Amazon’s CEO Bezos comes out in support of national infrastructure bill

Discussion
Source: Amazon
Apr 08, 2021
George Anderson

Jeff Bezos, founder and CEO of Amazon.com, supports spending big on infrastructure, even if that means his company is required to pay more in taxes to get it done.

“We recognize this investment will require concessions from all sides — both on the specifics of what’s included as well as how it gets paid for (we’re supportive of a rise in the corporate tax rate),” said Mr. Bezos in a statement. “We look forward to Congress and the Administration coming together to find the right, balanced solution that maintains or enhances U.S. competitiveness.”

Mr. Biden’s American Rescue Plan is being pitched by members of his cabinet, including Pete Buttigieg, Secretary of Transportation. In testimony before Congress last month, Mr. Buttigieg said the nation faces a $1 trillion backlog on repairs and improvements, even with “hundreds of billions of dollars in good projects already in the pipeline.”

Sec. Buttigieg likened the need for a massive project to the creation of the interstate highway system under President Eisenhower and the transcontinental railroad the century before.

“We see other countries pulling ahead of us, with consequences for strategic and economic competition,” he testified. “By some measures, China spends more on infrastructure every year than the U.S. and Europe combined. The infrastructure status quo is a threat to our collective future.”

Critics of Mr. Biden’s plan typically agree there is a need for increased spending on infrastructure but question its priorities and the strategy of raising corporate taxes.

The National Retail Federation (NRF) believes returning tax rates to the same levels as under the Obama administration, as proposed by Mr. Biden, will reduce investment and hiring.

Skeptics point out that supporters of the 2017 Tax Cuts and Jobs Act passed by Republicans said it would increase investment, create jobs and significantly raise the wages of American workers. The NRF was among those claiming that higher rates were costing the average worker as much as $4,690 a year. Many corporations used the windfall in the 2017 legislation for stock buy-backs, with a comparatively small amount going to workers.

President Biden has expressed a willingness to work out the details of the plan with Democrats and Republicans as long as negotiations are not used as a delaying tactic. Some legislators, such as Sen. Joe Manchin (D – WV), have suggested that an increase, albeit smaller than proposed, would be a middle ground that he and others could agree on.

DISCUSSION QUESTIONS: Are you surprised by Jeff Bezos’ qualified endorsement of the outlines of the American Rescue Plan? What do you see as the most needed infrastructure improvements with regard to the retailing industry and its suppliers and what, if anything, should retailers be willing to do (or pay) to support passage and implementation?

Please practice The RetailWire Golden Rule when submitting your comments.
Braintrust
"Whether you describe infrastructure as 'roads and bridges,' or whether you include broadband in the definition, improvements are long overdue."
"If politicians are sincere about infrastructure, the pork needs to be removed, and the proposal needs to be 100 percent related to infrastructure."
"Bezos was many years ahead of the curve by plotting a multi-year investment in supply chain infrastructure..."

Join the Discussion!

38 Comments on "Amazon’s CEO Bezos comes out in support of national infrastructure bill"


Sort by:   newest | oldest | most voted
Mark Ryski
BrainTrust

Let’s remember that Bezos owns the Washington Post, so no I’m not surprised that he’s supportive of a Democratic plan. America does need upgrades to its infrastructure, but I’m not sure there’s anything specific to retailing — better roads, airports, an electrical system and lead-free pipes for water will all make things better, and that’s good for everyone. I do find it ironic that Bezos is such a strong Democrat, except when it comes to his own employees.

Neil Saunders
BrainTrust

I think the broadband initiative could be interesting for retail – giving more people fast internet speeds might help them to access more goods and services online. However I’m not quite sure that the federal government is the best vehicle to achieve this. And should we be looking at fixed broadband rather than achieving more widespread coverage of the 5G network?

Zel Bianco
BrainTrust

I’m not surprised that Bezos would support the infrastructure bill. Our roads are crumbling along with our bridges. Amazon needs to use those roads and bridges to deliver product. And yes, he should pay more. A good deal more. As to other retailers chipping in their fair share, they use the roads and bridges as well.

