Of course, these companies may have reported zero GAAP-basis income tax expense, they still paid cash income taxes in cash. For example, Tesla paid about $1.2 billion in cash income taxes net of refunds in their FY 2025 ($28 million US federal; $151 million state; remainder foreign). United paid $65 million in cash income taxes. This is very clearly disclosed in TSLA's footnote 12, page 86 of Tesla's SEC-filed financial statements that ITEP so closely "analyzed." Same for United, whose disclosure is on page 59 of its financial statements.
I also would like some more accounting-literate editing of articles when people go spelunking into financial statements!
It's a common mistake! But it illustrates your point very clearly: an expert would see a problem right away, but ITEP wasn't interested enough in being correct.
I would like to continue this pressure campaign for more expertise-specific editors. Us accountants can keep our day jobs and will happily moonlight for the moments when unsuspecting writers are badly misconstruing the numbers they lifted from a pile of 10-Ks. Shit, they don't even have to pay me. I'll do it for the love of the game!
Double for science. Science reporting is terrible, mostly because reporters tend to treat scientific press releases as disinterested facts when they should treat them like they came from politicians. It's not hard to find some jaded post-docs in any given field who can identify problems all day for you. But which is better from a business perspective? Reporting the latest observational study about some health thing in maximally alarmist terms, or reporting that it's meaningless garbage?
Except cash tax has no necessary connection to 2025 income at all. It's just the value of the checks a company wrote for income taxes during a calendar year. Could be related to 2025 US income, but could as easily be 2024. Heck, if it reflects the resolution of a long-brewing tax audit, it could be related to income from a decade ago. And 2025 is an especially bad year to look at cash tax because it's the final year in which companies are paying the repatriation tax on pre-2018 foreign income that was mandated by Trump's 2017 Tax Cuts and Jobs Act. Companies were allowed to pay this on an 8 year installment plan ending in 2025. So if you paid that in 2025 ,as many companies did, it shows up in cash tax but not in current tax.
FASB (the org that is in charge of telling companies what to report in the 10-K on all sorts of topics including tax) defines current tax as "the estimated taxes payable or refundable on tax returns for the current year." If you want the best available measure of how much a company's paying on current year income, current tax expense is that number.
Some truth to what you say here, but the cited source said these companies "paid no federal corporate income taxes." This is a statement about cash flows, not accrued expenses, and it's factually inaccurate.
If the organization wanted to make a similar, but accurate, point, it could have said something like "these 88 corporations incurred insignificant corporate income tax expense on pre-tax profits of $[XX]." Or the corporations are "not likely to make material cash payments to the Treasury on their profits."
But they didn't say that and they elected to make an inaccurate claim.
I'd also observe that GAAP-basis pre-tax income isn't an appropriate basis for determining income tax liability. This is why public companies have to reconcile their GAAP-basis information to tax basis (see Reg S-X Rule 4-08(h)).
The NYT has been full of bad judgement recently. I cancelled after the did the pre-election hit piece on Mamdani checking an 'African' box on his NYT application. His COLLEGE application, when he was a teenager. How dare he check that box just because he is literally from Africa? Ugh. That was the last straw from me. When you unsubscribe you have the opportunity to tell them exactly why, so go for it. I haven't missed reading it, there are other less hyporcritical news sources out there.
I totally sympathize with feeling frustration when you see a basic error about economics go unchallenged. But... The Argument has published two pieces that at least heavily implied that post-pandemic inflation was bad for workers, specifically low-income workers. It published Kelsey Piper's piece disputing an object-level fact about how LLMs work. That one really stood out to me because it was based on a misunderstanding of why LLMs don't *sound* like autocomplete, a misunderstanding that could have been corrected by reading the excellent "The Many Masks LLMs Wear." Which I found because it was restacked by one Jerusalem Demsas, Founder and Editor-in-Chief of The Argument Magazine... the same week Piper's piece came out.
