The year 2017 was kind to Seattle-based Amazon, now the richest — or close to the richest — company in American history. It closed the year with a $1.86 billion profit, and on top of that, Washington tax cuts gifted it with an additional $789 million from the American taxpayers. Amazon actually earned more: over $5 billion, according to Fox Business.
Recently, criticism of Amazon’s absorption of taxpayer dollars has even reached across the political divide. David Barnes, who heads the Washington, D.C.-based conservative think tank Generation Opportunity, has noted that “Amazon is one of the largest, most successful corporations in the world — it doesn’t need help from struggling taxpayers to build its second headquarters.” His position echoes that of the Democratic Socialist grassroots organizer Roshan Abraham, who flatly admits that “Amazon doesn’t need the money.”
The e-commerce giant has already received billions in taxpayer subsidies over the years from state and local agencies and politicians. Amazon spends millions of deductible and expensed dollars on campaign contributions and legislators. In California alone, Amazon has poured over $4 million tax-deductible dollars into lobbying California state legislators and handing out campaign contributions.
Ever since Amazon started directing its cash flow toward government officials and agencies, these institutions have churned out subsidies amounting to over a billion dollars directly benefiting the company. Yet no one has dared quantify the subsidies received and cash spread around by Amazon—until now. Recently, the non-profit Free & Fair Markets Initiative (FFMI) released a study outlining the millions in taxpayer funds that have gone to Amazon, capitalizing on its well-connected and coordinated nationwide lobby.
FFMI spokesman and former Albuquerque Mayor Martin Chavez described the imbalance of power. “[In] a review of state campaign finance and lobbying databases and the National Center for Money in State Politics’ Follow The Money database, Amazon made over $6 million in campaign contributions and spent at least $9.8 million on state lobbying from 2000 to 2017…In 2017 alone, Amazon disclosed nearly $200,000 in lobbying expenditures in just two cities, New York and Chicago. According to company reports, Amazon spent nearly $14 million overall on non-federal “government relations efforts” over a five-year period from 2013 to 2017…[Amazon’s] massive tax breaks…have cost communities $704 million in lost sales tax revenue and directly resulted in a loss of 85,000 small retail businesses in the U.S.”
Amazon does not need to rely on tax dollars from struggling and hard-working residents to “build its second headquarters or to gain contracts with the U.S. Department of Defense,” says Generation Opportunity Director David Barnes. “Unfair corporate welfare deals like the ones being handed to Amazon fuel cronyism, are conducted in darkness, and force small businesses to subsidize their competition.”
Amazon is entertaining multi-billion-dollar offers of taxpayer dollar incentives to build a new headquarters (HQ2) somewhere outside its current Seattle headquarters. Los Angeles, Northern Virginia and the Washington D.C. areas lead a list of 20 potential sites. Amazon founder and chairman, Jeff Bezos, will make the decision, a move that will only cement his position as the richest man in the world.
Bezos will get richer because regardless of which area wins the HQ2 bid, Amazon will enjoy billions in taxpayer funding. The company will reap up to seven billion dollars’ worth of tax breaks, cash and future tax subsidies from Newark, Northern Virginia, or Washington D.C., all areas applying for Amazon’s HQ2.
What is wrong with this entire scene? How is Amazon getting away with practices that harm the broader public, and that the majority of Americans oppose?
Voters hate corporate welfare. A 2016 Rasmussen poll found that nearly 70 percent of voters think “government and big business often work together in ways that hurt consumers and investors.” An ABC News/Washington Post poll also discovered that nearly two-thirds of Americans think large corporations “don’t pay their fair share” in taxes.”
Conservatives aren’t the only corporate welfare critics; the center left’s New Republic is similarly taking aim at Amazon. “The famously grueling jobs in Amazon warehouses have also created strains on local services. Bloomberg reported in October that emergency responders visit the Amazon warehouse in Licking County at least once a day to attend to an injured worker. Local residents have to fund those forays because Amazon pays no property tax in Licking County under their subsidy deal.”
Leftist-populist commentator Jim Hightower phrases it more bluntly: “By demanding such corporate spoils, Amazon brands itself a common thief, not only taking our money, but also stealing our trust in the fairness of the system and widening inequality in our society.”
In the political middle, small to medium-sized businesses and their hard-working owners and employees suffer from corporate welfare given to large companies like Amazon that sell in direct competition with small firms that do not receive government money or any exemption from paying taxes.
Lastly, there is the individual taxpayer, whose hard-earned funds are handed over to behemoths like Amazon. Meanwhile, they are not exempt from paying property, sales and income taxes. They also suffer higher rents caused by the influx of people filling new “jobs” the subsidies help create, more traffic, more crumbling infrastructure, more crowded schools, and possibly even unemployment caused by their small business or employer losing the battle to the ecommerce giant.
Raoul Lowery Contreras is the author of The Armenian Lobby and U.S. Foreign Policy and “Murder in the Mountains: War Crime in Khojaly.” He also wrote for the New American News Service of the New York Times Syndicate.
The views and opinions expressed in this commentary are those of the author and do not reflect the official position of The Daily Caller.