{"id":27726,"date":"2014-09-07T11:52:35","date_gmt":"2014-09-07T15:52:35","guid":{"rendered":"http:\/\/quotulatiousness.ca\/blog\/?p=27726"},"modified":"2014-09-07T11:52:35","modified_gmt":"2014-09-07T15:52:35","slug":"amazon-and-the-taxman","status":"publish","type":"post","link":"https:\/\/quotulatiousness.ca\/blog\/2014\/09\/07\/amazon-and-the-taxman\/","title":{"rendered":"Amazon and the taxman"},"content":{"rendered":"

Tim Worstall<\/a> discusses how Amazon structures its business to meet various efficiency targets, a major one being the need to be as tax-efficient as possible. This upsets many political commentators, who all seem to believe that businesses should structure their activities to pay as much tax as possible:<\/p>\n

… it\u2019s exactly the tax laws that create one of those synergies that keeps Amazon as the one single company (even if with many different divisions and P&L centres). Because if it were a series of separate companies then those mature businesses, the ones making profits, could not simply switch their profits over to the subsidisation of those newer businesses. Instead, they would have to declare those profits, 35% would float off towards Uncle Sam and thus there would be less of that free cash flow to invest in those newer businesses.<\/p>\n

The way the tax laws work are what keeps Amazon from splitting out those profitable businesses from those ones not yet mature enough to be making a profit.<\/p>\n

Which brings me to the second point, one more about British political economy. We have a prolific commentator over here who insists on two separate points. I\u2019ll not name him in order to spare his blushes but he\u2019s often referred to as the UK\u2019s leading tax expert. The first thing he insists upon is that Amazon doesn\u2019t pay very much corporation tax (entirely true) but also that it ought to. The second is that many companies have vast amounts of cash, profits they have made in the past, which they don\u2019t know what to do with. Those cash reserves should therefore be taxed away so that they can be spent on what our tax expert thinks are good uses for other peoples\u2019 money. What I enjoy so much about this is that he manages to believe both things together. A company like Amazon, which obviously does know what to do with its free cash flow, should be taxed more. And companies that don\u2019t know what to do with their free cash flow should also be taxed more.<\/p>\n

It\u2019s as if the only answer to anything ever is higher tax rates. Rather like if all you\u2019ve got is a hammer then everything gets treated as a nail. I can\u2019t help thinking that the views of a leading expert in anything, let alone tax, ought to be a little more subtle than that. <\/p><\/blockquote>\n","protected":false},"excerpt":{"rendered":"

Tim Worstall discusses how Amazon structures its business to meet various efficiency targets, a major one being the need to be as tax-efficient as possible. This upsets many political commentators, who all seem to believe that businesses should structure their activities to pay as much tax as possible: … it\u2019s exactly the tax laws that […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[4,831],"tags":[833,118],"class_list":["post-27726","post","type-post","status-publish","format-standard","hentry","category-britain","category-business","tag-amazon","tag-taxes"],"jetpack_featured_media_url":"","jetpack_shortlink":"https:\/\/wp.me\/p2hpV6-7dc","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/posts\/27726","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/comments?post=27726"}],"version-history":[{"count":1,"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/posts\/27726\/revisions"}],"predecessor-version":[{"id":27727,"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/posts\/27726\/revisions\/27727"}],"wp:attachment":[{"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/media?parent=27726"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/categories?post=27726"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/tags?post=27726"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}