Anyway. I love much of what this magazine publishes, including most of Piper's pieces, which is why I subscribe. It's super valuable, generally lucid, many times a great antidote to a bad narrative. I tend to comment only when I disagree with something; it's a character flaw. I'm working on it. This is mostly just to note that everyone has certain little claims they tend to let slide, and a plea not to. And also to say, if you feel frustrated with cultural writing when it touches on economics... imagine what it's like being a scientist.
Wait til you see her takes on biomedical science! Hopefully Jerusalem takes her own advice and outsources the editor role when Kelsey tries to opine on virology/biology/medicine.
I liked this post and the criticism of the NYT stuff. But I think the call-out of the Atlantic article about lavish weddings was a little bit half-baked in a few directions.
1. It is not necessarily true that expensive weddings are not job-creating because if they didn’t exist the money would go elsewhere. We know that the wealthier one is, the less likely they are to spend the additional marginal dollar as opposed to saving or investing. And sure, investing does have some knock-on effects that are eventually kinda job-creating. But it’s very far removed and many bank shots away.
But, if you avoid that by saying “well, ok, let’s say they still spend the money but just not on a crazy expensive wedding.” You lead to point two:
2. How far down the chain of “well, this wedding spending is obscene but jobs are good, so they should spend money but on ::insert next thing::” do you go?
So, we do away with lavish weddings; too gaudy and evil seeming. But we still want people with that much money to spend money rather than saving and investing because jobs. Ok, what if that money shifts to cars and yachts? Still too gross? Ok how about luxurious travel? Still too gross ok then…
See? I feel like it just moves the goalposts until you get to whatever thing you personally think is acceptable for people to spend money on. Which, if you want to make the point that very wealthy people should only be allowed or found acceptable if all their money goes to charity, fine. But then make that actual point instead.
3. Lastly, I am not an economist. But it strikes me that “we should design society so that people just spend optimally in a way that creates jobs” is not entirely the point. I am not trying to straw man you. I know you are not actually saying this. But isn’t it kind of the end point of the logic behind “luxurious weddings are not at all redeemed by the jobs they create/maintain BECAUSE they are not optimally job creating.” ?
I didn't see it as opposed to wedding spending, so much as opposed to this argument excusing it. There's a liberalism argument defending the spending, bringing up the property rights of the couple and their family to spend their money as they see fit. The humanist argument says the whole point is the happiness of the married couple. My favorite is the full throated celebration of American capitalism, that thanks to its amazing wealth creation and freedom of opportunity, the great-great-grandchildren of dirt poor Greek immigrants can afford to spend six figures on a wedding. But saying "it's wasteful, but it's fine because it creates employment" is a little too similar to broken windows for comfort.
A.G. Sulzberger has done monumental damage to the Times. If you compare the front page of its website on any given day to the printed front page of the Times 30 years ago, it's hard to believe that you're looking at the same publication. Back then, I don't recall that it ever insulted our intelligence. This is a point about the quality of its content, not its political leanings.
To put it another way: thirty years ago, the Times was a hard-news publication. Today, it's a soft-news-and-entertainment publication with a large vestigial collection of excellent reporters. I feel sorry for those reporters and wish that they would leave to start their own publication.
The Times' transformation into a soft-news-and-entertainment product has been a financial success, but it hasn't been good for serious readers, or for society.
I worked as a cater waiter for 15 years. I am grateful for all that profligate spending on fancy NYC events. It was a miserable job, but it was flexible and paid remarkably well.
Reminds me of that 2020 primary debate where all the dems raised their hand about decriminalizing illegal border entries. The hivemind stupid bug eats the left’s brain here and there
On the one hand, of course you’re right, along with the hundreds of others who criticized the video. On the other hand, that’s a lot more links, views, and discussion than most NY Times content gets. Perhaps there is an incentive problem here.
Awesome piece. I think people want politically tinged culture writing because it makes them feel like they're actually thinking about politics, when in fact, they're not thinking at all.
I hadn't realized how disappointed I was with culture writing until reading this. Here's the pattern feel like I see. Describe either a trend or a personal experience, then connect that to one of the 10 most common political issues and either a) say something inconclusive or b) take a position and softly support it with a dab of the most convenient support evidence. Just one or two things you can point to and leave it at that.
