Amazon Pays Zero Corporate Tax for Second Year in a Row
SAN-FRANCISCO – February 21, 2019
Cyber-retailing giant Amazon Inc., the company that belongs to the richest man in the world, Jeff Bezos, did not pay a cent of corporate income tax either in 2017 or 2018. At the same time, Amazon’s revenues, which, in theory, should be levied, amount to many billions of dollars.
In fiscal 2018, Amazon's net income was $11.2 billion, which is two times more compared to $5.6 billion a year earlier. Yet, a report by the Institute on Taxation and Economic Policy (ITEP) shows that the company did not pay a single cent in income tax on both occasions—ironically in large part due to Trump’s tax bonanza of 2017. The same Trump, who is fighting against Amazon and Bezos:
Incredibly, the company’s latest corporate filing reveals that far from paying the statutory 21% income tax demanded under the new tax laws, it’s the federal government that ended up paying Amazon thanks to a slew of tax loopholes.
In 2017, Amazon collected $140 million in rebates for an effective tax rate of -2.5% with the company pocketing another $129 million last year for a tax rate of -1%. The fine print in Amazon’s tax disclosure says the company achieved this partly due to a tax break for executive stock options as well as various unspecified ‘‘tax credits.’’
In fact, Amazon is not the only high-profile company that has mastered the art of corporate subterfuge thanks to Trump’s hasty and not quite thought-out fiscal reform, complicated and confused by the actions of Congress. Last year, Netflix (Amazon’s “colleague” in the FAANG stock exchange group) got away with it too despite posting a net profit of $858 million, the largest in the video-streaming company’s history.
However, the fact is that the scandal began with Amazon, and this is not accidental.
It is likely that the reactivation of the topic of "Amazon taxes" is related to the fact that Trump (who rightly perceives Bezos as his personal enemy) has to choose between an attack on Amazon in terms of antitrust laws and an attack in terms of taxes.
From a legal point of view, the antitrust approach is much more efficient, but politically, taxes are much more interesting. In the US, for a monopoly you can lose control over a part of your business, but for tax evasion you can go to jail.
If the “Amazon taxes” topic is a targeted media strategy (for example, the Forbes article) of the Republican Party, then it turns out that Trump intercepts the “socialist” agenda from the Democrats and uses it against one of his most dangerous opponents.