Hacker News Reader

Comment by munk-a | Hacker News Reader

Honestly, what? The US props up US corporations all the time... didn't Amazon just pay -$129M (as in, received free money) in taxes to the US government?

View on HN

Comparing U.S government to the Chinese government here is ridiculous. The Chinese government has absolute and total control of everything within its borders. It could dissolve a company tomorrow if it didn't like it -- or do the reverse and allow it to operate at a loss in order to hurt foreign competitors. The U.S has laws against such practices while China actively engages in those behaviors.

The downvotes agree, but the parent comment didn't try to argue against an equal propping - they argued against any propping. The US has quite clearly propped up specific private business in the past - banks that failed to responsibly offer loans were bailed out, the auto industry has been bailed out, defense contractors only exist due to the immense amount of the total tax revenue that gets funneled to them.

Amazon has past the point where vertical integration questions should be raised and a break up should be considered for the public interest - not pursuing it for them (or Walmart, or Google, or many other too-large-to-fail corporations) is another form of assistance the government offers them.

The US is not a free market and participates in private industry subsidization both with and against the public interest but, I agree, it's no where near China's levels - to keep it from getting to those levels we need to acknowledge how bad it has already gotten.

Any corporation here can take advantage of tax rules. You can be a Chinese national starting a US company as a subsidiary of a Chinese company and do exactly the same thing.

In the best case that's a misunderstanding of the political situation in the US. As a reference, recall HQ2 where Amazon was negotiating to skirt property taxes for the next infinity years with the local government. All corporations technically have access to these, but regulatory capture is strong in the US and market incumbents tend to have a lot of weight to throw around to make sure they get favorable tax loopholes and exemptions. Access to these sorts of loopholes is also probably influenced by social network strength which a lot of chinese nationals (especially ones openly representing nationalized companies or the subsidiaries thereof) would find difficult to establish.

Those are opposite things. True, US corporations are independent and can gain influence over parts of the government. In China, the government controls the corporations.

Chinese nationals are the largest foreign group of investors in US commercial and residential real estate. They have plenty of access. The success and scale of the Belt and Road Initiative directly shows just how vast the control extends.

Is this separate from US investment abroad - historically, when the US was at it's peak, there were governments in central and south america that were overthrown to make sure fruit corporations received favorable government treatment. In the modern world we're seeing the influence of the US waning, but lots of countries have "voluntarily signed on" to buying the boondoggle that is the F-35 even after all of the negative press and the US (or US organizations) still have significant political sway in eastern africa, though their losing it.

In China the government appears to clearly control the corporations (while there are some highly influential corporations that, through their economic power, have essentially become moves and shakers in the government) in America corporations control the government (while there are a lot of former politicians who end up sneaking off into highly paid do-nothing positions for their help during their tenure in elected office). These things are different, and America is absolutely a more free place, but it isn't an absolutely free place.

We're not disagreeing on whether America is a free market. No country is. Your post on taxes was perhaps a bad example but regardless the topic here is about Amazon leaving China. The reason as I see it is not because they were a poor competitor but rather because they were not allowed to compete.

Assuming an average 8.00% sales tax on Amazon revenue 232.9 billion USD, Amazon still paid $18-19B in taxes. That's significant. And EU VATs are usually higher than 8.00%.

Amazon didn't pay those taxes, purchasers did.

In theory. Also, purchasers can be seen as paying profit taxes as well.

The theoretical response of Supply & Demand curves to taxes that we learned in macro don't hold as instantaneous or ever fully realized in the real world. Humans simply aren't rational actors.

Reply on news.ycombinator.com