FedEx responds to The New York Times article from Nov. 17, 2019 - <AUTHOR> https://about.van.fedex.com/newsroom/statement-from-frederick-w-smith-chairman-and-ceo-of-fedex-corporation/ <comment><USER3> Response to this: [https://www.nytimes.com/2019/11/17/business/how-fedex-cut- it...](https://www.nytimes.com/2019/11/17/business/how-fedex-cut-its-tax-bill- to-0.html)

<comment><USER4> Too bad it's impossible to read because of multiple overlays. I guess I'll take FedEx's word for it.

<comment><USER5> FedEx didn't even dispute any of the article. They're just doing some whataboutism.

Edit: Can someone downvoting point out where I'm wrong? They say the NYTimes distorted the truth, but give no indication of how.

<comment><USER6> Whataboutism is justifying one party's actions by pointing at another party and saying "they do it too."

This isn't that. Fedex is saying that they do a lot more for the national economy that the NYT. They pay more in taxes, they invest more in assets, etc.

<comment><USER7> Why is this even up for debate? Why would anyone think that the NYT is more useful to the economy than FedEx? Why do people continue to put ""journalism"" on such a high pedestal? Like, what actual value did the NYT article produce? At worst it could have potentially negatively affected the FedEx stock price and overall popular perception, for no good reason other than to generate clicks/ad views.

<comment><USER8> _Why would anyone think that the NYT is more useful to the economy than FedEx?_

Here's one point of view that doesn't come up as often as it should: the First Amendment doesn't say anything about churches that it doesn't also say about the press. Yet we don't tax churches on the grounds that "the power to tax is the power to destroy." [1]

If it weren't for this double standard, the Times would indeed be justified in paying zero tax.

[1]: [http://www.catholic365.com/article/1992/faith-of-our- fathers...](http://www.catholic365.com/article/1992/faith-of-our-fathers-the- power-to-tax-is-the-power-to-destroy.html)

<comment><USER6> > the First Amendment doesn't say anything about churches that it doesn't also > say about the press.

It assuredly does say different things:

>Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the Government for a redress of grievances.

If a newspaper didn't want to pay taxes they can form themselves as a non profit as churches largely do. It's been done before, e.g. ProPublica, Institute for Non-profit News, Crosscut, The Texas Tribune, and many more.

<comment><USER8> Either taxes "abridge freedom" or they don't. Which is it?

In reality, the language in the First Amendment is nowhere near sufficient to justify granting tax exemptions to an entire industry, be it religious or secular.

</comment></comment></comment></comment></comment></comment></comment></comment><comment><USER9> This statement is a farce. They claim the story is factually incorrect, but provide no corrections. They point out the NYT does the same thing, but that does not contradict anything in the NYT article, and has no bearing on what _they_ did. Finally, they yell "debate me!" but rather than proposing a debate on the facts in dispute, instead want to debate federal tax policy which neither controls.

<comment><USER10> I think it's a great statement. They aren't disputing the facts. Fedex is disputing that cutting taxes is a bad thing and is saying lets talk about it.

EDIT: and as you pointed out Fedex is just following fed tax policy that it doesn't control.

<comment><USER11> > Fedex is just following fed tax policy that it doesn't control.

Perhaps not individually, but a thrust of the article is that these large corporations pay huge amounts to lobbyists to bend tax policy in their favor.

<comment><USER12> wondering why they singled out some companies though?

> ese large corporations pay huge amounts to lobbyists to bend tax policy in > their favor.

Do we have a way to know if fedex did this?

<comment><USER13> >Do we have a way to know if fedex did this?

This is answered in the first paragraph of the nytimes article: "In the 2017 fiscal year, FedEx owed more than $1.5 billion in taxes. The next year, it owed nothing. What changed was the Trump administration's tax cut — for which the company had lobbied hard."

<comment><USER12> thank you

</comment></comment></comment></comment></comment></comment><comment><USER14> This is stupid. The NY Times, as a business, wasn't a subject of the article.

It's not a competition between a media company and a shipping company. It's a piece of journalism.

Either that journalism is accurate or it isn't. If it's wrong they should issue a correction, or review how it could be misleading or slanted and offer an alternate perspective. If it's correct they should stand by it.

In no event does the writing of a journalist, edited by an editor, have anything to do with the NY Times company as a business institution.

To claim otherwise is to buy into a frame that makes literally no sense here. I see why Fedex is doing it, it's apparently effective, even with the analytically sophisticated HN crowd. But this response is nonsense, it's almost a complete non-sequitur.

If I were the writer or editor of the story I'd tell Fedex to get bent. And if I were the publisher I'd patiently explain, yet again, the concept of independent journalism.

<comment><USER15> The problem is it isn't journalism, it's activism. People say corporate media is biased, but I think that falls short. It's not simply biased, it has an agenda. "Company follows tax laws" is not news. Whatever any individual company pays in taxes is not news unless there's criminal fraud of some sort. So it's completely fair to call them out in this way.

<comment><USER16> > The problem is it isn't journalism, it's activism.

The two aren't mutually exclusive. Journalists have an ethical responsibility to be honest, but outside of that there's nothing to say that a journalist cannot have a set of beliefs that shape their worldview.

In this case you aren't really accusing the NYT of being dishonest, you're saying that their honest opinion isn't ok because you have a different opinion (or that a journalist has to be void of any opinions at all). I'd just suggest you skip either that author's work or the NYT in general then, and find something more aligned to your own worldview.

As to the accusation it is "activism?" I mean, yeah, I guess. Arguing that something, anything, is wrong is activism depending on your definitions but since we haven't established that activism is a bad thing or wrong, that's not really problematic in and of itself.

<comment><USER17> The difference between the NYT having an opinion and me having an opinion is that only the NYT is protected against lawsuits for libel with a special standard of "actual malice" by the contorted reasoning that anyone they chose to publish an article on must therefore be a public figure.

