With the prosperity of America’s infrastructure in mind, President Joe Biden rolled out a $2 million proposal to increase corporates taxes by 28%. As expected, much backlash was given by a slew of companies that jump through a sea of hoops to dodge the 21% tax that Trump enacted in 2018. Though, the heads of elite corporations turned when former Amazon CEO, Jeff Bezos, stood out of the crowd to back up the President’s initiative. This came as shock to most seeing as how Amazon has had a sordid relationship with taxes – even having Biden railing the company from its reluctance to pay back when he was the Democratic nominee.

RELATED: Jeff Bezos Declines Bernie Sanders U.S. Income Inequality Testimony Invite

How Much Is Amazon Really Paying?

The pandemic saw the e-commerce giant make a mountain of success in 2020. With everyone shacked away in their rooms, online purchases through their website unsurprisingly skyrocketed sales up 38%, earning $24 billion in pretax income. With financial success comes much larger tax bracket – the company’s taxes last year allocated to $4.1 billion. Though, the various tried and tested corporate loopholes, the company avoided upwards of $2.3 billion of that amount. There’s a laundry list of big corporations that find ways out of paying taxes – for instance, Zoom allegedly paid $0 last year. This makes Amazon the prime example for the purpose of Biden’s new proposal.

“I don’t think any company,” the president says in a CNN interview, “I don’t give a damn how big they are, the Lord Almighty, should absolutely be in a position where they pay no tax and make billions and billions and billions of dollars.” He goes on to imply that companies should also, “start paying their employees a decent wage and protect their employees.”

These corporations finding their way around the dreaded tax season is undoubtedly common knowledge. But many don’t know that Amazon actually gets more money back from the federal government. In 2017, Amazon’s SEC reports how the company receiving a  whopping $137 million refund and $129 million in the year which followed.

Senator Warren went to battle with the company in March using Twitter as her arena. She scolded corporate America but singled Amazon out namely for exploiting seemingly divisive, bordering on nefarious, tax tactics.

Amazon responded with a fiery comeback, “You make the tax laws @SenWarren; we just follow them. If you don’t like the laws you’ve created, by all means, change them. Here are the facts: Amazon has paid billions of dollars in corporate taxes over the past few years alone.”

 How Amazon Dodges Taxes

There’s an assortment of strategies that Amazon and countless other major businesses utilize to downgrade their taxes.

Tax deductions for investment of equipment is one aspect. Through Trump’s 2018 tax bill, all costs towards incurred by the company – from trucks to item scanners – is fully reimbursed by the federal government the corporations. These tax credits added up to $419 million, according to Fortune.

Though, Vox attributes a great deal of the company’s continuously lucky tax years to stock-based compensation. A concept which derives from from Section 162(m) of Bill Clinton’s US Tax Code, “compensation that took the form of stock options or stock grants” can be deductible.” Amazon takes advantage of this rule since the salaries of executives with making more than $1 million is not detectable. By allowing it’s employees to become shareholders of the company, Amazon made $1 billion 2019 from stock-based compensation.

Bezos Backs Biden

No one say Bezos’s approval for the president’s 28% increase in corporate taxes coming. The idea that the richest man in the world, juggling his spot with Elon Musk, would advocate for higher taxes is quite mind-boggling to most – especially the company he found is seemingly leading the  white collar relay race of tax avoidance.

GeekWire, though, believes that Amazon’s backing is entirely self serving. Seeing as how the funds rolled in from the new bill would improve America’s infrastructure, it makes sense that the company would openly support the initiative. Better roads mean quicker and more efficient deliveries, which leads to higher customer satisfaction. The bill will also better the efficiency of other aspects of Amazon’s transportation, primarily airport transit.

While the company’s support for the bill may sway the minds of some politicians when it comes to how taxes are dealt with in America, it’s can be certain that Biden will keep a keen eye on Amazon’s tax reports for a long time.

When first proposing the bill in a March speech, the president sternly stated, “A fireman, a teacher paying 22% — Amazon and 90 other major corporations paying zero in federal taxes? I’m going to put an end to that.”

Read Next: Throwback 2004 Pic Featuring Elon Musk & Jeff Bezos Goes Viral, Musk Reacts

Sources: GeekWire, Vox,  Fortune, CNN, ITEP

Source: Read Full Article