Jeff Bezos of Amazon fame has topped out as the richest Man on earth with a net worth of $112 billion. His closest competitors are Bill Gates at $90 billion and Warren Buffet at $84 billion. Amazon has come under the grid by Trump for the fact that despite revenue of $177.86 billion in 2017 – it’s tax bill came to $-0-. But it isn’t the first year that the retail Giant has paid little to no taxes, it has been the agenda of Bezos, a Hillary supporter and Democrat, since the early 2000’s. And Trump is determined to redefine Bezos comeuppance.
In 2004, Bezos and a host of tax avoidance experts created Project Goldcrest in which a series of intercompany agreements effectively transferred intellectual property, licensing agreements etc… to a vast structure of subsidiaries thereby reducing their tax liability to $-0-.
Newsweek uncovered secret meetings between Bezos and EU Commissioner, Claude Juncker who was the former Prime Minister of Luxembourg, during which time a secret ‘sweetheart tax deal’ was created. Since then, the EU has attempted to collect back taxes from Amazon in the amount of $14.5 billion. According to the Commission, Juncker granted Amazon a preferred tax rate that was not granted to any other business and had absolutely no justification.
Interesting that the same Juncker now heads the commission that is fining Amazon when he was instrumental in creating the loophole.
Last September, Amazon announced it was searching for a second US city hub to open shop, claiming that in so doing they would create 50,000 new jobs, and an economic windfall of upwards of $38 billion over a six year period. As of January, Amazon released a list of 19 potential US cities and Toronto as candidates for their second hub. A bidding war has erupted as cities vie for the privilege of Amazon’s $0 tax base.
It isn’t just federal and state corporate taxes at stake, Amazon retailers sometimes forego collecting sales taxes as well, hurting the state income inflow that would normally be generated by malls and local retailers. Developers are watching as mall development stalls and declines. So, who is winning in the Amazon profile? Bezos, obviously. In January 2013, Bezos net worth was estimated to be roughly $24 billion. Growing 466% in 5 years has proven to be the Amazon tax loophole.
Bezos penchant for taxes is matched for his penchant for charity. To date, it appears that he has made two donations, one to Princeton for $15 million and one to the Museum of History and Industry for $10 million. As a percentage of wealth, it is relatively negligible Amazon’s Seattle Office Space is stated to include an area greater than 3.2 million square feet, and Bezo’s various homes boast anywhere from a piddling 10,000 square feet to upwards of 29,000 sq ft including 165,000 acres for his aerospace company in Texas.
It is of course not surprising, but rather inane, that two of largest media conglomerates, the New York Times and the Washington Post, which is owned by Bezos, would defy the obvious and claim that Amazon pays it’s fair share of taxes, ie payroll taxes, unemployment insurance, and those property taxes… No mention of corporate or State Income taxes. Short term memory loss would conjure stories from the presidential campaign in which these same organizations demanded Trump keep the high tax bracket on corporations… Oops.
Although Amazon averaged between 11% and 13% of all combined taxes from 2007 thru 2015, they weren’t the lowest. In fact, Facebook was the all time lowest positive contributor at 3.8%! Google contributed roughly 16% and Apple 16.5%… All lean Liberal, all promote heavy taxation as Democrats, all pay considerably less than even the S&P average of 26.9%. The companies holding up their share include: Lowes, CVS, Home Depot, Exxon Mobile, UPS, Starbucks, Walmart and Disney at 30.7% to 39.3%.