[m777z]

This is because some corporations make a lot more profit than others.

"Amazon's corporate income tax bill is so small, though, because its corporate income (aka profit) is so small. Wal-Mart's pretax income since 2008 has totaled $209 billion, Amazon's less than $11 billion. So while Amazon's rise to fifth-biggest market cap in the world on the strength of such small earnings is a fascinating and perhaps disturbing phenomenon, it doesn't necessarily signal a problem with our system of corporate taxation."

[quuquuquu]

The author is acting like this wasn't an intended phenomenon. I don't understand the mental gymnastics required to NOT see this.

Bezos decided, "we need to grow, and to grow we need equipment and real estate, so I'm going to spend the profits on those assets, since we will get more bang for our buck than just holding onto after-tax cash."

A corporation doesn't just accidentally conduct business that way lol, for better or worse.

[benmmurphy]

I didn't think you could spend revenue directly on assets without booking it as profits and paying tax on it. My understanding was you can discount part of the cost of an asset each year against revenue but not all at once.

[gnicholas]

Depends on what you're spending on. If you're spending on capital equipment, it's depreciated and spread over many years. But if it's discounting your sales so that you have razor-thin profit margins, then you're just cutting your income which directly cuts your current-year taxes.

[rb808]

> I'm going to spend the profits on those assets

If you make profits you pay tax - Amazon doesn't pay tax because it doesn't make profits. It invests a lot of its operating cashflow true but that is different.

[mabbo]

The most surprising thing about Amazon lately is that it suddenly is showing some profits. Normally, Bezos has every single dollar that looks like it might be a profit re-invested in something or other.

[quuquuquu]

Maybe he wants to prop up that share price so he can become the world's richest man again :)

Amazon is expanding really heavily into so many verticals. It is crazy to see. I don't think they will stop the spending, but maybe they felt like showing a small profit for some kind of "investor confidence" strategy :)

[mabbo]

You have it backwards- he only became the world's richest man by showing those profits. Something like 7 or 8 quarters in a row with profits is very weird for the company.