Opinion

Amazon made $11 billion and paid no taxes. Why aren’t Democrats angry?

Amazon CEO Jeff Bezos helps launch a new phone. His company hasn’t paid any corporate income tax for two years.
Amazon CEO Jeff Bezos helps launch a new phone. His company hasn’t paid any corporate income tax for two years. AP

The current crop of Democrats seeking their party’s presidential nomination have made it clear who they’ll be coming after once they’re in the White House: Big corporations and the wealthy 1 percent.

Senators Cory Booker and Kamala Harris echo the sentiments of Sen. Elizabeth Warren, who has all but declared war on “these rich guys who have been waging class warfare on the middle class for decades” through a “rigged system that props up the rich and powerful, but kicks dirt on everyone else.”

So when news broke that Amazon – the world’s third-most valuable company, run by the world’s richest man – paid zero federal corporate income taxes on its $11.3 billion in U.S. profits in 2018, what did these candidates have to say about it?

Surprisingly, nothing.

No statements, no speeches, not even a tweet. In fact, 2018 was the second year in a row Amazon avoided paying U.S. corporate taxes and actually got a $129 million refund in 2017. Progressives like Warren, Booker and Harris have issued public statements on a wide array of topics lately, from Jussie Smollett to support for using paper ballots in elections, but not a single note about Amazon’s zero-dollar tax bill.

Some campaign observers are wondering why. In a political moment dominated by economic populism and calls for class warfare, why aren’t progressive presidential candidates making Amazon the poster child for corporate greed?

A notable exception is Sen. Bernie Sanders, who tweeted: “If you paid the $119 annual fee to become an Amazon Prime member, you paid more to Amazon than it paid in taxes.”

Sanders has been singling out Amazon for its tax avoidance and oversized political influence for years. Interestingly, so has another populist, President Donald Trump.

When the company avoided all U.S. corporate income taxes last year, Sanders proposed the Stop Bad Employees by Zeroing Out Subsidies, or “BEZOS” Act, targeting the online retail giant’s CEO, Jeff Bezos. The bill would tax corporations for every dollar their low-wage workers receive in government benefits like food stamps or Medicaid.

No other 2020 candidate is even close to matching Sanders’ stance toward a corporation that, on paper, embodies everything progressive candidates say they hate. But other than a few remarks about Amazon’s decision to withdraw plans for a new corporate headquarters in Queens, N.Y., (“The fact that Jeff Bezos wanted our taxpayers to pay for his helicopter landing pad just shows how disingenuous he was from the beginning,” said Sen. Kirsten Gillibrand of New York, another 2020 contender), they’ve been silent.

Some Amazon critics credit the company for what they call an effective, if evil, communications strategy.

“Why have politicians been so silent? I’m guessing somewhere in Amazon’s executive office someone said, ‘Look, if we’re going to pull the plug on New York (the HQ2 project) anyway, let’s do it now while the tax bill comes out. That way people will be totally distracted from it,’” says Bob Engel of the corporate watchdog group Free & Fair Markets Initiative. “If you’re gonna rob a bank, rob it on a day the FBI is busy.”

Engel, a longtime Amazon critic, told InsideSources, “Amazon is a company whose business strategy is really based on gaming the system.” Yet the company has largely gotten a pass, perhaps because of an area of math not directly related to taxes: Polls.

A July 2018 survey by the Baker Center for Leadership and Governance asked Americans to rate their level of confidence in 20 U.S. institutions, including the military, media and courts. The No. 1 most trusted institution among America’s Democrats? Amazon.com.

Don’t be smug, Republicans; you rated it No. 2, just behind the military.

Nicole Karlis, who writes for the website Salon.com, called those polls “frankly embarrassing. ... From an objective standpoint, Amazon’s values – like any for-profit corporation – don’t exactly line up with those of a democratic society that promotes wealth equality and opportunity for all.”

“I blame Congress,” says Matt Gardner, of the Institute on Taxation and Economic Policy, which first divulged Amazon’s zero corporate tax bill.

“Unless we see the actual tax returns, nobody can say exactly how Amazon avoided paying any corporate income taxes, but the available information makes it clear that three provisions in the tax code were very important: The research and development tax credit, the ability to write off 100 percent of investments in equipment, and the ability to deduct stock options to employees from taxable earnings,” Gardner said.

“While the Trump tax bill made some changes, all three of these have been part of the tax code for a long time. Congress could have eliminated or reformed them. They knew full well what the impact would be,” Gardner said.

Gardner also blames Capitol Hill lobbyists, but reserves some scorn for progressives for not pushing back. Do opponents of so-called corporate greed like Warren, Booker or even Bernie Sanders really want to close the R&D “loophole”? Do they oppose allowing companies to deduct the costs of equipment, or reject the law (proposed and enacted by President Bill Clinton and a Democrat Congress in 1993) allowing the stock-option deduction?

If so, they rarely mention it and all declined requests for comment.

Or does it have more to do with the fact Jeff Bezos isn’t just the CEO of Amazon, with 100 million Prime subscribers; he also owns the The Washington Post, one of the most influential newspapers in America.

Michael Graham is political editor at InsideSources. You can reach him at michael@insidesources.com.

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