Saturday, April 13, 2019

New corp tax

Last year Amazon made $10 billion and paid zero income tax. How is this possible. First off Amazon made no money in its first ten years so those loses are carried forward into profitable years. Second and more important Amazon does not pay dividends and reinvests all profits causing the company to grow. Investors make money by growth in the stock. In the past five years the stock has increased from $300 per share to $1,800. CEO Jeff Besoz has a salary of $84,000 per year but the company pays for all of his expenses including things like personal security and travel. He is like President Trump in that he has no expenses. Senator Warren has proposed a surtax on corporation to pay for new government programs. For Amazon this means $700 million in taxes on their last years profits of $10 billion. This is money that will not be invested in new business adventures since Amazon invests all of their profits. These new adventures could create jobs and expand the overall economy. Once the money goes to the government there will be no new jobs just new public assistance programs. Too add to the confusion it is well known in economic circles that corporations don't pay taxes they just raise the prices and pass the tax onto consumers. There are 60 million Amazon Prime uses so this would be a $12 per year increase in price. It still comes down to the little guy paying to transfer money to the little guy with the government acting as middle man and taking their cut. New tax proposals rarely bring in what is predicted and cost of new government programs is almost always more than predicted.

No comments:

Post a Comment