IANAL, but a good example of this is the coverage of the Covington High School students.

<comment><USER18> The _actual malice_ standard was first defined in a case involving media (the NYT, as it happens), but it applies to _anyone_ , including you.

<comment><USER19> I think what the other poster was trying to say is that in the US defamation law treats public figures and non-public figures (and confusingly "limited purpose public figures") differently. The standard of "actual malice" applies to public figures only, the standard is lower for non-public figures. Which invites the question of "Is anyone the NYT writes about automatically a public figure?" Or even a limited purpose public figure?

IANAL so I don't know the answer, but I hope the answer is no. Since if the answer is yes it would allow a large media organization to thrust anyone into the spotlight and defame them without recourse as long as "actual malice" can't be established (ie the Covington High kids).

</comment></comment></comment></comment></comment></comment><comment><USER20> From the article this statement is responding to:

> Companies that make up the S&P 500 index had an average effective tax rate > of 18.1 percent in 2018, down from 25.9 percent in 2016, according to an > analysis of securities filings. More than 200 of those companies saw their > effective tax rates fall by 10 points or more. Nearly three dozen, including > FedEx, saw their tax rates fall to zero or reported that tax authorities > owed them money.

> From the first quarter of 2018, when the law fully took effect, companies > have spent nearly three times as much on additional dividends and stock > buybacks, which boost a company's stock price and market value, than on > increased investment.

This is concrete, relevant data (unlike the argument made by the FedEx CEO, as others have already mentioned). I'm curious if anyone in the pro-Fedex crowd can provide evidence to the contrary.

The increasing share of wealth that is moving from the bottom 90% into the hands of the top 1% in the US is a real concern to me. And I suspect a big part of that has to do with the recent trend of stock buybacks and dividend increases, which benefits shareholders and not workers. How many people in the bottom 50% (or even 90%) actually own a significant amount of stock, do you think?

The first source I found on this topic states: [1]

In 2016, American households headed by someone aged 32-61 averaged $120,809.40 in retirement savings, or $264,453.30 using an expansive calculation. Using the same calculations and definitions, American households have a median of $7,800 and $17,000 saved, respectively.

[1] [https://dqydj.com/retirement-savings-average-median- percenti...](https://dqydj.com/retirement-savings-average-median-percentile- united-states/)

<comment><USER10> Investors have stock. Dividends and stock buybacks move idle cash out of the corporation and back into the hands of investors. Investors now have cash instead of stock. Those investors are better at distributing cash to good investments than Fedex or Apple or Google is. The cash doesn't get redistributed from the non-1% to the 1%. The idle cash that corporations have aren't generating jobs.

<comment><USER21> > The idle cash that corporations have aren't generating jobs.

But that contradicts the claimed raison d'être for the 2018 tax cut: that corporate direct investment was being restrained by corporate income taxes.

A call to lower corporate income taxes so more money could flow to investors would have been consistent, both with economic orthodoxy and with the observed outcome.

<comment><USER10> > more money could flow to investors

Is that a bad thing? I'm thinking it is good.

Why do people want higher taxes for?

I'm thinking lower taxes reduces the amount of money going to the government is good. The government is horribly inefficient due things such as bureaucracy, corruption, etc. No matter where they operate, it hasn't been good. Whether it's US or China, the gov't is not where I think money should go.

<comment><USER22> >No matter where they operate, it hasn't been good.

That's what the rich hand powerful _want_ you to think. But the facts don't support it. Look at any of the other top western democracies. You know, the ones with longer lifespans, more upward mobility, happier populations, better infrastructure, better education, and so on.

I'm not suggesting that those countries are perfect or that there aren't gross inefficiencies, but the widespread belief that _good government is basically impossible, so why even try_ is mostly an American (right wing) phenomenon.

Other top-tier western style democracies, despite their many imperfections, are doing just fine.

<comment><USER10> Western societies have been more democratic... and more capitalist. If you take high taxes to the extreme (eg. eliminate all billionaires like Bernie Sanders recommends), you get closer to communism which hasn't done as well.

<comment><USER22> I'm not even sure what you're arguing anymore. Communism is bad? I agree.

It does nothing to support your assertion that any and all governments are inherently bad.

<comment><USER10> We were having a tax discussion. We both agree that gov't has gross inefficiencies, so I'm suggesting funding the inefficient organization less. When I said "it hasn't been good" I was talking in the context about efficiency.

In my next comment, I again was talking about taxes. I used communism as an example of a high tax system. I also wanted to point out that western style democracies which you call good, lean toward capitalism, where gov't have a smaller role in society - which I am using to support my lower tax argument.

</comment></comment></comment></comment></comment></comment></comment></comment><comment><USER23> From their annual filings, these are broad numbers, and adjustments should be made, but it helps with context.

      | Period Ending:             | 5/31/2019   | 5/31/2018   | 5/31/2017   | 5/31/2016   | 5/31/2015    | 5/31/2014    | 5/31/2013    | 5/31/2012    | 5/31/2011    | 5/31/2010    | 5/31/2009    | 5/31/2008    | 5/31/2007    | 5/31/2006    | 5/31/2005    | 5/31/2004    | 5/31/2003    | 5/31/2002    | 5/31/2001    | 5/31/2000    | 5/31/1999    | 5/31/1998    |

      | Income Tax                 |  115,000    |  (219,000)  |  1,582,000  |  920,000    |  577,000     |  1,334,000   |  1,622,000   |  1,109,000   |  813,000     |  710,000     |  579,000     |  891,000     |  1,199,000   |  1,093,000   |  864,000     |  481,000     |  508,000     |  435,000     |  343,202     |  449,404     |  429,731     |  401,363     |

      | Capital Expenditures       | (5,490,000) | (5,663,000) | (5,116,000) | (4,818,000) |  (4,347,000) |  (3,533,000) |  (3,375,000) |  (4,007,000) |  (3,434,000) |  (2,816,000) |  (2,459,000) |  (2,947,000) |  (2,882,000) |  (2,518,000) |  (2,236,000) |  (1,271,000) |  (1,511,000) |  (1,615,000) |  (1,893,384) |  (1,627,418) |  (1,769,946) |  (1,880,173) |

