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While the complexities have not yet been fully explained, Democratic presidential candidate Joe Biden has sometimes described the tax reviews he is contemplating if elected. His online crusader page explains that a White House run through Biden would seek to increase the U. S. corporate tax rate. But it’s not the first time From 21% to 28% and the accumulation of taxes on the source of revenue generated from 10. 5% to 21%. It also aims to impose “a minimum tax of 15% on the source of accounting revenue so that no corporation gets away with it. “
This plan poses a transparent risk to the functionality of maximum giant corporations. Tax Foundation’s independent research into nonprofit tax policy estimates that these measures would extract another $2. 65 trillion (on a net basis) from U. S. corporations over a period of time. All for-profit organizations would pay at least a little more, adding the e-commerce giant Amazon (NASDAQ: AMZN), which is criticized for avoiding taxes.
Anyone who fears biden’s proposed tax code plan is devastating for Amazon, however, doesn’t want to sweat too much.
If you get the impression that Joe Biden is obsessed with Amazon’s tax bills, you can’t believe it. The Democratic nominee is continually under pressure how little Amazon will pay in a given year.
After Amazon did not pay US taxes in 2019 for tax year 2018, Biden tweeted: “I have nothing behind Amazon, but no company that makes billions of dollars in profit pays a lower tax rate than firefighters and firefighters. teachers “. In an interview with CNBC earlier this year, Biden commented, “I don’t think any corporate parent . . . is absolutely in a position where it doesn’t pay taxes and make billions and billions and billions of dollars. ” He added at the time: “I think Amazon starts by paying its taxes. “
In fact, Biden’s corporate tax reform plan seems to be so Amazon-centric that in some circles it’s called “Amazon Rule” or “Amazon Tax. “
Contrary to the existing complaint, Amazon will pay revenue source taxes, simply not paying them every year because you don’t owe them every year. In unpaid years, you benefit from past taxes. credits and overpayments.
There are two other lines in the investor reports regularly published by Amazon that give body to this monetary reality. The “provision of income source taxes” appears to be in the revenue matrix, while “money paid by net reimbursement taxes” is a component of the new form of The number of money flows is not the same because the provision does not take into account reimbursement costs in the form of inventories and inventory options.
Overall, Amazon reported $40. 6 billion in taxable revenue for more than thirteen years. About 8. 8 billion of this amount was allocated to the above-mentioned “provision”, which reflects a fundamental tax payable in a given year, representing approximately 21. 7% of its net worth. In contrast, the company earned $4. 4 billion in genuine money bills for the IRS in this period, or about 10. 8% of its cumulative net source of income (beneficiary inventory and company inventory option allocations particularly reduce its final tax liability). Even though the genuine payment is much lower than the tax payment provision, Amazon will pay something.
The 800-pound gorilla in the room: regardless of the approach used to measure your tax debt, Amazon has benefited from much lower rates under the recently revised tax code than in the past. Higher rates can largely offset this increase.
Although it provided approximately $2. 4 billion in income taxes last year, that’s only 17% of its revenue. Joe Biden’s plan would have taxed net profit at a rate closer to 28%, which may have charged the company an additional dollar. Amazon issued $881 million in genuine payments, or 6. 3% of the benefits before tax, for the source of income taxes in 2019 (but not necessarily for fiscal year 2019). But the application of the minimum tax rate of 15% in Amazon’s source of accounting revenue, or the genuine source of income reported to% of age holders, may have more than doubled the tax rate by 6. 8% after taking into account the%-age prizes. To the extent that Biden’s proposed tax rates on cash earned abroad are twice the existing rate, the additional annual burden could exceed $1 billion.
A Biden victory remains devastating: Amazon’s tax provision of just under $2. 4 billion and its $881 million money tax charge are still well below $14 billion in profits in 2019. There is room for larger bills.
However, any figure close to $1 billion remains huge and Amazon can do many things with an additional billion a year. And, of course, the more successful Amazon grows, the greater the additional tax burden.