Bob Amster
BrainTrust

This is yet another complex matter that both political camps try to express in simple terms that express their view. One camp says, we need it, let’s do it. The other camp says, any increases in the corporate tax rate will be passed onto the consumer and consumers will ultimately pat the tax increase.

The country needs to upgrade its infrastructure. (I would love to see trains go everywhere.) The improvements will create jobs of the type that are needed the most: middle and lower income. What we also need is a restructuring of the tax loopholes so those who earn, pay — period.

Gene Detroyer
BrainTrust
The U.S. has the lowest corporate and personal tax rates of any advanced country. And as a country we have shown the results, not only in infrastructure, but also in education and healthcare. The greatest economic boom the country had experienced was when the top personal rate was 90 percent on income over about $45,000. That is about $400,000 today. The way an economy works is pretty simple. The government primes the pump with big projects. Those big projects hire people. Those people spend money. Those big projects hire companies to provide equipment and materials. Those companies hire people. Those people spend money. Companies are not charities. They do not hire people if there is no demand. The highest income earners don’t spend their tax breaks, they don’t generate jobs or demand. Once the U.S. led the world in infrastructure, education, healthcare, power grid. The U.S. needs a big kick in broadband availability and technology. Now the U.S. ranks very poorly when compared to other advanced, and in some cases not so advanced, countries. Any… Read more »
DeAnn Campbell
BrainTrust

Amazon stands to benefit from the new infrastructure as much if not more than any company in the U.S. Bezos sees the economic fallout from the blockage of the Suez Canal and wants to prevent similar disruptions in our own ability to distribute products across the nation. We are still living off of the economic progress made possible by infrastructure built by Franklin Roosevelt’s Works Project in the 1930s. The last report I read showed we have over 230,000 U.S. bridges that are in need of major repair or replacement. This should have started a decade ago.

Craig Sundstrom
Guest

I think I would give a lot more credit to Interstate Highways of the Eisenhower (and subsequent) administration(s), than the New Deal. If your business is dependent on a post office or airport built in 1935, it’s probably not long for the world.

Dick Seesel
BrainTrust

Whether you describe infrastructure as “roads and bridges,” or whether you include broadband in the definition, improvements are long overdue. Anybody who has been involved in building projects, or has observed local governments debating if and when to improve streets and highways, understands that “kicking the can down the road” costs more in the long run. And more widespread broadband could carry the same benefits as “rural electrification” nearly a century ago.

Certainly a company like Amazon, in the business of delivering physical goods and virtual services to people, sees the merit in investment spending despite the likelihood that its own taxes will rise. At this point, most Americans surveyed seem to get the rationale regardless of party.

Cathy Hotka
BrainTrust

This is a smart move by Mr. Bezos, who has carved out an outsize presence here in DC with the purchase of the Washington Post, the siting of Amazon’s second headquarters, and the purchase of a former museum as his home. He has now staked a claim as an influencer.

Jennifer Bartashus
BrainTrust

It is good to see Amazon supporting infrastructure improvements, but also remember the company had an effective tax rate of just under 12 percent in 2020 and 17 percent in 2019, well below industry averages. So supporting a tax increase is fine, but may have a greater impact on other retailers who have fewer ways to use the tax code to their advantage. Infrastructure improvements should translate to supply chain efficiencies for many companies over time as well.

Ron Margulis
BrainTrust

I’ll leave the Bezos question to others, but having clients in the rail industry, I’m very well aware of the need for both track and crossing improvements. Without upgrades, there will be more frequent congestion and derailment issues causing a slowdown of the supply chain and we’ll continue to see more train-truck collisions.

In addition to rail, many of the small- and mid-sized ports need investment to transfer goods more efficiently to distributors and ultimately to the consumer. This is especially true for inland ports, which have close proximity to rail, highways and industrial parks, and provide speed to market for most retail goods.

