National news earlier this month reported that a survey of nearly 1,500 Amazon employees in 42 states found that one in three need government assistance, primarily food stamps or Medicaid.
The news coincides with a 2020 Government Accountability Office analysis that covered nine states and found that Amazon (and also Walmart) were among the largest employers of workers whose incomes were low enough to qualify for food stamps.
That Amazon and Walmart are near the top is no surprise: Walmart is the country’s largest private sector employer with about 1.6 million workers, more than the population of 11 states; Amazon is in second place, with about 1.1 million.
Both Walmart and Amazon have raised wages in recent years to attract and retain workers. Those higher salaries were reflected in the survey of Amazon employees: Nearly two-thirds said they earned more at the online retailer than at their previous jobs. But many still needed help from the government.
The two companies also share another trait: They built their businesses on low prices, lower than those of their competitors. In the case of Amazon, its prices are so low that the company loses money on many of its sales after covering the cost of free shipping.
Buyers enjoy the low prices. It saves tens of millions of people billions of dollars a year on food, clothing, and everything else that sits on shelves or packed in a shipping box. The companies recorded about $1 trillion in sales in the United States last year.
But keeping prices and wages low comes at a cost, whether at Amazon or Walmart or other employers across the country. States and the federal government help cover the cost of living for employees through food stamps, Medicaid, housing assistance and other programs.
The government’s role is to help ensure that families have enough food, safe housing, and health care. Sometimes it is a political fight and costs a lot of money, but overall the country pays attention to the needs of low-income families.
Which is part of the reason for taxes, along with paying for national security, law enforcement, roads, and all the other essentials. And not just personal income taxes, but also corporate taxes.
Which brings me to Alaska.
Last session, the state Legislature considered, but did not adopt, amending the corporate tax code to go after oil and gas producer Hilcorp, the largest operator in Cook Inlet and which bought all of BP Alaska’s assets in 2020. Hilcorp, Privately owned, it pays no corporate income tax in Alaska.
It’s not a scam, it’s what the law says.
The state’s tax code was written decades ago to apply to public corporations, before companies like Hilcorp and thousands of other Alaska businesses organized as private corporations or limited liability companies (s). Those increasingly popular corporate structures are not a problem at the federal level or in states with a personal income tax: Corporate profits flow to the owners, who pay the personal income tax on the money.
But Alaska has no personal income tax; The Legislature abolished it in 1980 when the state became rich from oil. Which means that the State does not collect income taxes on the profits of private companies.
All corporations, whether large public companies like Amazon and Walmart, or private companies like Hilcorp, large law firms, or doctor’s offices, can succeed in their businesses, in large part, because the government provides services that companies, their employees and customers use. , such as roads, ports and police. The government also provides the financial assistance its lower-paid employees need.
It is fair to tax all businesses, just as it is fair to tax all individuals, since everyone benefits from public services.
Low prices make life more affordable; Public services without tax revenue are unaffordable.
Larry Persily He is a veteran Alaska journalist, with stints in federal, state and municipal public policy work in Alaska and Washington, DC. He lives in Anchorage and is editor of the weekly Wrangell Sentinel.
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