<comment><USER24> That's their GAAP taxes. If you instead look at cash taxes paid it's significantly lower on average:

      Period       Cash Taxes Paid ($mm)
      May-31-2010 43
      May-31-2011 387
      May-31-2012 257
      May-31-2013 468
      May-31-2014 766
      May-31-2015 1113
      May-31-2016 991
      May-31-2017 377
      May-31-2018 189
      May-31-2019 371
      Aug-31-2019 324

<comment><USER23> Both are important to look at for sure. But accrual is a fairer picture wihtout a lot of notes imho when using such a broad brush. Thank you for adding it though. I should have included it probably.

</comment></comment></comment><comment><USER25> The NYT piece seems to be a great example of factual statements not telling the full story. I'm a NYT subscriber and value their reporting, but I think they fell short here. It's easy to get a sense from the article that tax reform simply saved FedEx about $1.5 billion (the amount they owed the previous year). But it's more complicated than that.

Yes, tax reform helped FedEx lower their tax bill. But a huge chunk of that was due to temporary behavior changes FedEx made in response to the bill - <USER2> a permanent reduction in how much they will owe each year. One of the ways they saved a lot of money was investing a _lot_ into assets for which they could deduct 100% of future depreciation immediately. This is a temporary part of tax reform. They would have been able to deduct that value eventually anyway, just over a long period of time.

<comment><USER26> The information you're using to show the article doesn't tell the full story is in the article.

<comment><USER25> They could go into a lot more detail about exactly which provisions of tax reform helped FedEx, and how.

They did not explain the 100% deduction for asset depreciation, or the fact that it's only a temporary provision of the law. They merely included a brief statement from FedEx referencing this provision in sort of generic terms.

They also mentioned very briefly that a large part of the reduced tax bill was FedEx's pension contribution, but didn't provide any additional details about how tax reform encouraged this behavior.

They also include misleading statements like this:

> "Something like $1.5 billion in future taxes that they had promised to pay, > just vanished," said Matthew Gardner, an analyst at the liberal Institute on > Taxation and Economic Policy in Washington.

The idea that FedEx had "promised" to pay that money is just ridiculous.

</comment></comment></comment><comment><USER27> So this response says the story is factually incorrect, but doesn't dispute a single fact. If the story is inaccurate, FedEx should describe what was wrong, in detail, and ask for a correction.

That they didn't do that makes me wonder.

<comment><USER28> Corrections don't sell papers...err get clicks. They also don't evolve the narrative.

Fedex isn't just challenging the facts. They are challenging the underlying premise that corporations are a net negative on society.

I think it would be fascinating to see an actual debate by folks that aren't politicians, but are willing to put their public reputation on the line.

<comment><USER27> The Times newsroom doesn't posit premises (and certainly not the one you suggest) or debate tax policy, it reports facts. I find the ignorance on the basics of journalism and its role in American society on hacker news to be shocking and embarrassing.

<comment><USER29> No person/group/company is ever perfect. Always be skeptical of everything. Here's a humorous mistake where the Times created inception-esque corrections: [https://slate.com/news-and-politics/2016/09/new-york- times-a...](https://slate.com/news-and-politics/2016/09/new-york-times-aleppo- story-inception-but-for-corrections.html)

</comment></comment></comment></comment><comment><USER30> I love this idea – of an actual, genuine debate on this topic where an actual corporate executive can make some points (I know they will be Tim-Cook-like spin but debate is better than asynchronous speeches where people talk at each other)

Update: I realized I didn't write the second half of my sentence... which makes me sound like a corporate shill.

The second half is... AND someone on the other side can immediately call bullshit on their spin, but we can have a proper debate on the inadequacy of current Federal tax policy.

<comment><USER31> Eh, real-time live debates are terrible formats for this because they encourage and reward Gish Gallops. This is why scientists stopped debating creationists, because they discovered through repeated trials that it just rewards people who have less shame and are always willing to spout more lies. In theory, the other guy can call BS, but generally it takes a little bit of time, even with Google, to figure out where the lie is, and then even longer to explain it, by which point the liar simply moves on to another one.

<comment><USER32> That's mostly the case, though it's _possible_ to have substantive real-time debate.

You need a strong format, with ample time and good faith actors who will steel man each other's positions instead of strawmanning them.

So ultimately you have both sides debating the strongest version of the opposing side. Here's an example: [https://youtu.be/m0-oC_49fq4?t=195](https://youtu.be/m0-oC_49fq4?t=195)

</comment></comment></comment><comment><USER33> Stock buybacks serve important purposes that are often overlocked when this topic comes up. One major purpose of stock buybacks is to reduce the company's cost of capital. With debt financing being so cheap right now, we've seen fedex significantly increase it's long term debt.

For fedex, using their cash to buy back stock improves their overall financial picture because even if they need to raise more debt to financing their business, their overall cost of capital actually decreased - because the carrying cost of debt is cheaper then equity!

</comment><comment><USER34> Expected behavior coming from New York Times. Good on Fedex for pushing back.

<comment><USER35> You'd think they'd have their house in order before besmirching someone else... good on FedEx calling them out.

<comment><USER9> Journalists and editors should not let the business practices of the paper they work for prevent them from investigating and publishing stories. This is a _feature_ , not a bug.

