Amazon Dodged $5.2B In Taxes Last Year, Study Shows
Thanks to a tax code that favors corporations and the wealthy, Amazon was able to dodge billions of dollars of federal income taxes in 2021, a new report has found, Sharon Zhang reported for Truthout.
Photo Insert: Since 2018, the company has only paid an average effective tax rate of 5.1 percent.
According to the Institute on Taxation and Economic Policy (ITEP), the tech behemoth reported record profits last year, raking in $35 billion – 75 percent more than they made in 2020, which was also a record year for the company.
Despite these record profits, the company paid a federal income tax rate of 6.1 percent, or $2.1 billion, in 2021. If the company hadn’t benefited from tax breaks and had paid the already low statutory corporate tax rate of 21 percent, it would have paid $7.3 billion in federal tax. This means that the company successfully dodged $5.2 billion in corporate taxes last year.
Since 2018, the company has only paid an average effective tax rate of 5.1 percent. In 2018 and 2019, Amazon’s tax dodging was especially egregious; in 2019, the company paid 1.2 percent in federal income taxes. The year before, the company paid a negative 1.2 percent tax rate, meaning that it received more money from the government than it paid in taxes.
“It has been well documented for decades that Amazon’s strategy for retail dominance rests on two tactics: avoiding taxes and using the savings to finance a slow strangulation of its retail competition,” the authors of the ITEP report wrote.
“First at the state and local level, then federally and internationally, Amazon has bullied lawmakers into bending tax laws to its advantage and made that the source of its competitive advantage over small businesses in the retail space.”
In their calculations, the report’s authors took into account tax credits, excess stock option deductions, and other tax breaks. Congress has the power to end these tax breaks as long as lawmakers can summon the political will, they pointed out.