June 28, 2022

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Amazon’s Jeff Bezos and Biden administration spar over inflation, corporate taxes

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Bezos denounced a tweet from President Joe Biden about corporate taxes as “disinformation” and “misdirection.” The White House quickly retorted by saying that Bezos “opposes an economic agenda for the middle class.” 

Washington: Jeff Bezos this weekend became the latest centibillionaire to launch a political fight on Twitter by denouncing a tweet from President Joe Biden about corporate taxes as “disinformation” and “misdirection.” The White House quickly retorted that Bezos “opposes an economic agenda for the middle class.” And then Bezos fired back, arguing that the Biden administration would have made inflation worse if its $3.5 trillion economic and social spending bill, known as ‘Build Back Better,’ had made it into law. “They failed, but if they had succeeded, inflation would be even higher than it is today, and inflation today is at a 40-year high,” Bezos tweeted.

The dispute marks an unusually high-profile one for Bezos, who has generally sought to avoid political fights in public. Bezos is the second-wealthiest person in the world, with a net worth of $150 billion, behind Elon Musk, whose wealth has reached $268 billion. Musk, the Tesla founder who is seeking to purchase Twitter, has frequently used the social media platform to attack his perceived critics and to pick fights about free speech. The spat began on Friday, when Biden’s account tweeted: “You want to bring down inflation? Let’s make sure the wealthiest corporations pay their fair share.”

Biden has often accused Amazon, the e-commerce giant that Bezos founded and led for nearly a quarter-century, of failing to pay its fair share in taxes. In 2017 and 2018, Amazon paid no income tax despite earning billions in profits. Since then, the company has made modest tax payments. “Raising corp taxes is fine to discuss,” Bezos tweeted in response. “Taming inflation is critical to discuss. Mushing them together is just misdirection.”

On the actual policy question of “whether raising corporate income taxes would in fact restrain inflation” most economists give Biden the edge, with a caveat. “The idea would be that raising the corporate tax would reduce corporate spending and would reduce overall demand in the economy and put downward pressure on prices,” said Michael Strain, an economist at the conservative American Enterprise Institute.

Still, Strain and most other economists caution that it would take many months for any rate increase to have much impact, Strain said, and even then, would not reduce inflation by much. “Of all the things I would do to rein in inflation, the corporate income tax is a long way down the list,” said Carl Tannenbaum, chief economist at Northern Trust, an asset management firm in Chicago.

 

 

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