Love to see the Clair obscur shoutout! That soundtrack is hauntingly evocative and beautiful, I listened to it for weeks after playing. Unbelievable masterpiece all around
>> “I think the problem has less to do with comprehension than standards. Culture pieces are not evaluated in the same way policy pieces are. That makes sense, but only if they don’t make the sorts of claims that demand policy editing.”
🔥🔥🔥
Also, I think there is a lot more *there* there to this line of thinking than even this short piece suggests. I don’t mean to imply that culture sections at newspapers are leading everyone to misunderstand certain kinds of policies and policy-relevant realities, but I do think that cultural systems (of which these kinds of newspaper culture sections are a part) do have this effect.
I often ask this question of my fellow, normie, left-of-center friends: “How much of our total federal budget is spent on our military?” And they almost universally say, “Like, 50 or 60 percent, right?”
I know why they think that this is the case: it’s not because they are reading any serious, policy-minded sources about our federal budget (and, in case it’s not obvious the true percentage is much lower than 50 or 60 percent; it’s currently in the 15 percent range if I remember correctly); it’s because they live in the kinds of left-wing-adjacent cultural systems that perpetuate this meme. (A similar thing could be said about the gender-wage gap, which is always misunderstood. I remember an episode of Rick and Morty, for example, in which a character, in a line of dialogue, says something like “On earth, women are paid 60 percent of what men are paid for the exact same jobs,” which, like, isn’t what the gender-wage gap shows or is even designed to measure.)
I think that part of the problem is the silence-is-violence *attitude* (i.e. not the literal slogan) toward politics and policy that a lot of cultural figures and institutions have implicitly adopted. Yes, silence can be violence when reality is under attack, but when you don’t really know what the reality is, speaking just creates more noisy, unreliable signals about what reality really is. And when these noisy, unreliable signals creep outside of discussions by people with real knowledge of these issues, as they so, so often do these days, I think our politics really, really suffers.
(P.S. For funsies, one day, I tried to come up with a rhyming retort to “silence is violence,” but the best I could come up with was “noise destroys.” … So if anyone has any better ideas, I’d love to hear them, lol.)
You mention different editing standards for "culture stories and political and economic stories. The public sees the Times and other media entities as one thing. Social media are criticized by the Times and others for allowing right wing "misinformation" to appear on their sites. And should the Times encourage theft? They have a pay wall. How would they react if some hacker figured out how to break their pay wall and shared that with the public on the grounds that the Sulsbergers have too much money?
I’m pleased that 99.9% of the responses to that NYT podcast/article have been negative. Sometimes you really have to wonder about their editorial decisions.
It would be hard for me to imagine the like of Michiko Kakutani hosting this conversation in the same way. Audiences could expect people like Clement Greenberg to be an adult. There's the need for non-experts to stay in their lane, but writing something like a retrospective of Marquez's novels would require a baseline level of knowledge Colombian history, so a culture writer in such a circumstance would have to go outside their lane a bit to do their job. Such a writer would need a baseline level of maturity to be useful. Piker is a streamer whose importance has been inflated along with his ego. He has nothing useful to say. However, Tolentino is a staff writer at the New Yorker who used to be the EIC at Jezebel. She should know better.
We have too many non-helpful people particularly in New York working in non-wonky media who are basically part of the Tumblr/Gawker/theater kid set who are providing more heat than light. They don't have technical expertise, but also are too far removed culturally from the middle and working class here and abroad to have any real connection to anyone who wouldn't be an extra on Broad City. This is where the Sanders movement has ended up: broke people trying to pay off their MFAs in Brooklyn.
The best response that I've seen to this debacle is Anastasia Berg's "Shooting and Crying." Berg focuses on the morality, or immorality, of Tolentino's apparent worldview. https://substack.com/home/post/p-195790388.
Of course, these companies may have reported zero GAAP-basis income tax expense, they still paid cash income taxes in cash. For example, Tesla paid about $1.2 billion in cash income taxes net of refunds in their FY 2025 ($28 million US federal; $151 million state; remainder foreign). United paid $65 million in cash income taxes. This is very clearly disclosed in TSLA's footnote 12, page 86 of Tesla's SEC-filed financial statements that ITEP so closely "analyzed." Same for United, whose disclosure is on page 59 of its financial statements.