<comment><USER35> If they are going to do that, I'd expect disclosure: "Your revered newspaper is misrepresenting facts and also does worse than the entity we're calling out". Or at least "We also do the things we call others out on."

<comment><USER36> Which facts about FedEx were misrepresented?

</comment></comment></comment></comment></comment><comment><USER37> It's a bit strange that this statement says "FedEx has paid federal income tax every year, including fiscal year 2018.", while the fact sheet they link to within the statement ( [https://about.van.fedex.com/wp- content/uploads/2019/08/FedEx...](https://about.van.fedex.com/wp- content/uploads/2019/08/FedEx_Tax_Facts_v8.21.19.pdf) ) specifically calls out that their effective income tax rate was negative in 2018 _due to_ TCJA, the year and legislation in dispute:

> The FedEx effective income tax rates for the last five fiscal years (June - > May) were 17.6% in 2019, (5.0%) in 2018 (this rate is an anomaly due to the > impact of the Tax Cuts and Jobs Act)

Maybe this is due to state income taxes?

</comment><comment><USER38> Facts are not up for debate, FedEx. either rebut with evidence or sit down.

</comment><comment><USER39> This is so absurd that the only response that would make any sense for the Times would be to double down. Sulzberger should challenge Fred Smith to a fistfight live on CNN.

</comment><comment><USER40> Wow, let's get more debates between various institutions, not sure why we don't have more to begin with.

For instance, why is it that the Democratic and GOP primaries never crossed paths? Shouldn't they have organized some R vs D debates before the final two candidates? Or what about FCC vs net neutrality advocates? Kaepernick vs Police Chief? I can think of lots of interesting pairings that will sadly never happen.

<comment><USER29> I would be interesting in opening up debates like those you mentioned. The hard part would be attracting the average person and not just people with extreme or conspiracy-theorists views

</comment></comment><comment><USER41> Streissand-Effect much? I hadn't heard about this story at all, and all a public debate would do hear is make the story even higher profile.

<comment><USER42> I don't know, I have a much more favorable view of FedEx because of this. It's good marketing to push back on bad journalism in 2019 (for a lot of people).

</comment></comment><comment><USER43> Is this the Fortune500 version of challenging the person who beat you on Xbox Live to fight IRL?

On a different note, the biggest standout to me from the NYT piece was how the tax cut effected FedEx's outstanding tax liabilities. Doesn't this set up an scenario where the megacorps of our era can just kick their tax bill down the road until they get a favorable WH/Congress they can lobby?

</comment><comment><USER44> I would love to see this debate. I don't trust the media, and I don't really trust corporations, so I'm not sure who to believe here. A public debate would go along way towards bringing transparency an open discussion. Those are not bad things.

</comment><comment><USER45> So they lay out what the discussion should be about :

 _The focus of the debate should be federal tax policy and the relative societal benefits of business investments and the enormous intended benefits to the United States economy, especially lower and middle class wage earners._

But this above is not what the piece was about..

Now I'm confused..

</comment><comment><USER46> A public debate would do much more good than outright suing the NYT

</comment><comment><USER47> If I were NYT I would make that article free and advertise it more

</comment><comment><USER48> Rich people debating poor people's issues, in DC, as is proper. What temperature should the champagne be served at?

</comment><comment><USER49> Stupid as this may be it will be incredibly entertaining to watch this debate if NYT accepts it that is.

</comment><comment><USER50> I don't trust the New York Times. They lost credibility a long time ago.

</comment><comment><USER51> This can't be real

</comment><comment><USER52> Besides the call for a debate (which frankly, I don't think will amount to anything worthwhile), isn't this exercise just "whataboutism"?

</comment><comment><USER53> Why is everyone on this thread running to rescue NYT? Most of what NYT does in the last 10 years as far as I remember is crony-corporatism and warmongering. And occasionally support social liberal causes to deceive people.

<comment><USER42> Agreed. They also post continuous anti-tech coverage. They are definitely yellow journalism at this point and I wish they'd stop being voted to the front-page of HN as if they're an impartial source.

</comment></comment><comment><USER54> Doesn't respond to any of the claims in the story. The story is about 1) how FedEx lobbied for the Trump tax cuts, 2) what they claimed they would do with that money if the tax cuts were passed, 3) what they actually did with that money and 4) what the implications are for the efficacy of the Trump tax cuts in general. If the New York Times corporation followed exactly the same playbook as FedEx with regard to lobbying, how would that change any of the four points above? And what would Arthur Sulzbergers opinions about tax cuts have to do with the reporting of the story?

It's an extremely blatant and I thought transparent attempt to change the subject, but, if the first fifteen comments here are any indication, a surprisingly effective one.

</comment><comment><USER55> Damn, can't believe Fred Smith is _still_ running FedEx.

</comment><comment><USER56> You've kind of got to respect them for a pretty gutsy move right there. Will be interesting to see what happens.

</comment><comment><USER42> I'm much, much more concerned about The New York Times deceptively pushing a political agenda during an election year than I am about FedEx legally paying as few taxes as possible. We all do that every tax season!

It seems like the real story is how the NYT is actively campaigning for the DNC and I'm glad FedEx is calling them out.

<comment><USER57> NYT has been publishing articles about big corporations evading taxes for many years, including during the Obama administration. This is not new, and it's part of the NYT's social agenda, not the election year.

