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Joe Biden Twitter joined Thursday to join various other Democrats who revealed to Amazon in the light of information that the company would have paid no federal taxes in 2018.
I have nothing against Amazon, but no company making billions of dollars in profits should pay a lower tax rate than firefighters and teachers. We must reward work, not just wealth. https://t.co/R6xaN3vXGT
– Joe Biden (@JoeBiden) June 13, 2019
"We have to reward work, not just wealth," said Biden. But Amazon replied that their wealth was creating work:
We have paid $ 2.6 billion in corporate taxes since 2016. We pay every penny we owe. Congress has designed tax laws to encourage businesses to reinvest in the US economy. We have. $ 200 billion in investments since 2011 and 300,000 US jobs. Suppose that VP Biden's complaint concerns the tax code, not Amazon. https://t.co/uPUv1Tzlma
– Amazon News (@amazonnews) June 13, 2019
This comes amid reports that 60 Fortune 500 companies avoided all federal income taxes in 2018.
Amazon nearly doubled its pre-tax income in 2018, totaling $ 10.8 billion, without paying any federal income tax. "No company making billions of dollars in profits should pay a lower tax rate than firefighters and teachers," Biden said.
However, Amazon's tax returns are private. These figures are based on "current provisions" published for accounting purposes.
The tax cuts in 2017 widened tax breaks and lowered corporate tax rates to 21%. It has allowed companies to expense their capital expenditures in order to encourage investment and innovation and create jobs.
If the tax rate had been paid in full, without taking advantage of tax loopholes, it would have netted Amazon $ 2.27 billion in 2018. Instead, Amazon has announced a $ 129 million reduction. federal income tax dollars, which means that Amazon paid -1% federal tax. , bringing the profits of Amazon to $ 11.2 billion.
"Because we operate in a low-margin business and invest in innovation and infrastructure, we do not realize as much pre-tax profits as other high-tech companies, so our taxes are lower." said Amazon in a statement. And it's true: out of 2o17, Amazon spent $ 23 billion on research and development more than any other American company. This is one of the major Amazon deductions in the tax code that the company used to pay a negative federal tax.
This does not mean that Amazon has not paid taxes. In 2018, Amazon paid $ 1.2 billion in taxes, but it could have been local, regional or international income tax levies. They were not taken into account in reports that Amazon would have paid $ 0 in taxes.
Conclusion: The real argument is whether tax loopholes to spur job growth and investment are worth sacrificing federal tax money that a simple rate could offer.
[[[[Photo of Scott Olson / Getty Images]
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