Last year, Amazon revenues were $232,000,000,000 – the same total amount as all the combined 2018 budgets of the following U.S. federal departments:
Small Business Administration, Environmental Protection Agency, Department of Commerce, Department of Labor, Treasury Department, Department of the Interior, Department of Transportation, Department of Agriculture, State Department, Department of Justice, Department of Energy, and Department of Education
Amazon’s corporate filing reveals that, far from paying the newly-lowered 21 percent tax rate on its immense U.S. income in 2018, the company received a federal income tax rebate of $129 million.
Not satisfied with no corporate income tax, Amazon and other firms are avoiding FICA’s employer/employee 15.3% levy for Social Security and Medicare. Here’s how the scheme works, and why it can hurt your family:
The major tech companies, including Amazon, Facebook, Microsoft and Apple, all benefit from a deal that allows them to hire tens of thousands of recent graduate software engineers, programmers and other STEM students for up to three years with renewals, and even longer if approved for a work visa.
The scheme is the Optional Practical Training (OPT) program, which exempts non-citizen workers from paying both FICA and Medicare taxes. Employers are also exempt from their matching share.
OPT’s lost taxes represent money that should be funding Social Security and senior health insurance – Medicare. While deficit hawks say these programs are underfunded, they are also the same politicians who have promoted OPT and its no-tax loopholes.
The exemption works this way, for example. An American, who earns $80,000 total a year, nets $73,888, vs. the OPT worker’s net of the full $80,000. In addition, the company saves $6,120 in payroll expense.
Meanwhile, universities are also pushing for even more OPT workers, because it allows them to exclude American candidates in favor of higher-tuition foreign students. This is especially true in graduate schools.
The National Foundation for American Policy (NFAP) said: “the fate of the optional training program could be critical for universities. International students make up about 80 percent of full-time graduate students in the United States in electrical engineering and computer science, and faculty rely on them for research assistance.”
The foundation is run by leadership associated with CATO Institute, a pro immigration group funded by the Koch foundations.
Some questions for NFAP? Why aren’t 80% of the positions taken by Americans, rather than vice-versa? Does this surplus of foreign grads, versus citizens, also account for the relatively low pay for workers with advanced degrees in the STEM disciplines?
Author Hillary Gamm was recently interviewed on SiriusXM, and she explained how OPT started. Gamm is author of Billions Lost: The American Tech Crisis and The Road Map to Change.
OPT started … in the Bush administration and then what Obama did … was he went from creating something that allowed foreign children studying in the United States to work for like six months or a year to instead be able to work three years and then get a renewal for up to five to six years.
So what’s happening today is you’ll have children that are American citizens, where parents have basically bankrupted themselves to send their kids to these American universities and they’ll be sitting alongside their foreign friends who are … earning the same degree. And those foreign children will have a job offer in hand when they graduate and the American child will not have even gotten an interview for that same company.
Tech giants employ thousands of OPT foreign workers annually, instead of American STEM graduates. In 2017 alone, Amazon placed nearly 2,400 OPT foreign workers into white-collar STEM jobs that should have gone to Americans.
Gamm said OPT is not a visa. It is actually administered by Immigration and Customs Enforcement (ICE), which exempts the employer and employee from FICA taxes.
The bill passed the House, 385-65. Corporate lackeys will kill it in the Senate.
As an aside, one game played in Congress is for House members to vote on bills they want killed, gaining positive publicity, but knowing that the bill will never pass the Senate, so their vote was just fake to get votes.