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Amazon Will Pay $0 in Federal Taxes on $11.2 Billion Profits (fortune.com)
Those wondering how many zeros Amazon, which is valued at nearly $800 billion, has to pay in federal taxes might be surprised to learn that its check to the IRS will read exactly $0.00. From a report: According to a report published by the Institute on Taxation and Economic (ITEP) policy Wednesday, the e-tail/retail/tech/entertainment/everything giant won't have to pay a cent in federal taxes for the second year in a row. This tax-free break comes even though Amazon almost doubled its U.S. profits from $5.6 billion to $11.2 billion between 2017 and 2018. To top it off, Amazon actually reported a $129 million 2018 federal income tax rebate -- making its tax rate -1%.
I'm all for capitalism but it's ridiculous that Amazon gets money back from the government after those huge profits!
Circle the wagons and fire inward. Entropy increases without bounds.
Q: So who is paying for their employees' Social Security and SSI disability?
A: We are.
I'm more than a little bit tired of the wealthiest corporations and individuals paying proportionally less in taxes than even people in the bottom tax bracket. Giving tax breaks to help small businesses grow makes sense. Giving huge tax breaks to help one of the largest businesses in the world grow does not.
It's time for a tax revolution at the ballot box. Vote only for politicians who declare a willingness to make our tax code more fair and less protective of the wealthy. Raise capital gains taxes. Phase out corporate tax exemptions for companies earning more than 100M annually or add a business version of the alternative minimum tax. Make our tax system fair.
Check out my sci-fi/humor trilogy at PatriotsBooks.
It is common for companies that made several years of losses to not pay tax until those losses are zeroed from current profits.
Maybe nothing to see here?
Where are we going and why are we in a handbasket?
They are a business expense and are passed directly to the consumer of their goods and/or services.
So actually, you pay their taxes.
Before we bash Amazon it's important to note the following from the linked to article.
"...ITEP notes that its non-existent federal tax payment is a result of the Trump Administration’s corporation-friendly tax cuts. The think tank writes that the 2017 Tax Cuts and Jobs Act not only decreased corporate tax rates from 35% to 21%, but it also didn’t close “a slew of tax loopholes that allow profitable companies to routinely avoid paying federal and state income taxes on almost half of their profits.”
According to The Week, Amazon ended up paying an 11.4% federal income tax rate between 2011 and 2016, which is a contrast to the -1% rate this year."
I ignore Anonymous Coward posts. If you want to discuss something, that's awesome. Log in.
Q: So who is paying for their employees' Social Security and SSI disability?
A: We are.
No, Social security and SSI disability are paid by both the employee and the employer, and are not "Income Taxes".
Your ignorance of the topic undercuts and invalidates your argument.
Ken
Talk to the folks that write the tax code, they structured it this way for a reason, and we (collectively) keep re-electing them.
Ken
Oh no! Then customers would be forced to support local, brick-and-mortar, small businesses instead (the ones that actually DO pay taxes and create real jobs).
Support Right To Repair Legislation.
Well, it's not average, but maybe close enough? 44% of the people pay $0.00 in federal income taxes:
https://www.marketwatch.com/st...
Amazon actually spends their money to help bring people good things.
The fine print of Amazon’s income tax disclosure shows that this achievement is partly due to various unspecified “tax credits” as well as a tax break for executive stock options.
In researching what "a tax break for executive stock options" means, I found a Forbes article from 2013, that described it this way:
The option break,which Sen. Carl Levin (D-MI) calls an “unjustified corporate loophole,” works like this: A company issues options to executives to buy stock at a certain, usually low price. (For example, Facebook’s Mark Zuckerberg had options to purchase 120 million shares for just 6 cents a share when the company went public last May at $38 per share.) Then, when the executive exercises those options, the company gets to deduct the difference between the executive’s exercise price and the shares' higher market value, even though the company hasn’t actually paid the exec that large amount of cash. As a result, while Facebook reported $1.1 billion in pretax U.S. profits for 2012, it owed no corporate income taxes and in fact qualified for $429 million in refunds. (One key here is that companies report their earnings to shareholders and the SEC under different rules than they use to report taxable income to the IRS.)
It went on to explain:
Defenders of this tax treatment for executive options point out that it’s not like Uncle Sam is getting stiffed. That's because the executive must report the same amount deducted by the company as ordinary income. So while corporations avoid a 35% corporate income tax, wealthy executives pay individual income taxes (after this year's fiscal cliff tax deal) at a top 39.6% rate. Plus, the whole amount is considered compensation subject to Medicare taxes at a 3.8% rate. (That’s the normal 2.9% Medicare rate, equally split between employer and employee, plus a 0.9% Medicare surcharge on highly paid employees that was part of ObamaCare.) And, of course, the exec has state individual income taxes to pay too. (In California, the top rate on income above $1 million is now a whopping 13.3%.) Some companies such as Facebook, “net settle” options. As Forbes contributor Robert Wood, a tax lawyer, explains here, that means Facebook made tax payments to Uncle Sam on employees’ behalf (essentially, it withheld taxes the workers owed), giving them only the shares they would end up with, after tax. (Note that the tax treatment of executive stock options—also called nonqualified stock options--is entirely different than the tax treatment of the "qualified" or "incentive" stock options typically handed out to rank and file employees.
