Online retail giant Amazon doubled its profits last year but for the second year in a row paid zero dollars in US federal income tax.
The $AU1.1 trillion company recorded a $AU15.8 billionprofit in 2018 in its home country but managed to skip the statutory 21 per cent corporate tax thanks to accounting manoeuvring — it leveraged unspecified tax credits and stock-based compensation deductions.
Amazon instead, as reported by the Institute on Taxation and Economic Policy, last year recorded a federal income tax rebate of $AU129 million, which means one of the world’s largest companies had a tax rate of less than 1 per cent.
The avoidance has naturally raised eyebrows, particularly from Senator Bernie Sanders whose Democratic primary campaign in 2016 attacked the “billionaire class” and the “rigged economy”.
“Amazon made $US16.8 billion in profits over the past two years but have paid ZERO in federal income taxes,” he tweeted. “In fact it got a $US269 million tax refund.”
“Our job: Demand large corporations pay their fair share in taxes so that we can rebuild the disappearing middle class.”
Amazon made $16.8 billion in profits over the past two years but have paid ZERO in federal income taxes. In fact it got a $269 million tax refund.
Our job: Demand large corporations pay their fair share in taxes so that we can rebuild the disappearing middle class.
— Bernie Sanders (@SenSanders) February 13, 2019
Amazon is facing further backlash after it abruptly bailed on plans on Thursday for a new headquarters in New York that would have brought 25,000 jobs to the city.
The e-commerce giant made the decision after politicians and activists objected to the nearly $AU4.22 billion in tax breaks promised to what is already one of the world’s richest, most powerful companies.
“We are disappointed to have reached this conclusion — we love New York,” the online giant from Seattle said in a blog post announcing its withdrawal.
The stunning move was a serious blow to Governor Andrew Cuomo and Mayor Bill de Blasio, who had lobbied intensely to land the project, competing against more than 200 other metropolitan areas across the continent that were practically tripping over each other to offer incentives to Amazon in a bidding war the company stoked.
Mr Cuomo lashed out at fellow New York politicians over Amazon’s change of heart, saying the project would have helped diversify the city’s economy, cement its status as an emerging techhub and generate money for schools, housing and transit.
“A small group (of politicians) put their own narrow political interests above their community,” he said.
Democratic Republican Alexandria Ocasio-Cortez, New York City’s new liberal firebrand, exulted over Amazon’s pullout.
“Today was the day a group of dedicated, everyday New Yorkers and their neighbours defeated Amazon’s corporate greed, its worker exploitation, and the power of the richest man in the world,” she tweeted, referring to Amazon CEO Jeff Bezos.
Anything is possible: today was the day a group of dedicated, everyday New Yorkers & their neighbors defeated Amazon’s corporate greed, its worker exploitation, and the power of the richest man in the world. https://t.co/nyvm5vtH9k
— Alexandria Ocasio-Cortez (@AOC) February 14, 2019
Amazon faced fierce opposition over the tax breaks, with critics complaining that the project was an extravagant giveaway — or worse, a shakedown — and that it wouldn’t provide much direct benefit to most New Yorkers.
The list of grievances against the project grew as the months wore on, with critics complaining about Amazon’s stance on unions and some Long Island City residents fretting that the company’s arrival would drive up rents and other costs.
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