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I am sure there is no connection between these events….

Team Blue has given another bunch of 1%ers a huge tax break, in this case the execs at facebook:

It hasn’t drawn much attention, but Facebook’s first annual earnings report contains an accounting gem: a multibillion-dollar tax deduction for the cost of executive stock options and share awards.

Even though Facebook (FB) reported $1.1 billion in pre-tax profits from U.S. operations in 2012, it will probably pay zero federal and state taxes—and even receive a federal tax refund of about $429 million—according to a Feb. 14 statement from Citizens for Tax Justice.

But do not despair. These 1%ers are the right kind, and no harm was done. They are progressives and love Team Blue, so they are OK, and deserve their break. It’s the other people that do not march to the tune of Team Blue that are the problem. Then again, the 1%ers at Facebook did pay their dues to Team Blue already, so all is really well:

The team had elite and, for tech, senior talent — by which I mean that most of them were in their 30s — from Twitter, Google, Facebook, Craigslist, Quora, and some of Chicago’s own software companies such as Orbitz and Threadless, where Reed had been CTO. But even these people, maybe *especially* these people, knew enough about technology not to trust it. “I think the Republicans fucked up in the hubris department,” Reed told me. “I know we had the best technology team I’ve ever worked with, but we didn’t know if it would work. I was incredibly confident it would work. I was betting a lot on it. We had time. We had resources. We had done what we thought would work, and it still could have broken. Something could have happened.”

As I have pointed out repeatedly, the left only hates the rich people that do not bow down to them and which do not agree with keeping and growing a system where these 1%5ers have to pay members of Team Blue big money or big favors to keep their cash. Anyone that doesn’t want to be part of this despicable scam/scheme is evil, but the ones that play along are all good people. The evil people are the ones that do not find this system that rewards cronyism and pay-offs to be a good thing or that think the rules should apply to everyone equally.

8 comments

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  1. hist_ed says:

    Uhh Alex, gotta say I don’t see what the big deal is. Facebook followed the law to reduce their taxes. This isn’t a special perk that the Dems gave to FB; any company can do this. Compensation to employees is tax deductible. Facebook, like lots of companies, partially pays its people using stock. Why shouldn’t they be able to deduct that expense?

    Now I think our corporate taxes structure is an unholy mess. I’d scrap the whole thing and make all companies pay some low amount (maybe 5%) of gross income with no deductions, depreciation, carry-overs, or other bullshit (no subsidies either), but as long as FB is operating in our current set of tax laws, they have an obligation to their shareholders to reduce their tax burden.

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  2. Mook says:

    This isn’t a special perk that the Dems gave to FB; any company can do this. Compensation to employees is tax deductible.

    My understanding is the same as yours that this wasn’t a “special” exemption that Dems gave to Fakebook. However, I take issue with your 2nd statement block quoted because the cost of the compensation to FB for issuing those stock options to employees was zero. I have no problem with the employees paying taxes if they receive stock benefits, but FB’s cost to issue those stock options was zero and they should not receive a deduction for it and neither should other companies imo.

    Contrast FB’s tax dodge with the left’s demonization of tax breaks for oil companies, which are the same depreciation benefits allowed to manufacturing and other industries. Dems have been targeting big oil, but do nothing over massive writeoffs over stock options to employees. Double standards to the max. Anyone who complained about tax treatment of big oil but who is now silent over FB, or who minimizes FB’s more questionable tax treatment over stock options is dishonest to the core, demonstrating yet again how the left has no problem with cronyism and corruption, as long as the “right people” are doing it.. because they mean well, and it’s for our own good you see.

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  3. CM says:

    Anyone who complained about tax treatment of big oil but who is now silent over FB, or who minimizes FB’s more questionable tax treatment over stock options is dishonest to the core…..

    What about people who are complaining about the tax treatment of FB, but have been silent over Big Oil?

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  4. Mook says:

    What about people who are complaining about the tax treatment of FB, but have been silent over Big Oil?

    Depreciation allowance, which is a deduction commonly provided to many industries but singled out with oil companies as being particularly eevill and dastardly, is not on the same level as FB’s tax dodge imo because unlike depreciation which requires an investment expense, issuing stock options cost FB (and others who took the same tax break) nothing, yet the company receives a fat tax break anyway. For that reason, I don’t consider the two equivalent by any stretch.

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  5. CM says:

    Sounds reasonable to me.

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  6. hist_ed says:

    However, I take issue with your 2nd statement block quoted because the cost of the compensation to FB for issuing those stock options to employees was zero

    Sorry dude, but you flunk econ 101. Apparently these stock options appear from magical fairy dust with no economic consequences right? If FB has 100 shares outstanding and creates 10 shares for stock options, then the ownership of the original 100 is diluted and becomes less valuable (just like if FB has $1000 on hand and pays out $100 in salaries, the owners of FB have less money).

    Just like if the Fed creates 40 billion a year in dollars to buy US debt, all the other dollars that we have become worth less.

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  7. Mook says:

    Sorry dude, but you flunk econ 101. Apparently these stock options appear from magical fairy dust with no economic consequences right?

    Nice strawman dude. Of course the issuance of stock options has “economic consequences”, but those consequences are felt by shareholders in the form of diluting the worth of individual stock shares.. It’s the SHAREHOLDERS who are affected, not the company (except for shares company owned) which has no cost or negligible cost, in issuing those stock options, and therefore shouldn’t be entitled to a deduction in my opinion. It’s not the same as if they gave each employee $10,000 cash or a new car as a bonus, as that would entail a clear cost/expense incurred by the company that should be fully deductible.

    A company’s market capitalization is what it is, regardless of the number of shares issued. Issuance of more shares affects the worth of each share of stock, not the market cap.. Share worth is diluted just like the Fed creating credit out of thin air to buy US debt dilutes the value of our fiat currency

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  8. HARLEY says:

    More proof that our Tax system is a unholy cluster fuck…
    Flat Tax
    Fair Tax…

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