Unrealized capital gains aren't income because I can't pay my rent and buy groceries with Amazon stock. Even if I could once I did it would be realized same as if I sold it for cash, and I'd owe tax.<p>You could argue that capital gains rates are too low, but that's a different argument than saying stock owners are getting "invisible income".
This article gets two big things wrong:<p>1) Amazon's lack of profits appears to be due to reinvestment back into the business, not because the margins are non-existent. If the margins weren't there, there would be no money to invest in R&D.<p>2) The author never comments on the issue of double taxing corporate profits. Is it really the spirit of the tax code that $1 in profits earned by a business should really yield $0.48 to the federal government? The best way to address the author's concern is to put the effective corporate tax rate (35% corp income + 20% dividend) more in line with capital gains rates.
A principle well known to economists is that if you tax some activity, you are going to see less of that activity. This applies to business profits. Heck when I started my first business our newly engaged accountant told us "whatever you do don't make a profit" (meaning pay any money mad to employees/managers). Hardly a new or specific to Amazon concept.
I'm all for raising taxation, but I've always felt Amazon is often the wrong target to pick on. They are a rare example of an old-school business in the digital age - they pinch every penny and then reinvest all revenues in the business itself or send them out as personal compensation. They don't stash billions in Bermuda accounts, they don't give them to Wall Street players with the right connections, they don't leverage their might to spike property prices, and so on. Amazon is what every big business could be if people at the top were a bit more concerned with actual efficiency and growth, and less with pure greed.<p>But: in their actual business practices, Amazon often squeeze the little guy - both their workers and their small-retail competitors - so they are easy to hate. They clearly display all the problems with cyberspace (who should be taxed where, when bits go up and down some fiber? Where is my data "in the cloud"? Etc etc), so they are at the nexus of a number of critiques, and rightly so. I personally don't think, though, that their overall investment/growth strategy should be attacked, because it's actually <i>very good</i> from a social perspective.
Avoiding double taxation? Evil!<p>How about removing the corporate income tax?
<a href="https://www.nytimes.com/2014/01/06/opinion/abolish-the-corporate-income-tax.html" rel="nofollow">https://www.nytimes.com/2014/01/06/opinion/abolish-the-corpo...</a>
"Simple: don’t show any profits" is a concept that's been used forever to avoid paying taxes from the local handyman all the way to Amazon.<p>It isn't evil, but just try and convince some people that.<p>Especially that handyman, who's trying to avoid those estimated payments in a slow business part of the year.
Almost six years ago, before I took to taxi driving, I spent almost two months as a "seasonal associate" at an Amazon warehouse in Phoenix. It was such a relief to get laid off... In the warehouses, people are servants to the machine, and are entirely replaceable.<p>"Humanity's Second-Best Hope" was based on my experiences at Amazon: <a href="http://www.taxiwars.org/p/humanitys-second-best-hope.html" rel="nofollow">http://www.taxiwars.org/p/humanitys-second-best-hope.html</a>
Amazon's net profits increased to $1.17b in 2016 and are likely to stay healthy. So the article is already a bit obsolete. It's not like it isn't onto something, but the ingenious scheme used by evil megacorporations isn't just not posting a profit, but moving that profit to some tax haven to avoid taxation.
Of course their unrealized gains are not included in income... that's not what income is.<p>The online reason this works is because the tax code specifically preferences investment & the gains thereon vs interest & wages/Self Employment income.<p>Wouldn't that be an interesting discussion to see as part of tax reform...not holding my breath.