Amazon founder Jeff Bezos turned quite a few heads Tuesday when he came out in favor of President Biden's $2-trillion infrastructure plan and even endorsed Biden's proposal to raise corporate taxes to pay for it.
"We support the Biden Administration's focus on making bold investments in American infrastructure," Bezos wrote on his company's website. He added, as explicitly as you'd wish, "we're supportive of a rise in the corporate tax rate."
For those hankering to find the devil in the details, it's proper to note that Bezos' endorsement wasn't entirely unconditional.
"We recognize this investment will require concessions from all sides — both on the specifics of what's included as well as how it gets paid for," he wrote.
Yet no one should be too surprised that on balance, Bezos is on board. The Bezos statement acknowledged, explicitly or otherwise, a few truisms about public infrastructure-building in the United States.
One is that these projects more than pay for themselves. That's been the record of public works projects dating back to the 19th century.
Another is that only the government can accomplish much of this construction, because the program is generally too big or its benefits too diffuse or conjectural to attract private sector investment. But once the projects are built, the benefits redound to private enterprise.
A third is that companies such as Amazon don't have to worry about increases in the corporate tax rate, because they don't pay anywhere near that rate.
In 2020, Amazon paid $1.84 billion in federal income taxes on its profits of $20.2 billion. That's a tax rate of about 9.1%, well below the statutory corporate rate of 21%. In 2019, its effective tax rate was 1.2%, and in 2018 it got a tax refund of $129 million.
Laying that aside for the moment, let's look at the potential impacts for Americans generally from the Biden plan.