An activist holds a sign demanding that online retailer Amazon pay its share of taxes on April 24, 2018. (Photo: Sean Gallup via Getty Images)
'Class Warfare' in Action: Amazon Dodged $5.2 Billion in Taxes in 2021
"Amazon's 6% tax rate is a result that lawmakers have enabled and could prevent if they summon the political will to do so," said one expert.
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.
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 are at a crossroads
This country and this world are at a monumental crossroads. In a few short weeks, US voters will have an opportunity to beat back the forces of fascism and confront the billionaires who are rigging the economy, our media system, and our democracy, making it increasingly impossible for ordinary people to get by. We’re not just talking about the election. We’re talking about what must be done once these fascist elements are vanquished from power. We need a bolder set of solutions than what either major party has so far been willing to offer and a working-class movement ready to fight like hell for it. Trump didn't emerge from nowhere. The conditions that fueled MAGA authoritarianism were created by decades of radical neoliberal economic policies and a corrupt political system dominated by corporate interests. They slashed taxes on the super-rich, promising that the benefits would trickle down. They said giveaways to the corporate titans would make life more affordable for the rest of us. It was all bullshit. And when a bitter, betrayed populace searches for someone to blame, right-wing demagogues have little trouble finding scapegoats. People know when they're being lied to, but you won't hear any of this from the corporate media. Only independent journalism—powered and funded by people who believe in building a better world—can deliver truly trustworthy daily news. Our Fall Campaign is underway, and we need your help. To power our newsroom through the rest of the year, we need to raise $125,000 by midnight on October 31. So if you share our vision, please contribute whatever you can to sustain our work. |
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.
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.
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.