Trump's new tax plan could save Amazon roughly $2 billion over the next two years


While public support for President Donald Trump’s tax plan remains low, there’s reason for Amazon to feel giddy about it: an estimated $2 billion in tax savings over the next two years.

That’s based on a report by financial research firm Cowen & Co., which estimates Amazon will save $723 million in 2018 and $1.3 billion in 2019 under the proposed tax bill. In total, Amazon’s earnings could see a 24% boost in each of the next two years, Cowen wrote in the note.

For comparison, Amazon is expected to make roughly $2.1 billion in net income this year alone, according to FactSet.

Cowen’s estimate puts Amazon’s effective tax rate under the new plan at 13.2 percent, which is vastly lower than the 30 percent Amazon is estimated to be paying now. It also assumes the US corporate tax rate will drop to 22 percent starting January 1, 2018, and the new tax plan to have no other major impact on US businesses, including international tax rates.

Cowen added that the new tax bill could drive up earnings for other big tech companies. Google, for example, is estimated to save $2.3 billion and $2.7 billion in each of the next two years, while Facebook could save $1.6 billion and $2 billion over the same period, according to Cowen’s note.



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