Free lunch, not free enterprise
I suppose I shouldn’t be any more surprised than most taxpaying Americans to discover that I paid more in income taxes in 2018 than the behemoth retailer Amazon.com; but then I didn’t have a net profit of $11.2 billion, either. Nor did I get anything close to Amazon’s $128 million tax refund for 2018. This is the second consecutive year that Amazon has not paid federal income taxes. In 2017 it paid no taxes on an income of $5.6 billion. All this from the April 11, 2019 “Fortune” magazine which reported on research done by the Institute on Taxation and Economic Policy.
Amazon’s not alone in the corporate world. You can see a list of 60 “Fortune 500” companies that paid zero taxes on an aggregate net income of $80 billion (and got $4 billion in refunds) at itep.org/notadime/. The list is followed by an explanation of how they did it.
Corporate income tax is not public information. It was when it was signed into law in 1911 by Republican President William Howard Taft. It was his baby, and his express desire was to make the taxes corporations paid public information. That public information provision lasted about a New York minute, but it is possible to approximate what corporations pay by sifting through the financial documents that corporations have to provide to the government, and that’s what ITEP has been doing for the past 40 years.
But back to Amazon, which had big plans to build new facilities in New York City. State and Local governments salivated at the idea of adding thousands of jobs, but not everyone welcomed the company. Many New Yorkers were angered that a three billion dollar tax incentive had been offered to Amazon to make the move, quite possibly because they were the ones who were going to pay for it.
New York Governor Andrew Cuomo lamented the opposition to the deal, saying that the taxes that Amazon would pay to New York would go along way to pay for the incentive. I refer the governor to the first paragraph; if Amazon doesn’t pay corporate tax to the feds, they won’t be paying it to New York, either.
This is also the same Amazon whose founder and CEO Jeff Bezos has bought the Washington Post and turned it into his platform for taking on President Trump. It would be interesting to see Bezos’ tax returns, too.
Why is this important? Because when anyone, individual or corporation, doesn’t pay their fair share, it has to be made up by other taxpayers either in the form of higher taxes, poorer government services, or a national debt that at sometime, somehow will have to be paid down by the honest taxpayer.
It is common, as in the case of Amazon’s expansion, for cities to give tax breaks to companies for relocating to their town. But these offers don’t originate in city hall, they are requested by the company which is essentially soliciting a bribe. Just as Amazon has taken billions of dollars of retail sales away from local stores, so do these businesses take sales away from local merchants, and the city is paying them to do it. This largess does not apply to local retailers already located where big retailers want to move.
The cities do it in the name of “economic development” That it might be, but it is certainly not free enterprise. More like free lunch.
— Jim Elliott served 16 years in the Montana Legislature as a state representative and state senator and four years as chairman of the Montana Democratic Party. He lives on his ranch in Trout Creek.