So taxes were paid, mainly by the employee exercising the stock options, but also to an extent by the corporation as well - the article sums it up thusly:
To tax geeks, the treatment of executive stock options makes perfect sense: A tax deduction on the corporate side is balanced by taxable income to the employee.
Source: Stock Options Meant Big Tax Savings For Apple And JPMorgan, As Well As Facebook
The takeaways - rather than tax the income at corporate tax rates (21.5%) the income is taxed at the highest individual rate (39.6%) AND Medicare at 3.8% and state tax rates, and the source of these deductions predate the Trump administration, since the above article is from during the Obama Administration. The origins of the tax break are left as a research project for the reader, I've done my part by showing the taxes are still paid by the employee that got the tax break, and paid at a higher rate than the corporation would have paid. (All tax rates described are from the 2103 article, the concerned reader is invited to substitute in post-Trump tax break rates if they like, the principle remains the same.)
Ken
This has nothing to do with the Trump tax reform, it is from previously earned tax credits and executives exercising stock options, see my fuller comment here to understand this is based on tax "loopholes" that pre-date the Trump administration (it describes how Facebook earned $1BN in profit in 2012 and got a tax REFUND of over $400M - the Trump Tax Breaks weren't in effect in 2012...
Ken
Since Amazon products are shipped all over the world, 70% covered by water and US Navy is to keep ocean commerce free of pirates, they should help pay for that service. Also other military services allows commerce of US products that also allows Amazon to ship their sales stuff around. Unless Bezos gives up Blue Origin to fund his own military services to allow undisturbed shipment of products, he should pay taxes. Yikes a private military of Amazon, now that's a scary concept.
mfwright@batnet.com
The average taxpayer doesn't buy billions of dollars worth of depreciating assets that incentivize economic growth through myriad other mechanisms than a simple income tax return.
The average tax payer spends a thousand dollars a month. There's a few hundred million of them, and combined they spend tens of billions on the economy. Yet we tax them just fine.
It's not a way to organize a society, it's a way to fund things of public benefit. Even the found fathers recognized the need for taxation to fund the Continental Army.
There's allot of people who want no taxes, but that is in effect saying you don't want first responders, public schools, jails or infrastructure - roads, bridges, etc. It's cheaper and safer to pay for public schools than to deal with the hoards of uneducated, unemployable hoodlums that would be rampant in society.
Government provides services. Those services have to be funded. Yes, theoretically we could probably run a government on just a Value Added Tax, if we weren't trying to be the policeman for the entire world.
Meh, our defense budget is only $676 B out of a total budget of $4 T. It's not the cold war any more.
Actual government services, such as roads and courts, are even less, down around 10% IIRC. Those probably could be funded with some other form of tax, but the form of the tax isn't some much the point. Mostly our government is a pension system these days, and for some reason free Americans are hostile to the idea of alternatives to systems like Social Security and Medicare, which give the government the power to eliminate undesirables by simply not mailing them a check.
Socialism: a lie told by totalitarians and believed by fools.
So the thing I'm amazed at is given the stranglehold Amazon seems to have on its market, they only made 11.4 Billion for the year. From what I can see, Apple posted a 14.1 Billion profit on Q4 alone.
" In 2016, the company earned $10 billion but recorded a tax benefit of $400 million for a 12-month tax rate of -4.5%, according to Forbes."
"GE was one of 18 Fortune 500 companies that paid no net federal income taxes between 2008 and 2015"
https://www.thestreet.com/stor...
When Fascism comes to America, it will call itself Anti-Fascism, and tell you to give up your guns.
Even though ( via Citizens United ) Corporations are now " people " too, not all citizens are equal apparently. Especially when it comes to paying their share of taxes. :|
Whereas the vast majority of us pay somewhere between 20-30% in Federal Taxes every year, it seems most corporations pay no where near this amount. With some, like Amazon, not paying anything at all.
How do we fix this ?
Can it be fixed ?
Why is the majority of the tax burden sitting on the shoulders of the individual tax payer instead of the multi-billion dollar shoulders of Mega-Corp ?
This wouldn't happen with no deduction flat taxes, or even a sliding scale no deduction tax system.
I dispute your finding
http://www.governing.com/week-...
and
https://rockinst.org/wp-conten...
with the data to support it from
https://www.govinfo.gov/conten...
NY and NJ pay a lot of taxes and don't get it all back.
and Politifact California, can't find your reference, cite your source
if you see me, smile and say hello.
All those against a simple, flat tax; how is the complex, loophole ridden tax system working out for you?