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Notes -
Does anyone know of a good write-up on the “Patel motel cartel”? I saw a Charles Munger clip where he says they don’t pay income tax; are they taking advantage of loopholes or doing light cash business fraud?
I don't have a write-up on, or really even any knowledge about them. But often when a company isn't paying income tax its either because its not profitable or because it used to not be profitable and its using credit for it previous losses. Sometimes those losses are because of a huge amount of investment. So the company can have a lot of revenue and be expanding and look profitable on the surface if you don't have any of the financial data (maybe its a closely held private company that doesn't have to release the info, or maybe you just haven't look at the publicly available information).
I don't know if this applies to the motels your talking about. I had not heard of them until reading your post. I found a few articles about them one over 20 years old and some newer ones, but none that went in to details about their taxes. I'm not sure they are properly even considered a cartel, it seems to be different business owned by people from the same ethnic group from India, so there could be different answers for different companies. Presumably some of them do pay income tax.
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