Jeff Bezos has publicly thrown his backing behind continued investments in U.S. infrastructure, and is even encouraging an anticipated corporate tax rate increase that would result from the $2.3 trillion infrastructure plan proposed by President Joe Biden.
In a statement, the outgoing Amazon CEO said the Seattle company supports the Biden administration’s “focus on making bold investments in American infrastructure.”
“Both Democrats and Republicans have supported infrastructure in the past, and it’s the right time to work together to make this happen. We recognize this investment will require concessions from all sides—both on the specifics of what’s included as well as how it gets paid for (we’re supportive of a rise in the corporate tax rate),” he continued. “We look forward to Congress and the Administration coming together to find the right, balanced solution that maintains or enhances U.S. competitiveness.”
The $2.3 trillion deal would have a significant impact on all things related to the supply chain, logistics and retail, making Amazon a key stakeholder as the country’s e-commerce leader. In the fourth quarter alone, the e-commerce giant spent $21.5 billion in shipping costs, a 67 percent jump year over year as more shoppers continued to shift to online shopping during the pandemic-influenced holiday season.
Amazon steadily invested in and expanded its own infrastructure during the pandemic, increasing the square footage across its fulfillment and logistics network by 50 percent in 2020.
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The company even pledged support to the federal government in January, offering to use its logistics expertise and network to hasten the availability of Covid-19 vaccines.
As part of Biden’s proposal, $621 billion would be put into transportation infrastructure such as bridges, roads, public transit, ports, airports and electric vehicle development. Another $580 billion would be invested in American manufacturing, research and development and job training efforts.
Under the plan, the corporate tax rate would increase from 21 percent to 28 percent.
Bezos, who is stepping down as CEO of Amazon in the third quarter of 2021, did not go so far as to say he supports the $2.3 trillion in spending or the specifics of the expected tax hike, both of which Biden unveiled last Wednesday. But the decision to speak publicly on the issue looms large, with Amazon being the first major corporation to come out in support of the corporate tax increase.
After the plan was proposed last week, the Business Roundtable, an organization that represents CEOs of major U.S. firms, issued a statement strongly opposing the tax increase as a way to pay for the infrastructure plan, saying it would create “new barriers to job creation and economic growth.”
Bezos’ support for a tax increase would not only represent a sharp turn from the Business Roundtable, which he is a member of, but would be an easing of tensions given his company’s history with taxes. Not only has Amazon previously faced scrutiny over its tax record, but Biden himself has been a critic.
Biden singled out Amazon during an address in Pittsburgh last week, saying the company uses “various loopholes so they’d pay not a single solitary penny in federal income tax.”
The White House noted that raising the corporate tax rate to 28 percent is still below what corporations paid before President Donald Trump’s tax cuts in 2017—35 percent. Biden also wants to increase the minimum tax on U.S. multinational corporations to 21 percent of profits (some companies pay as little as 10.5 percent now). The plan would balance out the infrastructure spending by generating $2 trillion in tax revenue over the next 15 years.
The tax overhaul, dubbed the Made in America Tax Plan, seeks to incentivize job creation and investment in the U.S., end profit-shifting to offshore tax havens and ensure large corporations pay “their fair share,” according to the White House.
The plan would eliminate a rule that allows U.S. companies to pay no taxes on the first 10 percent of returns when they locate investments in other countries.
The Biden Administration has pulled no punches in spending as the U.S. seeks to stabilize from the Covid-19 pandemic and boost the economy. In early March, Biden signed a $1.9 trillion coronavirus relief plan.
While Democrats narrowly control both chambers of Congress, the party faces challenges in passing the infrastructure plan. Republicans broadly support efforts to rebuild roads, bridges and airports and expand broadband access, but have been opposed to tax hikes as part of the process.
The administration aims to approve the $2.3 trillion package before it turns toward a second plan to improve education and expand paid leave and healthcare coverage. Last Wednesday, Biden said he would unveil the second part of his recovery package “in a few weeks.”