There is a real issue involving Amazon and its contributions to the country that made it great. It just isn’t the one the president keeps going on and on about.
I see that the reality carnival show that is this presidency is now said to be “obsessed” with our hometown company Amazon and its founder, Jeff Bezos.
Every day the president twitter-barrages all manner of ALL-CAPS attacks on Amazon, apparently in service of finding a way, any way, to “(bleep) with” Bezos and his superstar company (and more likely, his other company, The Washington Post).
“He’s off the hook on this. It’s war,” a source close to the White House said of President Donald Trump, according to the magazine Vanity Fair.
Hmm. Perhaps I could be of some small assistance in this squabble? By stating: Trump, you’re bashing Amazon all wrong.
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For starters, it’s been well-established by fact checkers that the president’s anti-Amazon harangues have been mostly off the mark.
But I would humbly suggest there is something fundamentally off-kilter about the company’s relationship with its home country. Any other president might be able to make hay of this. But this president, awkwardly, has only made it worse.
The big problem is this: Last year, Amazon paid zero federal income tax. That’s right: $0, on pretax profits of $5.6 billion. It means that I, the lowly scribbler of a couple columns a week, paid more to support the federal government and its myriad programs in 2017 than the high-tech corporate entity that is said to be one of the great economic engines in world history.
When you report your own taxes in the next couple weeks, look at the total tax paid. Whatever it is, if it’s a positive number, then you paid more federal tax than Amazon, too (I’m talking about the corporate entity, not its hundreds of thousands of employees).
Last year, a New York University business professor totted up Amazon’s corporate tax burdens and found what he called “the most disturbing fact in business.” Since 2008, Wal-Mart (remember when it was the evil company?) has paid $64 billion in corporate income tax, the professor, Scott Galloway, found. Amazon? $1.4 billion.
Concluded Galloway: “The most uncomfortable question in business, in my view, is how do we pay our soldiers, firefighters, and teachers if a firm can ascend to $460B in value (#5 in the world) without paying any meaningful corporate taxes.”
Since he wrote that, Amazon has added an additional $240 billion in market value, making it No. 4 in the world.
Also since then, Republicans in Congress passed, and Trump signed, a massive corporate tax cut, putting the cost of it on the nation’s credit card. Amazon got a one-time windfall totaling $789 million, as well as reduced tax burdens going ahead.
Yet all the while, it is going around requesting still more tax breaks for its second headquarters.
But Amazon’s financial statement reveals it did end up paying taxes somewhere in 2017: overseas. It reported owing $724 million in international taxes, and just $211 million in state taxes across the 50 states (and again, zero to the U.S. federal government). So a rock star American company that has two-thirds of its sales in America nevertheless paid three-fourths of its taxes to other countries!
That’s what the president should be fired up about. If Amazon is helping pay for soldiers, firefighters and teachers, it’s mostly in places like Germany and Japan. But there’s no sign Trump is vexed by that, or even understands it. His tax-cut bill just made it worse. Having a president launch a vindictive, fact-free jihad against an American company is breathtaking. (Imagine if former President Barack Obama had done this, he would have been impeached the following day.)
But it’s simultaneously true that beneath that attack is a larger fight that really is sweeping the nation: Who should pay for basic services, if anyone?
It’s got teachers on strike in red states like Kentucky and Oklahoma, where leaders chose to let the education system swirl the drain. Conversely, here, lawmakers wisely saved the education system. But they put all the cost on property owners, so now we have the spectacle of people selling their homes as they’re struggling to pay the school taxes.
Trump is right: There is a war on of sorts. It isn’t the delusional one the president thinks he’s fighting. But Amazon is winning it just the same.