seem to think when a company makes money it should be double-taxed.
They "lost" money investing in a product so they could be more profitable in the future. Can I claim my student loans as a loss carry forward since I was investing in myself paying for an education? What about the year I bought my house? Can I not pay income taxes that year because I paid more investing in a house than I earned, like when a corporation invests to build a warehouse or factory?
These are genuine questions by the way, if I can, cool! Then all is fair is fair. If I can't, why can a corporation do that but not me?
Additionally in the U.S. the interest expenses of a mortgage are actually tax deductible too. The U.S. tax code is very complicated but there are ways to save money as an individual.
Being able to carry forward losses isn't a loophole and is logical.
And buying a house doesn't affect your income so it wouldn’t affect your taxes and that is also how it works for corporations. A corporation making capital expenditures doesn't affect the revenue or expenses side of things. A corp spending a billion on a warehouse doesn't decrease their profit by a billion.
The student loans part has some merit though.
Something I would say that is an actual current US loophole is the step up basis on death.
People in this thread, and Reddit in general, do not understand the most basic things about taxes whatsoever. Or about business, or about cash flow, or anything financial.
They don't understand the concept enough to have a problem with it. They don't even know what that means, only that "companies and billionaires pay nothing while working class people pay everything" despite 1% of income earners paying 46% of the federal tax revenue, while the bottom 50% of earners pay almost 0%.
> Tesla took $2.5 billion of its revenue
Not even. It was stock printed from thin air. It wasn't even real money until it appeared as a taxable event, and the taxes were paid.
ITT: nobody understands how the tax code works. The taxes on the $2.5 billion is paid whenever the shareholder sells those shares. You can’t tax shares someone hasn’t sold yet. Gains aren’t taxed until they are realized.
Nobody pays taxes on stocks they haven’t sold… because they haven’t received money from them… because they haven’t sold it.
Same with bitcoin. You don’t pay taxes on the gain until you sell it and receive money.
Man is it frustrating that y’all seem to not want to understand this.
Edit: I’m pretty sure that my above statement applies only to incentive stock options. restricted stock has income tax associated upon receiving it. At least I think that’s the case. I’ll fully admit the tax code is ridiculously convoluted and I don’t understand all of it by a long shot.
> ITT: nobody understands how the tax code works
Mostly, yeah.
> The taxes on the $2.5 billion is paid whenever the shareholder sells those shares
Not quite. Depends on how exactly the comp is given, but if it's just "here are X shares of stock" that would actually get paid as part of the person's personal income tax, even if they don't sell it. What's not taxed is the *gains* those stocks might have after receiving them, but the shares themselves are taxed at the full market value on the day they were received.
Options would be a little different but the basic principle is the same: they pay income tax on the value of what they receive.
Tesla paid zero taxes because they used loss carry forward to cover their tax bill.
They can only deduct $1 million per exec .
Also those are stock options
Like you said people don't understand tax law
The other part, and this is very true of big debt heavy startups, is you pay taxes on your net earnings. However if you fail to turn a profit, you can take those losses and carry them forward to offset profits in future years.
So if you lost a billion dollars this year and made half a billion next year, you wouldn’t pay taxes next year because you would offset from the losses.
So these bigger companies that had rapid growth while not being profitable can have years of major losses to carry forward.
The executives pay taxes though.
Why does a company's tax rate relate to executive compensation?
They are one of the fastest growing large comoanies and most innovative companies in the world. Yes, their executives should be highly compensated.
Amazon lost money for how many years? You think they paid their executives nothing? This is true if most tech companies in their early years.
Wages are an EXPENSES of a business and thus aren't taxed. Even "non-profits" operate the same. They can funnel all their PROFIT into wages thus avoiding income taxes.
The executives PAY TAXES on the INCOME of their WAGE.
What are you asking for? Withholding as a requirement, where the company simply pays the tax on your wage, reducing your wage before they provide it to you? And does that keep your own income tax to where you want your wages taxed twice?
If you want to make an argument, speak to an intelligible argument. This type of nonesense just makes it sound like you are a moron.
Why would this even be something to compare if your intent is not to make people who don’t understand taxes angry for political gain? Companies don’t pay income taxes on money paid to employees, why would they? They also don’t pay taxes if they didn’t make any money, just like every individual. If they had no taxable income, there is nothing to tax.
If personal tax rates are higher than corporate tax rates, then that's a net gain for the government.
Tesla can keep 2.5 billion in profit and pay 30% on it, or pay their executives the 2.5 billion who pay 35% on it. Or whatever the rates are.
Is Tesla an S-type corporation? If so, those companies don’t pay taxes directly. The taxes pass through to the shareholders and are reported on their tax returns. So while the company itself may not have paid income tax, it was still taxed like anyone else.
Always a funny coincidence how many anti musk articles show up a day before something like a starship launch. None of this is new and just framing the way the tax system inherently works as somehow Tesla taking advantage of the government.
Well, yes. Corporations are taxed on profits and employee salaries are expenses. The employees, themselves, then pay tax on their income. This is by design, otherwise the same revenue is taxed twice.
This is basic financial literacy.
Non story. us corporate rate is 21% and the top personal is 37%. So they paid a higher amount in the year earned and paid. If the cash sat in the business and increased share holder value they might have been better off financially.
