Abolish Minnesota’s estate tax
Today we launch the third of our new Policy Briefings: ‘Abolish Minnesota’s estate tax‘. Minnesota imposes heavy estate taxes. We are one of 12 states and the District of Columbia…
When president Joe Biden announced plans to raise taxes on the rich and corporations, Amazon was, surprisingly, among the entities that supported such efforts.
“We support the Biden Administration’s focus on making bold investments in American infrastructure. Both Democrats and Republicans have supported infrastructure in the past, and it’s the right time to work together to make this happen. 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 (we’re supportive of a rise in the corporate tax rate). We look forward to Congress and the Administration coming together to find the right, balanced solution that maintains or enhances U.S. competitiveness.“
– Jeff Bezos, founder and CEO, Amazon
To be fair, it is quite possible that the people at Amazon support “making investments” in the USA economy and are therefore willing to pay higher taxes. However, looking at Amazon’s recent lobbying activity, that seems highly unlikely.
As Amazon publicly embraced President Joe Biden’s plan to raise the corporate tax rate across the board, it has also lobbied Congress to preserve a prized tax break that’s helped it lower its corporate tax bill.
The retail giant’s founder Jeff Bezos earned plaudits earlier this year when he announced that Amazon would back “a rise in the corporate tax rate” to help pay for Biden’s infrastructure package. His comments broke with most of the rest of corporate America — the U.S. Chamber of Commerce and Business Roundtable vehemently opposed such tax hikes — and served as a rejoinder to critics who have attacked Amazon for paying little to no federal income taxes. Biden himself criticized Amazon’s tax rate as too low on the campaign trail.
Behind the scenes, however, Amazon and other companies have been making moves to help keep their taxes from rising. And their efforts illustrate some of the unseen hurdles the Biden administration faces in its efforts to bring in more revenue from corporate taxation as it calls for raising the overall corporate tax rate to fund its ambitious domestic agenda.
The company hired the tax lobbyist Joshua Odintz, a former Democratic congressional aide and veteran of the Obama administration, last month to lobby on the section of the tax code dealing with the research and development tax deduction, according to a disclosure filing.
And the R&D Coalition — an alliance of companies that benefit from the deduction including Amazon, Intel, the National Association of Manufacturers and others — hired a squad of veteran tax lobbyists at PricewaterhouseCoopers earlier this year. Those hired included a former top aide to Senate Minority Leader Mitch McConnell (R-Ky.).
Politicians, especially liberal ones, like to present themselves as enemies of big business by proposing high taxes and complex regulations. It is probably possible that they actually believe that such proposals would make corporations pay. The realities of lawmaking however, prove different.
Amazon, like every other business, has an incentive to reduce its costs –– taxes included. So it should not be surprising that after backing high taxes for everyone, it is making efforts to reduce its tax burden through such things as deductions.
However, unlike mom-and-pop stores, Amazon has the resources to spend on lobbyists who influence how laws are written. And it also has the resources to spend staggering amounts on lawyers to comb through complicated tax and regulatory codes and use them to their advantage. In fact, this Twitter exchange between Elizabeth Warren and Amazon News is very telling about just how much power big businesses wield in lawmaking through lobbying.
Goes without saying, it is the small businesses we should really be worried about when politicians tell us that they are going to make big corporations pay. And we should especially be more worried when big corporations back up such efforts.