Join our mailing list to receive the latest news and updates from our team.
You have Successfully Subscribed!
Amazon saved a ton of money on taxes in 2021 using perfectly legal—thanks to Congressionally provided loopholes—maneuvers to bring their tab down from $7.3 billion which would be the statutory rate.
An analysis released February 7th shows that Amazon utilized several perfectly legal mechanisms to avoid paying $5.2 billion in federal corporate income taxes in 2021, a year in which the online retail behemoth saw its profits and sales skyrocket.
Matthew Gardner, a senior fellow at the Institute on Taxation and Economic Policy (ITEP), estimated that given Amazon’s record-breaking $35 billion in U.S. pretax income for fiscal year 2021, the Seattle-based corporate giant paid an “effective federal income tax rate of 6%”—far lower than the statutory corporate tax rate of 21%.
Had Amazon paid the latter rate on its 2021 U.S. income, Gardner noted, the company’s federal tax bill would have amounted to more than $7.3 billion.
“Instead, the company reports a current federal income tax expense of $2.1 billion,” Gardner wrote Tuesday. “Amazon’s 2021 federal income tax payment is comparatively significant for a profitable company that paid less than $0 in the first year of the Trump-GOP tax law. But the company’s continuous tax avoidance adds up over time. Over the past four years, Amazon reported a total federal tax rate of just 5.1% on over $78 billion of U.S. income.”
ITEP’s latest analysis caught the attention of Warren Gunnels, the staff director for Senate Budget Committee Chairman Bernie Sanders (I-Vt.), a longtime critic of Amazon’s tax dodging and mistreatment of workers.
“Class warfare is Amazon making a record-breaking $36 billion profit last year, avoiding $5.2 billion in taxes, and paying an effective federal income tax rate of 6% while Jeff Bezos spends his fortune on union-busting, flying to outer space, and protecting his $500 million yacht,” Gunnels tweeted late Monday, referring to Amazon’s billionaire executive chairman and former CEO.
After seeing record profits, Amazon managed to avoid paying a whopping $5.2 billion in federal taxes last year. Another case that underscores why Congress needs to fix loopholes that allow corporations to pay far less in taxes or sometimes nothing at all. https://t.co/ZZid1UmSdopic.twitter.com/bir0ZSoxCL
Gardner explained that Amazon used several “familiar” legal maneuvers to slash its federal tax bill in 2021, including tax credits and deductions such as the foreign-derived intangible income (FDII) deduction—which was made available by the 2017 Trump-GOP tax law.
“These are tax breaks that Congress has endorsed and even expanded,” Gardner emphasized. “This means that Amazon’s 6% tax rate is a result that lawmakers have enabled and could prevent if they summon the political will to do so. This outcome will be very unlikely for Amazon and other very low-tax corporations to replicate in the future if Congress enacts the minimum corporate tax provision included in the Build Back Better Act passed by the House of Representatives in November.”
While raking in massive profits, handing CEO Andy Jassy a huge compensation package, and doubling its cap on base salaries for corporate employees to $350,000, Amazon is working aggressively to crush a unionization effort by warehouse employees in Bessemer, Alabama.
Bessemer workers are currently voting for the second time on whether to unionize after the National Labor Relations Board ruled that Amazon unlawfully interfered in the previous election last year.
According to Glassdoor, the average Amazon warehouse worker in the U.S. makes $16 an hour—roughly $31,000 a year for a full-time worker.
Bezos, meanwhile, saw his wealth grow by $1.4 billion in 2021.
Common Dreams has been providing breaking news & views for the progressive community since 1997. They are independent, non-profit, advertising-free and 100% reader supported.
