Senator Elizabeth Warren (D-Mass.) on Thursday morning singled out Amazon and Occidental Petroleum as companies not paying their fair share in taxes. In a new policy proposal published on Medium, the 2020 hopeful outlined a plan that would impose a new tax on the global profits of corporations reporting more than $100 million in annual profits.
“That first $100 million is left alone, but for every dollar of profit above $100 million, the corporation will pay a 7% tax,” wrote Warren. “That means Amazon would pay $698 million in taxes instead of paying zero. And Occidental Petroleum would pay $280 million in taxes instead of paying zero.”
The seven percent tax would fall on top of the preexisting corporate tax (currently at roughly 21 percent), as well as a provision included in the Republican tax plan which imposes a domestic tax on the profits U.S. companies make overseas. While Warren acknowledged the need for corporate tax reform, she stressed that the current tax code “is so littered with loopholes that simply raising the regular tax rate is not enough.” She estimates her Real Corporate Profits Tax will raise at least a trillion dollars over a decade.
“The Real Corporate Profits Tax takes advantage of market incentives to ensure that profitable companies continue to pay their fair share,” said the Democrat. “Corporations will always want to report as low of a profit figure as possible to the IRS. But they want to report as high of a profit figure as possible to investors to drive up the company’s stock price, which in turn drives up bonuses and other compensation for executives. Companies will be hesitant to under-report their profits to investors — which means they won’t be able to game the tax system as much as they can now.”
In response to Warren, Amazon said it was “creating tens of thousands of quality jobs each year with industry-leading pay for people of all skill levels.”
“Amazon pays all the taxes we are required to pay in the U.S. and every country where we operate, including paying $2.6 billion in corporate tax and reporting $3.4 billion in tax expense over the last three years,” said the tech giant in a statement. “Corporate tax is based on profits, not revenues, and our profits remain modest given retail is a highly competitive, low-margin business and our continued heavy investment.”