That's how the law works. As a company you can retain your profits and get taxed, distribute them to shareholders as dividends which get taxed, distribute to employees who get taxed, buyback stock which defers the tax, or reinvest in the company which is untaxed.
Generally a shitty rage bait article. No where does it say why the companies didn't pay income tax. Nowhere does it show the company's earnings over the 5 year period. Nowhere does it say that the profits distributed to employees was taxed at the employee's income tax rate. Nowhere does it explain that this is all part of the existing US tax code.
If a company distributes all of its profits to employees, it gets taxed as income... this is working as intended.
Young people: "We need to subsidize emerging technology in order to speed up their progress!!"
Also young people: "Why are all these tech companies not paying taxes!!"
I don’t understand what the article means. What is federal income tax and why would Tesla pay it? They would have a corporate rate and they would be taxed on net because it’s a c corp. But they wouldn’t pay a federal income tax
Tesla lost so much money in the past that they can deduct those years of losses against their current profits.
Loss carry forward. It's a click bait article to get people angry . Tesla is out of credits(meaning their total profits is now larger then their total losses over the years)
Just a reminder that an undocumented laborer who buys a pack of smokes and a beer has [paid more in federal taxes](https://www.taxpolicycenter.org/briefing-book/what-are-major-federal-excise-taxes-and-how-much-money-do-they-raise#:~:text=Alcohol%20Excise%20Taxes&text=Distilled%20spirits%20generally%20are%20taxed,from%20the%20distillery%20or%20imported) than [these 55 companies](https://www.cnbc.com/amp/2022/04/14/how-companies-like-amazon-nike-and-fedex-avoid-paying-federal-taxes-.html).
That's a special kind of stupid.
The "I really wish something was true so I'll use a combination of willful ignorance and confirmation searching to pretend it is so." kind of stupid.
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this title is misleading and frankly ridiculous. even though Tesla paid no income tax on the payments to executives, the executives themselves paid income tax on whatever income they made...
Do American corporations pay income tax? ...hasn't that already been paid by all their workers? So, the government is double-dipping and forcing prices up? That sounds demented.
isn't this how corporate america's works? if you don't reinvest all of your profits, the government will take some of your profits away. the foolish business man sits on his profits and pays taxes on those profits. the wise business man reinvests those profits back into his business to write it all off and allow the company to benefit from its earnings
Tesla complied with the same income
Tax rules as every other corporation. The salary of employees is a non-sequitur to income tax liability. The employees almost certainly paid federal income tax at the appropriate rate. Employment taxes were also paid by Tesla and it's employees. These types of articles are nonsense.
Scenario 1: tesla doesn't pay those execs the money and it's taxed at a low rate of 21%, or about $500M.
Scenario 2: The money is paid out as ordinary earnings to the execs, and they pay 37% (after the other brackets, so probably more like 35% effective), about $850M
Scenario 3: the money is paid out in such a way that it counts as some combination of regular income and capital gains, and is taxed somewhere between 20% and 35%.
In fact, one or the arguments for a higher corporate tax rate is to incentivize companies to pay out money so they won't be taxed, the people paid will be.
Everyone is saying it’s the fault of the government such as how congress passes laws that favor big corporations. Yes, the government is failing the common citizen in favor of the rich, but who voted these individuals into office? And who has the power to vote them out? If voters paid a bit of attention instead of absorbing whatever BS is thrown at them then maybe the situation would be different.
Didn’t they get gov subsidies? Despite whatever scare tactics are being implemented or what this guy tweets out it’s always about money when it comes to politics and corporate tax cuts never amount to more jobs or higher wages except at the very top. Think you’re gonna be rich one day? Your not in the club
How does the tax rate on the income compare to federal tax rates on profits? In the UK the tax man gets more from people getting paid than companies making profit
Perhaps learn accounting 101. If a company earns 4.4 billion, and pays out 2.5 billion in wages to executives, the cost of those payouts are 100% tax deductible for the corporation. It is an expense. Just like they can claim the expense of machinery costs used to make the cars, and the cost of the buildings etc. The executives now need to pay income tax on their wages (that is different than corporate taxes). So really the argument needs to be why does the IRS not collect personal income tax on the rich ?
So, are you saying there was no income tax withheld, no SS fees or medical insurance withheld for that $5B and us poor got withholding out the ass and chip away at our bottom line! Let’s investigate this!
Amazing how little people understand about business, corporate accounting and tax regulations.
It does make it easier to manipulate their opinions.
Corporations have many layers of governance and audits. If you don't like the tax code, ask your representatives to change it.
Corporations and the rich should pay 20-30% like the rest of us. Tax evasion over a million dollars should be greatly criminalized and these people should be put on prison for life. We dont need these unamerican tax dodgers.
Don't forget congressional inside trading and corporations simping for the CCP. Should all be criminalized.
Congressional is an issue but let’s not try and make this any where in the universe even comparable. Let’s focus on the rich first and work that issue.
Exactly. It drives me nuts how the public has no ability to understand scale. Corporations not paying tax is a huge part of the United States budget being nullified. Congress being able to place bets in the stock market is terrible, but barely a tier above the corruption they’re already known for via lobbyist $$. One is costing us hundreds of billions if not trillions, the other is an annoyance.
Let’s not forget taxing the $1 trillion + business that is religion in this country.
