The web giant, Amazon, which is the one of the largest private employers in the US with about 566,000 employees, and which doubled its profit to $11.2 billion in 2018 from $5.6 billion in 2017, paid zero tax in US federal taxes in 2017 and 2018 and redesigned its corporate structure so it could do so in future.

The average American citizen pays an income tax rate between 10 and 15 percent, but Amazon, which is one of the largest corporations in the world, paid a tax rate at minus one per cent. What a contradictory world we live in. It was not always so – according to ITEP (The Institute of taxation and Economic Policy) as in 2012, the company paid 15.5 percent in taxes, but then changed its structure and approach.

How is that even possible? It’s down to tax credit or a tax break for executive stock options.

But today we will look not into corporate structure but into the other side, the ‘’green grass,’’ which is, how does this affect the middle–class people, the employees and moderate-income taxpayers.

According to a new analysis, US state taxes are making the rich richer and the poor poorer, according to Carl Davis, the research director of ITEP, as quoted by the Washington post.

“On average,” according to ITEP’s analysis, “the approximately poorest 20 percent of taxpayers spend 11.4 percent of their income on state and local taxes, which is 50 percent higher than the 7.4 percent average effective rate for the top 1 percent.” The result is that the total share of post-tax national income flowing to poorer households shrinks as a result of state and local taxes, while the richest households see a boost in their income share after those taxes are applied.”

“Oftentimes the absence of an income tax is interpreted as proof that a state is ‘low tax,’ ” said Mr. Davis. “But while this is true for families with high incomes, it’s often not the reality for low-income and even middle-income families.”

“The cost of regressive taxation is growing larger as income inequality worsens,” Mr. Davis said. “The states are leaving huge amounts of revenue on the table when they choose to levy very low tax rates on high-income earners with surging incomes. That’s revenue that could have been invested in education, or health, or infrastructure in ways that would expand economic opportunity and build broadly shared prosperity.”

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