A massive tech-giant pays zero federal taxes- Amazon
Amazon is a very sophisticated tax player. It is very much the canary in the coal mine. They’re really doing what a lot of politicians wish more companies would do.
Amazon is a huge company. But you know just how huge it really is? It is one of the only two US companies to reach over a trillion-dollar valuation. No one in history has become as rich as quickly. It has a hundred million prime subscribers globally. If you put those prime subscribers in one country, it would be the fourteenth largest on the planet.
Amazon avoided Federal Tax on more than $11 billion dollars of profit in 2017, despite being such a massive company. And somehow they got a $129 Million tax rebate for the year 2018.
First, there is a Tax Bill…
President Trump’s signature tax legislation lowered the corporate tax rate from 35 percent to 21 percent. Corporations were literally going wild over this. This immediately slashed Amazon’s tax burden.
Second, Amazon’s shrewd use of revenue…
Amazon plows a large portion of the revenue back into itself to cultivate long term growth. Amazon has actually been self-funding for a long time now. The company challenged a significant cash flow.
Third, the massive federal tax credits…
The company reports are primarily related to research and development. These include Amazon’s A.I. assisted logistics network & its research for consumer electronics products. Amazon has poured tens of billions of dollars into research and development over the years.
Fourth, industry performance…
The U.S. economy has not been as productive in recent years. There was a solution to it. The government made plans to help companies invest more in machinery and training. Thus resulting in higher productivity.
Fifth, stock is gold…
Stock-based employee compensation…Amazon uses this extensively. This allows Amazon to pay employees using stock and then take the value of that stock off their tax bill. Employees, especially executives are rewarded with stocks. Amazon’s stocks were rising fairly substantially for many years. The size of that stock-based compensation is really large now. It affords Amazon a large write-off!
