Amazon Reveals New Details About Its Federal Tax Bill in Shot Across the Bow at Critics (geekwire.com) 42
Amazon disclosed new details about its U.S. taxes for 2019 in public financial documents and a blog post Friday morning, saying its federal income tax expense for the year was more than $1 billion, in addition to more than $2 billion in other types of federal taxes. From a report: The disclosures appear designed to push back against assertions from politicians and researchers that Amazon does not pay any federal income tax. However, the federal income tax is still a small fraction of the company's profits, representing about 6 percent of the $14.5 billion in operating income that Amazon reported Thursday in its year-end financial report. "Like most governments that try to encourage economic investment by companies, the U.S. Congress has written a tax code that incentivizes the type of job creation, capital investment, development of technology, and employee ownership that Amazon does because these are critical drivers of a prosperous economy," the company says in its post. "We follow all applicable federal and state tax laws, and our U.S. taxes are a reflection of our continued investments, compensation of our employees, and the current tax rules."
Federal tax laws also allow the company to delay payment of the bill. According to regulatory filings, Amazon will pay $162 million in federal income taxes for 2019 now, and an additional $900 million over time due to deferrals for which the company is eligible. That adds up to the $1 billion federal income tax expense Amazon says it's on the hook for in 2019. Amazon will pay an additional $2.4 billion in other federal taxes, like payroll and custom duties, the company said, and $1.6 billion to state and local governments for the year. In addition, Amazon paid $9 billion in sales and duty taxes last year, the company said.
Federal tax laws also allow the company to delay payment of the bill. According to regulatory filings, Amazon will pay $162 million in federal income taxes for 2019 now, and an additional $900 million over time due to deferrals for which the company is eligible. That adds up to the $1 billion federal income tax expense Amazon says it's on the hook for in 2019. Amazon will pay an additional $2.4 billion in other federal taxes, like payroll and custom duties, the company said, and $1.6 billion to state and local governments for the year. In addition, Amazon paid $9 billion in sales and duty taxes last year, the company said.
I'm kinda with them (Score:5, Insightful)
We have all sorts of provisions in the tax code which are intended to encourage companies to behave one way or the other. The sweetener is the company gets a lower tax rate.
Classic examples are depreciation of capital goods and R&D tax credits. Depreciation can be a really grey area. We have decided we want to tax a company's profits, not revenue. Depreciation is part of how we convert from revenue to profit. The devil is in the details. If I buy a $1 million widget, does that come off this year's revenue? Do I depreciate over three years? Five? 30? This is a hotly debated topic. Every company wants it as short as possible. Everyone else wants it as long as possible. There isn't any one right or wrong answer, it's simply a political question.
R&D credits are similar. We (rightly or wrongly) have decided we want to encourage companies to invest in future products. The difficult question is what sorts of activities count and which don't.
When it's all said and done, I think anger at Amazon is misplaced. They're just responding to the incentives in the rules. If we don't like the outcome and want to be productive, let's talk about changing the rules.
Re:I'm kinda with them (Score:5, Insightful)
Anger is not misplaced because Amazon, like most large multinationals, is fighting efforts to change the tax laws. They are not just passive recipients of federal largess.
More importantly, not all tax breaks are equally valid or useful to society at large. Because Amazon and companies like it have been bribing our politicians for so long, they have been able to create many types of tax breaks custom made for them, and of little use to actual citizens.
If person A tells person B to punch me in the face, I am perfectly justified in my anger towards both. If company A tells politician B to give them tax breaks, I am perfectly justified in my anger towards both. Stop trying to cover for the authoritarians aristocrats who dominate business, politics and the media.
Re: I'm kinda with them (Score:1, Insightful)
Letâ(TM)s start with a couple of truths. Tax credits are not spending. Taking less of anyoneâ(TM)s money is not a giveaway. There.
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It is if they have to make up for it by increasing what they take from someone or something else.
