Reason.com - Free Minds and Free Markets
Reason logo Reason logo
  • Latest
  • Magazine
    • Current Issue
    • Archives
    • Subscribe
    • Crossword
  • Video
  • Podcasts
    • All Shows
    • The Reason Roundtable
    • The Reason Interview With Nick Gillespie
    • The Soho Forum Debates
    • Just Asking Questions
    • The Best of Reason Magazine
    • Why We Can't Have Nice Things
  • Volokh
  • Newsletters
  • Donate
    • Donate Online
    • Donate Crypto
    • Ways To Give To Reason Foundation
    • Torchbearer Society
    • Planned Giving
  • Subscribe
    • Reason Plus Subscription
    • Print Subscription
    • Gift Subscriptions
    • Subscriber Support

Login Form

Create new account
Forgot password

Taxes

Joe Biden Said Amazon Doesn't Pay Enough Taxes. Amazon Wasn't Having It.

The Democratic presidential hopeful tweeted that the company pays "a lower tax rate than firefighters and teachers."

Billy Binion | 6.14.2019 1:20 PM

Share on FacebookShare on XShare on RedditShare by emailPrint friendly versionCopy page URL
Media Contact & Reprint Requests
biden | Jeff Topping/Polaris/Newscom
(Jeff Topping/Polaris/Newscom)

In the wake of reports that Amazon paid no federal taxes last year, Democratic presidential hopeful Joe Biden took to Twitter yesterday to complain about the tech behemoth's tax bill:

I have nothing against Amazon, but no company pulling in billions of dollars of profits should pay a lower tax rate than firefighters and teachers. We need to reward work, not just wealth. https://t.co/R6xaN3vXGT

— Joe Biden (@JoeBiden) June 13, 2019

Amazon wasn't having it. "We've paid $2.6B in corporate taxes since 2016," it tweeted back. "We pay every penny we owe. Congress designed tax laws to encourage companies to reinvest in the American economy. We have. $200B in investments since 2011 & 300K US jobs. Assume VP Biden's complaint is w/ the tax code, not Amazon."

First things first: Amazon does indeed pay taxes. In 2018, it shelled out $1.18 billion in local, state, and international income levies.

Federal corporate taxes are a different story, since Congress specifically devised them with a set of deductions meant to incentivize investment, create jobs, and spur economic growth. And Amazon does all that. In 2017, for instance, it invested $22.6 billion in research and development—the highest of any company that year. That huge number is just one such deduction included in the tax code, which explains how Amazon skirted federal taxes even with an impressive $11 billion in profits.

It's misleading for Biden to lament that these numbers indicate that the tax code is rewarding wealth instead of work. Research and development are work, after all. If Amazon were getting a tax break for letting money gather interest in the bank, his complaint might make sense, but that's not what's going on here.

This isn't the first time a company has faced ire for its tax history. In response to a barrage of headlines about Netflix paying $0 in taxes, for example, the streaming service pointed out that it had shelled out $131 million in cash levies in 2018. Those taxes were international, which the U.S. credits.

And in May 2019, Delta CEO Ed Bastian defended the airline's tax filings on the Corner Office podcast:

We're following the tax code. Delta, as you recall, lost a lot of money. We lost almost $20 billion post-9/11. We went through some very difficult economies over the last 20 years. And so, what we're doing is we're able to offset the losses of those years against the profits of today. We have probably only have about another year or so left in those losses, and then at that point then we should start being a cash taxpayer once again. But, you know, these are hard-earned losses, I would say, that we utilize, and our people had real pain attached to them. I am proud that we've got the best profit-sharing plan in corporate America for our employees. They get 15% of the profits of the company; $1.3 billion we paid last year, so yeah, I think we're doing our share.

You could make a reasonable case that it's better to tax companies at a consistent rate than to try to encourage or discourage different sorts of behavior via the tax code. But it seems inappropriate to condemn companies for taking advantage of the incentives enshrined in the law. And you shouldn't say a company isn't paying any taxes when its tax bill is actually more than a billion.

Start your day with Reason. Get a daily brief of the most important stories and trends every weekday morning when you subscribe to Reason Roundup.

This field is for validation purposes and should be left unchanged.

NEXT: To Hold but Not to Have: California's Marijuana Laws Get Weird When You're in Jail

Billy Binion is a reporter at Reason.

TaxesCorporate TaxesJoe BidenAmazonElection 2020
Share on FacebookShare on XShare on RedditShare by emailPrint friendly versionCopy page URL
Media Contact & Reprint Requests

Show Comments (227)

Latest

Brickbat: Cooking the Books

Charles Oliver | 5.9.2025 4:00 AM

The App Store Freedom Act Compromises User Privacy To Punish Big Tech

Jack Nicastro | 5.8.2025 4:57 PM

Is Shiloh Hendrix Really the End of Cancel Culture?

Robby Soave | 5.8.2025 4:10 PM

Good Riddance to Ed Martin, Trump's Failed Pick for U.S. Attorney for D.C.

C.J. Ciaramella | 5.8.2025 3:55 PM

Trump's Tariffs Are Already Raising Car Prices and Hurting Automakers

Joe Lancaster | 5.8.2025 2:35 PM

Recommended

  • About
  • Browse Topics
  • Events
  • Staff
  • Jobs
  • Donate
  • Advertise
  • Subscribe
  • Contact
  • Media
  • Shop
  • Amazon
Reason Facebook@reason on XReason InstagramReason TikTokReason YoutubeApple PodcastsReason on FlipboardReason RSS

© 2024 Reason Foundation | Accessibility | Privacy Policy | Terms Of Use

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.

r

Do you care about free minds and free markets? Sign up to get the biggest stories from Reason in your inbox every afternoon.

This field is for validation purposes and should be left unchanged.

This modal will close in 10

Reason Plus

Special Offer!

  • Full digital edition access
  • No ads
  • Commenting privileges

Just $25 per year

Join Today!