Big Tech may be in the federal government’s crosshairs but you wouldn’t know it from the Democratic debates this week. Like the first round of debates, tech rarely came up other than one company that has emerged as a favorite punching bag for 2020 hopefuls.
Amazon was name-checked during each of the two debates this week. That was also the case during the first round of debates in June.
What they said: Sen. Bernie Sanders took a familiar jab at Amazon during the first debate this week. He called the company out for not paying federal income taxes in recent years. Amazon didn’t pay income taxes in 2018 as a result of the Republican tax cuts the year prior, tax credits, and its compensation structure for employees.
“As we speak, right now, 500,000 Americans are sleeping out on the street and yet companies like Amazon, that made billions in profits did not pay one nickel in federal income tax,” he said. “Tonight half of the American people are living paycheck to paycheck and yet 49 percent of all new income goes to the top one percent.”
The following night entrepreneur Andrew Yang criticized the company for the impact it has had on American retailers. “Raise your hand in the crowd if you’ve seen stores closing where you live,” he said. “It’s not just you. Amazon is closing 30 percent of America’s stores and malls and paying zero in taxes while doing it.”
It’s a familiar refrain for Yang, one he trumpeted on a visit to Seattle in May. GeekWire sat down with Yang during his trip to discuss automation, Amazon, and his signature policy, universal basic income.
Amazon did not immediately respond to our request to comment.
(Update) Amazon’s response: An Amazon spokesperson provided the following statements in response to Sanders’ and Yang’s comments:
“Small and medium-sized businesses are thriving with Amazon. Today, independent sellers make up more than 58% of physical gross merchandise sales on Amazon, and their sales have grown twice as fast as our own, totaling $160 billion in 2018. Amazon’s retail business competes in the worldwide market for retail sales, and represents less than 1% of global retail and less than 4% of U.S. retail. And the vast majority of retail sales — 90% — still occur in brick-and-mortar stores according to the U.S. Census bureau.”
“Amazon pays all the taxes we are required to pay in the U.S. and every country where we operate, including paying $2.6 billion in corporate tax and reporting $3.4 billion in tax expense over the last three years. The government has designed corporate tax law to encourage businesses of all sizes to invest in the U.S. economy to drive growth and create jobs. Amazon has invested more than $50 billion in 2018 and $200 billion in the U.S. since 2011, building a network of 125 fulfillment and sortation centers, air hubs and delivery stations as well as cloud-computing infrastructure and wind and solar farms. We invest heavily in research and development at our Seattle headquarters and 18 tech hubs across the country. We created over 45,000 full time, full benefit jobs in 2018 alone, and today employ more than 250,000 people that receive our $15 minimum wage and valuable benefits including 401k, health insurance and bonuses. Our investments also support over 450,000 indirect jobs in construction, building services, hospitality and other industries.”
Background: The House Judiciary Committee, Federal Trade Commission, and Department of Justice have launched investigations into the tech industry over antitrust and privacy concerns. Tech has critics on both sides of the aisle. Sen. Elizabeth Warren is campaigning on a proposal to break up the industry and President Donald Trump frequently criticizes companies like Facebook and Amazon on Twitter.
Why it matters: The federal government is investigating several tech titans, including Apple, Facebook, and Google. But Amazon has emerged as a particular target for Democrats running for president because income inequality is a key focus of the race. Amazon CEO Jeff Bezos is the richest person in history thanks to the company’s growth. That fact, coupled with Amazon’s tax practices and retail dominance, put a target on the company’s back.
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