Re: I'm kinda with them (Score:2, Informative)
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Letâ(TM)s start with a couple of truths. Tax credits are not spending. Taking less of anyoneâ(TM)s money is not a giveaway. There.
It is when it creates a thing called a "deficit".
When there's a deficit the government is spending money it hasn't got. It's a bit like people running up debts on credit cards when they should be economizing because their income can't cover the card.
That's spending by any definition of the word.
Re: I'm kinda with them (Score:4, Insightful)
No, that's just propaganda. If you are in debt and someone relieves that debt, it is considered a gift and a form of income. Taxes are the debt you pay off for the privilege of civilization. Don't even start with that "taxation is theft" bullshit, unless you finish with "because all property is theft."
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The government is not "vague services" and my taxes are not an indefinite amount. Government is what creates civilization. I like living in a civilized nation, so I pay my taxes. If you like living in a hell hole with no services, there are several failed nation-states around the world that can fail to provide for you, why not move there?
Oh right, because you like civilization too. You just want other people to pay for it for your lazy freeloading ass.
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Anger is not misplaced because Amazon, like most large multinationals, is fighting efforts to change the tax laws. They are not just passive recipients of federal largess.
No doubt. That's part of the incentives. I'd fight tooth and nail if my boss suggested cutting my salary too. That's why I'm very skeptical when I hear a company suggest this or that tax break "will stimulate the economy" or "level the playing field." To me the more plausible reason is it "will increase our profits."
More importantly, not all tax breaks are equally valid or useful to society at large.
I hear what you're saying but don't really believe it. I firmly believe virtually all special tax treatment is way more beneficial to the recipient than to society at large. In that sense, they'
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Just as a counter-point, the tax breaks that used to go to homeowners for installations of solar panels. Or for installing double paned windows. We all win with those.
But yeah, in general I see where you are coming from. Except for the part where you say that writing or calling your representatives does not matter. It does. It really, really does matter and everyone should be doing it more. You might think they don't pay any attention, and in some cases they might not. But if enough people write in with the
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This is much the same reason we, in California, are stuck with Prop 13's ...
As a California homeowner, I agree the system has problems. Let's remember the alternative, though. In the '70s, property values were skyrocketing and so were property taxes. People on fixed income (e.g. my mother-in-law) were finding they couldn't afford to keep their houses. We (well not me I didn't live here then) decided that was bad and that property taxes should reflect the price when you bought the house. It's a tradeoff. One the one hand, granny can live out her years with all the fond memories of h
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Sweeteners don't get them to 0% or near 0% (Score:2)
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Taxing corporations more taxes all of us more (Score:1, Insightful)
I'm tired of hearing about corporations not paying enough in taxes.
If you raise taxes on corporations, the people who will ultimately be paying that will be you and me. Corporations do not print money. If we raise their taxes, those costs will simply be passed on to the consumer. The costs that don't get passed on through increased prices will come out of profits - BUT, it is those same consumers who will pay again because they own these companies through stock (which is found in everyone's 401ks and pensio
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not if the tax is against operating profit after the fact. pass through taxation occurs in sales tax, property tax and all kinds of other taxes, but taxes on profit are not factored in to costs.
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not if the tax is against operating profit after the fact. pass through taxation occurs in sales tax, property tax and all kinds of other taxes, but taxes on profit are not factored in to costs.
What kind of stunningly incompetent business managers are unable to realize that there will be a business income tax bill and calculate ahead of time approximately what it will be?
Income tax is always baked into prices as an expected cost.
well that's dumb (Score:2)
by that logic, we might as well eliminate corporate taxes completely. businesses would love that. but why would they love that, if we are the ones paying their taxes?
because its not that simple, obviously. businesses ALREADY charge as much as they can for products & services. if you raise taxes, they can't simply pass all of that along to customers. if customers would pay a higher price, THE BUSINESS WOULD ALREADY BE CHARGING THAT HIGHER PRICE.
Re: well that's dumb (Score:1)
Tax burden isnâ(TM)t just passed along to consumers. Itâ(TM)s passed on to workers through reductions in raises, elimination of discretionary bonuses, reducing health and other benefits, and less capital investment.