Here are some examples:

[https://www.nytimes.com/2017/03/09/business/economy/corporat...](https://www.nytimes.com/2017/03/09/business/economy/corporate- tax-report.html)

[https://www.nytimes.com/2012/04/29/business/apples-tax- strat...](https://www.nytimes.com/2012/04/29/business/apples-tax-strategy- aims-at-low-tax-states-and-nations.html)

[https://www.nytimes.com/2016/09/01/business/yesterday- outrag...](https://www.nytimes.com/2016/09/01/business/yesterday-outraged-by- apples-tax-dodge-today-by-its-tax-bill.html)

[https://www.nytimes.com/2013/05/21/business/apple-avoided- bi...](https://www.nytimes.com/2013/05/21/business/apple-avoided-billions-in- taxes-congressional-panel-says.html)

[https://www.nytimes.com/2016/06/06/us/panama- papers.html](https://www.nytimes.com/2016/06/06/us/panama-papers.html)

<comment><USER42> I wonder if it really is a "social" agenda vs. something else. They clearly do have some sort of agenda though, and while they no doubt always publish articles through that lens, I'd say they crank it up on election years, especially post-Trump.

</comment></comment></comment><comment><USER58> I certainly would have liked to the facts rebutted point by point.

But I don't think their response was completely void of substance.

It is worth noting the NY Times also uses the tax laws to pay little or no taxes.

And reinvesting money to shore up pensions -- so many of which are inadequately funded -- seems like a valid point to make when justifying how they used tax laws to their advantage. It's not like all the money used to defer tax payments went to pay executive bonuses, as the NY Times would have readers believe.

</comment><comment><USER59> Sounds like FedEx wants a public forum to push Reaganonmics. Arguing for trickle-down theory is a bad look, FedEx. 'Creating jobs' is not an excuse for skipping out on taxes. You invest to grow your business but you still need to pay taxes.

If I invest all of my money in a house I create, at least temporary, jobs. I push a bunch of cash through the economy in taxes, fees to a number of services, etc. I would have invested a lot into the local economy. Should I then get to skip paying taxes for one or more years? I mean, I'm creating or sustaining jobs.

<comment><USER29> Should I then get to skip paying taxes for one or more years? - Yes and you do. You get a tax credit on interest paid and many new build come with tax abatement to encourage investment opportunities

<comment><USER59> My tax bill tells me otherwise. The interest on my home loan does not and cannot erase my taxes. That deduction is not what you think it is: [https://www.fool.com/millionacres/taxes/real-estate-tax- dedu...](https://www.fool.com/millionacres/taxes/real-estate-tax- deductions/can-i-still-deduct-my-mortgage-interest-2018/)

My home happens to include Mello-Roos taxes for local improvements, like schools and a fire station. This more than doubles the property tax that I pay.

Sorry to tell you, I don't have it anything like FedEx. I paid over 26% of my gross income on taxes last year.

<comment><USER29> Taxes suck, no denying it. Thankfully where I live its relatively easy to find nice properties with long tax abatement for investment. Beyond that max your 401k, IRA, HSA and live or "live" somewhere with low taxes

<comment><USER59> Taxes suck, even big corporations that produce a lot of jobs need to pay them.

</comment></comment></comment></comment></comment><comment><USER60> Corporate taxes shouldn't exist, especially in their current form. Corporate taxes are just reflected to consumers as higher prices or to workers as lower wages. In the current structure, corporate taxes benefit large businesses more with large legal departments because they can afford to take advantage of deductions etc.

Corporate taxes should be replaced by an increase in capital gains tax.

<comment><USER61> > Corporate taxes are just reflected to consumers as higher prices or to > workers as lower wages.

 _The United States has had a corporate income tax since 1909, but in all the years since there is a major question about it that economists haven't been able to answer satisfactorily: who pays it? [...] Probably most people assume that the corporate income tax is largely paid by consumers of its products or services. That is, they assume that although the tax is nominally levied on the corporation as a whole, in fact the burden of the tax is shifted onto customers in the form of higher prices.

All economists reject that idea. [...] That leaves two remaining groups that may bear the burden of the corporate tax: workers and shareholders. [...] Most economists now agree that the burden of the corporate income tax falls on labor to some extent, but there is disagreement over the degree. [...] People should be aware that even the best academic economists disagree on the basics of who actually pays the corporate tax._

[https://economix.blogs.nytimes.com/2013/02/19/who-pays- the-c...](https://economix.blogs.nytimes.com/2013/02/19/who-pays-the- corporate-income-tax/)

<comment><USER62> Who are the consumers? We are.

Who are the workers? We are.

Who are the shareholders? _We are._

No matter which role you allocate the cost of the tax to, in the end it's us who are paying the bill. Even if you're one of those rare individuals without investments of your own, you still benefit from them. Punishing the shareholders who provide the capital to produce goods more efficiently isn't going to make the goods you consume any cheaper.

<comment><USER63> Who reaps the benefits of government investment into public infrastructure and the common good that these taxes make possible? We do.

In fact, since there are many consumers of US products (and shareholders in US companies) who are not resident or citizens of the US then it seems we win more if we raise those corporate taxes. If the shareholder's don't like this deal I suggest they sell.

<comment><USER62> The "benefit" of having government decide how to invest that money, as opposed to those who earned it, is strictly negative. All other considerations aside, the moral cost of endorsing the use of force in this manner outweighs any possible material benefit.

Using corporate taxes to shift the burden onto foreigners, as you've suggested, is at best a short-term tactic. The other countries would just enact reciprocal policies and we'd be back where we started, except with less international trade and poorer diplomatic relations. Isolationism is not a recipe for domestic economic bliss.</comment></comment></comment></comment></comment>


Anti-worm bot could silence epic Mirai DDoS attack army - <AUTHOR> http://www.theregister.co.uk/2016/10/31/this_antiworm_patch_bot_could_silence_epic_mirai_ddos_attack_army/ <comment><USER2> > "Such a tool could theoretically be used to reduce the attack surface."

So open source it, and let other people take the risk of releasing it in the wild for the good of mankind.</comment>


Why you can't cash out pt 2: Bitcoin and KYC/AML - <AUTHOR> https://davidgerard.co.uk/blockchain/2017/12/23/why-you-cant-cash-out-pt-2-bitcoin-and-know-your-customer-anti-money-laundering-laws-kyc-aml/ <comment><USER3> These articles raise real problems that exist, however the negative bias + the title tip the scale towards FUD. You might have trouble cashing out. You might, like me, have no trouble at all beyond having to upload a couple of images. I think if you do some research ahead of trying to cash out, your odds are pretty good.

