For the second year in a row, Amazon will pay a grand total of $0 in federal income taxes. This frustrating trend is part of a much bigger problem with the tech giant.
Amazon is valued at almost $800 billion as a company. Between 2017 and 2018, Amazon nearly doubled its U.S. profits from $5.6 billion to $11.2 billion, Fortune reported. Despite that, the Institute on Taxation and Economic Policy found Amazon paid no income tax thanks to unnamed “tax credits”.
In fact, ITEP reported Amazon will receive a federal income tax rebate of $129 million, working out to a tax rate of -1%.
The Trump Administration plays a huge role in Amazon’s lack of payment. ITEP highlighted the 2017 Tax Cuts and Job Act that cut corporate tax rates from 35% to 21%. It also failed to “close a slew of tax loopholes that allow profitable companies to routinely avoid paying federal and state income taxes on almost half of their profits.”
But, this isn’t the beginning of Amazon’s tax controversies. In June of 2018, Amazon also killed a small tax in Seattle. The proposed $275-per-employee tax on businesses making at least $20 million in gross revenue had the goal of raising $50 million annually to help the homeless population, as reported by Vanity Fair.
King County, which Seattle is located in, has the third-largest homeless population in the country. All Home reported 33% of King County’s homeless population are Black. Part of Seattle’s crisis is due to effects of a “tech boom” causing rocketing housing prices. As Seattle’s biggest employer, Amazon could have helped rectify the situation by paying the tax.
In addition, when searching for a city to set up new headquarters, Amazon was lured by potential tax breaks. The tech giant planned to build Amazon HQ2 in New York City due to the state offering $1.7 billion in grants and tax breaks.
Amazon’s proposed move to Long Island City, Queens was met by protests from those concerned about gentrification and a widening income gap, as reported by Vox.
The company abandoned its New York plans on Thursday.
