Of Course, Jeff Bezos Supports Higher Corporate Taxes. Here's Why.
He's Not The One Who'll Be Paying Them
Today’s big headline in the financial world is that the world’s richest man, Amazon founder and CEO Jeff Bezos - also the owner of the Washington Post and Whole Foods, supports higher taxes in Joe Biden’s “infrastructure” plan (although he does want bipartisanship “concessions” - on the details). Good luck with that, in the Schumer-led Senate under now widely-expanded anti-filibuster budget rules.
Dog bites man story. Who didn’t see this coming?
Amazon’s - excuse me, Bezos’ - brief and terse statement:
"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."
Not a lot of detail here, but the vision and strategy are all that matters when you run the universe. The details fall into place.
To be sure, Bezos earned his wealth. He took on many risks, worked hard, built a great team, and launched his company as an online bookseller during the early days of the internet. He has brilliantly expanded it into a consumer product and service juggernaut through masterful and relentless innovation. Retail booksellers like Borders have all but vanished. He gave us Alexa. He is integrating Whole Foods with Amazon in ingenious ways (starting with discounts for Amazon Prime members). Sure, his workers take bathroom breaks with the help of plastic bottles, and he fights unionization efforts. He even opposes mail-in balloting for union elections, at least the ones involving Amazon.
He built Amazon Prime into a premier video service on top of free two-day deliveries. He is a massive government contractor via Amazon’s dominant cloud service. He’s created hundreds of thousands of jobs, and who hasn’t seen one of his massive distribution centers in communities across the country? Or Amazon trucks on Interstates? Or Amazon vans in neighborhoods, doing delivery, sometimes several times a day? How many of you are NOT Amazon Prime households? Some 126 million households are. I am.
For some, he defies political labels. He’s considered a libertarian for opposing wealth taxes and supporting gay marriage. He has financially contributed to both Democratic and Republican incumbents. Looks very corporate to me.
It’s not hard to figure out why Bezos is all for an infrastructure bill in principle, even though Biden’s “infrastructure” bill’s portion for roads, highways, and bridges adds up to about 6% of the legislation. Some complain that Bezos and Amazon don’t pay taxes or enough taxes. That’s because Amazon is constantly plowing its profits back into its company and eschews dividends to shareowners. Stockholders don’t mind, with its stock price on a never-ending upward trajectory as the company’s tentacles reach farther into our economy and lives. You really have to admire what they’ve done.
Back to the topic. Why is Bezos so willing to see corporations pay higher taxes?
Consider the Amazon business model. In a sense, it is not unlike how Walmart built their business beginning in the 1970s, constructing effective marketplaces (unlike Amazon, via retail before the internet was invented by Al Gore) that literally made sellers come to them and then getting the lowest price possible for products. Consider how many consumer product goods companies have offices - rather large ones - in Bentonville, Arkansas, home to Walmart. Both with a relentless focus on consumers and a deeply competitive mindset, Walmart and Amazon will squeeze and squeeze to deliver lower prices for consumers while earning higher commissions for themselves. Both have the market power to push back if they’re not happy with your pricing or products, taxes or not. Or maybe your politics.
It works. And suppliers to Walmart and sellers on Amazon know exactly what I’m talking about. No one is forcing people to choose Walmart or Amazon for their purchases. It’s how the market works.
You see, Amazon and every other corporation may pay taxes, but in reality, they collect taxes. As part of the cost of “doing business,” they’re just added to the price tags of whatever you buy, or what they can squeeze out of suppliers. But barring a “minimum corporate tax,” an idea designed largely for Amazon and a few other businesses, they can avoid most taxes by continuing to reinvest profits to innovate and upgrade their operations (and maybe their employees). Amazon has never paid a 21 or 25 percent corporate rate and has no intention of doing so. So, watch their ample-sized Washington lobby shop and a bevy of consultants work to make sure that they don’t, as quietly and secretly as possible. Lobbyists don’t like sunshine.
Oh, sure, Bezos might personally be hit with higher taxes. Some think that is great. But if you’re net worth exceeds $250 billion, what’s a few billion here or there? He’s got his. That’s why so many wildly successful people are all on board with higher tax rates for the wealthy, short of confiscation (not that any of them are making voluntary tax payments). They’ve got theirs, so it doesn’t really hurt them. It really hurts those who are working or aspire to similar status - they’re the ones hurt by higher taxes and the higher prices that inevitably come with them. It keeps the potential opposition down.
And that’s the point. It is corporate cronyism. Taxes have become a tool of the ultra-rich and well connected to keep the competition at bay. Speaker Pelosi and Senator Schumer know full well who their real constituents are, as do most congressional Democrats. And Jeff Bezos is among them.