The Amazon chief presents himself as a defender of the US economy by endorsing an increase in taxes

0
5


Posted in: Last updated:

Washington (AFP)

It is often cited as an example of multinational companies that avoid paying taxes, but Amazon is seeking to change this bad reputation that has been attached to it for years due to tax competition between states and between US states.

On Tuesday, its founder and president, Jeff Bezos, surprised everyone by announcing his support for the corporate tax increase that Joe Biden wants to fund his plan to invest $ 2,000 billion in infrastructure.

The US president has attacked the e-commerce giant specifically on this topic.

Biden said last week, “In 2019, an independent analysis revealed that there are 91 companies, I confirm: 91 out of (…) the largest companies in the world, including Amazon, resorted to various legal tricks and did not pay a single cent in federal income tax on … Earnings. ”

The Institute for Tax and Economic Policy, a think tank that specializes in tax policy, says Amazon paid a 9.4% federal tax on $ 20 billion in profits, after two years during which it did not pay anything.

This lower rate is partly due to a tax adjustment decided by Donald Trump in 2017 that led to drastic cuts in corporate taxes from 35% to 21% during his term. Joe Biden plans to return it to 28%.

But Amazon has also benefited from tax breaks related to reducing assets and investments. To defend itself, the Seattle group regularly highlights their contributions to wealth and jobs creation.

– The system is responsible –

In 2019, the company tweeted in response to a comment from Joe Biden as a candidate, “We pay whatever we owe. Congress has passed laws encouraging companies to reinvest in the US economy.”

Amazon said it allocated $ 1.7 billion last year to pay its federal taxes and that it would spend billions more on payroll taxes, local taxes and tariffs.

“We support the vision of the Joe Biden government that wants to make bold investments in US infrastructure,” said Jeff Bezos, who is the richest man in the world with an estimated wealth of more than $ 188 billion, according to Forbes magazine.

Daniel Chaveiro, a law professor at New York University, explains that Amazon and other companies often resort to “daring” tax methods and can thus successfully circumvent the authorities, but in general they simply benefit from the provisions set by law.

The tax law expert adds that “the political system is responsible above all for the problem.”

The Institute for Tax and Economic Policy says at least 55 large, profitable U.S. companies paid no federal taxes in 2020, including delivery group FedEx and sportswear maker Nike.

“Corporate tax avoidance hurts ordinary Americans by reducing resources devoted to health, road repairs and other essential sectors,” said Institute director Amy Hanauer recently.

– Sharing of good practices –

Amazon’s massive investment in building warehouses and other services is cut from its taxable profits, which greatly reduces the amount the company owes the treasury.

This tax system is based on betting on higher winnings in the future. The growing group, Chaveiro said, “is paying less tax now, but in theory it will pay more when it stops expanding its business.”

He pointed out that the practice of transferring profits from one country to another to take advantage of tax loopholes is a matter of moral controversy and shows the need to coordinate taxes between countries.

The US Treasury Department recently floated the idea of ​​introducing a minimum tax rate globally for companies.

The proposal, which was supported by the International Monetary Fund and welcomed by countries such as France and Germany, may be agreed upon by the summer thanks to the ongoing negotiations in the G20.

Therefore, Amazon has an interest in establishing good relations with the Biden government. The impact of the president’s planned tax increase will likely be less costly for her than a potential tax on digital platforms advocated by European countries.

“Amazon needs support from the United States government to combat the dangers of double taxation,” noted Steve Rosenthal, a researcher at the Urban Brookings Center for Tax Policy.

Hence, Jeff Bezos’s support for the president’s plan may, in his opinion, stem from “Amazon’s hope to win Biden’s favor” before the negotiations end.





LEAVE A REPLY

Please enter your comment!
Please enter your name here