Amazon supports proposed Biden tax hike
Bezos statement fails to mention average Amazon tax payments of 4.3% over three years
Yesterday, Amazon CEO Jeff Bezos announced he supports a rise in the corporate tax rate to help pay for a proposed US infrastructure package. Still, his comments glossed over the company's history of meager corporate tax payments.
The tech mogul's response comes in the wake of a proposed $2.25 trillion package that would see the federal government invest in a range of enhancements to US infrastructure, including a $100 billion investment in broadband connectivity. That legislation would increase the corporate tax rate to 28% and establish a minimum global tax to help pay for these investments, partially reversing a Trump-era tax cut that took the corporate tax rate from 35% to 21%.
Bezos made his statement via the Amazon News Twitter account on Tuesday.
"We support the Biden Administration's focus on making bold investments in American Infrastructure. Both Democrats and Republicans have supported infrastructure the in the past, and it's the right time to work together to make this happen," he said. "We recognize this investment will require concessions from all sides-both on the specifics of what's included as well as how it gets paid for (we're supportive of a rise in the corporate tax rate)."
"We look forward to Congress and the Administration coming together to find the right, balanced solution that maintains or enhances U.S competitiveness," he continued.
The company paid no federal income tax at all in 2017, according to CNBC. In 2018, it reported negative $129 million in taxes, said an analysis from the Institute on Taxation and Economic Policy (ITEP). It faced a $162 million tax bill in 2019, representing just 1.2% of its corporate earnings.
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The e-commerce giant reported a far higher $1.8 billion in federal income tax for 2020, but ITEP’s calculations put this at just a 9.4% effective federal income tax rate. Over the last three years, the company's real tax rate has averaged 4.3%. In the previous 10 years, it’s averaged 4.7% on $57 billion in corporate earnings, ITEP said.
The company uses tax breaks on stock options and various tax credits to lower its overall tax bill, ITEP said.
In a speech on March 31, Biden specifically called out Amazon for failing to pay taxes. "In 2019, an independent analysis found that 91 — let me say it again, 91 Fortune 500 companies — the biggest companies in the world, including Amazon — they used various loopholes so they’d pay not a single solitary penny in federal income tax" he complained. "I don’t want to punish them, but that’s just wrong. That’s just wrong. A fireman and a teacher paying 22 percent? Amazon and 90 other major corporations are paying zero in federal taxes? I’m going to put an end to that."
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