Amazon has become the first company to endorse Joe Biden’s corporate tax hike to pay for its $2 trillion infrastructure plan – despite the online giant being one of the savviest tax strategists in the world.
Jeff Bezos, CEO and founder of the company, and the world’s richest man, said in a statement on Tuesday that Biden’s plan ‘will require concessions from all sides’. He spoke on the day Forbes, for the fourth year running, crowned him the world’s richest.
Despite his company’s own highly-controversial tax schemes, Bezos said Amazon was ‘supportive of a rise in the corporate tax rate,’ and called the plan ‘a bold investment in American infrastructure’.
Bezos added that it was ‘the right time to work together to make this happen’.
Amazon paid no federal income tax in 2017 or 2018.
The company paid just $162 million for 2019, and $1.835 billion for 2020 – an effective federal rate of 9.4 per cent.
The company’s stock price rose about 76 per cent in 2020, with a valuation now of about $1.6 trillion.
Jeff Bezos on Tuesday came out in support of Joe Biden’s $2 trillion infrastructure plan
Biden announced on March 31 the details of his plan, which would see huge investment in roads, airports, public transport, internet connectivity and key facilities.
He intends to raise the corporate tax rate from 21 per cent to 28 per cent to fund it.
Speaking at a union hall in Pittsburgh, the president called it a vision to create ‘the strongest, most resilient, innovative economy in the world’ – and said it would create millions of ‘good-paying jobs’ along the way.
Bezos, who announced in February that he was stepping down as the CEO of the online retail empire he founded in 1994, has long been dogged by criticism of his own company’s aggressive tax measures.
Bezos, pictured with girlfriend Lauren Sanchez, is stepping down as CEO later this year
Biden, seen on Tuesday, unveiled on March 31 his plan to improve America’s infrastructure
Amazon always point out that they are using legal measures.
In December 2019 campaign group Fair Tax Mark singled out Amazon as the worst of the ‘Silicon Six’ – Facebook, Google, Netflix, Apple and Microsoft – for shifting revenue and profits through tax havens or low-tax countries, and for also delaying the payment of taxes they do incur.
In a statement issued at the time, Amazon said: ‘Governments write the tax laws and Amazon is doing the very thing they encourage companies to do – paying all taxes due while also investing many billions in creating jobs and infrastructure. Coupled with low margins, this investment will naturally result in a lower cash tax rate.’
In 2020, Amazon paid an effective federal income-tax rate of 9.4 per cent, despite a year of massive pandemic-driven profits, according to the Institute on Taxation and Economic Policy.
The company’s 2020 full-year profits, reported in February, soared year-on-year to $21.3 billion – the highest level in company history.
Bezos’s own wealth, according to an Oxfam report issued in January, climbed so much during the pandemic that between March and September 2020 he could have given all 876,000 Amazon employees a $105,000 bonus and still have been as wealthy as he was before COVID-19 hit.
Nearly 6,000 Amazon warehouse workers in Alabama are currently awaiting the preliminary results of a unionization vote, which could be released at any moment by the National Labor Relations Board. The voting closed on Friday at the end of a hard-fought battle, which could have massive implications for the company’s future work practices.
Campaigners calling for the first Amazon union, in Bessemer, Alabama, are seen in February
Workers at the Alabama facility are hoping to become Amazon’s first unionized workforce
In 2019, Amazon only paid $162 million in federal taxes to the US government after reporting more than $13 billion in profits, according to the company’s filings with the Securities and Exchange Commission.
That was essentially a tax rate of about 1.2 per cent, after the company was allowed to defer $914 million in federal income taxes.
If Amazon had paid the full 21 per cent, its $162 million tax payment would have ballooned to $2.8 billion.
Thanks to those same deferments, the news was even better for Amazon in 2018, when it actually had a $0 federal tax bill, according to the SEC filing.
Critics said Bezos’s backing of the tax hike was self-serving, as it would improve infrastructure that his company needs.
The activist group Tax March pointed out that Amazon relied on ‘roads, bridges and infrastructure’ paid for by taxpayers’ money.
Dan Price, CEO of Gravity Payments, said that his company worked with 20,000 small businesses that were paying a higher rate of tax than Amazon.
One complained that Bezos’s support was ‘a cheap way for Amazon to get the country to expand his biz.’
Another pointed out the problem was tax loopholes, while another said that CEOs often hid their money in secret bank accounts.
Biden’s plan was endorsed by Treasury Secretary Janet Yellen on Monday.
The Business Roundtable, an organization that represents CEOs of major US firms, issued a statement strongly opposing the tax increase as a way to pay for the infrastructure plan, saying it would create ‘new barriers to job creation and economic growth.’
In 2017, then-President Donald Trump signed a new bill law that slashed the corporate tax rate from 35 per cent to 21 per cent.
This tax cut, in addition to legal deductions and exemptions, have resulted in companies paying $0 in taxes.
A total of 55 companies paid no federal taxes last year despite making billions in revenue, according to a report by the Institute on Taxation and Economic Policy (ITEP).
The companies represent industries such as telecommunications, utilities and computers.
A further analysis found that 26 of those companies, including FedEx and Nike, have paid no federal income tax for at least three years after the Trump tax cuts.
A new report from the Institute on Taxation and Economic Policy found that 55 large U.S. companies paid no federal income tax last year and 26 companies avoided taxes for three years
In his Prime! Bezos tops world’s wealthiest chart for FOURTH year as Forbes lists a record 2,775 global billionaires worth $13.1 TRILLION
Forbes’ annual world’s billionaires list includes a record-breaking 2,755 billionaires, with Amazon founder Jeff Bezos topping it for the fourth consecutive year, as the wealthiest saw huge gains in investments even as the global economy sagged during the coronavirus.