<comment><USER4> As with any transaction, if you're wiring in $1-10-100m (and you don't commonly transfer these amounts) then let your bank know. Much better than having it pop up unannounced -- "surprise!".

<comment><USER5> My bank makes it a bit difficult to wire large(ish) sums regardless of whether Bitcoin is involved, particularly when wiring overseas. It's just the nature of the US (maybe world) we're living in today.

I haven't had any trouble moving around the small sums I deal with in cryptocurrencies on Coinbase, and I suspect most people just dipping their toes into it won't have any issues. It's more likely to be an issue if you're dealing with large sums. $10,000 is, AFAIK, the amount that banks have to report and that's probably where things start to get a little more hair...and if you split up >$10,000 into a few transactions over a few days, they probably report that, too.

I guess Bitcoin millionaires are dealing with problems that Bitcoin thousandaires just don't experience.

<comment><USER6> Stucturing transfers to avoid reporting requirements is illegal...

<comment><USER5> But, just transferring sums that add up to $10k+ over a few days in the normal course of business is not. I've had several occasions in my life/business where I've done just that. It would be up to the government to connect that to other patterns that point to illegal activity I would think (or, your bank might grill you on it, since they've been put in the position of policing their customers). My bank has asked me why I was sending several thousand dollars a month to someone in Croatia or Russia (I've worked with contractors over a long period of time in both places), but they didn't make it particularly painful to do so, other than the large-ish money transfer fees US banks normally impose.

Merely moving money around for legal purposes is not a crime, even if it adds up to $10,000 in some specific period of time, but it might get your account flagged in some way, is what I'm trying to say.

</comment></comment></comment></comment></comment><comment><USER7> This is so bizarre. This is a whole series on the various reasons you can't do X, written while hundreds of thousands of people are doing X all over the world.

Seriously, I'm sitting next to someone who cashed out of cryptocurrency (yes, for USD) two days ago.

This is sour grapes to a new level.

<comment><USER8> Can you explain his process a bit? You could just be making this up.

<comment><USER7> He sold his coins on Coinbase and withdrew to his bank. Done.

Maybe the author's post should have been "why a tiny fraction of cryptocurrency whales can't cash out without a little research and upfront vetting" but I suspect that would have made for a terrible title. So he wrote a great title instead. It just doesn't have the benefit of being true.

<comment><USER9> Sold a significant amount, or like 40K worth? I'm curious about people cashing about significant values and converting to USD.

<comment><USER10> If you're cashing out more than $100,000 in crypto currency, you have the resources and the reason to hire a tax lawyer. They will, in addition to ensuring you don't piss off the IRS, help you mollify any AML concerns.

<comment><USER11> > They will, in addition to ensuring you don't piss off the IRS, help you > mollify any AML concerns.

Hmm? I'm not sure how a tax attorney would mollify any AML concerns on the exchanges. Customers have zero AML concerns, they just want their money.

I totally agree a tax attorney is a thing you need at that level. Disagree they will be helpful in any meaningful way in getting your money out of an exchange account - they are irrelevant to that process.

A good tax attorney with crypto experience _should_ be able to direct you to a vetted and legit OTC trade desk/counterparty though. That lets you avoid the exchanges entirely.

<comment><USER10> > _I 'm not sure how a tax attorney would mollify any AML concerns on the > exchanges_

Exchanges and banks need to verify you aren't laundering money. You want them to verify this quickly. A competent lawyer can help you prepare the necessary paperwork and, in a pinch, explain things to a bank's or exchange's compliance officer over the phone. That increases your credibility and in turn odds of getting approved quickly.

<comment><USER11> > compliance officer over the phone

I think this shows a bit of naivety on your part, unfortunately. No compliance officer at any public exchange is picking up the phone over a $100k customer. I'd be surprised if _anyone_ \- including 8 figure clients - can get such a person on the phone right now. I personally know of cases where 7 figures are locked up with zero way to contact a human. Typically it's so far working out in most cases I know of, but having that much tied up for 60+ days with almost no communication (attorney or not) can be a bit nerve wracking for most.

I do agree re: your point on documentation, that certainly can be helpful.

<comment><USER10> > _No compliance officer at any public exchange is picking up the phone over a > $100k customer_

At the exchanges you may have trouble. Many of them lack proper compliance departments. There are, however, response requirements under U.S. law your attorney will be knowledgeable about.

At a bank, contacting compliance is trivial if you know how to use the relevant public databases. There are also questions about structuring, _e.g._ transferring the coins to a multi-member LLC and then cashing out into it, that could be relevant for one's jurisdiction.

All that said, having documents in order is a huge plus. Incomplete AML and KYC documents tend to go to the bottom of the priority pile and top of the risk pile.

<comment><USER11> Completely agreed. I haven't seen many cases where the banks are holding funds up due to AML/KYC, so I was 100% focused on exchanges.

You're absolutely correct - when dealing with actual financial institutions just have a Real Lawyer(tm) do that for you or you're very likely to have a bad time.

</comment></comment></comment></comment></comment></comment></comment></comment></comment></comment><comment><USER12> If you want to start trading crypto, you need to set up a separate bank account for this before you start and go through the compliance process with the bank in advance. This can take several weeks, but if you don't go through the process before you start accumulating significant amounts of crypto then you'll never be allowed to cash out. (And also there are only a handful of banks that will allow you do this, you can't just make a new account at Chase or Wells Fargo or whatever.)

