The Washington Post reported on Sunday, February 17, 2019 that Amazon, the e-commerce giant helmed by the world’s richest man, paid no federal taxes on profit of $11 billion last year. In fact, Amazon actually received a federal tax rebate of $129 million, giving it an effective tax rate of -1%. This was the second year in a row that Amazon has enjoyed a negative federal tax rate on multibillion-dollar profits.
This was legal due to a variety of tax credits and tax breaks. In comparison, the poorest 20% of American households had a larger effective federal tax rate of about 1.5%.
In summary, Amazon is a $1 trillion company in the market cap of its stock; it grossed some $232 billion; its gross profit was $93 billion; its net profit was $11 billion; and, it paid no taxes, but instead received a $129 million tax rebate in 2018. What’s wrong with this picture?