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Illustration: Aïda Amer/Axios
Fortune 500 companies have begun to file their annual regulatory reports, and a pattern is emerging. After the Trump tax cut, an outsized number, led by giants like Amazon, GM and Halliburton, owe zero or very little in 2018 U.S. income taxes — or are actually due a refund.
Amid popular anger at establishment institutions, companies earning large profits and paying no taxes risk a serious public backlash.
No one suggests that anyone is violating tax laws. But paying or not paying taxes becomes an issue when few ordinary people are afforded the chance to escape the IRS and less and less money is available to fix crumbling infrastructure and struggling schools.
By the numbers:
After its HQ2 debacle in New York, Amazon has been under the most intense scrutiny of all — and now over its tax bill. In a report last week, the Institute on Taxation and Economic Policy said the e-commerce giant is seeking a $129 million refund on $11.2 billion in profit.
How they are doing it: Companies already were able to chip away at their tax bill when the top rate was 35%. The new rate of 21% approved under the Trump-backed legislation gets them much lower, and then loopholes take effect.
Some say the issue is overblown: Chester Spatt, a finance professor at Carnegie Mellon, tells Axios, "I don't think a company should be paying more taxes than it owes, and in fact it has an obligation to its shareholders not to pay taxes it doesn't owe."
Yet the optics for Amazon may be brutal: Richard Edelman, CEO of the global Edelman public relations firm, points to a PR blow suffered by GE in 2011 when it reported $14.2 billion in profit for the prior year and filed for a $3.2 billion federal income tax refund.
A busy Friday night, decades ago. Photo: Steve Liss/LIFE/Getty
As Amazon's market power has sunk big box stores left and right, Walmart seemed next in line for a big hit. But the 56-year-old legacy retailer has been surprisingly nimble as it stares down the formidable everything store.
Erica writes: Walmart today easily beat earnings expectations for Q4 of 2018, giving its stock a 5% boost at one stage. The company reported a whopping 43% year-over-year increase in online sales — for the second quarter in a row.
Backdrop: When Walmart and its big box peers were struggling to compete with Amazon, Walmart took risks by pouring money into sprucing up its stores and spending big to acquire Jet.com, the e-commerce business.
What's next: In a note to investors, Moody's analyst Charlie O'Shea said he expects Walmart to keep dominating retail in 2019. The company will "continue to flex its muscle across multiple product categories," he said.
Go deeper: Walmart, the anti-Amazon
Photo: Sean Rayford/Getty
In a video announcing his bid for president today, Bernie Sanders, the grandfatherly senator from Vermont, brought up an unusual talking point: artificial intelligence and robotics.
Kaveh writes: Right at the halfway mark of the 10-minute video, Sanders took a stance on the future of work. He said:
"I'm running for president because we need to understand that artificial intelligence and robotics must benefit the needs of workers, not just corporate America and those who own that technology."— Sen. Bernie Sanders
The big picture: For Sanders, who calls himself a democratic socialist, automation's painful effects on labor are a natural target. Other major candidates, like Sens. Cory Booker and Elizabeth Warren, haven't built this issue into their campaign platforms.
Why you'll hear about this again: Darrell West, director of the Brookings Center for Technology Innovation, says that bubbling discontent with Big Tech — the "techlash" — has launched these issues into the spotlight.
"Given public worries about technology and possible job losses, I can see workforce issues and economic prosperity being a central part of the upcoming campaign. Technology has major ramifications for all the big issues on the 2020 agenda."— Darrell West, Brookings
Illustration: Caresse Haaser, Rebecca Zisser/Axios
On the set of "Starship Troopers," based on the Robert Heinlein book. Photo: TriStar Pictures/Sunset Boulevard/Corbis/Getty
Robert Heinlein, author of "Starship Troopers" and "Stranger in a Strange Land," was a lifelong, tinkering MacGyver, according to fellow writer Gregory Benford, who knew him.
Kaveh writes: Heinlein's hijinks included pumping up the pressure in his Santa Cruz house so that dust blew out when the doors were opened, Benford said on Wired's "Geek's Guide to the Galaxy" podcast.