{"id":null,"mode":"form","open_style":"in_place","currency_code":"USD","currency_symbol":"$","currency_type":"decimal","blank_flag_url":"https:\/\/factkeepers.com\/wp-content\/plugins\/tip-jar-wp\/\/assets\/images\/flags\/blank.gif","flag_sprite_url":"https:\/\/factkeepers.com\/wp-content\/plugins\/tip-jar-wp\/\/assets\/images\/flags\/flags.png","default_amount":500,"top_media_type":"none","featured_image_url":false,"featured_embed":"","header_media":null,"file_download_attachment_data":null,"recurring_options_enabled":true,"recurring_options":{"never":{"selected":true,"after_output":"One time only"},"weekly":{"selected":false,"after_output":"Every week"},"monthly":{"selected":false,"after_output":"Every month"},"yearly":{"selected":false,"after_output":"Every year"}},"strings":{"current_user_email":"","current_user_name":"","link_text":"Leave a tip","complete_payment_button_error_text":"Check info and try again","payment_verb":"Pay","payment_request_label":"Factkeepers.com","form_has_an_error":"Please check and fix the errors above","general_server_error":"Something isn't working right at the moment. Please try again.","form_title":"Help Support Factkeepers","form_subtitle":null,"currency_search_text":"Country or Currency here","other_payment_option":"Other payment option","manage_payments_button_text":"Manage your payments","thank_you_message":"Thank you for being a supporter!","payment_confirmation_title":"Factkeepers.com","receipt_title":"Your Receipt","print_receipt":"Print Receipt","email_receipt":"Email Receipt","email_receipt_sending":"Sending receipt...","email_receipt_success":"Email receipt successfully sent","email_receipt_failed":"Email receipt failed to send. Please try again.","receipt_payee":"Paid to","receipt_statement_descriptor":"This will show up on your statement as","receipt_date":"Date","receipt_transaction_id":"Transaction ID","receipt_transaction_amount":"Amount","refund_payer":"Refund from","login":"Log in to manage your payments","manage_payments":"Manage Payments","transactions_title":"Your Transactions","transaction_title":"Transaction Receipt","transaction_period":"Plan Period","arrangements_title":"Your Plans","arrangement_title":"Manage Plan","arrangement_details":"Plan Details","arrangement_id_title":"Plan ID","arrangement_payment_method_title":"Payment Method","arrangement_amount_title":"Plan Amount","arrangement_renewal_title":"Next renewal date","arrangement_action_cancel":"Cancel Plan","arrangement_action_cant_cancel":"Cancelling is currently not available.","arrangement_action_cancel_double":"Are you sure you'd like to cancel?","arrangement_cancelling":"Cancelling Plan...","arrangement_cancelled":"Plan Cancelled","arrangement_failed_to_cancel":"Failed to cancel plan","back_to_plans":"\u2190 Back to Plans","update_payment_method_verb":"Update","sca_auth_description":"Your have a pending renewal payment which requires authorization.","sca_auth_verb":"Authorize renewal payment","sca_authing_verb":"Authorizing payment","sca_authed_verb":"Payment successfully authorized!","sca_auth_failed":"Unable to authorize! Please try again.","login_button_text":"Log in","login_form_has_an_error":"Please check and fix the errors above","uppercase_search":"Search","lowercase_search":"search","uppercase_page":"Page","lowercase_page":"page","uppercase_items":"Items","lowercase_items":"items","uppercase_per":"Per","lowercase_per":"per","uppercase_of":"Of","lowercase_of":"of","back":"Back to plans","zip_code_placeholder":"Zip\/Postal Code","download_file_button_text":"Download File","input_field_instructions":{"tip_amount":{"placeholder_text":"How much would you like to donate? You can change this amount to anything you would like.","initial":{"instruction_type":"normal","instruction_message":"How much would you like to donate? You can change this amount to anything you would like."},"empty":{"instruction_type":"error","instruction_message":"How much would you like to donate? You can change this amount to anything you would like."},"invalid_curency":{"instruction_type":"error","instruction_message":"How much would you like to donate? You can change this amount to anything you would like."}},"recurring":{"placeholder_text":"Recurring","initial":{"instruction_type":"normal","instruction_message":"How often would you like to donate this?"},"success":{"instruction_type":"success","instruction_message":"How often would you like to donate this?"},"empty":{"instruction_type":"error","instruction_message":"How often would you like to donate this?"}},"name":{"placeholder_text":"Name on Credit Card","initial":{"instruction_type":"normal","instruction_message":"Enter the name on your card."},"success":{"instruction_type":"success","instruction_message":"Enter the name on your card."