February 27, 2018

Amazon paid absolutely no federal taxes last year — in fact, they received $789 million


“The subjects of every state ought to contribute towards the support of the government, as nearly as possible, in proportion to their respective abilities; that is, in proportion to the revenue which they respectively enjoy under the protection of the state.”

The redistributionist pinko who wrote these words? Adam Smith, who is at once the Lennon and McCartney of world capitalism. (Friedrich Hayek, of course, is the George Harrison, and Ayn Rand, God help us, the Ringo.)

But Jeff Bezos may be the richest person who’s ever lived, and he sees things, oh, a little differently.

It’s recently come to light that thanks to the adventurous, stupid new tax plan advanced by Bezos’s bud Donald Trump, Bezos’s company—a mom-and-pop internet concern called Amazon—paid no federal taxes whatsoever last year. In fact, as Matthew Gardner, a senior fellow at the Institute on Taxation and Economic Policy, wrote in a blog post earlier this month, the company will receive $789 million, even though the law did not take effect until 2018, thanks to retroactive provisions it contains for businesses that have managed to wriggle out of paying taxes in previous years.

Classical economic theory regards $789 million as “a lotta guacamole.”

Add this to the list of stuff you blame Amazon for — alongside a life bereft of bananas with no one to bone, in a world rife with money launderers, amid rising funemployment and fucked-up bestseller lists. We’re talking about well over a billion dollars in would-be federal revenue, money that could go to the EPA, student loan forgiveness, all kinds of good stuff.

Gardner also points out that Amazon’s “spectacular federal corporate tax avoidance is very likely mirrored at the state level,” which is especially relevant considering the company’s ongoing search for a municipal host-body in which to insert the parasite that will be its second headquarters.

Jeff, discovering another tax loophole

Last October, a mighty coalition of local organizations in many of the cities Amazon is reportedly considering put out an open letter to Bezos, explaining what they’d need to see from the retailer before they could consider a second headquarters good news. Quoting the company’s list of desired characteristics in a host city, they wrote:

The qualities that Amazon is looking for in its new home search are the same things many of us want — it’s perfectly normal to want a place where employees will enjoy “living, recreational opportunities, educational opportunities, and an overall high quality of life.” The things about our cities that make you want to move here are the same reasons many of us live here — we have great systems of higher education, museums, and infrastructure that helps move people and things from one place to another. But we got that stuff by collectively paying for it, through taxes, and we’re expecting Amazon to pay your fair share if you end up being our neighbor.

  • If you want a highly-educated local talent pool you must pay all of your property taxes to fund our schools, public safety, infrastructure and other public goods and services;
  • For the same reasons, you must pay sales taxes on the HQ2’s building materials, machinery and equipment. And although you’ve finally this year started collecting sales taxes on your own goods in every state with a sales tax, you need to also do that on sales conducted on your platform by third parties.
  • You must not seek to keep your employees’ state personal income taxes, nor should you seek the right to sell your corporate income tax credits to other companies

That’d be a start.

Ian Dreiblatt is the former Director of Digital Media at Melville House.