You wouldn’t think that Democratic Socialist Bernie Sanders and Conservative Populist Donald Trump would agree on much. Indeed, the two hold nearly polar opposite worldviews and have led markedly different lives. Trump cut his teeth in real estate and business, the scion of a wealthy family. Sanders is a career politician from a middle-class background. Yet both politicians agree that online retail giant Amazon isn’t paying its fair share.
Sanders took to Twitter to claim that Amazon paid no income taxes last year. That’s preposterous, right? Amazon just reported profits in excess of a billion dollars a few weeks ago, and the last few years have likewise been generous for the ecommerce giant. Surely Amazon is shelling out millions, if not billions, in income tax, right?
You know what Amazon paid in federal income taxes last year?
Zero. https://t.co/2bVwXQNATl
— Bernie Sanders (@SenSanders) April 30, 2018
Actually, a filing with the Security Exchange Commission shows that not only did Amazon not pay income tax in 2017, but it actually received a $137 million tax refund. However, it’s important to acknowledge that Amazon did pay other taxes, such as sales taxes. These taxes totaled nearly a billion dollars for 2017.
For Sanders, the criticisms of Amazon should come as no surprise. Sanders has been very vocal about his desires to see taxes on corporations and the wealthy increased. Thus, criticisms with Amazon fit with Sanders’ general worldview.
I have stated my concerns with Amazon long before the Election. Unlike others, they pay little or no taxes to state & local governments, use our Postal System as their Delivery Boy (causing tremendous loss to the U.S.), and are putting many thousands of retailers out of business!
— Donald J. Trump (@realDonaldTrump) March 29, 2018
Trump, on the other hand, has taken a more targeted approach to criticizing companies. After all, the President pushed through one of the largest corporate tax reforms in history, slashing the top rate from 39 percent to 21 percent. Yet as Amazon’s case proves, many corporations are not paying anywhere close to top rates anyways. Despite producing billions of dollars in profits, Amazon (among many other big companies) actually makes more money come tax season, as mentioned earlier.
President Trump has also been very vocal about Amazon supposedly bilking the United States Postal Service. It’s true that Amazon does take advantage of subsidized postal services. So do many other companies and American citizens for that matter. Struggling with huge pension liabilities and changing habits (i.e. a drop in personal mail), the USPS is in fiscally dire straits. Allowing the USPS to adjust bulk shipping rates may alleviate the situation.
Yet Amazon neither appears to be doing anything different than any other company nor is it getting special treatment. The USPS has its hands tied when it comes to raising postal rates, but that’s because of Congressional mandates. Meanwhile, Amazon is taking advantage of the same tax system that helps IBM, GE, Goldman Sachs, and others. Trump himself insinuated on the campaign trail that he, too, took advantage of the same tax breaks.
(Credit: Facebook/Lee Fitch)
Could Trump’s beef with Amazon be over something else? Many speculate. For example, Amazon CEO Jeff Bezos owns the Washington Post, which has been heavily critical of the Trump administration. Bezos himself, however, has largely stayed meek regarding the President.
I don’t fault Trump or the companies taking advantage of the tax code. Congress and the White House set the rules, so it doesn’t make sense to blame companies for playing by them. Instead, more comprehensive reform at the USPS and IRS should be pursued.