I also would like some more accounting-literate editing of articles when people go spelunking into financial statements!
actual lol but I wanted to be fair to Spiegelman because there really is a tax line that says 0 and I didn’t want to imply she made it up
It's a common mistake! But it illustrates your point very clearly: an expert would see a problem right away, but ITEP wasn't interested enough in being correct.
I would like to continue this pressure campaign for more expertise-specific editors. Us accountants can keep our day jobs and will happily moonlight for the moments when unsuspecting writers are badly misconstruing the numbers they lifted from a pile of 10-Ks. Shit, they don't even have to pay me. I'll do it for the love of the game!
Double for science. Science reporting is terrible, mostly because reporters tend to treat scientific press releases as disinterested facts when they should treat them like they came from politicians. It's not hard to find some jaded post-docs in any given field who can identify problems all day for you. But which is better from a business perspective? Reporting the latest observational study about some health thing in maximally alarmist terms, or reporting that it's meaningless garbage?
I'm with you until the last two sentences. I agree with that Joker: if you're good at something, never do it for free.
Agree. This also true for legal journalism.
Except cash tax has no necessary connection to 2025 income at all. It's just the value of the checks a company wrote for income taxes during a calendar year. Could be related to 2025 US income, but could as easily be 2024. Heck, if it reflects the resolution of a long-brewing tax audit, it could be related to income from a decade ago. And 2025 is an especially bad year to look at cash tax because it's the final year in which companies are paying the repatriation tax on pre-2018 foreign income that was mandated by Trump's 2017 Tax Cuts and Jobs Act. Companies were allowed to pay this on an 8 year installment plan ending in 2025. So if you paid that in 2025 ,as many companies did, it shows up in cash tax but not in current tax.
FASB (the org that is in charge of telling companies what to report in the 10-K on all sorts of topics including tax) defines current tax as "the estimated taxes payable or refundable on tax returns for the current year." If you want the best available measure of how much a company's paying on current year income, current tax expense is that number.
Some truth to what you say here, but the cited source said these companies "paid no federal corporate income taxes." This is a statement about cash flows, not accrued expenses, and it's factually inaccurate.
If the organization wanted to make a similar, but accurate, point, it could have said something like "these 88 corporations incurred insignificant corporate income tax expense on pre-tax profits of $[XX]." Or the corporations are "not likely to make material cash payments to the Treasury on their profits."
But they didn't say that and they elected to make an inaccurate claim.
I'd also observe that GAAP-basis pre-tax income isn't an appropriate basis for determining income tax liability. This is why public companies have to reconcile their GAAP-basis information to tax basis (see Reg S-X Rule 4-08(h)).
That video conversation is the closest I've come to cancelling my NYT subscription - still mulling it over. Terrible judgment putting that out there.
The NYT has been full of bad judgement recently. I cancelled after the did the pre-election hit piece on Mamdani checking an 'African' box on his NYT application. His COLLEGE application, when he was a teenager. How dare he check that box just because he is literally from Africa? Ugh. That was the last straw from me. When you unsubscribe you have the opportunity to tell them exactly why, so go for it. I haven't missed reading it, there are other less hyporcritical news sources out there.
I totally sympathize with feeling frustration when you see a basic error about economics go unchallenged. But... The Argument has published two pieces that at least heavily implied that post-pandemic inflation was bad for workers, specifically low-income workers. It published Kelsey Piper's piece disputing an object-level fact about how LLMs work. That one really stood out to me because it was based on a misunderstanding of why LLMs don't *sound* like autocomplete, a misunderstanding that could have been corrected by reading the excellent "The Many Masks LLMs Wear." Which I found because it was restacked by one Jerusalem Demsas, Founder and Editor-in-Chief of The Argument Magazine... the same week Piper's piece came out.