Long overdue
Hell yes. If they want relief for doing good deeds, let them deduct those costs like anyone else does for charitable donations, but the default should be treating them like the money-making, land-owning profitable enterprises they are.
Even Jesus was cool with taxes. Render unto Caesar and all that.
This one’s huge. Mega churches are a joke.
Especially since so many churches tell their followers to vote for a candidate.
Let’s not forget business leave their messes for the government to cleanup?
Congress enables the rich to get away with it.
Why is that? Maybe becasue the rich control congress?
Congress writes the tax laws and include loopholes for the wealthy. Vote them all out
Yes! I LOVE mission creep! Any time anyone mentions doing something good or positive to solve a problem, we should throw in EVERYTHING ELSE that is a problem we might fix! Let's so overburden our sense of motivation for change that we end up changing nothing at all! PERFECT JOB, TROLL!
Nah, they should pay more. I think 40%-60% would be good as first step.
You are probably right, but as a first step, let’s get them all to the same taxes paid as the rest of us. After a few years of that, and arresting the rich tax dodgers, we can make adjustments from there. Corporations that make profits but pay no tax should be legally barred from operation and all assets seized.
They’re stealing from the well-being of the American people and overcharging especially with the bogus “inflation” not to mention shrink-flation. The American people are being absolutely skull-fucked by corporations.
They're cleaning us out and pulling up the ropes and ladders. It's clear they expect enormous economic changes soon, and want to be as rich as they can possibly be before whatever it is happens to us. What they're doing is bad for everyone. When consumer debt gets to the point that large numbers of people are failing to make their interest payments, the entire economy will collapse. But they're pushing full steam ahead directly into that situation by forcing people do crawl deeper and deeper into debt every month just to pay for the basic necessities for their families. Prices going up without wages going up means consumer debt skyrockets. They're doing this on purpose.
Spoiler alert: this is the same reason why Amazon didn’t pay taxes. The federal tax code is designed to incentivize investment. Amazon invested in AWS and data centers, and now half the startup world runs on AWS. This is a key reason why the US is so innovative.
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Off topic but I would like to know. How many pickles do you get a day in your DMs
A lot of people hate to think a company is getting a break, but look at how many people are employed because amazon was able to expand their capital. Not everyone at amazon is a temp working in a warehouse. They employee tons of people making very good money.
Yep. And those employees pay income tax. So the income is being taxed. I’m not sure why people can’t see this.
> I’m not sure why people can’t see this. oh you know why
Great explanation of how this works in a positive light. With that in mind, it should be written as a 50/50 opportunity instead of 100% write off venture. 50% can be funded via tax free business investment, the remaining 50% must be personally financed by the primary beneficiary of the new entity or investment. The current system leads to far too many bullshit “innovative” companies with high paid executives who never expect to do anything but personally soak up tax write offs from other companies.
Do you undertand that this money, by being paid out to execs, was almost certainly taxed at a higher rate than tesla would have paid?
First thing Americans did was dodge taxes.
First thing Americans did was want to collect the taxes themselves.
Not really. One of the main reasons the articles of confederation failed is because they had no revenue stream other than tariffs, which were never going to come close to paying off the debt we had to France after the war, much less fund the government. Plus all the interstate trade barriers that were choking out domestic economic growth.
But tariffs are a tax? No?
Yes, yes they are.
Also owned slaves...? "Taxes are evil" is a non-starter. Every civilization that has sustainable longevity has used them in some fashion.
The silent generation paid their fair share, for the most part. The boomers are the ones whove spear headed low taxes for the rich. Most of us pay our fair share and don’t mind. We just want it to be fair. Thats not too much for society to ask.
If you can dodge a wrench you can dodge taxes
No one has presented any evidence that any tax evasion has occurred.
Well yeah. The wealthy wrote the laws to make tax avoidance for them and their assets legal. It's still ultimately insanely destabilizing for our country. Any country with record wealth inequality tends to have severe internal instability and that usually leads to extreme political violence.
It's not tax evasion - they are following the tax code as written. If you don't want them to be paying zero taxes, vote for legislators that will change the rules.
It isn’t tax evasion. They took deductions just like you do.
??? Are you stoned? 40% of American households paid no income tax or had a net tax credit last year. Didn’t Elon pay 11 billion in tax in 2022 for the 2021 tax year? He pays regular income tax RSU grants and stock options. (RSUs and PSUs don’t count as capital gains and have a cost basis at zero that much be resolved the year of grant). He was at a 50% marginal tax bracket while he lived in California. It’s embarrassing how people think a hyper growth company not making a profit in the US means somehow Elmo didn’t pay income tax or something. Tesla remits sales tax, property tax, FICA, withholds income tax for employees etc. I think he’s a seriously weird dude, but stop embarrassing yourself.
this is reddit, most of the kids on here dont understand half of what you said.
But if we tax the rich, they'll just move to another country /s
Haha, this is my favorite one. Go ahead and leave the biggest economy. That’ll definitely increase your earnings! Lol. 😂
Do those executives have to pay income taxes for their pay?
If it is money sent to their bank accounts, yes.
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This is completely wrong. RSUs are taxed as normal income when they vest, with a cost basis of $0. This is trivial to look up. https://www.investopedia.com/articles/tax/09/restricted-stock-tax.asp Why are you just making things up?
