Amazon CEO Jeff Bezos has said he supports increasing corporate tax rates after receiving criticism, yet again, from US President Joe Biden.
Bezos' stance was revealed in an announcement and a tweet.
The reference to the Biden administration's infrastructure plans doesn't mention that the President plans to find some of his planned $2 trillion by increasing corporate tax rates from 21 to 28 per cent.
A rate of 28 per cent would place US corporate tax halfway between current rates and the pre-2017 rate of 35 per cent. To prevent multinationals from simply fleeing to tax havens, Biden has also advocated increasing the global minimum tax to 21 per cent.
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The infrastructure plan allocates $621bn into transportation including bridges, roads, airports and ports, plus billions to improve broadband. Amazon stands to benefit considerably from such measures.
Let me be clear: Hardworking Americans should not be paying more in federal income taxes than Amazon or Netflix.— Joe Biden (@JoeBiden) October 30, 2020
It’s time for big corporations to finally pay their fair share.
Biden's criticisms continued into 2021. In remarks delivered on March 31, Biden said an independent analysis found 91 of Fortune 500 companies used various loopholes to avoid paying any federal income tax. The speech included the following line:
I don’t want to punish them, but that’s just wrong
A day after that speech, Amazon spokesperson Jay Carney tweeted the following:
If the R&D Tax Credit is a “loophole," it's certainly one Congress strongly intended. The R&D Tax credit has existed since 1981, was extended 15 times with bi-partisan support and was made permanent in 2015 in a law signed by President Obama.— Jay Carney (@JayCarney) March 31, 2021
Amazon paid exactly zero dollars in federal taxes in 2017 and 2018, thanks to use of legitimate deductions that allowed it to reduce its liabilities. Changing the rate of company tax would therefore not necessarily mean Amazon pays more, although in 2019 the company paid $162m of federal income taxes on $13.9bn pre-tax income revenue, deferring $914m. The tax it has paid accounts for 1.2 per cent of 2019 pre-tax income, a far lower rate than most workers or corporations ever pay. ®