With a valuation of almost a trillion dollars, an annual profit over $13 billion, and a CEO who is the richest person in the world, you would assume that Amazon would pay a healthy-sized tax rate.
Instead it is barely over 1%, which is a rate far lower than the average working American pays.
“Last year, Yahoo Finance reported that Amazon (AMZN) paid a shockingly low amount in federal income taxes in 2018 on more than $11 billion in profits: $0.
But this year, while the company says it has paid “billions” in taxes for the year 2019, in reality it only paid $162 million in federal income tax — an effective tax rate of 1.2% on over $13 billion in profits.
‘We follow all applicable federal and state tax laws, and our U.S. taxes are a reflection of our continued investments, compensation of our employees, and the current tax rules,’ Amazon wrote in a blog post on Jan. 31 . . .
Amazon isn’t alone. Many big companies make use of tax breaks and loopholes to lower, or even eliminate, their tax liability.
According to the Institute on Taxation and Economic Policy (ITEP), 60 Fortune 500 companies avoided paying all federal income tax in 2018 (with their total average effective tax rate being roughly -5%).
That’s more than three times the number of companies that avoided paying corporate taxes on average from 2008 to 2015. During that period, 18 companies managed to pay 0% or less (with their total average effective tax rate over 8 years being roughly -4%).”
For the full story, visit Yahoo Finance here.