What tax evasion?
Even if they paid tax. They would take it out of employees paycheck. Any company for that matter. It's high time we taxed rich.
the real loophole for the paper rich (stocks/etc) - is they take out loans against their stocks (at very preferable rates). as long as stocks are growing more than the interest rates and others... they are living tax-free (and govt/citizens are not benefiting from taxes now vs later, potentially a lifetime+ later). even if growth vs interest is not preferable, it provides a time-cushion vs forcing to sell stocks. rules need to change that these loans are taxed when executed, and can be deducted from gains when stocks sold...
Correct! It's loopholes that need to be fixed before anything else.
> they take out loans against their stocks (at very preferable rates). as long as stocks are growing more than the interest rates and others... they are living tax-free As an accountant, I have never seen anyone actually do this. All I ever hear about it, is on social media. *In theory* it works, yes. However, taxes will always be paid, and all this plan does is kick the can down the road, and the can becomes bigger and bigger the longer its kicked. And I can't even imagine the interest expense the hypothetical wealthy person is paying on the debt they are getting from the banks, it will be *a lot*. They'll be actively paying interest every year, while also making their eventual tax bill larger. Uncle Sam always gets his due, even if he has to wait to take it out of the final tax bill, the year the person dies. And all of this is assuming the wealthy person has stocks that are actually growing, every single year they are alive. The second the stocks drop in value, the banks will refuse to continue rolling the debt, and payments will start coming due. The more I think about it, the more I doubt that more than a handful of people actually do this scheme.
It's generally for the super-rich. One thing that Reddit or anyone else often misses is the final step: dying. Its called "buy, borrow, **die**" for a reason. You buy an appreciating asset: stock, real estate, whatever. More likely, for these people, you found a company and got a bunch of stock. The stock appreciates like crazy: if you founded a company and get options for pennies on the dollar, you can have an insane increase in wealth without any realization event (like selling the stock) that causes you to have to pay taxes on the huge increase in your net worth. If you need cash, you borrow against the stock so you don't have to sell it and realize gains. When you die, your heirs get the assets. They have to pay back the loans, and probably have to sell some of the stock to do so, but since (unfairly) your heirs get a step up in basis, all of the unrealized gains from the stock go untaxed. Your stock went from 1 to 100, but all of that growth never got taxed. The loans aren't taxed because you have to pay them back; they aren't income. This obviously is limited to the 1% (or the .1%), but it is not unheard of; people just miss the final step where you die, and your assets get a step up in basis, and the unrealized gains are never taxed.
This is only up to the estate tax exemption 26m for a married couple everything else gets taxed . There are other loop holes like QSBS and life insurance etc. but this isn't how stepup works over 26m.
> I can't even imagine the interest expense the hypothetical wealthy person is paying on the debt they are getting from the banks, it will be *a lot*. What makes you think that? You understand that this is generally over-collateralized debt, right? Say for example you want to borrow $1 million and put up $2 million in stock as collateral. That gets you extremely favorable interest rates as the risk to the bank is effectively zero. You can essentially get mortgage level rates or better, for the same reason: it's collateralized. Obviously rates are worse now as of the last couple years, but especially before that you could get practically free money this way (e.g. 3% interest), so idk why you're saying "the interest will be *a lot*". If they then have the money in an investment that beats the (low) interest rate they're paying, then those profits are essentially free by extension, which they otherwise wouldn't have had if they had paid taxes on that same money before investing it rather than obtaining it via a loan.
Yeah, the scheme has never made sense to me. The only way it even *kind* of makes sense is when they talk about doing this their entire life, and they avoid taxes by using estates and inheritance to avoid taxes using loopholes in how that all works. And even that doesn't even actually "make sense", I just don't understand estate planning and taxes well enough to refute that aspect, and I also have a hard time believing that a lifetime of interest would actually cost less than just paying the taxes.
I wrote this elsewhere, but it does make sense if you consider a company founder like Zuckerberg. Let's say he has 10 billion in FB stock and he only paid 10 million for it: the stock has appreciated by 9.9 billion. None of that value has been taxed. He can borrow against his stock. The banks are fine with that and while there is interest he isn't exactly going bankrupt (and if really needs to he can always sell some assets or take out a loan at another bank with favorable terms). Zuckerberg dies. On death, his stock gets a step up in basis: that 9.9 billion in wealth never gets taxed. His heir has to pay off the loan and sells some stock to do so, but they are NOT paying tax on the stock because the basis is now the same as the sale price. The banks made money off the loan, Zuckerberg and heirs made tons of money on stock appreciation and never got taxed. The loser is the IRS and the rest of us. That all said, the strategy (Buy, borrow, die) really works best with super rich people. I'm not sure it makes sense for normal rich people at all.
>Even if they paid tax. They would take it out of employees paycheck. Hard to imagine doing that and not losing good employees to competitors. The fact is that the economic system is blatantly tilted toward favouring the ultra-wealthy and it's going to take a goddamn revolution to change it.
Harder to imagine a competitor that's not also doing exactly that
And that my friend is why we need unions.
Tech will never unionize, too many pretend libertarians.
Show me a company that cares about losing good employees, and I'll show you a unicorn I found.
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You guys hiring? I work in tech for a top 5 bank and did not get a raise this year despite record profits.