Anyway. I love much of what this magazine publishes, including most of Piper's pieces, which is why I subscribe. It's super valuable, generally lucid, many times a great antidote to a bad narrative. I tend to comment only when I disagree with something; it's a character flaw. I'm working on it. This is mostly just to note that everyone has certain little claims they tend to let slide, and a plea not to. And also to say, if you feel frustrated with cultural writing when it touches on economics... imagine what it's like being a scientist.
Wait til you see her takes on biomedical science! Hopefully Jerusalem takes her own advice and outsources the editor role when Kelsey tries to opine on virology/biology/medicine.
Fantastic. Unfortunate, but so true. NYT seems keen on living up to being a left-wing caricature of what right-wing trolls accuse it of.
And with it, I finally took the step to cancel my NYT subscription and gladly signed up to be a paid subscriber of The Argument. Keep it up.
I liked this post and the criticism of the NYT stuff. But I think the call-out of the Atlantic article about lavish weddings was a little bit half-baked in a few directions.
1. It is not necessarily true that expensive weddings are not job-creating because if they didn’t exist the money would go elsewhere. We know that the wealthier one is, the less likely they are to spend the additional marginal dollar as opposed to saving or investing. And sure, investing does have some knock-on effects that are eventually kinda job-creating. But it’s very far removed and many bank shots away.
But, if you avoid that by saying “well, ok, let’s say they still spend the money but just not on a crazy expensive wedding.” You lead to point two:
2. How far down the chain of “well, this wedding spending is obscene but jobs are good, so they should spend money but on ::insert next thing::” do you go?
So, we do away with lavish weddings; too gaudy and evil seeming. But we still want people with that much money to spend money rather than saving and investing because jobs. Ok, what if that money shifts to cars and yachts? Still too gross? Ok how about luxurious travel? Still too gross ok then…
See? I feel like it just moves the goalposts until you get to whatever thing you personally think is acceptable for people to spend money on. Which, if you want to make the point that very wealthy people should only be allowed or found acceptable if all their money goes to charity, fine. But then make that actual point instead.
3. Lastly, I am not an economist. But it strikes me that “we should design society so that people just spend optimally in a way that creates jobs” is not entirely the point. I am not trying to straw man you. I know you are not actually saying this. But isn’t it kind of the end point of the logic behind “luxurious weddings are not at all redeemed by the jobs they create/maintain BECAUSE they are not optimally job creating.” ?
I didn't see it as opposed to wedding spending, so much as opposed to this argument excusing it. There's a liberalism argument defending the spending, bringing up the property rights of the couple and their family to spend their money as they see fit. The humanist argument says the whole point is the happiness of the married couple. My favorite is the full throated celebration of American capitalism, that thanks to its amazing wealth creation and freedom of opportunity, the great-great-grandchildren of dirt poor Greek immigrants can afford to spend six figures on a wedding. But saying "it's wasteful, but it's fine because it creates employment" is a little too similar to broken windows for comfort.
A.G. Sulzberger has done monumental damage to the Times. If you compare the front page of its website on any given day to the printed front page of the Times 30 years ago, it's hard to believe that you're looking at the same publication. Back then, I don't recall that it ever insulted our intelligence. This is a point about the quality of its content, not its political leanings.
To put it another way: thirty years ago, the Times was a hard-news publication. Today, it's a soft-news-and-entertainment publication with a large vestigial collection of excellent reporters. I feel sorry for those reporters and wish that they would leave to start their own publication.
The Times' transformation into a soft-news-and-entertainment product has been a financial success, but it hasn't been good for serious readers, or for society.
I worked as a cater waiter for 15 years. I am grateful for all that profligate spending on fancy NYC events. It was a miserable job, but it was flexible and paid remarkably well.
Reminds me of that 2020 primary debate where all the dems raised their hand about decriminalizing illegal border entries. The hivemind stupid bug eats the left’s brain here and there
On the one hand, of course you’re right, along with the hundreds of others who criticized the video. On the other hand, that’s a lot more links, views, and discussion than most NY Times content gets. Perhaps there is an incentive problem here.
I have wondered if this podcast episode wasn’t intentional rage bait. It’s so hard to tell these days.
Awesome piece. I think people want politically tinged culture writing because it makes them feel like they're actually thinking about politics, when in fact, they're not thinking at all.