This is why almost all of the big ICOs still have the 'money' they've raised in crypto, because they didn't do KYC/AML and so they aren't allowed to sell their crypto and put the cash in a bank account. The only thing they can do is pay their employees in crypto, at which point it's the employees problem of how to cash out.

<comment><USER3> Can you explain the "never" in this assertion? Never is a strong word.

<comment><USER12> It's illegal for banks to accept deposits of money without knowing how the person depositing the money got it. And this isn't just in the US, it's in every country worldwide. This means that if you're buying crypto assets behind just a couple hundred bucks to mess around with, you're going to want to work with a compliance officer, where every time you buy something you send them an email explaining exactly what you bought and how much you paid for it.

Basically if you put a hundred bucks in Coinbase and you end up with a few thousand bucks then you're not going to run into any issues. But if try to drop $20M into a bank account they're going to tell you to get fucked.

</comment></comment></comment><comment><USER13> >As I detail in chapter 8 of the book, I'm pretty sure this is how the 2017 crypto bubble was kicked off — when people couldn't get US dollars off Bitfinex, so they bought Bitcoin and other cryptos to withdraw, pushing the price up.

How does that make sense? If you sold some crypto for fiat, realize you can't cash out, then buy back the crypto you just sold, isn't the effect on supply/demand net 0? I guess the only consequence is inadvertent wash trading, but I doubt that has a huge effect on the markets unless you're insane and are doing it over and over again, expecting something to change.

<comment><AUTHOR> The mechanism is:

1\. Users have a USD account and a BTC account. They can't sell their bitcoins and withdraw their cash, but they can buy more bitcoins using their newly- topped-up USD account – which contains trapped "dollars" which can't be used for anything else. Think of it as a Bitfinex "USD" token, not as actual US dollars – Disneyland fun-money which can only be spent inside the theme park. The price goes up. In April, BTC on Bitfinex was often $200 higher than elsewhere.

2\. With the higher price on Bitfinex, traders arbitrage by buying coins on an exchange with a lower price and selling them on Bitfinex. (Note that the USD from the sale is stuck on Bitfinex.) This raises the price on the other exchanges.

3\. Expectations rise, the price gets mainstream press and more people get into Bitcoin. The bubble inflates.

This works precisely because you can't get your money out – and other exchanges were also having problems with US dollar withdrawals. Users were reluctant to remove their BTC from Bitfinex because the "price" was highest there (even if unrealisable) and because they loved it as a trading platform.

The trapped "USD" tokens also got used to buy other cryptocurrencies – the price of altcoins tends to rise and fall with the price of bitcoins – and this fueled new ICOs, as people desperately looked for somewhere to put their unspendable "dollars." This got Ethereum and ICOs into the bubble as well.

FWIW, I described this to Phil Potter from Bitfinex and he thought it was plausible. I don't think they _intended_ a bubble to start, but I do think that's what kicked it off.

I'm not sure if the "USD" were Tethers at this stage, or just funbux trapped there.

<comment><USER13> >1\. Users have a USD account and a BTC account. They can't sell their bitcoins and withdraw their cash, but they can buy more bitcoins using their newly-topped-up USD account – which contains trapped "dollars" which can't be used for anything else.

that doesn't really address my question. the USD have to have come from somewhere, and in both case, it's either natural demand (from people wanting to buy BTC), or a net zero effect (from selling, then subsequently buying).

<comment><AUTHOR> These were dollars they had deposited before April and couldn't get out again.

<comment><USER13> Yeah, but weren't they intending to buy crypto (why else would you deposit money into an exchange)? The only effect I can see here is people not being able to back out after getting cold feet.

</comment></comment></comment></comment></comment><comment><USER14> Not all banks are opposed to Bitcoin. Some banks even offer integration with Coinbase so that you can see your Bitcoin transactions in their banking interface: [https://blog.coinbase.com/usaa-expands-coinbase- integration-...](https://blog.coinbase.com/usaa-expands-coinbase-integration- to-all-usaa-members-bd759bb836b2)

<comment><USER15> I was give 0.5 BTC at a hackathon run by an Irish bank (Ulster Bank) a few years ago. I guess when I cash out, I'll cash out with them!

<comment><USER16> you can only bank at USAA if you are a US federal government employee or current/former armed forces. which is fascinating that they are one of the most supportive banks of the US with Bitcoin.

</comment></comment></comment><comment><USER17> Bullshit, you can find a Bitcoin friendly financial organization that knows how to make the whole process easier. In the worst case you can use LocalBitcoins.

We have used services like Bitex[1] and the exchange process work like a charm after the, obviously slow, onboarding process (e.g. paperwork).

[1] [https://bitex.la](https://bitex.la)

</comment><comment><USER18> _I know of one such case where the user had sold a car for bitcoins years ago, and wanted to cash in on the current bubble. The best the exchange could come up with was sending it in daily in amounts of several thousand dollars_

Are all Bitcoin exchanges like this?

I'd be _very_ distraught if someone wouldn't allow me to withdraw my full balance.

<comment><USER19> It's all based on your level of verification with the exchange. At the maximum (level 4) verification on Kraken you are limited to $100,000 withdrawal per day or $500,000 per month. So while he still wouldn't be able to withdraw the full amount at once, it is not nearly as bad as the author makes it sound.

<comment><AUTHOR> Lots of people can cash out, but really, lots of people can't. Money suspended in mid-air from Coinbase for an indefinite length of time is becoming a _standard_ consumer experience.

Perhaps retail investors shouldn't go near bitcoin, in which case I completely agree.

I'd love to know what proportion of transfers from Coinbase end up stuck in mid-air; I did ask them, but of course they haven't time to answer email from some blogger.

<comment><USER7> This is ridiculous. I've read hundreds of stories about people who have had issues with Coinbase. I'm sure they're the tip of the iceberg and there are actually thousands or even hundreds of thousands having issues.