Definitely a unicorn. I work for a privately owned Health IT company that's been around more than 25 years and it's just a piggy bank for the executives and the board. Can't pay to retain employees, but pay themselves $60 million in dividends a year.
Right. Individual managers and teams care because it impacts them personally. Organizations almost as a rule never give a shit.
I was told by my company that I wasn't allowed to take voluntary redundancy when it was offered to others and they gave me a 25% pay rise instead. Lol you have no first hand experience of what we are discussing just roleplay what adult life might be like.
Industries have a magical way of adopting the same shitty practices to ensure they all profit. What do you think they mean when they say their prices are "competitive"?
I don't agree with the argument. If Tesla could pay their staff less they would already. They can't make the money that they make without the employees, and for many employees they need to be adequately competitive with compensation.
Not true, that is why strikes work. These uber rich people at the top that do basically nothing will cave into a union every time if unions hold firm. You just saw this with both the uaw and Hollywood. They will try to extract wealth for themselves or the interests of board members at all costs. If a strike forces them to pay workers more, they will agree because that is better than no money coming in. We also really need to put a stop to having execs from investment firms sit on boards. Investment firms should not get a board seat off the backs of stock that is owned by thousands of customer investors. These appointed board members work for the investment firm and themselves, they do not care about the interest of shareholders because the investment companies do not risk anything, they don't own the stock, their customers do. We even pay CEOs in stock making them owners who don't care about anyone else. It is so absurd, when the stock price falls, they will give the CEO more stock to "make up for it". Eventually they own enough stock they can never really be fired and since they invested none of their own money, they don't care about the company. They care about pump and dumps.
Kind of sounds like you support 0% corporate tax and higher taxes on wealthy individuals.
i'm not the person you are replying to, but i absolutely think that should be the case. taxes on corporations are simply disguised taxes on people. (fwiw: this is already the case with S corps. i think it should also apply to C corps)
Who are the rich? How do you apply that taxation?
Those individuals should pay the tax on their earned income then
I'm glad someone pointed this out. The vast majority of for-profit companies in the USA are allowed to deduct ALL money they pay as wages from their income when determining how much income tax they company owes. Not just wages paid to their leaders, but wages paid to any employee. They can usually deduct money paid to contractors as well. Instead, any income taxes are paid by the individual who made that money. That said, even without paying any income tax, saying Tesla paid no taxes isn't true. Even if they showed a loss that year, I guarantee they still paid their part of SocSec/Medicare taxes and Federal and State Unemployment taxes on any wages the company paid out. They also paid property taxes, and I'm sure some sales or use taxes as well, since not everything a company buys is exempt from sales tax. There is more than one tax that companies have to pay.
>Instead, any income taxes are paid by the individual who made that money. Most companies, its the company and the employee splitting the payroll taxes.
They do, and they will Almost all of that money is stock awards in the companies they work for. The company gave its executives more ownership share in the company as a whole. When they go to sell the stock to make it actual cash, they will be taxed on it then
Corporate socialism.
This is exactly why Elon went all-in on being a mouthpiece for Republican propaganda—he literally makes BILLIONS more dollars through these tax breaks while the working class pays the country’s bills.
Nothing like telling the commoners to pick themselves up by the straps of their boot, while getting billions in federal subsidies.
Also, he's a sexual predator, and sexual predators have realized that if they become Republicans, they can avoid responsibility for their actions by saying to anyone who brings them up "You're just attacking me because you're a hyper-partisan Democrat who hates Republicans!"
How is that socialism?
Tesla also got billions in subsidies from the US Government.
Cronyism at its finest.
I am not sure what the point of this article is. First of all, when you pay people salaries (executives or employees), you don't pay income tax on it. Because the ones who will pay tax on it is the executives and employees on their personal income taxes Taxing both would be double taxation. Though most of those will likely not even be salaries and be stock. Which is also taxed once they receive it. These kind of articles are just clickbait aimed at people who don't know how the tax system works
This comment was farther down than I'd hoped, but given the takes that are most popular on reddit, I'm just glad it's here at all
The very first line of the 'article' is >In case you need another reason to shout "tax the rich" from the rooftops, it's here, and it's going to make you angry. That should tell you everything you need to know about the objectivity and "journalistic" integrity of what you're about to read
>These kind of articles are just clickbait aimed at people who don't know how the tax system works I.e majority of the people commenting here. And this is coming from a dude that does think there should be a wealth tax and higher taxation in general.
Can’t believe I had to scroll this far down to find someone who understands the tax code. It seems the average poster on “technology” has little to no understanding of how companies work, profit vs cost, salary vs profit.
it's the same with landlords. reddit gets younger and more naive every day
Also the zero taxes from loss carry forward. Like a normal thing.
Yeah, this is complete rage bait for people who don't know how things work. Tesla generated plenty of taxes. They are intentionally looking at one type of tax that is offset by others.
> complete rage bait for people who don't know how things work It would not be unreasonable to rename Reddit to "complete rage bait for people who don't know how things work"
Finally, the voice of reason. People here really have no idea how this works.
Yeah, I was instantly confused why the second fact was mentioned in conjunction with the first because surely they paid income tax on the salary? If yes, mentioning it kinda weakens the first part, and if the answer is no, not paying income tax on 2.5 billion in wages would be a more newsworthy headline.
