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Stray Thoughts

Let’s see who really is ‘gaming the system’

2/19/2019

Last week’s news put furrows in my brow.

As I ruminated on the headlines and details in the news accounts, I came away convinced something is out of whack somewhere.

One of the reports was that Amazon, the online retailing behemoth, cancelled plans to build a corporate headquarters in New York City. The company had said 25,000 employees eventually would work there.

Amazon’s decision came after persistent criticism from some New York politicians and community activists about the amount of incentives the state of New York and the city government were going to give the company — $3 billion, with a “B.”

It’s appropriate to note that Amazon’s founder and largest shareholder, Jeff Bezos, is the richest man on Earth. He’s worth about $100 billion.

Prep Iowa

Those government handouts were instrumental in persuading Amazon to choose the west end of Long Island over scores of other communities that vied for the headquarters. With its decision to not build there, Amazon presumably will reopen its search for a different location.

I understand the fiduciary duty corporations have to look after the best interests of their owners. But I also know that in much of America, the Amazon deal looked like a gold-plated example of corporate greed.

That point was driven home in a stretch limousine by another news story: Last year, according to the Institute for Taxation and Economic Policy, a research group, Amazon’s profits were $11.2 billion, a 50 percent increase over the year before. But it paid no federal income taxes for the second year in a row.

Let that sink in.

Individual working stiffs in Iowa are paying a bigger federal income tax bill on their annual incomes than Amazon did, even though the average Iowan’s yearly income would barely cover the cost of fueling Jeff Bezos’ personal 20-seat jet for one trip.

With Amazon’s corporate profits from last year alone, the state of Iowa could operate state government for the next year and a half without needing a nickel of our taxes.

But Amazon contributed zero last year in federal income taxes to help pay for the air traffic control system that Bezos’ personal jet and the company’s airplane freighters rely on. And zero for federal law enforcement that keeps Amazon employees and executives safe. And zero for our military. And zero for Medicaid health care, food stamps and housing assistance for its poorest customers.

Amazon complied with federal tax laws in preparing its income tax return last year. But Matthew Gardner of the Institute for Taxation and Economic Policy said the taxes the company is not paying will have to be made up somehow, either by cutting government spending or by increasing taxes on middle-income families and small businesses.

“Their U.S. profits doubled in the last year,” he said. “If anyone is ever going to be subject to the corporate income tax, you would hope it would be Amazon.”

The tax breaks Amazon used were approved by Congress. But senators and representatives rely on hefty donations from corporate executives, lobbyists and interest groups to pay for their campaigns, and the ears of Congress are often more attuned to the wishes and concerns of those donors, not people who make up the majority of their constituents.

A couple of other headlines last week contributed to the furrows on my brow. Those news reports illustrate the difficulty Joe Average Citizen encounters not just in Washington, but at the Statehouse in Des Moines, too.

State Senator Jim Carlin of Sioux City introduced a bill that would raise the anxiety level of men and women who lose their jobs and receive unemployment benefits.

His bill sets penalties for those out-of-work Iowans on unemployment benefits who apply for jobs when, as the bill says, “the applicant does not meet the minimum lawful requirements” for a particular job or when the applicant is “manifestly unqualified.”

People who receive unemployment benefits of a few hundred dollars a week for up to 26 weeks are required to apply for at least two jobs per week or be in a job training program. Carlin told an Iowa Senate subcommittee he is concerned some people are “gaming unemployment.”

Try explaining that to the unemployed person who lost his job when his employer closed and he’s hoping to keep food on the table until he finds a suitable new job.

Is Carlin’s bill really going to get more Iowans employed, as he believes? Or is it going to leave an unemployed breadwinner reluctant to apply for a job that might be a stretch or for which he might be overqualified because he fears doing so might jeopardize the unemployment benefits that are keeping the family afloat temporarily?

And then there are a handful of bills in the Legislature aimed at the frequent target of some lawmakers: Iowans who supposedly are abusing food stamps by not working.

Senator Jason Schultz of Schleswig introduced the latest bills, which would impose work requirements for many food stamp recipients and would cut off benefits to those not current on child support payments.

Most food stamp recipients in Iowa have jobs but make so little they still fall below the poverty line. It’s foolish to think someone who is able to work is going to forego a steady income or a bigger paycheck just to receive an average of $106 per month in food stamps.

Our nation would be better off if lawmakers everywhere worried less about poor people “gaming” the system and worried more about laws that allow hugely successful businesses like Amazon to be the ones actually doing the gaming. ♦

Randy Evans can be reached at DMRevans2810@gmail.com.

One Comment

  1. Bill Lunburgh says:

    Typical liberal media, taking a topic where some good points can be made – Amazon not paying federal income taxes – and then doing such a poorly researched, inaccurate, and misleading reporting that they lose all their intelligent readers.
    Completely Wrong
    “Amazon contributed zero last year in federal income taxes to help pay for the air traffic control system that Bezos’ personal jet and the company’s airplane freighters rely on” neither did anyone else, taxes fund these services come from airport fees and aviation excise taxes including on fuel – Bezos’ and Amazon contributed millions to these government services.
    Very Misleading
    “the state of New York and the city government were going to give the company — $3 billion, with a “B”. No they don’t have $3 billion with a “B” to give – they were going to rebate or forgive the new tax revenue generated by Amazon. No wonder fellow poorly informed socialists like AOC though that NY now had $3 million to spend on other programs without Amazon – the money was never there to give without them coming to NY.
    “And zero for federal law enforcement that keeps Amazon employees and executives safe. And zero for our military. And zero for Medicaid health care, food stamps and housing assistance for its poorest customers” Most of the law enforcement that keeps employees safe comes from state and local taxes which Amazon contributed over $1 billion. Those state and local taxes also held fund Medicaid, food stamps, and housing assistance.
    Missed Points
    Amazon contributes huge amounts of money in payroll taxes, employees are taxed, and those fortunate enough to have bought Amazon stock early and sold it are paying huge capital gains tax. Retail – like the media is changing dramatically – you can go the route of the author and complain about it while you lose readers or retail tax base and be a loser like the DSM Register and NYC or you can embrace the change and attract the new retail and be the winner.
    The media keeps blaming Trump for the fact that much of the public does no longer trust them, they are doing a good job of losing trust without Trump’s help.

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