It’s not a mystery when you see what their stock has done in the past couple of years. When the stock more than doubled, the company gets to deduct the differen

It’s not a mystery when you see what their stock has done in the past couple of years. When the stock more than doubled, the company gets to deduct the difference between exercise and strike price. But employees then have to pay that difference. So most of this is a non-story around Amazon transferring it’s tax burden to its employees by awarding them lots of stock. The bigger issue here is the fiction that stock option compensation should be taxed as investment rather than employment compensation. Bill Gates even brought it up whe Colbert asked him about a 70% marginal tax rate and said something to the effect of, “The vast majority of these billion dollar fortunes weren’t built with ordinary income.” We need the tax code to separate profits made from buying stock for money only from profits made from buying stock that one is only offered at that price because of one’s employment status. Until we do that, those 70% marginal tax rates will only hit entertainers and others not able to structure their compensation using stock and leave open the huge loophole that the richest use to pay themselves in a way that allows them to pay an overall lower percentage of income than most of us commenting here.