Topline
In a bold stance on tax reform, Amazon’s billionaire founder Jeff Bezos proposed that the bottom 50% of earners in the United States should be exempt from paying federal income tax. On Wednesday, Bezos disclosed his intention to urge President Donald Trump to consider this tax cut, amidst rising discussions about imposing higher taxes on the wealthiest citizens in some states.
During an interview with CNBC, Bezos pointed out that the lowest half of American earners contribute only 3% to the nation’s tax revenue. “I believe it should be zero,” he stated, advocating for a dramatic reduction in their tax burden.
According to a Tax Foundation analysis of the most recent IRS data, the average federal income tax rate stood at 14.1% in 2023. Meanwhile, the top 1% of earners faced an average tax rate of 26.3%, whereas the bottom half, with an average gross income of approximately $24,500, paid just 3.7% on average.
Bezos emphasized that the revenue collected from the lowest earners represents a negligible portion of government funds. “It’s unreasonable to expect a nurse in Queens to contribute money to Washington,” he remarked. “Instead, Washington should be apologizing to her. The current system simply defies logic.”
He highlighted the case of an Amazon employee in New York with an annual salary of $50,000, labeling the taxation of such workers as “absurd.” Bezos questioned the fairness of imposing significant taxes on them, asking, “Why are you taxing them so much?”
Firm in his resolve, Bezos expressed his commitment to advocating for these tax cuts with President Trump, believing that such measures would genuinely benefit the American people.
Bezos said he would advocate for the tax cuts with Trump, arguing his position would “actually help people.”
Crucial Quote
“You have a bunch of people in this country who are doing really well, but you have a bunch of people in this country who are struggling,” Bezos said. “Some people talk about making the tax system more progressive. How about we start by having the nurse in Queens [who makes $75,000 a year] not pay taxes?”
Amazon’s Lower Wages And Job Instability
The average hourly pay for Amazon delivery drivers is $19, compared to $35 for unionized UPS drivers, according to researchers from Harvard University’s Shift Project, a wage analysis program. If working a 40-hour work week, this would pay roughly $39,520 per year, whereas a 30-hour work week pays out about $39,640 annually. About 26% of Amazon drivers faced hunger, and 33% could not pay utility bills, while most drivers have less than a year of experience and faced lower odds of long-term employment, the researchers said.
Forbes Valuation
Bezos is the fourth-richest person in the world with an estimated net worth of $267.3 billion as of Wednesday. He ranks just behind Google cofounders Larry Page ($315.3 billion) and Sergey Brin ($290.7 billion), who trail Tesla’s Elon Musk ($800.8 billion).
Key Background
Several states have proposed additional taxes on their richest citizens in recent years, including a “billionaires” tax in California that has faced pushback from wealthy residents. Former California resident Brin opposed the one-time, 5% tax on state residents with assets of at least $1.1 billion, arguing he fled the Soviet Union in 1979 and that he doesn’t “want California to end up in the same place.” Peter Thiel was among the first billionaires to exit the state because of the proposed tax, followed by car loan magnate Don Hankey, former Uber CEO Travis Kalanick and DoorDash cofounder Andy Fang. Some federal lawmakers recently proposed tax cuts for lower earners, including Sen. Corey Booker, D-N.J., whose proposed “Keep Your Pay Act” calls for the first $75,000 of income to be tax-free.
Further Reading
Jeff Bezos Says Bottom Half Of Earners Should Pay Zero In Income Taxes (CNBC)
