Absolutely obscene. Literally their entire Net Income increase from $5.4b to $9.4b is due to a tax cut from 20%. We will be paying for this Republican tax policy for the rest of our lives.
If you think lobbyist-driven tax policy in America is ONLY done by Republicans, you should probably expand your reading beyond CNN / WashPo. You're right that the federal government that creates the tax policy is for sale, but it's not just the Republicans.
You can say what you want, but this is a republican tax bill no matter who it benefits. It was supposed to benefit the rich, and thats what it does (I'm sure if it was possible to isolate by party they would have done so). It won't discriminate in who it hurts in the long run either (the middle class and the poor, like usual). The wealthy are going to take 90% of whatever economic gains result, they won't end up in schools or in communities, again like usual. Unemployment is already low and cant go much lower without even more illegal immigrants and wages will probably continue on their current trajectory and we'll be arguing for the next decade about who is to blame. My guess is some hidden variable will be scapegoated to explain why it didn't work.
[0] https://www.nytimes.com/interactive/2017/12/19/us/politics/t... [1] https://www.nytimes.com/interactive/2017/12/19/us/politics/t...
Hyperbole. Revenue is up $6.4B YoY from $24.75B to $31.1B.
If we don’t want to be getting more in debt we should raise taxes on middle class people to the level of say Germany. In a state like California, our taxes on rich people and corporations are already about as high as in Germany, its our taxes on people making sub-200k that really dramatically lower. That’s where most of the income is—in the 50-99% range.
Or... cut spending.
Adding a tax to the middle class without a corresponding raise in income will result in economic downturn, especially since we are increasing interest rates on an already debt-burdened middle class.
It is truly astounding how few people realize this...
As a proportion of GDP the US was already lower than average.
https://www.npr.org/2017/08/07/541797699/fact-check-does-the...
I don't know enough to argue for one side or the other, but I think the provided link could be misleading (not necessarily intentionally)
The bulk of OECD have far stronger social indicators and spends. Perhaps a tax cut before achieving higher ranks on key criteria is misplaced.
[1] http://www.sgi-network.org/docs/studies/SGI11_Social_Justice...
Fixing our corrupt system is the real solution.
Thus a corporation domiciled in California is still paying a corp tax rate about as high as any in the world.
I'm not quite as cynical when it comes to bureaucrats (military contractors aside), because as we can see in some of the recent teachers strikes, it makes sense to tax oil/gas corporations who are making full use of states infrastructure to for the benefit of themselves (and workers etc). The tax rate is not really affecting how much they invest. [1]
I'm with you on corporate influence though. However, I think the answer there is to limit corporate influence of elections, say by disallowing funding of candidate specific ads and limiting the $ they can put towards issue lobbying.
[1]https://qz.com/1243098/oklahoma-teachers-strike-how-income-t...
For someone like Apple or Google, they have made it very clear their policy is to hoard as much money as possible (and as much of it offshore as possible too). This is a main reason why a corporation SHOULD be taxed, you only get taxed on PROFIT as a corporation. If a company was truly increasing their "productivity" and "output" they would have much less profit quarter over quarter.
As far as the government being owned by corporations, that already happens because we allow them to directly fund politicians. With or without taxes.
Corporations generate activity that taxes support, such as the use of roads. That's really what it comes down to I think.
> or else government would be even more beholden to coporations instead of citizens
This is a real problem...perhaps one of the biggest problems we face, and I really don't have any reasonable ideas on how to fix it.
For another, reinvesting into the business lowers your tax burden.
[0] https://www.npr.org/sections/money/2012/07/18/156928675/epis...
The myth that lowering taxes on corporations results in economic growth needs to die.
https://www.nytimes.com/2008/06/24/business/worldbusiness/24...
"A 2007 academic study by Roy Clemons, then a graduate student at Texas A&M University, that was based on earlier data, found that the tax break did not stimulate investment in the United States economy and that repatriated money was often used for disallowed purposes, like stock repurchases."
https://fas.org/sgp/crs/misc/R40178.pdf
"While empirical evidence is clear that this provision resulted in a significant increase in repatriated earnings, empirical evidence is unable to show a corresponding increase in domestic investment or employment"
I don't understand how the "tax cuts grow reinvestment" argument sways people. Investments into the business are deductible as expenses, meaning doing the exact opposite of a tax cut will actually drive reinvestment far more effectively. Cutting taxes allows for stakeholders to withdraw profits with much less of an incentive to reinvest.
Want to drive up the velocity of capital? Cut personal taxes especially on lower bands since people in these bands are more likely to spend that money on essentials and personal luxuries to make life better. Increased spending -- be it at the corporate level on growth, hiring, and research, or at the personal level on necessities and occasional luxuries -- keeps the economic engine going.
The US corporate tax rate had grown until 2017 to be much higher than it is in Western European countries (and remains relatively high). If you, like many anti-Republicans, think that Sweden is an interesting model -- please note that Swedish corporate taxes are much lower than in the US. [1]
As for the notion that profits, or their increase, are "obscene" -- this is the essence of the anti-capitalist mentality.
[1] https://taxfoundation.org/how-scandinavian-countries-pay-the...
Even if Google paid 0%, they are a massive net economic gain for the country.
Remember, corporations don’t pay taxes, people do. If Google paid more, prices for their services would rise and that would then increase customer acquisition costs for businesses which would result in lower profits for the businesses which means they hire fewer people and thus lower wages and higher unemployment which results in even fewer taxes collected and then, before long, you have the economy of France. Google would then lose business and contract in size and then they would pay even less in taxes.