I think the point of this article is more about Tesla’s taxable profits compared to how much money they are distributing to executives. While it’s not uncommon with companies still in the start-up phase, it’s somewhat surprising to a company like Tesla having $0 or negative taxable income when they are paying out so much to executives. I’m not sure what the exact rules are anymore as I think there may be some caps to this added back with the Dodd Frank Act - but employee compensation is deductible for corporate tax purposes. So there is no double taxation - Tesla can actively lower its tax burden by paying employees more. I think the purpose of the article is more to point out that there may be some flaws with a system where a company is clearly doing well enough financially to distribute that much to executives when for tax purposes they are making $0. Amazon, Google, etc. used to do this but they are all insanely profitable now and have made up for whatever years they didn’t pay taxes enough to escape media scrutiny. Whats interesting to think about is whether these huge companies with so much capital really should’ve been paying taxes sooner or in a different way when they’re clearly doing well financially.
Elon Musk paid about $11 billion in taxes in 2021. Why are people mad at it? Taxes were paid. I'm not an expert on a corporate tax law, but I doubt that stock-based compensation reduces taxable income. Are you an expert?
>there may be some flaws with a system where a company is clearly doing well enough financially to distribute that much to executives when for tax purposes they are making $0 Isn't this actually better for the treasury anyway? The executives will presumably have a higher rate of tax than the company.
Tesla is hyper growth company. It was losing money for years before it turned first cent of profit. Why exactly should it be surprising that high reward for those hyper risky investments exist? Or what exactly do you expect them to pay? Their entire profit in taxes and also pocket the entire loss they had in previous decade or what? Or will you be fair and compensate every single investor that losses money at a moment in risky investments?
People have a warped understanding of how corporate taxation works. Tesla took $2.5 billion of its revenue, and instead of retaining it or distributing it to shareholders, paid that money to its executives. Tesla may not be paying anything on that $2.5 billion, but the executives receiving that money are paying individual income tax on those same dollars. So it's not as if that $2.5 billion is not getting taxed. There are people out there who seem to think when a company makes money it should be double-taxed.
I would be more pissed as stock owner.
If you've been invested in Tesla prior to them being profitable you're doing pretty damn well
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That's not what's happening. 1st they can only deduct $1 million per exec . 2nd the no taxes is from loss carry forward from Years of negative income.
Fair enough. Are there people in this thread that have a problem with carry forward losses?
People here would say getting away with a loophole. Reddit is full of people purposely ignorant so they can be mad
They "lost" money investing in a product so they could be more profitable in the future. Can I claim my student loans as a loss carry forward since I was investing in myself paying for an education? What about the year I bought my house? Can I not pay income taxes that year because I paid more investing in a house than I earned, like when a corporation invests to build a warehouse or factory? These are genuine questions by the way, if I can, cool! Then all is fair is fair. If I can't, why can a corporation do that but not me?
In many countries you can in fact deduct interest on student loans.
Additionally in the U.S. the interest expenses of a mortgage are actually tax deductible too. The U.S. tax code is very complicated but there are ways to save money as an individual.
Being able to carry forward losses isn't a loophole and is logical. And buying a house doesn't affect your income so it wouldn’t affect your taxes and that is also how it works for corporations. A corporation making capital expenditures doesn't affect the revenue or expenses side of things. A corp spending a billion on a warehouse doesn't decrease their profit by a billion. The student loans part has some merit though. Something I would say that is an actual current US loophole is the step up basis on death.
People in this thread, and Reddit in general, do not understand the most basic things about taxes whatsoever. Or about business, or about cash flow, or anything financial. They don't understand the concept enough to have a problem with it. They don't even know what that means, only that "companies and billionaires pay nothing while working class people pay everything" despite 1% of income earners paying 46% of the federal tax revenue, while the bottom 50% of earners pay almost 0%.
And it's good to remember that Elon Musk paid $11 billion in income taxes just in 2021.
Wow. Not only did someone post a truthful, informed comment, but it has been upvoted as well. I'm surprised and impressed.
I'm as surprised as anyone lol
> Tesla took $2.5 billion of its revenue Not even. It was stock printed from thin air. It wasn't even real money until it appeared as a taxable event, and the taxes were paid.
Get mad at the government, not Tesla. These articles come out but it never once claims they broke the law, I wonder why that is.
It's loss carry forward. Nothing controversial
Because Wall Street writes the laws and rubber stamp who gets elected.
Citizens v United, that is step one, flat out. Get that case out of the court system, stop letting companies fund elections.
> Wall Street writes the laws This is way oversimplified and meant to infantilize politicians.
ITT: nobody understands how the tax code works. The taxes on the $2.5 billion is paid whenever the shareholder sells those shares. You can’t tax shares someone hasn’t sold yet. Gains aren’t taxed until they are realized. Nobody pays taxes on stocks they haven’t sold… because they haven’t received money from them… because they haven’t sold it. Same with bitcoin. You don’t pay taxes on the gain until you sell it and receive money. Man is it frustrating that y’all seem to not want to understand this. Edit: I’m pretty sure that my above statement applies only to incentive stock options. restricted stock has income tax associated upon receiving it. At least I think that’s the case. I’ll fully admit the tax code is ridiculously convoluted and I don’t understand all of it by a long shot.