},"empty":{"instruction_type":"error","instruction_message":"Please enter the name on your card."}},"privacy_policy":{"terms_title":"Terms and conditions","terms_body":null,"terms_show_text":"View Terms","terms_hide_text":"Hide Terms","initial":{"instruction_type":"normal","instruction_message":"I agree to the terms."},"unchecked":{"instruction_type":"error","instruction_message":"Please agree to the terms."},"checked":{"instruction_type":"success","instruction_message":"I agree to the terms."}},"email":{"placeholder_text":"Your email address","initial":{"instruction_type":"normal","instruction_message":"Enter your email address"},"success":{"instruction_type":"success","instruction_message":"Enter your email address"},"blank":{"instruction_type":"error","instruction_message":"Enter your email address"},"not_an_email_address":{"instruction_type":"error","instruction_message":"Make sure you have entered a valid email address"}},"note_with_tip":{"placeholder_text":"Your note here...","initial":{"instruction_type":"normal","instruction_message":"Attach a note to your tip (optional)"},"empty":{"instruction_type":"normal","instruction_message":"Attach a note to your tip (optional)"},"not_empty_initial":{"instruction_type":"normal","instruction_message":"Attach a note to your tip (optional)"},"saving":{"instruction_type":"normal","instruction_message":"Saving note..."},"success":{"instruction_type":"success","instruction_message":"Note successfully saved!"},"error":{"instruction_type":"error","instruction_message":"Unable to save note note at this time. Please try again."}},"email_for_login_code":{"placeholder_text":"Your email address","initial":{"instruction_type":"normal","instruction_message":"Enter your email to log in."},"success":{"instruction_type":"success","instruction_message":"Enter your email to log in."},"blank":{"instruction_type":"error","instruction_message":"Enter your email to log in."},"empty":{"instruction_type":"error","instruction_message":"Enter your email to log in."}},"login_code":{"initial":{"instruction_type":"normal","instruction_message":"Check your email and enter the login code."},"success":{"instruction_type":"success","instruction_message":"Check your email and enter the login code."},"blank":{"instruction_type":"error","instruction_message":"Check your email and enter the login code."},"empty":{"instruction_type":"error","instruction_message":"Check your email and enter the login code."}},"stripe_all_in_one":{"initial":{"instruction_type":"normal","instruction_message":"Enter your credit card details here."},"empty":{"instruction_type":"error","instruction_message":"Enter your credit card details here."},"success":{"instruction_type":"normal","instruction_message":"Enter your credit card details here."},"invalid_number":{"instruction_type":"error","instruction_message":"The card number is not a valid credit card number."},"invalid_expiry_month":{"instruction_type":"error","instruction_message":"The card's expiration month is invalid."},"invalid_expiry_year":{"instruction_type":"error","instruction_message":"The card's expiration year is invalid."},"invalid_cvc":{"instruction_type":"error","instruction_message":"The card's security code is invalid."},"incorrect_number":{"instruction_type":"error","instruction_message":"The card number is incorrect."},"incomplete_number":{"instruction_type":"error","instruction_message":"The card number is incomplete."},"incomplete_cvc":{"instruction_type":"error","instruction_message":"The card's security code is incomplete."},"incomplete_expiry":{"instruction_type":"error","instruction_message":"The card's expiration date is incomplete."},"incomplete_zip":{"instruction_type":"error","instruction_message":"The card's zip code is incomplete."},"expired_card":{"instruction_type":"error","instruction_message":"The card has expired."},"incorrect_cvc":{"instruction_type":"error","instruction_message":"The card's security code is incorrect."},"incorrect_zip":{"instruction_type":"error","instruction_message":"The card's zip code failed validation."},"invalid_expiry_year_past":{"instruction_type":"error","instruction_message":"The card's expiration year is in the past"},"card_declined":{"instruction_type":"error","instruction_message":"The card was declined."},"missing":{"instruction_type":"error","instruction_message":"There is no card on a customer that is being charged."},"processing_error":{"instruction_type":"error","instruction_message":"An error occurred while processing the card."},"invalid_request_error":{"instruction_type":"error","instruction_message":"Unable to process this payment, please try again or use alternative method."},"invalid_sofort_country":{"instruction_type":"error","instruction_message":"The billing country is not accepted by SOFORT. Please try another country."}}}},"fetched_oembed_html":false}