The Laffer Curve is a real thing.
The balance sheets of most of these companies were at record levels before the tax cuts, and most of the tax benefits will go into share buy backs, which will not do that much to stimulate the weakest parts of this economy.
This is ignoring the issue, even when accepting the Laffer curve as true, that the revenue maximising rate would surely be well above what would be morally acceptable to enforce (~75%)
Parody account?
On an annualized basis, they are doing ~$120B.
They have ~85k employees.
That means they are generating ~1.5M Revenue Per Employee.
That's crazy
Definetely needs to be weighted.
An example, Murphy Oil Corporation has 1,294 employees...
Also another interesting trend is how many healthcare companies are in that list.
Alphabet's growth rate is actually accelerating.
And they're not acquiring this growth, they're generating it organically.
Truly astounding.
Usually, when a business is as lucrative as google's, competition arrives. But it seems like tech doesn't work that way.
For example, if a chicken restaurant is making $1.5 million in revenue per employee, then you'd see tons of chicken restaurants pop up to compete. Even the employees, seeing such extraordinary revenue, would quit and open up shop. But for a variety of reasons, tech doesn't seem to work that way.
Is it lack of capital? Lack of opportunities? Lack of tech-oriented people? Lack of entrepreneurs?
> That's crazy
It's ridiculous. It's amazing how profitable large tech companies are. What's even more puzzling is why there aren't more googles/facebooks/etc, especially in other countries like france, germany, britain, etc.
Also, the "cost per employee" can look artificially higher because they contract out so many of the support positions they do have. I think "employees" mostly constitute management, marketing, and engineers?
My guess is that this 85k is just FTE
Numbers:
- Alphabet 1Q EPS $13.33, Est. $9.300
- free cash flow for the first quarter of $4.34 billion.
- 1Q Google Other Rev. $4.35B
- 1Q Rev. Ex-TAC $24.9B, Est. $24.3B
- Capital expense for Google more than triples: up from $2.4 billion to $7.7 billion year-on-year. That probably reflects spending on hardware, including the Nest division.
- Porat says that CapEx was "almost completely split" between paying for machines ("compute capacity") and paying for real estate.
- Without Nest, the "Other Bets" operating loss narrowed to $571 million from $703 million a year earlier.
- The company has discussed making annual stock grants to executives and other employees in the first quarter, and it's not clear yet how much that dragged down Alphabet's operating profit.
Ads
- 1Q Paid Clicks +55%
- Our first new glimpse at Google's network business: impressions on Networks sites stayed flat for the quarter, but the cost-per-impression went up 18 percent. Translation: Google is getting steady growth out of its display business.
Misc:
- added nearly 5,000 employees in the quarter, to 85,050 as of March 31. That works out to more than 50 new hires a day in a 90-day quarter.
- Porat also says the company has been working on the GDPR compliance for 18 months. "We've changed our policy as needed. We are also providing users with strong user controls and privacy settings and privacy check ups," she told Bloomberg Television.
- Porat says Waymo has achieved 5 million miles of driving on city streets.
Part of that also comes from Google buying up $1 billion of north Sunnyvale properties over the past year [0]. They bought roughly 50 properties. The article [0] has a nice map that shows since July 2017 Google has bought up roughly half of the Sunnyvale Moffet Park area.
I am mildly surprised how little coverage Google's buying spree has received.
[0] https://www.mercurynews.com/2017/12/22/google-expansion-ques...
$2.4 billion of that $7.7b is from their Chelsea Market purchase.
Is that and the other Porat comments from the earnings call? The PDF doesn't seem to mention that.
Curious what makes that possible. I thought that most monitizable queries already had 100% of the above the fold content as ads.
At some point, Google is no longer a search engine, but rather, a targeted ad engine with some organic search if you bother to click to page 2.
Starting to feel like the old yellow pages in it's waning days.
Edit: Honestly curious. How do you keep outpacing general internet growth when you've already over optimized click growth. It's an honest question, not snark. I'm curious where the magic lies. I'm honestly surprised there's still magic after a couple of decades of squeeze. There's only so much blood in the turnip. Downvotes don't bother me, if there is some explanation. I'm here to learn.
1. Last year I saw ads for cat food even though I don't have a cat and Google has access to my photo stream.
2. I searched for information on the new Pixel 2 phone, but Google continued to show me ads for it after I had bought it and was using it at the time.
3. I saw an ad for Android Pay, so I tried to sign up. But then Google told me my bank doesn't support Android pay. Fair enough, but why do they continue to advertise Android Pay to me?
4. On Apple's website I configured a new MacBook Pro and placed it in my shopping cart, but then had second thoughts and I didn't actually buy it for 6 months. In that time I didn't see a single Google ad for a MacBook Pro.
On top of that, I don't think Google has actually optimised ad impressions. When I read a Forbes article I see ads like, "You won't believe what these celebrities look like now". When I read The Economist I see ads for milk processing plant equipment. With all the personal information Google has about me, why aren't these publications using AdSense?
That's not the only thing, but it's a big part of it.
On the downside, effective tax rate is down to 11%. That's concerning because the EU is very unhappy about the whole "double Irish with a Dutch sandwich."
I have admired the stability and the maturity of their technology platform since my AWS days.
Revenue is up 26% year-over-year. Operating income is up 6.6% year-over-year.
The stock is up ~25% over the last 12 months, by the way.
