Netflix’s Record Pandemic Profits Speak to a Much Larger Problem.
While we struggle, a corporation that didn’t pay a penny in taxes continues to capitalize.
The last two months have been nothing short of unprecedented.
A global health crisis continues to spread, over twenty million people have lost their jobs and many lost their insurance as well. One third of Americans were unable to pay April rent, state unemployment offices and websites cannot keep up with the demand, and food banks that were never equipped to handle a nationwide crisis are being overrun. But at a time when millions of restaurants and other businesses are being forced to shut their doors uncertain of whether or not they’ll ever be able to open again, there is one company that appears to be thriving.
Wendy Lee, a staff writer at The Los Angeles Times writes:
“Netflix on Tuesday reported a record increase in subscribers as the Los Gatos, Calif., company reaped the benefits of a massive increase in home viewing caused by stay-at-home measures intended to curb the spread of the coronavirus.
The company gained 15.8 million global subscribers, surging ahead of Wall Street’s expectations of 7.6 million. It now has a total of 183 million customers.
Netflix generated a net income of $709 million or $1.57 earnings per share in its first quarter, more than double from a year earlier. Revenue during the same period rose 28% to $5.77 billion.”
Of course on its surface, it might come as no surprise that a company like Netflix would be among those like Amazon that see incredible gains at a time when millions of people are forced to stay home. But while an incredibly profitable company like Netflix continues to capitalize from the fact that people are stuck at home with no jobs to go to and a lack of certainty about their future, it’s worth noting once again that they didn’t pay a penny in taxes in 2018.
Megan Cerulo at CBS News writes:
“Big companies have long relied on strategies to reduce their tax bills. But the new tax law is making it even easier, with a new analysis finding that 60 profitable Fortune 500 companies paid no taxes on a total of $79 billion of profits earned in 2018.
The companies, which include tech giants such as Amazon and Netflix, should have paid a collective $16.4 billion in federal income taxes based on the Tax Cuts and Jobs Act’s 21 percent corporate tax rate, according to the left-leaning Institute on Taxation and Economic Policy. Instead, these corporations received a net tax rebate of $4.3 billion. The analysis is based on the corporations’ annual financial reports, which were filed earlier this year to report their 2018 results.”
Why is this particularly relevant now?
During one of the most unprecedented economic crashes in American history, the Government of the richest nation on earth sent us a one time check of $1200 dollars. Means tested, meager crumbs that wasn’t even going to be enough to cover rent in many cities at a time when 40 percent of Americans were already living paycheck to paycheck well before all of this happened. Once again, the American people whose subscriptions during this time are responsible for this company’s record success will see nothing in return.
If the end stage capitalist economic structure we’re seeing crumble around us was even remotely designed to benefit the middle and working classes as well as the poor, the money companies like not just Netflix, but Amazon as well who’s also seeing record gains, would be returned back to their workers and consumers who have made the success possible. But even at a time when millions of people have been brought to their knees financially, the wealth being generated by our labor and consumption in this country continues to be robbed from us.
At the very least, the American people should be expecting $2,000 dollar checks each month for the duration of this crisis, as well as a freeze on rent, mortgages, student loans and utility payments as well. In a just world, companies like Netflix and Amazon would be contributing to a larger, broader social safety net to ensure that our lives and stability are not turned completely upside down. But capitalism and the very notion of a publicly owned company with a mandate by law to generate profits for their wealthy shareholders was never, ever meant to be just. As unreasonable and infuriating as it might be to witness these companies running away with the money we allowed them to generate, the only way practices like these will change is if we acknowledge that this is exactly what they’re meant to do.
The more time goes on, I can’t help wondering what the America on the other side of this crisis is going to look like. While there’s no denying that things certainly look bleak at the moment, we have an incredible opportunity to create the necessary changes to ensure a crisis of this scope and scale never, ever happens again. Companies like Netflix are running on borrowed time. At some point in the likely very near future, when Americans miss another rent payment and are unable to put food on the table for their families, they will have nothing left to lose in an effort to take back what’s been taken from them.