Feb 08, 2022
An analysis released Monday 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%.
"These are tax breaks that Congress has endorsed and even expanded."
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.
\u201cAfter 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/ZZid1UmSdo\u201d— ITEP (@ITEP) 1644268395
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.
Join Us: News for people demanding a better world
Common Dreams is powered by optimists who believe in the power of informed and engaged citizens to ignite and enact change to make the world a better place. We're hundreds of thousands strong, but every single supporter makes the difference. Your contribution supports this bold media model—free, independent, and dedicated to reporting the facts every day. Stand with us in the fight for economic equality, social justice, human rights, and a more sustainable future. As a people-powered nonprofit news outlet, we cover the issues the corporate media never will. |
Our work is licensed under Creative Commons (CC BY-NC-ND 3.0). Feel free to republish and share widely.
An analysis released Monday 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%.
"These are tax breaks that Congress has endorsed and even expanded."
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.
\u201cAfter 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/ZZid1UmSdo\u201d— ITEP (@ITEP) 1644268395
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.
An analysis released Monday 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%.
"These are tax breaks that Congress has endorsed and even expanded."
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.
\u201cAfter 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/ZZid1UmSdo\u201d— ITEP (@ITEP) 1644268395
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.
We've had enough. The 1% own and operate the corporate media. They are doing everything they can to defend the status quo, squash dissent and protect the wealthy and the powerful. The Common Dreams media model is different. We cover the news that matters to the 99%. Our mission? To inform. To inspire. To ignite change for the common good. How? Nonprofit. Independent. Reader-supported. Free to read. Free to republish. Free to share. With no advertising. No paywalls. No selling of your data. Thousands of small donations fund our newsroom and allow us to continue publishing. Can you chip in? We can't do it without you. Thank you.