Bezos Backs Corporate Tax-Rate Increase and Infrastructure Plan -- Update
|04/06/2021 | 05:34pm|
By Sebastian Herrera
Amazon.com Inc. Chief Executive Jeff Bezos said he supports a rise in the corporate tax rate and supports President Biden's focus on major U.S. infrastructure spending.
Mr. Bezos made his support public in a memo Tuesday. Amazon has faced scrutiny over its workplace policies and some criticism from members of Congress over what they view as low tax payments. Mr. Biden's $2.3 trillion plan centers on fixing roads and bridges, expanding broadband internet access and boosting funding for research and development.
"We recognize this investment will require concessions from all sides -- both on the specifics of what's included as well as how it gets paid for, " Mr. Bezos wrote. He said Amazon was "supportive of a rise in the corporate tax rate" and said the company looked forward to seeing the U.S. government's progress on the plan.
Mr. Biden's plan would impose a minimum tax on profitable corporations. Had the minimum tax he proposed been in place for 2020, Amazon's cash taxes would have been about double what it reported, The Wall Street Journal reported in February.
Mr. Biden met in February with chief executive officers from JPMorgan Chase, Walmart Inc. and other corporations to discuss wage gaps and economic recovery, among other topics. Joshua Bolten, president and chief executive officer of the Business Roundtable, an association of CEOs of major U.S. companies, has said that policy makers "should avoid creating new barriers to job creation and economic growth, particularly during the recovery."
Democratic presidential candidates and other critics over the years have seized on Amazon's low tax rates, pointing out the company's tax liability in contrast with how much money it generates. Amazon had $386.1 billion in sales last year.
Amazon has taken advantage of policies allowing companies to reduce their tax liability through research spending or investment in renewable energy. The company reported $1.8 billion in U.S. tax liability for 2020 after years of paying far less or even reporting a negative tax liability. It said a bump in pretax income in 2020 led to the rise. Amazon had an effective income-tax rate of 9.4% for 2020, less than half the statutory corporate tax rate of 21%, according to the progressive think tank Institute on Taxation and Economic Policy.
Mr. Biden's infrastructure plan is proposed to be offset by 15 years' worth of corporate tax increases. If passed, it would raise the corporate tax rate to 28% from 21% over several years, increase minimum taxes on the foreign income of U.S. companies and make it harder for foreign-owned companies with U.S. operations to benefit from shifting profits to low-tax countries. Senate Democrats on Monday also proposed an increase in the tax burden on U.S. companies' foreign profits and to align the tax system with the Biden plan.
Amazon employs about 950,000 people in the U.S. The company's stock price rose about 76% in 2020, with a valuation now of about $1.6 trillion. Mr. Bezos is planning to step down as CEO later this year to become executive chairman. He is to be succeeded by Andy Jassy, the longtime head of the company's booming cloud-computing business.
Mr. Bezos's message comes as Amazon is facing a unionization vote at its warehouse in Bessemer, Ala. An outcome in the closely watched election could happen this week, with thousands of workers at the facility having voted. Bessemer workers are looking to become the first employees at the online retailer to gain such representation.
Some Amazon employees have criticized the company for how it monitors workers and for the rate at which packages must be sorted and processed in its warehouses. The company has defended its workplace policies and said its $15-an-hour starting wage and health benefits are far better than what is provided by many other companies.
Write to Sebastian Herrera at Sebastian.Herrera@wsj.com
(END) Dow Jones Newswires