The pitchforks are out against Big Tech right now. The latest demands coming from the left (and some on the right) is that Amazon’s tax returns should be made public.

To clarify, it would mean Congress passing legislation to require Amazon (and other privately-held companies) to disclose their full tax returns.

Proponents want to understand how a major corporation like Amazon could owe no federal taxes last year. (I explained why this was the case here.)

The conclusion that a tech writer draws is that Amazon is “rigging the system.” More specifically, he says Amazon is “abusing the tax deduction system, exploiting poorly designed deductions and using political influence to keep those loopholes open.” Those are some serious and unfounded charges — and ones that he also uses against President Trump.

What’s more likely is that Amazon is a big company and a big, easy target to criticize. Like other companies and individuals (like you and me), Amazon aims to reduce their federal tax burden. Most taxpayers take the standard deduction when filing their taxes, but if they itemize, they’ll apply credits and deductions that they qualify for to reduce their tax liability. 

From the student loan interest deduction to the child tax credit, our tax law is full of credits and deductions that are meant to provide financial help to those who need it, encourage certain types of saving and spending all year, and reward values such as giving. 

Taking these credits and deductions to lower your adjusted gross income or tax bill is not gaming the system, but working with it.

Corporations have their own set of tax benefits and employ strategies to similarly lower their tax bills. They can reinvest the tax savings back into their businesses to boost productivity, innovation, and employee benefits.

There’s also a concern about the damage to competitiveness that U.S. companies face if they have to make private information public.

For those concerned about fairness or are angry that corporations benefit from too many “loopholes,” there is an even simpler answer: a flat tax. 

Tax individuals and corporations all at the same rate and eliminate all other tax benefits. You can’t get any fairer than that.

There’s little appetite for a flat tax though. 

Critics would rather use tax returns to shame private companies and, worse, to bludgeon political enemies. The left and the right will want to harass their foes.

Conservative groups and donors got a taste of this when an unfriendly administration used the IRS's unlimited access to private (tax) information to target those groups for added scrutiny and leak their sensitive information. This is precisely the reason that corporate tax returns are no longer publicly available. 

Big Tech companies like Amazon deliver tremendous value to society, despite the real concerns that many have about them. Their size and success should not be taken as signs of illegal or immoral behavior including their tax strategies.

Calls for making their tax returns public are likely politically motivated and should make every tax-paying American uneasy. First, it’s the big companies. Next, it’s medium and small companies. Finally, it’s you and me. 

I would rather my private tax information stay that way and I can understand businesses which do too.