According to a report by the Institute on Taxation and Economic Policy (ITEP), Amazon will not pay a single cent of federal taxes after making $11.2 billion in profits in 2018. This is the second year that Amazon will pay $0 in federal taxes.
And if that wasn’t bad enough, Amazon reported a $129 million federal income tax rebate, making its tax rate -1%. How does one of the biggest company’s in America end up with a -1% tax rate? Mr. Bezos can thank President Trump’s Tax Cuts and Jobs Act, which cut the corporate tax rate from 35% to 21%, and kept a host of known tax loopholes that allow profitable companies to routinely avoid paying federal and state income taxes.
Because of those loopholes, many corporations never come close to paying a 35% or even a 21% tax rate. From 2011 to 2016, Amazon paid a 11.4% income tax rate (and don’t forget about the $0 Amazon has paid the last two years). The average American pays a $14,210 in taxes each year, which equates to a 24% tax rate. Despite what Trump said at his MAGA rallies, the sad and simple truth is that the Trump Tax Cuts were never going to benefit the middle or working classes.
It’s no secret that Trump lies more than any other President in America’s uneven history. However, the tax-cut-bait-and-switch he sold his supporters, who are primarily made up of the white working and middle classes, may have the most dire consequences.
The tax cuts have caused the national debt to explode, and as of today, it currently sits at $22 trillion. For reference, the national debt was half as much under President Obama. The Republican party promised that these tax cuts would give a major boost to the economy. However, the economy is not growing nearly fast enough to fill the massive holes the tax cuts have left in the government’s budget. Moreover, the windfall that corporations received from the tax cuts has not “trickled down” to the working or middle classes. Instead, they simply increased the wealth of the corporations who received them.
If the Republican Party has their way, instead of implementing a fair tax policy to balance the budget, they would cut key programs that millions of Americans rely on everyday like Social Security, Medicare, Medicaid and the Department of Education. So if you hear a Republican friend talk about how we need to reduce government spending, you can politely remind them that the government’s budget would look a lot better if billion dollar corporations paid the same tax rate as the average American household.