From the shareholder point of view, this makes sense. A gift card is a promise to deliver something later. A company that makes a bunch of promises it can’t keep isn’t actually earning revenue or making a profit that shareholders are likely to see.

The GAAP standards are conservative, so many companies emphasize alternative accounting measures that cast their performance in a more favorable light. Amazon.com Inc. chief executive Jeff Bezos, for example, has said that he doesn’t much care whether his company ever earns a profit as calculated by GAAP; his goal is to maximize another measure called free cash flow. That seems to be fine with his investors because the stock price has kept rising even though Amazon has usually reported quarterly losses or scant profit during most of its 22 years as a public company.

The IRS allows, and in some cases demands, that companies deviate from GAAP. For example, the IRS does not allow a corporation to deduct any expenses from its profit until money is actually spent. GAAP, on the other hand, requires a corporation to deduct losses from profit as soon as it's probable that the loss will occur.

This makes sense when you consider that the IRS is primarily interested in keeping shareholders honest, not management. The corporate income tax was first introduced to keep taxpayers from cheating on their individual returns.

The personal income tax originally applied only to the wealthiest 3 percent of the population, and Congress was concerned that much wealth would be sheltered inside corporations to avoid paying the tax. The corporate income tax discouraged that trick.

The corporate tax eventually evolved into a tool for tax fairness. Investors are expected to pay corporate tax on top of any taxes on capital gains or dividends. For this to work, however, the corporate tax has to be designed so that the burden actually falls on investors rather than workers.

If corporations respond to the corporate tax by reducing the number of workers they hire or the speed at which they expand, that doesn’t just lead to lower profit but to fewer jobs and lower wages. For this reason, the IRS allows companies to count losses they incurred in the early years of growing the company against a later year’s taxable income.

Warren singled out Amazon as a symbol of tax unfairness because it reported $9.4 billion in profit in 2018 but paid no federal tax. One of the factors reducing Amazon’s tax bill, however, was the hundreds of millions of dollars in losses the company was still carrying from previous investments.

Amazon also benefited from other credits that Congress created to encourage investment, including the research and development tax credit that cut $419 million off of its tax bill.

If Warren’s real profits tax were passed, these incentives to invest in the U.S. rather than abroad would be blunted. Whatever else one might think about Amazon, it has invested a staggering amount in the U.S. economy over the last two decades and says it has hired nearly 50,000 new employees per year since 2012.