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Critics of Amazon Tax Breaks Speak Out in Pandemic

Amazon has received more than $1 billion in state and local tax subsidies nationwide. (Adobe Stock)
Amazon has received more than $1 billion in state and local tax subsidies nationwide. (Adobe Stock)
April 13, 2020

FRANKFORT, Ky. -- Amazon is seeing a surge in business as people shop at home during the COVID-19 pandemic. The company recently announced plans to hire 100,000 new workers nationwide, and critics say now is the time to halt tax breaks to the e-commerce giant.

Amazon, which operates five distribution centers and a handful of other sites in Kentucky, employs thousands of people.

Greg LeRoy is executive director of Good Jobs First, a nonprofit group that tracks corporate tax subsidies. He said in Kentucky, a percentage of Amazon employees' paychecks are paid back to the company instead of going to local municipalities and the state.

He calls that "paying taxes to the boss."

"If you were to look at just Kentucky by itself, we know of at least 22 deals that Amazon has gotten in the state, worth more than $117 million," LeRoy said.

According to LeRoy, Amazon has received breaks and incentives from every level of government, even as lawmakers have slashed the state budget year after year since 2008 -- a problem likely to worsen as Kentucky grapples with the economic fallout from the coronavirus.

Supporters of corporate tax breaks contend they bring jobs and regional investment.

LeRoy said he agrees Amazon is bringing jobs to the state. But he said local governments give the company access to public services, such as roads and educated workers to run its facilities.

"In fact, in some recent years, Amazon has paid $0 in federal corporate income taxes," he said. "And that's due to a variety of reasons, some of which you might call incentives, but others are just because of the aggressive tax avoidance policy."

LeRoy noted that what started out as a way to lure factories and businesses to rural, mostly Southern states has morphed into a tax-break industrial complex, where states are pitted against one another to offer corporations the best deals.

"And certainly, Kentucky is an example of this," he said. "So, Kentucky created something called the Rural Economic Development Act back in the 1980s. It's a very aggressive form of subsidy."

He said neighboring Ohio and Indiana then passed similar laws aimed at attracting large employers.

Nadia Ramlagan, Public News Service - KY