Amazon CEO Jeff Bezos became one of the few corporations to lend support to US President Joe Biden's plans to raise corporate taxes to fund American infrastructure. However, Amazon may not be affected significantly even if the tax increases which makes it easier for Bezos to get behind the plan, a CNN report said.
The current rate of corporate tax stands at 21 percent and Biden is vying to raise it to 27 percent.
The report cited Amazon's federal income tax bill which was $1.7 billion in 2020 which is only 7 percent of the pretax income of the $24.2 billion it reported to investors. Thus Amazon only paid about a third of the 21% rate.
Reportedly, few corporations pay 21 percent of their reported pre-tax income. These corporations use tax breaks to reduce their amount of income subject to tax. Experts believe that just increasing the corporate tax will have a little effect on these corporations as they will continue to use these tax breaks to reduce their taxable income.
"The increase in the statutory rate and the closing of loopholes that encourage profit shifting overseas, that is where you have the biggest bang for the buck," said Frank Clemente, executive director of Americans for Tax Fairness, a group pushing for greater corporate tax collection told CNN.