Why spend on new machinery when you have a tax rate may become 30%? Why give raises or open a new office? They wonâ(TM)t but hey the government will get more to waste
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you have it exactly backwards. most expenses like payroll, R&D, expansion etc are tax deductible. when business tax rates are higher, there is more incentive to invest back into the business which reduces profits which reduces tax burden.
when tax rates are lower, there is more incentive to just milk existing profits since they aren't being taxed much, and to perform stock buybacks and boost dividends to raise stock prices, etc
i mean, we literally JUST saw this happen with the Trump tax cuts. the VAST ma
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because its not that simple, obviously. businesses ALREADY charge as much as they can for products & services. if you raise taxes, they can't simply pass all of that along to customers. if customers would pay a higher price, THE BUSINESS WOULD ALREADY BE CHARGING THAT HIGHER PRICE.
That's a profound point, now extend it a bit. If you tax a business, it needs to pass that cost somewhere. Generally it can be employees (lower wages), investors (lower profits), or consumers (higher prices). All of those are already in an equilibrium. When you add a tax, the equilibrium will change. Depending on how elastic each of those markets is will determine the new equilibrium.
Thus, in a very tight labor or investment market, the cost will definitely turn into higher prices. In a very competitive sal
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Correct, and this incentivizes people to shop at smaller businesses.
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If you raise taxes on corporations, the people who will ultimately be paying that will be you and me.
No, that the corporation's owners and executives just make less money is in fact a possible outcome.
Why not simply argue that the corporation will increase prices 1000x, to be sure that taxes are covered, and we'll of course pay the 1000x increased price tag?
There seem to be a few aspects of how reality actually works that you are neglecting.
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The costs that don't get passed on through increased prices will come out of profits - BUT, it is those same consumers who will pay again because they own these companies through stock (which is found in everyone's 401ks and pension plans).
I'm going to rebut this, but I'm going to break it in two parts.
The costs that don't get passed on through increased prices will come out of profits
Exactly. For better or worse, this recent trend of supersized companies is bad in a sense of market diversity. Fewer players come forward in a market that is dominated by one or a few giant players. For the most part this may play out as somebody invents something or begins some line of business and then the large company buys them out, gobbles their company, and then subsequently shutters the product or creates some process that removes the
Where is the line drawn? (Score:2, Insightful)
You don't have to dig too far to find articles about how large companies pay zero taxes. They probably had to pay one of the Big 4 firms who would then pay half the population of India to do their taxes, construct all the loophole-friendly financial arrangements, etc. But the point is that companies are willing to pay up to a certain point to get out of paying any taxes.
You'll also find tons of instances where companies leverage their "job creator" status in corporate headquarters beauty contests, promising
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Even though I'm a New Yorker, I'm glad the state/city didn't roll over on that one. New York loses these HQ contests all the time because Texas or Florida or North Carolina will bend over backwards to get them.
You might like this [reason.com]. I'm glad NYC told Amazon to buzz off because it bolsters the case for other cities doing the same thing, especially for corporate developments and sports facilities.
Job "creation" (Score:2)
Translation: a job is created by the person offering pay for labor; the person offering labor for pay plays absolutely no part in job creation, and our benevolence is why we deserve to pay so little.
Stop the charade (Score:1)
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This is how Democracy dies ... (Score:2)
"Like most governments that try to encourage economic investment by companies, the U.S. Congress, which is a wholly owned subsidiary of the corporations, has written a tax code ...
If you want to get angry ... (Score:2)
... just scale that down to your salary.
Percentage? (Score:2)
hockey stick (Score:2)
"Paid" is not a proper synonym for "collected and passed along". How can you "pay" money that was never yours in the first place?
With a more progressive tax system, we can keep the incentive structure and still have Amazon pay closer to the nominal rate that smaller businesses pay. I'm convinced there's a negative externality to these trillion-dollar conglomerates that justifies a progressive taxation system with a hock