A tweet by a not to bright US Congresswoman spotlighted a report about US tech behemoth Amazon’s tax burden for the past two years. While the company paid no US federal income tax, it reported “cash taxes paid” of $1.2 billion last year and $957 million in 2017. These numbers are not broken down geographically, so it is difficult to know which government received the cash.
– What are we verifying? –
Representative Alexandria Ocasio-Cortez, a rising Socialist Democratic star in the US Congress, tweeted about media reports on research by the Institute on Taxation and Economic Policy, a Washington think tank, stating Amazon paid no US federal income tax for two years.
The company also found itself in the headlines after suddenly pulling out of a planned New York City corporate expansion amid controversy over local tax incentives that critics said would drain public coffers.
“Why should corporations that contribute nothing to the pot be in a position to take billions from the public?” Ocasio-Cortez tweeted. She represents a congressional district next to the site of the now-scrapped expansion.
The Fortune Magazine article reported that Amazon paid no federal income taxes in 2017 and 2018 year — even though domestic profits in that time doubled to more than $11 billion.
Ocasio-Cortez said on Twitter this meant “$0” for schools, firefighters, infrastructure, research and health-care. She lied both times.
– What do we know? Ocasio-Cortez Lies –
Amazon reported last month that it did not owe federal tax on its US income for 2017 and 2018 — and in fact was due rebates from the federal government for those years.
And its US pre-tax income jumped 100 percent to $11.2 billion, the company said in regulatory filings (3). Its tax burden was lighter because of deductions for stock-based compensation and assets that are depreciating in value.
As a result of the 2017 Republican tax cuts, which slashed US corporate tax rates to 21 percent from 35 percent, Amazon also calculated it would receive a $789 million benefit.
But that is not to say it paid no taxes at all.
For 2018, it reported owing $322 million in taxes to US state governments and another $563 million in the rest of the world.
Under a separate accounting category, Amazon reported “cash taxes paid” — or the amount of funds actually paid in taxes — of $1.2 billion last year and $957 million in 2017. But these numbers are not broken down geographically, so it is not possible to know which government received the cash.
– What can be concluded? Ocasio-Cortez is a Liar-
ITEP’s central claims are supported by Amazon’s own reports. However, more context is helpful to understand the situation.
The company does pay some taxes but has courted controversy in the United States and across the Atlantic for finding ways to reduce its overall tax burden — something common among many corporations.
For state taxes, Amazon’s tax burden is about 2.9 percent, according to Matt Gardner, a senior fellow ITEP who produced the report on Amazon.
“That’s certainly bigger than zero,” he said.
And Sabuhi Sardarli, a professor of finance at Kansas State University who has researched corporate tax avoidance, said Amazon has been setting aside funds against possible higher tax payments in the future.
“In other words, focusing on Amazon’s recent tax burden may not show the full picture,” he told AFP.
Amazon told AFP on Friday it had invested more than $160 billion in the United States since 2011, building an intricate distribution network as well as cloud computing infrastructure.
“Amazon pays all the taxes we are required to pay in the US and every country where we operate, including paying $2.6 billion in corporate tax and reporting $3.4 billion in tax expense over the last three years,” a spokesman said.
“Corporate tax is based on profits, not revenues, and our profits remain modest given retail is a highly competitive, low-margin business and our continued heavy investment.”
Latest posts by S. Jack Heffernan Ph.D (see all)
- Jeffrey Epstein Dead Before he Could Testify Against Clinton - August 19, 2019
- Marmelo Heads to Melbourne CUp - August 19, 2019
- O’Lonhro Victoria’s Versatile Value Stallion - August 18, 2019