'How about paying your taxes?'—Walmart responds to Amazon's challenge over pay

  • Jeff Bezos issued a challenge to other retailers, not naming which ones specifically, to match Amazon's pay and benefits.
  • Walmart's executive vice president of corporate affairs, Dan Bartlett, then tweeted: "Hey retail competitors out there (you know who you are) how about paying your taxes?"
  • Walmart's minimum wage of $11 an hour, set in January 2018, is still below Amazon's, which was hiked to $15 in November.
Amazon CEO Jeff Bezos (l) and Doug McMillon, CEO of Walmart.
Getty Images | CNBC
Amazon CEO Jeff Bezos (l) and Doug McMillon, CEO of Walmart.

Amazon and Walmart are in war over worker pay — and now corporate taxes.

After Amazon CEO Jeff Bezos on Thursday issued a challenge to other retailers, not naming which ones specifically, to match Amazon's pay and benefits, Walmart has responded, albeit quietly.

"Today I challenge our top retail competitors (you know who you are!) to match our employee benefits and our $15 minimum wage. Do it! Better yet, go to $16 and throw the gauntlet back at us. It's a kind of competition that will benefit everyone," Bezos wrote in his annual letter to shareholders.

Walmart's executive vice president of corporate affairs, Dan Bartlett, then shared an article Thursday morning on Twitter about Amazon paying $0 in federal taxes on more than $11 billion in profits last year. He wrote: "Hey retail competitors out there (you know who you are) how about paying your taxes?"

The CEO of eBay, Devin Wenig, also snapped back at Amazon on Thursday, writing on Twitter: "I'll dedicate my [shareholders] letter to customers, purpose and strategy."

A spokesperson for Amazon said in a statement to CNBC:

Amazon pays all the taxes we are required to pay in the U.S. and every country where we operate, including paying $2.6 billion in corporate tax and reporting $3.4 billion in tax expense over the last three years. Corporate tax is based on profits, not revenues, and our profits remain modest given retail is a highly competitive, low-margin business and our continued heavy investment. We have invested more than $160 billion in the U.S. since 2011, building a network of more than 125 fulfillment and sortation centers, air hubs and delivery stations as well as cloud-computing infrastructure and wind and solar farms. We invest heavily in research and development at our Seattle headquarters and 18 tech hubs across the country. We are creating tens of thousands of quality jobs each year with industry-leading pay for people of all skill levels, bringing our total workforce in the U.S. to more than 250,000.

Watch: How Amazon paid no federal income tax in 2018

Walmart's minimum wage of $11 an hour, set in January 2018, is still below Amazon's, which was hiked to $15 in November. But Walmart has said its average worker earns $17.55 an hour with wages and benefits. To stay competitive in the marketplace for talent, taking into consideration such a low unemployment rate in the U.S., Walmart has added perks like subsidizing the cost of higher education for its employees who've yet to earn a college degree. And it started loosening its dress code to let staffers in its stores wear blue jeans.

One of Amazon's incentives is its "Career Skills" program, which trains hourly workers on how to build out their resumes, use a computer and "communicate effectively," Bezos explained in his Thursday letter to shareholders.

Meantime, before raising its minimum wage to $15 an hour, Amazon had been facing heightened criticism for its own pay disparity. Sen. Bernie Sanders, I-Vt., went as far as introducing legislation called the "Bezos Act" to tax corporations for every dollar that their low-wage workers receive in government health-care benefits or food stamps.

When Amazon last year announced its plans to raise pay, Sanders said, "What Mr. Bezos has done today is not only enormously important for Amazon's hundreds of thousands of employees, it could well be, and I think it will be, a shot heard around the world."

But clearly, Amazon continues to come under attack for not having to pay anything to the IRS. Democratic presidential candidate Elizabeth Warren on Thursday cited Amazon when she unveiled her proposal to slap a 7% tax on companies who report more than $100 million in profits to their shareholders.

In 2018, Amazon paid $0 in U.S. federal income tax on more than $11 billion in profits before taxes. It also received a $129 million tax rebate from the federal government. Amazon's low tax bill mainly stemmed from the Republican tax cuts of 2017, carryforward losses from years when the company was not profitable, tax credits for massive investments in R&D and stock-based employee compensation, CNBC previously reported.

In 2018, Walmart paid more than $3.2 billion in U.S. federal corporate income taxes.