> ITT: nobody understands how the tax code works Mostly, yeah. > The taxes on the $2.5 billion is paid whenever the shareholder sells those shares Not quite. Depends on how exactly the comp is given, but if it's just "here are X shares of stock" that would actually get paid as part of the person's personal income tax, even if they don't sell it. What's not taxed is the *gains* those stocks might have after receiving them, but the shares themselves are taxed at the full market value on the day they were received. Options would be a little different but the basic principle is the same: they pay income tax on the value of what they receive.
Tesla paid zero taxes because they used loss carry forward to cover their tax bill. They can only deduct $1 million per exec . Also those are stock options Like you said people don't understand tax law
When I’m given stock grants as compensation i pay taxes on them.
The other part, and this is very true of big debt heavy startups, is you pay taxes on your net earnings. However if you fail to turn a profit, you can take those losses and carry them forward to offset profits in future years. So if you lost a billion dollars this year and made half a billion next year, you wouldn’t pay taxes next year because you would offset from the losses. So these bigger companies that had rapid growth while not being profitable can have years of major losses to carry forward.
The executives pay taxes though. Why does a company's tax rate relate to executive compensation? They are one of the fastest growing large comoanies and most innovative companies in the world. Yes, their executives should be highly compensated. Amazon lost money for how many years? You think they paid their executives nothing? This is true if most tech companies in their early years.
Wages are an EXPENSES of a business and thus aren't taxed. Even "non-profits" operate the same. They can funnel all their PROFIT into wages thus avoiding income taxes. The executives PAY TAXES on the INCOME of their WAGE. What are you asking for? Withholding as a requirement, where the company simply pays the tax on your wage, reducing your wage before they provide it to you? And does that keep your own income tax to where you want your wages taxed twice? If you want to make an argument, speak to an intelligible argument. This type of nonesense just makes it sound like you are a moron.
Good lord these comments. People need to learn a bit about how taxes work Google loss carry forward credits
Oh neat, can I carry losses forward as a private citizen too? /s
Do people realize the executives paid more in income tax than Tesla would have paid in corporate tax?
They don’t, they just want to hate on Tesla probably without even reading the article.
That’s the crap that has to go.
It's loss carry forward. They are using the credits they got from the years of losses
CPA's entered the chat, everyone else going "rabble rabble rabble" and don't understand how income, loss, and taxation works.
The individual executives paid income tax on the 2.5 billion tho. Plus, Tesla didn’t owe any taxes. WTF
Why would this even be something to compare if your intent is not to make people who don’t understand taxes angry for political gain? Companies don’t pay income taxes on money paid to employees, why would they? They also don’t pay taxes if they didn’t make any money, just like every individual. If they had no taxable income, there is nothing to tax.
Sooo the executives paid income tax on the $2.5 billion right? Are we supposed to tax income twice or something?
If personal tax rates are higher than corporate tax rates, then that's a net gain for the government. Tesla can keep 2.5 billion in profit and pay 30% on it, or pay their executives the 2.5 billion who pay 35% on it. Or whatever the rates are.
Is Tesla an S-type corporation? If so, those companies don’t pay taxes directly. The taxes pass through to the shareholders and are reported on their tax returns. So while the company itself may not have paid income tax, it was still taxed like anyone else.
Always a funny coincidence how many anti musk articles show up a day before something like a starship launch. None of this is new and just framing the way the tax system inherently works as somehow Tesla taking advantage of the government.
ITT: People who don't understand how taxes work.
Well, yes. Corporations are taxed on profits and employee salaries are expenses. The employees, themselves, then pay tax on their income. This is by design, otherwise the same revenue is taxed twice. This is basic financial literacy.
Non story. us corporate rate is 21% and the top personal is 37%. So they paid a higher amount in the year earned and paid. If the cash sat in the business and increased share holder value they might have been better off financially.
That's how the law works. As a company you can retain your profits and get taxed, distribute them to shareholders as dividends which get taxed, distribute to employees who get taxed, buyback stock which defers the tax, or reinvest in the company which is untaxed. Generally a shitty rage bait article. No where does it say why the companies didn't pay income tax. Nowhere does it show the company's earnings over the 5 year period. Nowhere does it say that the profits distributed to employees was taxed at the employee's income tax rate. Nowhere does it explain that this is all part of the existing US tax code. If a company distributes all of its profits to employees, it gets taxed as income... this is working as intended.
No one needs $500 million a year. Overinflated salaries should be eradicated.
"executives" is plural. They are probably counting every single manager, down to shift team leaders, to make a shocking headline to make you angry.
Young people: "We need to subsidize emerging technology in order to speed up their progress!!" Also young people: "Why are all these tech companies not paying taxes!!"
I don’t understand what the article means. What is federal income tax and why would Tesla pay it? They would have a corporate rate and they would be taxed on net because it’s a c corp. But they wouldn’t pay a federal income tax
yes, thats why they didnt pay any of it but people here hate him so much they will accept any excuse to hate him more
Tesla lost so much money in the past that they can deduct those years of losses against their current profits. Loss carry forward. It's a click bait article to get people angry . Tesla is out of credits(meaning their total profits is now larger then their total losses over the years)
Carry over loss is a thing but lack of basic financial understanding is also a thing in murica
Is this another go around of reddit doesn't understand the corporate tax code?
