Is Amazon Too Big to Tax?
The e-commerce giant paid zero federal taxes in 2017. And it’s being rewarded with further tax breaks at the state and local level.
By Alex Shephard, March 1, 2018
This year, like every other year, is shaping up to be a triumphant one for Amazon. It is on the cusp of becoming the first trillion dollar company ever. In the coming months it will announce the opening of a second headquarters—and likely bank billions in tax breaks and other incentives from the lucky city it chooses to grace with its presence. The company’s founder and CEO Jeff Bezos will continue to be the richest person in the history of the world. Amazon will continue to grow at a rapid clip, gobbling up e-commerce market share and posting staggering revenues. It will even post profits. And it will pay next to nothing, and possibly nothing at all, in federal taxes.
Earlier this week, Matthew Gardner of the Institute on Taxation and Economic Policy reported that Amazon, which recorded $5.6 billion in profits in 2017, paid zero in federal taxes, thanks to “various tax credits and tax breaks for executive stock options.” That’s remarkable in isolation, but especially remarkable when you consider that Donald Trump’s corporate tax bill hadn’t even gone into effect; Amazon projects it will get an additional $789 million in benefits from the passage of that bill. And it’s even more remarkable given that Amazon was already paying a much lower rate than other companies. The tax bill may have cut the corporate tax rate from 35 to 20 percent, but Amazon had paid