Thanks to a variety of tax credits and a significant tax break available on the disclosure in the form of a corporation, Amazon actually received a federal tax rebate of $ 129 million last year, giving it an effective federal tax rate of about – 1 percent.
It's the second consecutive year, the company has had a negative federal tax rate on a multibillion dollar surplus. It would place the company's effective federal tax rate below the rate paid by the poorest 20 percent of US households, which had an effective federal tax rate of 1.5 percent in 2015, according to the Treasury.
"Amazon pays all taxes we are required to pay in the US and all countries in which we operate, including paying $ 2.6 billion in corporate taxes and reporting $ 3.4 billion in tax over the past three years," says one Amazon. spokeswoman, Jodi Seth, in a statement. "We have invested more than $ 1
(Amazon founder Jeff Bezos owns The Washington Post.)
Matthew Gardner, an ITEP senior guy, called the situation a failure of US tax policy." Their US profits doubled in the past year. If anyone ever gets the subject of corporate tax, you will hope it would be Amazon, "he said.
From 2009 to 2018, the company earned about $ 26.5 billion in profits and paid about $ 791 million in federal taxes , for an effective federal tax rate of 3.0 percent for the period, according to ITEP's analysis, it is well below the statutory 35 percent corporate tax rate in force for most of this period, as well as the 21 percent rate reported last year with Tax relief and labor law of 2017.
Like many other major corporations, Amazon reduces its effective tax rate each year through a variety of credits, rebates, and loopholes, for Amazon, the most lucrative of them is a tax break for stock options, which allowed the company to rake about $ 1 billion from its 2018 bill, Gardner said, which would account for almost half of the total federal tax bill that was charged to the company's profits of $ 11.2 billion, he said.
Earlier ITEP analysis has shown that between 2008 and 2015, profitable Fortune 500 companies paid an average effective federal tax rate of 21.2 percent, well below the statutory 35 percent interest rate in that period. One hundred of the companies had paid zero or negative tax on at least one profitable year, and 58 of them had several zero-tax years while they were profitable.
Trading companies that Amazon has a legal responsibility to trade in shareholders' best interests, a mandate that many companies interpret to mean maximizing shareholder value in many ways, including reducing their tax burden.
"Of all indications, Amazon looks to use the tax breaks Congress has made available," Gardner said.
But he added that in a prolonged environment of federal budget deficits, when a company like Amazon avoids billions in taxes, the money will eventually come from somewhere. "It can take the form of two billion cuts out of infrastructure spending," he said. "Or it may take the form of tax increases down the road at some level on someone else, probably middle-income and small business."
Gardner says that most of the tax breaks that profitable businesses use to reduce or eliminate their tax burdens were introduced on behalf of deep-pocketed and well-connected corporate lobbyists. "In a political system that goes on private money, it will always be difficult to vote against those who have money," he said. "Businesses have not been shy about raising millions of dollars to support a system that distributes them." For example, research has shown that congressional offices are serious about entering business groups into drafting legislation. Surveys have shown that many employees recognize changing their thoughts on issues after talking to lobby groups and seeing corporate correspondence more representative of corporate responsibility than ordinary citizens' letters. Politicians believe that these factors partly explain why Congress often comes down to the side of the former.
Amazon recently canceled plans to build a campus in New York City after fierce opposition from local activists, unions and politicians claimed over $ 3 billion in state and local incentives promised the company to sweet deal. "Instead of engaging in the community with the community they proposed to change, Amazon continued its efforts to shake governments to recover," said New York State Sen. Michael Gianaris, D-Queens, in a statement. "It is time for a national dialogue on the dangers of these types of business support."
This article was written by Christopher Ingraham, a reporter for The Washington Post.