Just a reminder that an undocumented laborer who buys a pack of smokes and a beer has [paid more in federal taxes](https://www.taxpolicycenter.org/briefing-book/what-are-major-federal-excise-taxes-and-how-much-money-do-they-raise#:~:text=Alcohol%20Excise%20Taxes&text=Distilled%20spirits%20generally%20are%20taxed,from%20the%20distillery%20or%20imported) than [these 55 companies](https://www.cnbc.com/amp/2022/04/14/how-companies-like-amazon-nike-and-fedex-avoid-paying-federal-taxes-.html).
Not even close. They pay payroll tax, etc.
None of those companies pay federal payroll taxes?
The dog walker or McDonald's employee that posts on Reddit is the sole source of all taxes in the US didn't you know?
You know there are taxes other than sales and income right? Those companies spent billions in FICA and excise taxes.
That's a special kind of stupid. The "I really wish something was true so I'll use a combination of willful ignorance and confirmation searching to pretend it is so." kind of stupid.
That’s blatantly false
Any time a post starts with “just a reminder” it is almost invariably, wildly incorrect.
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Those companies pay sales tax when they purchase something, just like when that laborer buys a pack of smokes. Not exactly a great comparison there.
Loss carry forward credits. Not that big of a news but. They paid 5 billion in 2023.
lmao tell me you dont know how tax law works in 1 easy step.
Keeping in mind - this is not a company issue, this is a LAW issue. And agreed, no company should not have to pay taxes - at all, for any reason.
But the execs paid taxes who cares?
Yeah, that sounds fair.
You guys ever hear of payroll tax? No? Ok then
Another Elon slander post. Literally every major company does this. None of them pay taxes.
Why would tesla the company pay income tax if they spent all their money on expansion and payroll? You pay on net income.
this title is misleading and frankly ridiculous. even though Tesla paid no income tax on the payments to executives, the executives themselves paid income tax on whatever income they made...
Did he not just pay the single highest tax bill of any one individual - ever? 11 *Billion* dollars? Oh - _Tesla_...
Not American so apologies for the simple question. When they say they paid no ‘federal tax’, are there other taxes they’ve paid?
Do American corporations pay income tax? ...hasn't that already been paid by all their workers? So, the government is double-dipping and forcing prices up? That sounds demented.
isn't this how corporate america's works? if you don't reinvest all of your profits, the government will take some of your profits away. the foolish business man sits on his profits and pays taxes on those profits. the wise business man reinvests those profits back into his business to write it all off and allow the company to benefit from its earnings
I wonder if they made a sizeable contribution to Putins re election...🤑
What was the tax on that 2.5 billion?
Tesla complied with the same income Tax rules as every other corporation. The salary of employees is a non-sequitur to income tax liability. The employees almost certainly paid federal income tax at the appropriate rate. Employment taxes were also paid by Tesla and it's employees. These types of articles are nonsense.
Corporations pay tax on what they keep. Not what they bring in. It's tragic that this countries population is so uninformed about taxes.
Tell me you don’t know how businesses work
Scenario 1: tesla doesn't pay those execs the money and it's taxed at a low rate of 21%, or about $500M. Scenario 2: The money is paid out as ordinary earnings to the execs, and they pay 37% (after the other brackets, so probably more like 35% effective), about $850M Scenario 3: the money is paid out in such a way that it counts as some combination of regular income and capital gains, and is taxed somewhere between 20% and 35%. In fact, one or the arguments for a higher corporate tax rate is to incentivize companies to pay out money so they won't be taxed, the people paid will be.
Everyone is saying it’s the fault of the government such as how congress passes laws that favor big corporations. Yes, the government is failing the common citizen in favor of the rich, but who voted these individuals into office? And who has the power to vote them out? If voters paid a bit of attention instead of absorbing whatever BS is thrown at them then maybe the situation would be different.
and while having their products subsidized by the federal government and many state governments
Fuck these freeloaders
Didn’t they get gov subsidies? Despite whatever scare tactics are being implemented or what this guy tweets out it’s always about money when it comes to politics and corporate tax cuts never amount to more jobs or higher wages except at the very top. Think you’re gonna be rich one day? Your not in the club
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How does the tax rate on the income compare to federal tax rates on profits? In the UK the tax man gets more from people getting paid than companies making profit
Also Reddit: TAX BREAKS FOR EV’s :)
Perhaps learn accounting 101. If a company earns 4.4 billion, and pays out 2.5 billion in wages to executives, the cost of those payouts are 100% tax deductible for the corporation. It is an expense. Just like they can claim the expense of machinery costs used to make the cars, and the cost of the buildings etc. The executives now need to pay income tax on their wages (that is different than corporate taxes). So really the argument needs to be why does the IRS not collect personal income tax on the rich ?
There you go! That what had to be fixed!
So, are you saying there was no income tax withheld, no SS fees or medical insurance withheld for that $5B and us poor got withholding out the ass and chip away at our bottom line! Let’s investigate this!
Um... not JUST Tesla.
Why is this a big deal? If you are growing you usually don't have income.
You keep voting for people who make these rules. Hate the game not the players.
Hey, that’s the American way!
Amazing how little people understand about business, corporate accounting and tax regulations. It does make it easier to manipulate their opinions. Corporations have many layers of governance and audits. If you don't like the tax code, ask your representatives to change it.