Amazon.com, Inc. AMZN founder and executive chairman Jeff Bezos recently ripped President Joe Biden for blaming elevated inflation on large U.S. companies not paying enough taxes. Bezos fired back, claiming Biden's tweet was "misinformation," but which of the two heavy hitters was in the right?
What Happened? Biden's original tweet suggested the U.S. can curb inflation by raising corporate taxes.
"You want to bring down inflation? Let's make sure the wealthiest corporations pay their fair share," Biden said.
Bezos replied to Biden's tweet, calling for Biden's controversial new Disinformation Board to review Biden's tweet.
"Raising corp taxes is fine to discuss. Taming inflation is critical to discuss. Mushing them together is just misdirection," Bezos said.
In response, the White House said Bezos "opposes an economic agenda for the middle class. Bezos then doubled down, claiming that the Biden Administration would have made inflation much worse if it had succeeded in passing the $3.5 trillion "Build Back Better" plan.
"They failed, but if they had succeeded, inflation would be even higher than it is today, and inflation today is at a 40 year high," Bezos tweeted.
Bezos Has A Point: Economist Mohamed El-Erian recently discussed the inflation situation on CNBC.
"This inflation was triggered by a supply shock that was beyond the Biden Administration's control followed by the failure of the Fed to contain inflation expectations. So pointing the finger at the Biden Administration is unfair," El Erian said.
He noted Bezos' criticism of Biden's original tweet was certainly valid.
"The good is when he pointed out that taxing large corporations is not an inflation issue. That's a fiscal policy decision, and in particular it's a redistribution decision," El Erian said.
Benzinga's Take: The unprecedented combination of global economic circumstances that led to the current inflationary environment would likely have resulted in elevated inflation no matter who was in the White House at the time, so it's unfair to place all the blame on Biden.
However, there's no reason to believe higher corporate tax rates would help bring down inflation. In fact, many companies would likely choose to pass the higher tax costs on to consumers by further raising prices.
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