Stock Comp Key to Amazon’s Low Tax Rate

Joe Biden joined a chorus of Amazon critics last week attacking the e-commerce giant for not paying enough in federal taxes. But Amazon’s effective tax rate is only a couple of percentage points below that of some other big tech companies. And they all benefit from the same thing: the tax deduction they get from paying employees heavily in stock.

In Amazon’s case, that deduction was magnified by the dramatic rally in its stock in recent years—which implies that it may pay more in taxes in future years.