Amazon Dodged $5.2 Billion in Taxes in 2021

by | Feb 8, 2022 | Money and Politics, Wealth Gap

Photo by Bryan Angelo

Amazon Dodged $5.2 Billion in Taxes in 2021

by | Feb 8, 2022 | Money and Politics, Wealth Gap

Photo by Bryan Angelo
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.

Republished with permission from Common Dreams, by Jake Johnson

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.

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.

<a href="http://commondreams.org" target="_blank">Common Dreams</a>

Common Dreams

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1 Comment

  1. C J Flynn

    Another place to attack the Repressives Congresscritters who voted for the give-away during the next election.

    Reply

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