You paid more for your Netflix subscription than the company paid in taxes in 2018. Seriously.
And on top of that, they got a $22 million rebate
Remember when Netflix was still just a DVD rental company that offered mail delivery? Back when they only had 30 employees, no original content and company shares were only $1.21 a pop? Those were simpler times…
These days things are more complicated. Everybody has Netflix account (or at least, access to a friend’s) and our culture is so obsessed over their streaming services their business has spawned memes, like the “Bird Box Challenge,” and cultural sensations like “Netflix and Chill.” They’ve even managed to make Ted Bundy hot again.
Over the years, this corporation has expanded to previously unimagined scales, growing rapidly, attracting big name actors, directors and producing original shows and movies that are quickly gaining notoriety and respect in the film industry. Today they have some 7,100 employees worldwide, 148 million users and a single share costs $359.97 (as of February 13th, 2019).
Things have been on the up and up for Netflix for a while now.
As evidenced by their earnings: in 2018 Netflix reported their largest profit in the company’s history: $845 million. On top of that that, according to the IRS they also qualified for a $22 million rebate. That’s a total of $907 million in gross revenue.
And the kicker? They didn’t pay a single cent in federal or state taxes.
That’s right, the $10.99 membership fee you’ve been forking over to the “Big N” every month, is $10.99 more than they paid in taxes for the entire year of 2018. Which is a twisted realization, even before you consider the fact that the average American pays $10,489 in federal taxes alone, annually.
“With a record number of subscribers, the company's profit last year equaled its haul in the previous four years put together,” says senior fellow at the Institute of Taxation and Economic Policy, Matthew Gardner. “When hugely profitable corporations avoid tax, that means smaller businesses and working families must make up the difference.”
Which is to say, We The People have to pick up the tax slack Netflix is leaving behind. We get bogged down paying for our own infrastructure, emergency services, defense and education while companies like Netflix ride off into the night with bags and bags of untaxed revenue.
This seems to be the way of things nowadays — corporate tax evasion is becoming a high art-form to these big businesses and the mogul’s who sit on their thrones. And under Donald Trump’s new Tax Cuts and Jobs Act, the issue seems to be proliferating. The Act, which was passed in 2017, chopped the corporate tax rate from 35 percent to 21 percent, in hopes that the extra money would “trickle down” to employees in the form of higher wages or bonuses.
Instead, those cuts have just made the corporate tax loopholes wider and easier for these companies to leap through. Gardner called the figures “troubling” and said that, “Netflix is precisely the sort of company that should be paying its fair share of income taxes.”
Of course, Netflix won’t openly admit to having paid nothing in federal or state taxes. According to the company, they paid $131 million in taxes in 2018… worldwide. The problem there is, taxes paid in foreign countries don’t do much for the US.
“It is pretty clearly true that Netflix’s cash payment of worldwide income taxes in 2018 was $131 million. But that is a worldwide number,” says Gardner. “All of the income taxes Netflix paid in 2018 were foreign taxes. Zero federal income taxes, zero state income taxes in the US.”
Which just goes to show how bent our system is, how warped our tax laws are that such a massive company can slip past the IRS without paying a cent in taxes, and at the same time walk into a new year with $22 million in tax rebates.
Corporations really are the worst kind of people.