With the White House considering a corporate tax hike for the first time in more than 25 years, the boss of one of America’s largest corporations endorses such a plan.
Amazon CEO Jeff Bezos said in a statement Tuesday that the company “supports an increase in the corporate tax rate.”
“We support the Biden administration’s focus on bold investments in American infrastructure,” said Bezos. “Both Democrats and Republicans have supported infrastructure in the past, and the time is right to work together to make this happen. We are aware that this investment will require concessions on all sides – both in terms of the details of the scope of delivery and the way in which it is paid for. “
The White House lays the groundwork to raise the corporate tax rate above its current level of 21% to fund an ambitious infrastructure package. Bezos’ testimony is remarkable evidence of approval for the move as many others in the business community have warned it could threaten the recovery from the pandemic.
The outgoing Amazon boss is in some ways a surprising proponent of corporate tax hikes.
In 2019, then Vice President Joe Biden called Amazon for its history of using tax credits and withholding to reduce its corporate tax bill. The company fired back saying, “We pay every penny we owe” and that it has paid $ 2.6 billion in corporate taxes since 2016.
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And last year, then-presidential candidate Biden also said that Amazon should “start paying their taxes” as part of a more comprehensive criticism of large, successful companies. Amazon has repeatedly stated that it complies with all applicable tax laws.
The company also recently grappled with Senator Elizabeth Warren, who advocated a tax hike for large corporations. Last month, Warren said in a tweet: “Huge companies like Amazon report huge profits to their shareholders – but they take advantage of loopholes and tax havens to avoid paying taxes. That’s just not right. “
Amazon responded and said, “They make the tax laws @SenWarren; we just follow them. If you don’t like the laws you’ve created, be sure to change them. Here are the facts: Amazon has paid billions of dollars in corporate taxes in the past few years alone. “
For the 2017 and 2018 tax years, Amazon’s financial records showed that the company expected to get money back from the federal government, not that it owed income taxes. For the 2019 tax year, Amazon said it owed more than $ 1 billion in federal income taxes, a number that experts say accounts for just over 1% of its profits.
In 2020, Amazon paid $ 1.7 billion in federal taxes, the company said in its response to Warren. Net income for the year was $ 21.3 billion.
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While it has already drawn some criticism, the Biden government’s infrastructure plan could be convincing enough to convince more corporate leaders to support the corporate tax hike.
Bezos said in his statement: “We look forward to Congress and the government coming together to find the right, balanced solution that will maintain or improve US competitiveness.”
And he’s not alone. Rick Rieder, chief investment officer global fixed income at BlackRock, the world’s largest wealth manager, said rolling back corporate tax cuts from the Trump era won’t hurt the economy – and could even be positive for growth.
Rieder told CNN Business last month that he believes the US economy can “definitely” withstand higher corporate taxes and suggested that a rise in the corporate tax rate could help ensure economic profits are more evenly shared between businesses and employees.
“The US economy is amazingly resilient,” he said, “and it will do well indeed if you get some of that income redistribution and consumption in an easier and better place, especially for the lower and middle incomes.”