Amazon gets big tax cuts as it expands its distribution network

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Amazon has a reputation for delivery, but it turns out the e-commerce giant is pretty good at receiving as well.

With three months remaining in 2021, new data released Wednesday shows that Amazon has already won a record amount of tax breaks in the United States this year. States and municipalities have bent over backwards to get the incredibly profitable company to open warehouses in their backyards. But it’s unclear how much good this will do for anyone except Amazon.

Mi Casa, Su Warehouse

Amazon is rapidly building up warehouses and processing facilities across the country to speed up its delivery speeds, which it sees as key to asserting its dominance in the e-commerce industry. In its quest to own more land than a Roman Emperor, the retail giant more than doubled its capital spending in 2020 to $ 40.1 billion by opening 100 new facilities in 40 states.

By mid-2021, Amazon had already spent $ 26.4 billion on capital spending, and with all that money spent, local politicians were lining up to offer special deals in exchange for jobs they can brag about. of their electors:

  • Amazon raised $ 650 million in grants, tax exemptions and other incentives from states and municipalities in 2021 – its highest-grossing benefits year yet, according to new data of the economic development watchdog Good Jobs First.
  • Since 2000, the online retailer has secured $ 4.1 billion in incentives from local and state governments. It’s not like it needs help – the company made $ 21.3 billion in profit last year, an 84% year-over-year increase.

Amazon side: Amazon says it deserves grants because it created more than 400,000 jobs last year alone. Corn a 2018 study by the Economic Policy Institute found that while Amazon’s new Fulfillment Centers increased warehouse jobs by 30% in a region, they attracted staff from other employers and therefore resulted in no net gain in jobs.

Ask a worker: There is also the question of remuneration. Take New Jersey: A UPS driver makes an average of $ 38.35 an hour there, according to recent congressional testimony. An Amazon pilot? Only $ 19.25, the Financial Time Remarks. The company recently bred his average starting salary of $ 17 to $ 18 – and increasingly touting perks like signing bonuses and tuition assistance – as he aims to fill 125,000 warehouse and delivery jobs .

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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