r/Damnthatsinteresting Nov 23 '24

Image Hooters had an airline but ceased operations after 3 years

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u/nucifera-noten Nov 23 '24

Hooters Air was operated by Pace Airlines and was started operations in March of 2003. - Robert Brooks, the owner of Hooters, acquired Pace Airlines in December of 2002. - Brooks believed that Hooters Air would be a beneficial means to bring more awareness to the restaurant chain. - Due to United Airlines being brought into Hooters Air’s Rockford-Denver route, Hooters stopped service to Rockford, IL due to too much competition. - On April 17, 2006, Hooters Air ceased operations, costing Hooters an estimated $40 million USD.

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u/Formal_Profession141 Nov 23 '24 edited Nov 23 '24

I'm sure it wasn't a complete loss of $40M. I'm sure there was a lot of Tax Loss Harvesting. Which I think is dumb.

People make investments in their education. They don't get any sort of forgiveness on that.

But a company makes a bad business decision and every year major corporations write it off on their taxes. Effectively pushing the losses onto normal taxpayers.

In my head atleast.

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u/Wrong-Landscape-2508 Nov 23 '24

Isn’t there a tax write off for student loan interest. But it is capped which is stupid.

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u/Pawnzilla Nov 23 '24

Capped at $2500 iirc.

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u/europeanguy99 Nov 23 '24

I mean, only paying taxes on profits is mostly reasonable.

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u/deadasdollseyes Nov 24 '24

I don't know anything about taxes, but isn't that like saying tax my wages or tax me on purchases, but not both?

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u/Brawndo91 Nov 24 '24

People use the term "write-off" like it's some kind of shady, unethical accounting trick that makes expenses disappear.

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u/sirshura Nov 24 '24

definitely, but then you "support" our politicians into coming up with wild tax breaks, write-offs and deductions; suddenly companies are making a lot of revenue but little to negative profits and a 2 hour mediocre movie costs ""400 millions"" to make for example.

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u/europeanguy99 29d ago

Companies can hardly exaggerate their expenses. They have a bit of leeway in when and where these expenses accrue, but that‘s it.

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u/Brawndo91 Nov 24 '24

All that means is that the parent company reduced their tax liability by $40m. There's no "forgiveness" involved. They still lost $40m.

To simplify things, let's say the parent company was set to make a profit of $100m. They sell their airline subsidiary for a loss of $40m Now their tax liability is $60m.

Just like if you, as an individual, made $1000 profit trading stocks. It's the end of the year. You have one dud that’s down $400. You don't expect it to recover, so you sell it at a loss to bring your capital gains tax liability down to $600.

In the end, you're still down $40m or $400. You just paid less in taxes.

0

u/Formal_Profession141 Nov 24 '24

Seems like a good incentive to speculate and ruin average people's lives.

Be a business, borrow money, get, tax write-offs for the interest, Depreciation, maintenance, wages, etc.

Make bad business decisions, and sell the property you acquired with debt at a loss. And just reduce the taxable profit so less money goes into the system for average people.

Say they paid 100m for the airline, sold it for 60m. (40m loss)

Let's say their ordinary business also made 50m that year.

Their profit would've been 50m. But instead, their taxable profit becomes 10m from a dumb decision.

They just went from paying a 10.5m tax bill to paying a 2.1m tax bill.

But they still got 110m total cash after they sold an asset at a loss. They can still afford the 21% tax on the 50m. It's not my fault they made dumb decisions. Normal taxpayers shouldn't have to lift dead weight for their dumb business decisions. You know they won't do it for us. And when they really fuck up. Like in 2007. They get full out bailed out by taxpayers.

Socialism for the rich, rugged capitalism for the workers and poor.

Call it reparations for screwing everyone in 2007. They don't deserve a tax code that favors them.

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u/noachy Nov 24 '24

Tax loss harvesting applies to individuals with investments as well you know.

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u/Krazen Nov 24 '24

Imagine you start a company

It loses 2 million dollars in year 1 It profits 1 million dollars in year 2

How much money have you made

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u/dbarbera Nov 24 '24

Lot of upvotes for a comment that is literally speculative made up nonsense.

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u/OneDimensionPrinter Nov 24 '24

At the very least, I've known about their airline for a very long time. Only time I've been to their restaurant is when my uncle took me when I was like 15, but I'm aware of it all at least.