I hadn't realized how disappointed I was with culture writing until reading this. Here's the pattern feel like I see. Describe either a trend or a personal experience, then connect that to one of the 10 most common political issues and either a) say something inconclusive or b) take a position and softly support it with a dab of the most convenient support evidence. Just one or two things you can point to and leave it at that.
Love to see the Clair obscur shoutout! That soundtrack is hauntingly evocative and beautiful, I listened to it for weeks after playing. Unbelievable masterpiece all around
>> “I think the problem has less to do with comprehension than standards. Culture pieces are not evaluated in the same way policy pieces are. That makes sense, but only if they don’t make the sorts of claims that demand policy editing.”
🔥🔥🔥
Also, I think there is a lot more *there* there to this line of thinking than even this short piece suggests. I don’t mean to imply that culture sections at newspapers are leading everyone to misunderstand certain kinds of policies and policy-relevant realities, but I do think that cultural systems (of which these kinds of newspaper culture sections are a part) do have this effect.
I often ask this question of my fellow, normie, left-of-center friends: “How much of our total federal budget is spent on our military?” And they almost universally say, “Like, 50 or 60 percent, right?”
I know why they think that this is the case: it’s not because they are reading any serious, policy-minded sources about our federal budget (and, in case it’s not obvious the true percentage is much lower than 50 or 60 percent; it’s currently in the 15 percent range if I remember correctly); it’s because they live in the kinds of left-wing-adjacent cultural systems that perpetuate this meme. (A similar thing could be said about the gender-wage gap, which is always misunderstood. I remember an episode of Rick and Morty, for example, in which a character, in a line of dialogue, says something like “On earth, women are paid 60 percent of what men are paid for the exact same jobs,” which, like, isn’t what the gender-wage gap shows or is even designed to measure.)
I think that part of the problem is the silence-is-violence *attitude* (i.e. not the literal slogan) toward politics and policy that a lot of cultural figures and institutions have implicitly adopted. Yes, silence can be violence when reality is under attack, but when you don’t really know what the reality is, speaking just creates more noisy, unreliable signals about what reality really is. And when these noisy, unreliable signals creep outside of discussions by people with real knowledge of these issues, as they so, so often do these days, I think our politics really, really suffers.
(P.S. For funsies, one day, I tried to come up with a rhyming retort to “silence is violence,” but the best I could come up with was “noise destroys.” … So if anyone has any better ideas, I’d love to hear them, lol.)
You mention different editing standards for "culture stories and political and economic stories. The public sees the Times and other media entities as one thing. Social media are criticized by the Times and others for allowing right wing "misinformation" to appear on their sites. And should the Times encourage theft? They have a pay wall. How would they react if some hacker figured out how to break their pay wall and shared that with the public on the grounds that the Sulsbergers have too much money?
I’m pleased that 99.9% of the responses to that NYT podcast/article have been negative. Sometimes you really have to wonder about their editorial decisions.
It would be hard for me to imagine the like of Michiko Kakutani hosting this conversation in the same way. Audiences could expect people like Clement Greenberg to be an adult. There's the need for non-experts to stay in their lane, but writing something like a retrospective of Marquez's novels would require a baseline level of knowledge Colombian history, so a culture writer in such a circumstance would have to go outside their lane a bit to do their job. Such a writer would need a baseline level of maturity to be useful. Piker is a streamer whose importance has been inflated along with his ego. He has nothing useful to say. However, Tolentino is a staff writer at the New Yorker who used to be the EIC at Jezebel. She should know better.
We have too many non-helpful people particularly in New York working in non-wonky media who are basically part of the Tumblr/Gawker/theater kid set who are providing more heat than light. They don't have technical expertise, but also are too far removed culturally from the middle and working class here and abroad to have any real connection to anyone who wouldn't be an extra on Broad City. This is where the Sanders movement has ended up: broke people trying to pay off their MFAs in Brooklyn.
The best response that I've seen to this debacle is Anastasia Berg's "Shooting and Crying." Berg focuses on the morality, or immorality, of Tolentino's apparent worldview. https://substack.com/home/post/p-195790388.