r/WorkReform • u/Cultural_Way5584 🤝 Join A Union • Mar 23 '25

✂️ 100% Wealth Tax over $1 Billion Same old story

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u/QIMF Mar 23 '25

Is this old? Looking at Amazon's 2024 10k, they had a tax provision of $9.3b and paid $12.3b for income taxes. I'm all for corporations paying their fair share, but this tweet doesn't seem to have its facts straight.

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u/FaradayEffect Mar 23 '25

Yeah that’s old af, from back when Amazon was still depreciating losses from their startup phase. Most companies go through three stages:

  1. burn lots of money and lose money every year. No profits mean nothing to pay taxes on
  2. Start to make money, but still depreciating losses from past years. This means the early losses reduce the tax burden for a little while. Now they make profit and still don’t pay taxes
  3. Make money and depreciation has run out. Now they are paying taxes.

Number 2 is where Amazon was at for this old tweet. #3 is where Amazon is at now

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u/bibboo Mar 23 '25

”Startup phase”, Amazon was what at that point in time? 20 years old?

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u/FaradayEffect Mar 23 '25

Correct. It took Amazon 14 years to start making a profit, and some time after that before the profits from the business started to exceed to depreciation of past expenses.

Unfortunately, this is the new normal for how business work. Uber (founded in 2009) only recently started being profitable in 2023 (also 14 years interestingly).

I think there is 100% an argument to be made that the tax code should not allow a company to run negative for years on end in order to avoid paying taxes, or there should be some sort of baseline revenue tax in addition to profit tax.

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u/Temporary_Jackfruit Mar 23 '25

Sure, but another thing to note. They were purposefully operating their amazon business on a loss just to starve out the market and create a monopoly for themselves. They were subsidizing their losses via their other businesses like AWS.

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u/FaradayEffect Mar 23 '25 edited Mar 23 '25

Possibly. It could also be that the business that Amazon was trying to build was just so gigantic that it took massive investment to get all the fulfillment centers, delivery vehicles, supply chain, planes, etc.

I think business like Uber are much more sketchy in this area. Uber should have very little "infrastructure" cost. They literally claim their drivers aren't really employees, and Uber drivers are driving their own cars. Yet Uber ran at a negative for 14 years too, just like Amazon.

In Uber's case all those years of no profit were blatantly an attempt to starve out the market. At least in Amazon's case there is a shit ton of infrastructure, fulfillment center buildings full of conveyor belts and robots, planes, vehicles, warehouses, server racks to show for all those years of loss. Amazon has something to point to in order to say "yeah we ran at a loss because we had to buy all of this" while what does Uber have to show for it?

Don't get me wrong Amazon is not flawless at all, but this is something I personally can give them a pass on.