Jeff Bezos' support for Biden's corporate tax hike means nothing if Amazon can still dodge paying their fair share in taxes

 Last month, Amazon CEO Jeff Bezos offered his support for hiking the corporate tax rate as a way to pay for President Joe Biden's infrastructure plan.

At first glance, an endorsement for raising corporate taxes from one of the country's most influential corporate titans may seem like welcome news. However, it will ultimately amount to very little if Amazon and Big Tech are allowed to continue to use slick accounting loopholes to avoid paying their fair share in taxes - loopholes which small businesses that provide nearly half of all US jobs are ill-equipped to take.

During the 17 years I spent as an Amazon seller, my small business paid significantly higher federal tax rates than Amazon and other billion-dollar tech companies. As a business owner, paying a federal tax rate greater than 30% while Amazon and others paid little to none was a hard pill to swallow.

Large companies don't pay their taxes

To pay for his sweeping infrastructure proposal, Biden has to aim just as high. The new administration has now proposed pushing up the corporate tax rate to 28% and implementing new ways to curb the flow of corporations moving profits offshore. The Treasury Department and the Joint Committee on Taxation have estimated that changes to offshore taxation would raise roughly $700 billion.

This number should not come as a shock; some of the most profitable companies - often those that represent the future of the economy - have long looked for ways to skirt their tax bill. A recent study by the Institute on Taxation and Economic Policy, for example, found that 55 of the largest corporations paid no federal taxes on their 2020 profits, resulting in $8.5 billion in tax avoidance and $3.5 billion in earned tax rebates - a total cost of $12 billion.

Unfortunately, raising the tax rate will be of little to no use unless the government can genuinely guarantee these same companies pay their taxes - no strings attached. Many of the most powerful tech companies have deployed networks of lobbyists to ensure favorable outcomes in Washington, DC, and state capitals around the nation. Amazon tops the list of corporate lobbying spenders, pouring nearly $19 million into the halls of Congress last year alone to score influence.

Amazon is one of the worst offenders

As one of the companies that has profited the most amid the pandemic, Amazon has historically been among the most egregious tax avoiders. As someone who works with Amazon sellers and as a former Amazon seller myself, I'm very familiar with the corporation's persistent attempts to impose its tax responsibilities, including sales taxes, on others. For years, the company somehow managed to pay no federal corporate income taxes. And in 2020, they dodged $2.3 billion in federal income tax, even as they amassed immense profits fueled by an unprecedented surge in online shopping.

Especially given Amazon's impact on local infrastructure in the communities it operates in, the company should be paying back its share in taxes. But thanks to the lucrative economic development incentives the company influenced lawmakers to offer up, cities receive little funding from Amazon to solve local infrastructure issues. Even the taxes that Amazon does pay rarely trickle down to the local level.

Fortunately, Biden has not shied away from blasting Amazon's tax avoidance schemes, singling out the company after unveiling his infrastructure plan. He hit the nail on the head when he contrasted Amazon with the middle-class families forced to fork over more money in taxes than many giant corporations. Even though Amazon's warehouse workers can manage to pay their fair share, the company somehow shirks its tax responsibility through an army of savvy accountants and lawyers.

The crux of the matter is that our current tax system does not work if companies do not want to participate financially. Our system benefits when all companies - especially those with large profit margins - pay their share. But if the wealthiest companies use lucrative loopholes, the average American who plays by the rules falls further behind without the funding to support crucial public programs. We need a practical method of generating much-needed revenue that works for all Americans - whether they are in the boardroom or the warehouse.

The Biden administration has proposed a 15% minimum tax on book income, or the income reported publicly to shareholders, of large companies like Amazon that report high profits, but have little taxable income. Meanwhile, the Treasury is considering additional changes to the structure of research and development credits that Amazon has long depended on to lower its tax bill. These fixes would close some of the tricky avenues Amazon has taken advantage of to lower its tax liability through accounting loopholes.

Biden can raise the corporate tax rate as high as he wants, but if loopholes still exist, it won't affect the largest corporations. Lawmakers must ensure that Big Tech companies like Amazon cannot abuse loopholes and sidestep meaningful attempts by the government to generate revenue, loopholes which leave hard-working Americans picking up the tab of Fortune 500 companies. For our nation to truly make sure everyone is paying their fair share, it's about time that these companies finally settle their bill.

Jeff Bezos' support for Biden's corporate tax hike means nothing if Amazon can still dodge paying their fair share in taxes Jeff Bezos' support for Biden's corporate tax hike means nothing if Amazon can still dodge paying their fair share in taxes Reviewed by CUZZ BLUE on May 17, 2021 Rating: 5

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