How do you order record results and still pay no federal taxes? The treasure wonk that discovered that Amazon has been doing these two years in a row, worries that "the big disturbance" can begin to destabilize democracy itself.
Last week, I suggested that Amazon is not as much a Seattle company as a "sovereign, boundless nation state." It turns out I left a key description out of that sentence.
It would be "tax free".
This week, ironically, before Amazon broke down with New York because of the city's annoying doubts as to why it was giving the company billions in fiscal error, a tax wonk was poring through Amazon's 201
The nation's third largest company booked record profits last year. But paid nothing in US federal taxes.
"Zero, not in percent," says Matthew Gardner, of the Department of Taxation and Economic Policy, a DC-based think tank.
Amazon paid Taxes to state and foreign authorities (more in a minute). But the accounts mean that one of the most powerful corporate entities in the world paid fewer dollars to maintain the national government than tens of millions of individuals – say, your average low-grade newspaper column.
That's right – I pay more to the US government in 2018 than Amazon (I'm talking about the corporate entity, not its mass of employees). So, probably, you are.
Gardner says the internet giant was able to reset the bill – actually go below zero, when it qualified for a $ 129 million discount – largely because of Congress and President Donald Trump's annual old tax law.
"This law did not reform much of anything; It was simply cutting taxes, says Gardner. "So it's not surprising that this happens. Cutting corporate tax was the whole point."
All the way to nothing?
The company also received a number of tax credits (such as equipment purchases) and booked permissible business deductions (the largest was writing off-stock options).
Businesses often pay little or no tax when they make low profits. But Amazon's total USD-book profit for 2018 almost doubled to over $ 11 billion.
Gardner does not say that Amazon did anything wrong, and of course pay hundreds of thousands of employees income tax. But last year, the total corporate tax paid to the US government increased 31 percent, a decline described by a debt guard group as "unparalleled in a time of economic growth."
Shipping from US businesses is already below 18 percent in First Quarter of 2019 years (government fiscal year began in October last year). That is part of the reason why the federal deficit increased by 42 percent in the same quarter, despite a booming economy and no major war that pushed the budget.
The latest chopping factor about our red ink is that next year, the federal government will spend more on interest on the debt than it would on children. As a critic puts it : more in the past than in the future.
Amazon's accounts also show that the US alone is not letting the company contribute anything late.
Amazon's total tax paid to the United States and all US states over the past two years amounted to only $ 267 million (count of rebates, over $ 16 billion in profits). While the taxes paid to foreign governments amounted to $ 1.3 billion. So a company we call "ours" contributed nearly five times as much to the cats in the countries abroad as it did here at home.
Gardner says he cries out when rich, successful companies pay nothing, not because he thinks they are evil. But because it is "strenuous a crisis with democratic legitimacy."
It is not only the important public services that can go, will have (even if they can). It's that everybody else can say in the end: If even Amazon doesn't have to pay, why should the diaper get it?
"There is an extremely strong reinforcement of mistrust," Gardner said. "It strongly signals that we have a system that is tilted to take advantage of the great and powerful, not the rest of us."
Gardner said the obvious answer is actually reforming the tax system so that those who have the ability to pay at least contribute something.
We are so distant right now from the more democratic ideal – the idea of not asking what your country can do for you, but what you can do for your country. Unless you are a sovereign, boundless, tax-free nation state. So what happens is perfect.