Big Tech reports lower tax bills from Trump’s Big Beautiful Bill

00:00 George

This banner tax year is shaping up for big tech companies such as Amazon, Meta and Alphabet. Yahoo Finance’s Washington correspondent Ben Werskul joining now with the details. Ben.

00:15 Ben

Yeah, George. So we’ve seen in the in the big tech earnings of the last few weeks, we’ve also seen some full 2025 tax bills um in evidence there as well in annual reports with a clear trend and evidence at least among three major players, which is downward tax bills for 2025 compared to 2024. This is a confluence of sorts between this AI tech buildout that we’re that we’ve been talking about for months, but also the business-friendly provisions in Trump’s one big beautiful bill that he signed last summer and will goes into effect for the entire tax year 2025. The numbers are pretty striking. It’s billions of dollars less in their tax bills. Amazon’s bill dropped from $9 billion in 2024 to about $1.2 billion in 2025. Meta similarly from 9.6 billion in 2024 to 2.8 billion last year in 2025. These are tax credits that Trump signed into law around things like property depreciation, new factory construction, research and development. Some of them are deferrals. It’s important to note so that it’s instead of cutting these taxes entirely, it spreads the it’s less spread out. So in other words, you take this deduction up front, so there may be bigger um um tax bills down the road for these companies. But for right now, it’s a clear kind of benefit to these companies bottom line in in terms of right now. And you’re hearing that a lot in in their messages to shareholders.

02:00 George

I’m curious in terms of messages, Ben, how you think that story kind of plays out with the public? Like if you if you were these big tech companies, would you be thinking, all right, I I’m probably going to be on the receiving end of some heat here, some criticism?

02:16 Ben

Yeah, absolutely. So there is a history here of of this of this heat and criticism coming to these companies because of over issues like this. Amazon paid actually zero dollars in federal taxes in 2017 and 2018 and that got a lot of attention at the time. Very similar situation here where they use research and development credits, all these different government credits, which is by the way how these company how these tax credits are designed. They’re not doing anything nefarious here. They’re using the rules as they’re set up to to minimize their tax bill. And you’re already seen some kind of pre-empting of the criticism that could potentially come here. Amazon had a lengthy statement around this um about basic to make this point that we are sort of this is the rules that Congress set out and we are playing by those rules. They also note that this is because of their investments. They estimate they’ve they’ve um invested $340 billion in the US economy last year. So that’s what they’re getting credit for. On the other side of this, you are seeing some touting of this as well. This again is a a boon to these companies’ bottom lines especially this year. Meta’s CFO was talking about this on their earnings call recently saying this is a substantial tax cash tax savings for the company right now. So it’s so they’re they’re trying to kind of do both sides of this and I think you’re going to see a lot more of this um in the year ahead as we sort of see more companies full tax situations.

03:47 George

And finally, Ben, before we let you go, we got that jobs report, my friend, tomorrow. Curious, how do you think the White House is preparing for this one? What’s the what’s the messaging going to be there?

04:02 Ben

Yeah, we’ve seen a pretty notable kind of pre-buttle of sorts from the White House economic team on these jobs numbers before they’re even out. essentially saying these numbers could be um lower than the market wants, but that’s going to be okay and you shouldn’t take this as a major indicator of the economy. White House National Economic Council Director Kevin Hasset even said markets shouldn’t panic over this, describing what’s going to be in his view a smaller number than many expect. The overall case being made here is that there’s other factors here that may are putting downward pressure on the jobs numbers here, but that’s not an indicator of an economy overall that’s slowing. They cite AI productivity, essentially um productivity of economy um is is there, as well as Trump’s ongoing deportation efforts as major factors here that may drive this number down, but again, shouldn’t change the overall economy. Peter Navarro was also pushing this message and he even made the case that we should be rethinking kind of what is a good jobs report or not. His case is that $50,000 or 50,000 jobs is a is a good number to kind of keep up with population growth because basically the US economy is is deporting so many so many um um immigrants at this point. Um either way, economists what economists are projecting is a report in the neighborhood of 70,000 new jobs added um added last month. but the the range is really wide there. So I think we’re going to be in for kind of a pretty unpredictable jobs response both in the political and the economic arena tomorrow.

05:40 George

All right, Ben. Thank you. Appreciate it.