[lbo-talk] Dean Baker on how Amazon's tax subsidy > its profit

Michael Pollak mpollak at panix.com
Thu Nov 1 19:01:15 PDT 2007


http://www.alternet.org/story/66429/

Amazon's Success: Tax Avoidance, Rather Than Savvy Entrepreneurial Spirit

By Dean Baker, TruthOut.org Posted on October 30, 2007, Printed on November 1, 2007

<snip>

The point here is simple: if someone goes to their neighborhood book

store, clothes store, toy store, or even Wal-Mart (Amazon sells just

about everything these days), they generally have to pay sales tax

on whatever they buy. In some states, the sales tax can be higher

than 8 percent, costing a family $16 or more on a $200 purchase

But not at Amazon: operating in the 21st century Internet, Amazon

shoppers can purchase their products without paying state sales tax

....

To see how important the tax subsidy is, Amazon earned just under

$400 million in profits last year, which is approximately equal to 3

percent of its $13 billion in sales. If we assume an average state

sales tax of 4 percent on purchases, Amazon's tax subsidy exceeded

Amazon's profits.

<end excerpt>

Michael



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