But Coinbase has many tens of millions of users, so it's still probably a small fraction. And by your own admission, you have no idea, so stating that it's "the standard experience" is just more anti-cryptocurrency FUD like your article series.

EDIT: it's actually 13 million as of Dec 1. The point stands: 100,000 users having issues is still less than 1%.

<comment><AUTHOR> Literally any bank having 100,000 fucked-over customers would consider it - <USER2> be made to consider it - an issue, and any reasonable person would consider it a matter of _tremendous_ concern.

Would you consider it a matter of no concern if it was your bank, rather than something bitcoin-related?

</comment></comment></comment></comment></comment><comment><USER20> KYC/AML is going to be the biggest bone of contention going forward. Given the rising complexity of online transfers lot of countries are now rolling out laws which require banks to track _source of funds_. Any transfers which happen outside _known sources_ is promptly reported to government authorities.

Then there are transfers from _high risk_ companies. Coinbase seems to be one of them. With the bitcoin prices going through the roof, IRS and DHS will be keenly interested in the flow of money.

<comment><USER21> _Contact your bank first. Be prepared to provide the full history of every crypto you've ever touched and where the money for it came from. Be prepared to give enough information to your tax office that they could reconstruct you from a nail clipping. If it's any substantial sum, get a proper accountant._

Exchanges, at least in countries like the US, could add a lot of value by offering IRS- and KYC/AML-friendly transaction history reports.

</comment></comment><comment><USER22> Cryptocurrencies' weakest link are the exchangers. There is a greater than zero chance that a well known US exchanger will have their US offices raided by authorities in 2018-19 after a terror attack of some sort will be linked to cryptocurrency financing, whether true or not. Assets would then be seized indefinitely. If Bitcoin fails, it will be because of the exchangers.

For this reason (and others), do not ever store your coins in an exchange wallet.

<comment><USER23> The other side of it is that it wouldn't be at $15000 without exchange buyers.

</comment></comment><comment> ryan-c If you have cryptocurrencies, you should set up accounts on exchanges well in advance, and request substantial limit increases. Also, don't keep a balance you're on actively trading with on exchanges.

</comment><comment><USER24> "But what happens when a fourth use of money is introduced, one which subordinates all the other characteristics: money as a system of control?"

[https://www.youtube.com/watch?v=FyK4P7ZdOK8&t=382s](https://www.youtube.com/watch?v=FyK4P7ZdOK8&t=382s)

</comment><comment><USER25> These sensationalist articles serve as indirect spam for OP's 180-pg book on Amazon. Millions of people are transacting in crypto (including trading for national currencies) every day.

Bitcoin is trading on the CBOE/CME now for heaven's sake. Please apply your talents to something more constructive.</comment>


Client wants me to be a cofounder - <AUTHOR> I work for a small software shop. One of my clients offered me a position as a cofounder after we'd worked together a bit, but I turned him down (all above the board and we just continued). I've even tried setting him up with another developer who he can trust, but he wasn't interested.
Yesterday he let me know he was open to basically any arrangement (equity and/or cash). He's my favorite client, we work well together, and I love the project. Still, in my heart of hearts I know I don't wanna leave where I'm at in the immediate future/go anywhere else full time. So we arrived at something along the lines of I work exclusively on that project one day a week, or whatever.
He doesn't want to hire anyone else at the shop I work for, and it would be easier for him to just pay me directly. That would be sweet, but its weird. Fundamentally though, direct to me or through the consulting company, I want to see the project successful. The referral came directly to me from a good friend. My company definitely doesn't want to give up any of my time, but at the end of the day I'm responsible for me so it's my call.
Not really sure what to do, on super good terms with everyone involved & my policy is & has been to keep everything out in the open.
So...take a 1/5 paycut and go on the side? Go through the company and let them chomp away a percentage without being able to contribute? Do it on a 'saturday'? Honestly I can probably start managing projects & instead of doing them and hold everything down (at the expense of some personal projects).
I'm new at this, I like building stuff and I don't have very much wisdom. Any advice or stories is appreciated! <comment><USER2> Getting offers from clients is normal when you're good and have direct client contact. Could be full-time jobs, part time or side-projects. Employers know that.

Your contract probably forbids you to compete with your employer and might even contain a clause that you need to get approval for any side project which might compete. Since you'd work for an active client and thus harm your employer if you take over the contract (less money for them) it's not the best situation to be in from a legal point of view. Additionally the client has signed some kind of contract with your employer. That might have included an anti-poaching clause: the client is not allowed to lure you or make you work on the side. Depends in which jurisdiction you're in.

In my opinion you'd either need approval from your shop (if the client is still in contract with them) or you quit. Other arrangement will back-fire and can be reason for termination (or worse reimbursement, you're acting in bad faith or whatever that is called).

</comment><comment><USER3> Always be careful in these types of situations. Do you remember signing a non- compete with your current company?

If you see value ie. through a monetary sense OR another, I would speak to a employment Lawyer to make sure you can't get in trouble. Last thing you want is being sued for what your company lost in revenue + all other expenses.

You must have some great talent id this other guy wants you as co-founder, keep up the good work.

</comment><comment><USER4> Between your Consulting Job and the Co-Founder roles-- which one represents the greater opportunity for intellectual challenge & professional growth?</comment>


Has google added voting to search results? - <AUTHOR> http://www.google.com/search?client=safari&rls=en-us&q=php+explode&ie=UTF-8&oe=UTF-8 Noticed this just now as I was browsing. Let me know if you see the voting options... <comment><USER2> This is SearchWiki. You only see that if you log in, and it only affects your view of specific results.

See: [http://googleblog.blogspot.com/2008/11/searchwiki-make- searc...](http://googleblog.blogspot.com/2008/11/searchwiki-make-search-your- own.html)</comment>