Bernie Sanders Calls Out Netflix for Paying Less Income Tax in 2018 Than The Cost of One $8.99 Subscription

Senator Bernie Sanders called out Netflix this week for allegedly paying less in income tax during 2018 than the cost of a single month on the company's cheapest video streaming subscription plan.

"Your $8.99 Netflix subscription is more than the company paid in federal income taxes last year (nothing)," the 2020 presidential candidate tweeted on Tuesday. "We are going to make massive corporations finally pay their fair share."

Newsweek subscription offers >

Sanders, who has long been critical of corporate tax breaks and loopholes, has focused much of his campaign and political career on income inequality. His tweet on Tuesday is not the first time he has called out a large corporation for allegedly failing to pay their fair share in taxes. The Vermont senator has criticized a wide range of companies, but in 2019 he appears to have particularly singled out Amazon, in addition to Netflix.

"Amazon made $16.8 billion in profits over the past two years but have paid ZERO in federal income taxes. In fact it got a $269 million tax refund," Sanders tweeted in February. "Our job: Demand large corporations pay their fair share in taxes so that we can rebuild the disappearing middle class."

In 2017, President Donald Trump signed into law the Tax Cuts and Jobs Act, which lowered the U.S. corporate tax rate from 35 percent to 21 percent. Critics claim that many companies don't pay the tax anyway due to legal loopholes, which the bill failed to close.

A spokesperson for Netflix told CBS in April that the idea the company paid nothing in federal income taxes for 2018 was "inaccurate," but did not say how much the company did pay in U.S. income tax, if anything.

"Our effective tax rate in 2018 was reduced by a number of items typical of many other companies, including adjustments for 2017 tax reform," the spokesperson added. "We expect our tax rate to be significantly higher in 2019."

An investigation by WUSA9 claimed that while Netflix did pay around $133 million in taxes for 2018, all of the taxes paid were foreign and none of the money went to the United States. And because the federal government gives credits for foreign taxes paid, the company allegedly ended up with a "negative tax rate" due to millions in foreign tax credits. The company's worldwide revenue for 2018 is said to have topped $1.2 billion.

Netflix offers three subscription levels in the U.S., ranging from $15.99 for their "premium" plan which includes video streaming to an unlimited number of devices in "Ultra HD," to $8.99 for the "basic" plan referenced by Sanders, which includes streaming on one device in standard definition.

If claims that Netflix paid no U.S. income tax in 2018 are true, they do not appear to be alone. An analysis released in April by the Institute of Taxation and Economic Policy (ITEP) claimed that Netflix was just one of at least 60 of the wealthiest corporations in America that paid nothing in federal income taxes for 2018.

"Tax loopholes allow many profitable corporations to avoid paying a single dime in taxes, but it should also be noted that many other profitable corporations are also using these special breaks to pay far less than the 21 percent statutory federal income tax rate," Matthew Gardner, ITEP senior fellow and lead author of the report, said in a press release.

The report states that the corporations that allegedly paid nothing would have owed $16.4 billion in taxes, but tax breaks and loopholes instead resulted in the companies receiving a collective $4.3 billion in tax credits.

Bernie Sanders
Senator Sanders claims that corporations are getting away with paying an unfair share of taxes, which sometimes amounts to companies paying nothing in federal income taxes. ALEX EDELMAN/Getty
Bernie Sanders Calls Out Netflix for Paying Less Income Tax in 2018 Than The Cost of One $8.99 Subscription | News