Jeff Weidauer
BrainTrust

Love him or hate him, you have to admit that Mr. Bezos is no dummy. He has to come out in support of the infrastructure proposal – his company depends on that infrastructure. It’s an investment in his own future success.

Neil Saunders
BrainTrust

Do we need to improve infrastructure? Yes, we do. Absolutely. Do I think the bill – if passed – would accomplish that goal? No, not necessarily. And that’s the issue I have with raising taxes. If it was a certainty that they would be put to good use then, while I’d dislike the idea on principle, I’d be more receptive to it. The problem is, I think a lot of the money will be spent ineffectively.

The cost of maintaining and building highways has ballooned over the past 10 years, with no real economic justification. Projects have become mired in a sea of federal regulations. And funds are frequently misdirected into projects that, ultimately, have little value or purpose because there isn’t enough rigor in looking at return on investment.

I’d be far happier to see the private sector and states encouraged and incentivized to make more investments and for the federal government to get out of the way.

George Anderson
Staff

One of the other posters mentioned the difficulties in getting local projects completed. In principle I understand your point, but do you think that individual members of the private sector would be willing to finance investments that do not directly affect them in a positive way? Would they even agree on where the investments should be made?

What would states have to raise in taxes to approach anything on the scale of investment needed to address problems this big? Wouldn’t states with large rural populations, for example, already have taken steps to concretely improve broadband access? Wouldn’t Texas and other states already have put regulations in place to make utility providers bury lines deep enough under ground that millions would be left without power during a cold snap?

Mark Ryski
BrainTrust

Good points George. Privatization isn’t always the answer — it hasn’t worked well for the prison system either.

Joe Skorupa
BrainTrust

Nor higher education.

Neil Saunders
BrainTrust
But why is it difficult to get local projects completed? Part of the answer is because the federal government slows everything down. On the slowness point, any project funded by or associated with the federal government must jump through far more hoops and adhere to far more regulations than if it was done locally. An environmental impact study for a federal highway project is now in excess of 6.6 years compared to 2.2 years in the 1970s. You can bet your bottom dollar that China isn’t taking almost seven years to do studies before building infrastructure! And no, we should not be like China and ride roughshod over the environment, but neither should our policy be so burdensome as to take that length of time. The federal government getting involved also acts as a disincentive for states or private firms to participate. The former because if they can get federal funding (which takes ages to materialize) why would they spend local tax dollars? Just look at the case study of the Brent Spence Bridge across… Read more »
George Anderson
Staff

My experience, which goes back many years covering local planning boards among other things, is that localities and counties are much more likely to get hung up on the dollars they are receiving from state or federal sources than regulations. The next biggest holdup is usually related to private developers.

There’s no doubt that much more emphasis needs to be placed on streamlining processes and removing duplication of efforts when it comes to internal rules. Much of that comes down to a federal system where the House and Senate pass legislation, but leave it up to agencies to develop the rules.

Laws, as the name makes clear, involve legaleze. It will require a huge effort (that always means money) by the government to optimize its workings. Whether Democrats or Republicans have the will or attention spans to address that is a completely different discussion.

Neil Saunders
BrainTrust

I don’t disagree. Unfortunately, until and unless the government puts in some effort to become more efficient we won’t get bang for our buck! And, like you, I am not holding my breath on that!

Gene Detroyer
BrainTrust

The problem with entities getting involved in infrastructure is ROI. Private companies need a reasonable time frame for the return on investment. Governments do not. Rural electrification in the 1930s is a perfect example. Private companies electrified cities, but found no ROI in electrifying rural areas. In the early 1930s only about 20% of Americans had electricity. The government had to step in and get it done.

Scott Norris
Guest

In today’s experience, private monopoly providers Comcast and Spectrum are doing the least amount possible to upgrade last-mile digital distribution while continually raising rates and imposing data caps. Wireless 5G is nice, but there’s nothing better than a fat fiber-optic pipe, and without government mandates (or just doing the job themselves), we keep falling farther and farther behind Asia and Europe.