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   Technology StocksAmazon.com, Inc. (AMZN)


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From: Sr K6/13/2019 7:48:10 PM
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In a mixed day, but with indices up, AMZN was +.81%, and WMT -.16%, or a total +.97%.

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From: Sr K6/14/2019 9:54:03 AM
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WSJ article on taxation and a rebuttal to Democrats bickering about Amazon paying taxes, points out that

some key offsets are the $160 billion of investments in their warehouses, cloud computing, wind and solar investments, and employee gains when options were exercised, not the earlier estimate of issuance cost.

They say:

What else is lowering Amazon’s tax rate? When companies give employees restricted stock grants, companies take an expense for financial statement purposes, based on estimated value. The tax deduction isn’t set until compensation vests and employees can take it—and pay personal income taxes on it. If a company awards restricted stock worth $20, it records a $20 expense and assumes it will get a $20 tax deduction. But if the stock price rises and it vests at $35, the company then takes a larger-than-expected tax deduction.

wsj.com

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From: JakeStraw6/14/2019 1:07:14 PM
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Joe Biden’s Twitter fight with Amazon perfectly sums up the battle over America’s new tax code
cnbc.com
Amazon and Joe Biden are in a Twitter spat, and it perfectly captures the controversy over America’s new tax code.

“I have nothing against Amazon, but no company pulling in billions of dollars of profits should pay a lower tax rate than firefighters and teachers,” Biden writes. “We need to reward work, not just wealth.”

“Assume VP Biden’s complaint is w/ the tax code, not Amazon,” the company responds.

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To: JakeStraw who wrote (163768)6/14/2019 1:24:34 PM
From: Glenn Petersen
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“Assume VP Biden’s complaint is w/ the tax code, not Amazon,” the company responds.

A tax code that Joe Biden had some hand in writing.

The political season is guaranteed to trigger the “willful ignorance” gene in our politicians.


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To: Sr K who wrote (163767)6/14/2019 2:19:41 PM
From: Labrador
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So Amazon gets a tax deduction of $35 (US corporate federal tax rate is 21%) and the employee has taxable wage income of $35 (current individual federal tax rate is 37%). So the government walks away with extra tax of $35 x 16% = $5.60.

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To: JakeStraw who wrote (163768)6/14/2019 2:22:26 PM
From: Sr K
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Biden is a pandering idiot.

That "new tax code" was passed 26 or more years ago.

This started in 1993 when a combination of Bill Clinton and Newt Gingrich, and Congress, passed a limitation on the deductibility of salaries over $1,000,000/year. In response, companies issued more stock to tie compensation to stock gains realized. If stocks go down, they expire. If they go up, they value them on the front-end using a measurable expectation, usually using a Black-Scholes valuation, as granted. But if the gain is a lot, they have to look when they vested, and the employee pays more taxes due some time later, possibly the end of tax year of vesting plus time to the next April 15. To match gains and expenses, the company gets a tax deduction then for the other side of an employee or even a director exercising for a gain. Those negative costs can be seen in a Statement Of Cash Flows.

It's a significant offset to a company when options rise in value and vest with a gain for the shareholder.

Apparently Biden only looks at the employee side, or doesn't even see that, and is surprised that Amazon and many other companies get the losses (deductions) from employee exercises when a stock rises. They also get instant deductions for capital expenses (current law), for warehouses and sortation centers they operate, and even for the towers they've built around Seattle and the world.

The WSJ today asks and then answers some of these questions by the pandering candidates who want employees to gain, consistent with a socialist model, and for the companies to build and lose, what he is aiming for, until he gets nominated, and remembers what he's running for.

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To: Labrador who wrote (163770)6/14/2019 2:42:45 PM
From: Sr K
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Even though SALT is a current topic in the news, for Individuals, companies deduct SALT so the .21 can grow by compounding of .06 and .21 or even .09 plus .21. The $35 in the WSJ example as a stock price rising, sounds familiar because of the old 35% rate for larger corporations, but has nothing to do with a .35 rate.

You may know it better.

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From: Sr K6/14/2019 4:54:12 PM
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AMZN -.03%, WMT +.39%

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From: Julius Wong6/15/2019 2:31:45 PM
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How Amazon Cloned a Neighborhood to Test Its Delivery Robots

wired.com

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To: Julius Wong who wrote (163774)6/15/2019 3:42:56 PM
From: ig
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If Amazon can make a success of delivery bots, it will be amazing. I'm looking forward to seeing the brave new consequences of these things.


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