The number of billionaires on the list of the world’s richest people grew by 660 people in 2020, Forbes said – a record increase.
And 86 percent of the people on the list are more wealthy than they were last year, Forbes said.
The ranks of the ultra-wealthy are expanding after a year in which the coronavirus pandemic upended world economies and threatened the livelihoods of people across the globe.
At No. 1, Amazon’s Bezos clocked in at a staggering $177B, cementing his spot as the wealthiest billionaire on the list.
Tesla founder Elon Musk zoomed into the No. 2 spot with $151 billion. Tesla stock is up more than 560 percent over the past year, helping put a motor under Musk’s worth.
For comparison, the median net worth in the U.S. is $121,411, according to Federal Reserve data. Median means half the country is worth more and half is worth less.
Even the ‘top one percent’ that is oftentimes touted as the country’s elite had an average household net worth of just over $11 million in 2020 – a far cry from the billionaire’s list.
This year’s billionaires are worth a combined $13.1 trillion, up from $8 trillion last year, Forbes said.
And the richest cities are tilting toward China: Five of the top 10 richest cities in the world are within China, if counting Hong Kong, which comes in at No. 3.
Beijing takes the top crown for city with the most billionaires at 100, while New York comes in at No. 2 – just shy of the top with 99.
Tech billionaires, meanwhile, increasingly dominate the list, Forbes says: They’re worth a combined $2.5 trillion on the list, up about 80 percent from the $1.4 trillion they logged in at last year.
And 365 of the billionaires had fortunes made in technology, Forbes said – up from 241 last year.
Jeff Bezos had a staggering $177B, cementing his spot as the wealthiest billionaire on the list. Pictured in Mumbai, India, on Jan. 16, 2020, with girlfriend Lauren Sanchez
Tesla Chief Executive Elon Musk jumped into second spot on the list with $155B, up from 31st last year. He’s pictured with his baby X Æ A-12, which he had with musician Grimes
The tech industry is the second-biggest contributor to the list, coming just under finance and investments, which has 371.
‘The very, very rich got very, very richer,’ said Forbes’ Chief Content Officer Randall Lane, in an interview with Reuters Video News.
Of the 660 who were added to the list this year, 493 were brand new to the list. (Some had fallen off and re-gained their status.)
The increase of 493 brand new billionaires means one was minted roughly every 17 hours, according to Forbes calculations.
The U.S. has the most people on the list, with 724. China has 698 when including Macao and Hong Kong.
Bernard Arnault, chief executive of luxury goods firm LVMH, and Microsoft founder Bill Gates were the next two wealthiest billionaires
Investor and business tycoon Warren Buffett fell out of the top five for the first time in over two decades, as tech executives dominate the Forbes rankings and as Mark Zuckerberg knocked him out for the fifth seat
Stock prices from March 5 were used to calculate net worth, Forbes said.
Bernard Arnault, chief executive of luxury goods firm LVMH; Microsoft founder Bill Gates; and Facebook Chief Executive Mark Zuckerberg round out the top five of the world’s richest billionaires.
Investor and business tycoon Warren Buffett, the Oracle of Omaha and CEO of Berkshire Hathaway, fell out of the top five for the first time in over two decades, as tech executives dominated the Forbes rankings.
Other notables included Michael Bloomberg, with $59 billion, at 20; and Nike founder Phil Knight, with $49.9 billion, at 25. Oprah and her $2.7billion secured the 1174 spot.
MacKenzie Scott, the Amazon CEO’s ex-wife, was 22 on the list with $53billion.
There were only six women in the top 50 billionaires.
Twitter CEO Jack Dorsey came in at 173 with $12.5billion.
Former President Donald Trump notably dropped almost 300 spots as he had an estimated worth of $2.4billion, putting him at spot 1,299.
Last year, Trump came in at 1,001 on the list.
Of the top 50 billionaires, 24 of them are from the United States. Only 10 are from China.
But while he has fallen lower on the list, the former president is still richer than he was when the pandemic started last year.
The rate at which his wealth grew was slower than that of others on the list.
This year’s list has 493 newcomers, includes Whitney Wolfe Herd, chief executive of dating app Bumble, which went public this year. She came in at 2,263 with $1.3billion.
Kim Kardashian is 2674th on the list of Forbes Billionaires. Since October, her net worth has increased from $780million to $1billion, according to the magazine.
Ex-husband Kanye West is also on the list – he is ahead of Kim, in 1750th place with a net worth of $1.8billion.
Kylie Jenner is no longer on the list, after selling a 51 percent stake of her company in 2020.
Last April, Kanye West was named a billionaire by Forbes – largely the most trustworthy media authority on who gets the name – after pleading with them for months to look at his financials.
He said they’d snubbed him repeatedly for years, leaving him off of the annual April list, because of his race.
He showed them financial records from his enormously successful sneaker and clothes line, Yeezy, which backed up his status.
It’s unclear how their respective fortunes will be divided in their divorce, but it is more than likely the pair signed a pre-nuptial agreement when they got married in 2014.
This year’s list has 493 newcomers, including Kim Kardashian – who came in at 2674th on the list. Kanye West is also on the list – and the ex-husband is ahead of Kim, in 1750th place with a net worth of $1.8billion
Kim is the third person in her family to earn billionaire status.
Kylie Jenner, her 23-year-old sister, was the first in 2018 when, aged 21, she was named the youngest self-made billionaire in history.
New to the list is Miriam Adelson, widow of Sheldon Adelson who died earlier this year. The Trump supporter and CEO of Sands Entertainment appears to have left his wife his entire fortune. She clocks in at $38.2 billion – good for No. 36.
Meanwhile, U.S. stocks are up more than 10 per cent so far this year, so billionaires are likely – at least so far – to be racking up gains in the coming year, too – perhaps cementing even more into the rich list.