July 21, 2019 | 83° F

EDITORIAL: Amazon evades taxes, takes from system

Nation is held hostage by corporations in exchange for tax subsidies


Bound and gagged, American democracy is held as a hostage of the rich and powerful. The system of power in our nation has closed off the faucet that flows to the people, diverting efficacy and influence to those at the top of the socioeconomic hierarchy. The policies governing society have been tilted to benefit the wealthy few of the elite class. 

Amazon not only paid $0 in federal taxes on profit of $11.2 billion last year, it actually received a federal tax rebate of $129 million. The e-commerce giant had an effective federal tax rate of approximately -1 percent. Led by Jeff Bezos, a man worth the combined wealth of 2.3 million Americans, Amazon is paying an effective federal tax rate below that of the poorest 20 percent of American households after its second year of paying a negative federal tax rate on multibillion-dollar profit. 

National Low Income Housing Coalition's (NLIHC) annual report “found that a worker needs to earn $17.90 an hour at a full-time job — 40 hours a week, 52 weeks a year — to afford a modest one-bedroom apartment.” A low-income federal minimum wage earner would have to work more than two jobs to afford this apartment. That wage earner would be paying more in taxes than a company bringing in billions of profit. 

Amazon’s history of avoiding taxes includes their success in lobbying Seattle Mayor Jenny Durkan to repeal a tax that was going to benefit the homeless population in the city. The company’s business practices became a target of the White House as President Donald J. Trump tweeted on March 29, 2018, “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!”

While Trump’s personal vendetta against Bezos and his company manifested vocal opposition, the 2017 Tax Cuts and Jobs Act is the main contributor to Amazon’s legal evasion of taxes. The corporate-friendly tax cut not only lowered the tax rate on corporations, but it also maintained the “slew of tax loopholes that allow profitable companies to routinely avoid paying federal and state income taxes on almost half of their profits.”

This past Thursday, Amazon also announced it will no longer be setting up its new headquarters in Long Island City. While many decry the efforts of politicians to prevent Amazon’s New York location as there was promise for the creation of 25,000 jobs, others are not too quick to deem the dropped project as a loss. 

Housing economists found that “in tight housing markets, the poor do worse when the rich get richer.” Rising tides do not lift all boats when pricing of already scarce housing increases. A major pillar of the opposition was Bezos’s antagonistic position against organized labor. Amazon unilaterally determined that its workers cannot unionize.

The degradation of unions in America is directly related to the irreprehensible rise in income inequality and wage stagnation. Our era of corporate tax cuts and plutocratic policies is also the era of wage stagnation and inequality. As corporations blackmail states for tax subsidies and exploit federal tax loopholes, the people of America are left to bear the burdens and costs. Power must be returned to the people. The workers that drive our economy forward must not be smothered by corporate interests. A balance can be reached between the fostering of entrepreneurship and the preservation of workers’ interests. 


The Daily Targum's editorials represent the views of the majority of the 151st editorial board. Columns, cartoons and letters do not necessarily reflect the views of the Targum Publishing Company or its staff. 

The Daily Targum

Comments powered by Disqus

Please note All comments are eligible for publication in The Daily Targum.