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Obvious_Chapter2082 t1_j7dppml wrote

Reply to comment by no_buses in [OC] How Google makes money (its 2022 income statement visualized as a Sankey diagram) by IncomeStatementGuy

Their effective tax rate really has no relation to the income tax they pay. It’s possible they pay much more than that reflects

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no_buses t1_j7ejxwf wrote

Corporations don’t pay income taxes, they pay corporate taxes. Income taxes are paid by Google’s employees.

The federal corporate tax rate is 21%, and Alphabet Inc. is registered in Delaware so they don’t pay state tax. If you make 45k a year or more (after deductions), your marginal tax rate (not effective tax) is lower than Google’s.

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Obvious_Chapter2082 t1_j7f32c3 wrote

That’s…not true

Corporate tax is also referred to as “corporate income tax”, because it’s a tax on their income. On the income statement, this is labeled as income tax expense

Registering in Delaware doesn’t mean you don’t pay state tax, as your income gets apportioned to every state that you operate it. Registering in Delaware is for legal reasons, not tax reasons

And you also can’t really compare individual and corporate tax rates. A rate for a corporation is based on their income tax expense instead of the tax they actually pay

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jt121 t1_j7fx8co wrote

Technically, corporations pay income tax equivalent to all of their employees' income tax (part of FICA), along with a corporate income tax. So, technically they pay the tax you pay and then some. That said, I'm firmly in the camp that Google and others should pay much more to encourage reinvestment of their profit instead of money hoarding like Google and other multi-billion-dollar corporations do.

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implicitpharmakoi t1_j7kvyb4 wrote

>corporations pay income tax equivalent to all of their employees' income tax

This is wrong or badly phrased.

They pay payroll taxes, so however much you pay in fica on your paystub, not the whole income tax.

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