Collins, Business Ethics 3e
SAGE Publishing, 2021
Test Bank
CASE 13: CORPORATE CITIZEN OR PUBLIC PARASITE? AMAZON’S COMPLICATED
RELATIONSHIP WITH THE TAX MAN
Multiple Choice
1. Amazon is smart about adapting to customer changes due to ______.
a. tracking shopping patterns
b. widespread survey use
c. highly qualified public relations
d. following known consumer trends
2. Why is Amazon regarded as a bad corporate citizen?
a. bullying other companies
b. expanding into too many markets
c. aggressive takeovers of competitors
d. management of their tax obligations
3. Amazon tax payments are unknown because ______.
a. Amazon pays no taxes
b. tax returns are confidential
c. IRS doesn’t release information on corporations
d. Amazon has sued anyone who sought their returns
4. Amazon’s tax refund means that it deprived the public of ______.
a. its goods and services
Collins, Business Ethics 3e
SAGE Publishing, 2021
b. knowledge of its tax practices
c. two billion in funding
d. information regarding its finances
5. At least sixty Fortune 500 companies ______ in 2018.
a. received a tax refund
b. paid no corporate income taxes
c. refused to release their financial information
d. filed complaints against Amazon
6. Corporations avoid paying taxes using what method?
a. petition the government
b. don’t file taxes that year
c. give employees many bonuses
d. carry losses forward
7. Governments invest public money acquired through taxes in order to do what?
a. maintain order and control
b. create the conditions for a thriving society
c. prevent uprisings
d. sustain military dominance
Collins, Business Ethics 3e
SAGE Publishing, 2021
8. Corporations have an incentive to engage in ______ because it is legal.
a. tax avoidance
b. large public investment
c. tax evasion
d. money laundering
9. Amazon enjoys what benefits that result from taxes even as they try to avoid them?
a. low interest rates
b. public roads and publicly educated workers
c. favorable regulatory standards
d. ease of access to raw materials
10. If Amazon saves tax money to increase shareholder wealth, what effect does this
have on the public?
a. increases the need for public alternatives to Amazon’s services
b. improves communication between stakeholders
c. shareholders increase wealth at the public’s expense
d. alters the ability of government to function properly
11. Some scholars argue that the relationship between corporations and society is best
described as a ______.
a. social contract
b. family resemblance
c. form of class conflict
d. site of interest convergence
Collins, Business Ethics 3e
SAGE Publishing, 2021
12. Amazon has asked for tax breaks in cities where they desired ______.
a. government attention
b. ease of access to natural resources
c. input on economic planning
d. strong tax-funded services
13. Tax avoidance can negatively impact a company’s ______ value.
a. philanthropic
b. employee
c. monetary
d. social and reputational
14. Amazon’s reputation struggles have been shown to impact it’s ______.
a. recruitment of employees
b. public image
c. government support
d. share price
15. How might tax avoidance be seen as less objectionable?
a. If it was used to offset environmental impacts.
b. If it promoted social mobility for executives.
c. If it provided a public good.
d. If it prevented economic collapse.
Collins, Business Ethics 3e
SAGE Publishing, 2021
16. Amazon uses tax credits and deductions to invest in ______.
a. research and development
b. more books
c. an alternative to packing peanuts
d. new streaming services
17. When asking cities to bid for hosting HQ2, Amazon was looking for each city to list
______ to offset Amazon’s contribution.
a. environmental policies
b. transportation benefits
c. raw materials
d. tax incentive programs
18. Why did Amazon pull out of the New York City proposal to host HQ2?
a. lack of resources
b. public opposition to public contribution
c. not enough tax incentives
d. transportation concerns
19. Amazon is relatively quiet about carrying its share of the cost of ______.
a. environmental initiatives
b. employee unionization
Collins, Business Ethics 3e
SAGE Publishing, 2021
c. improving its processes
d. maintaining society
20. Amazon doesn’t pay more than it’s ______.
a. federally required
b. minimum tax obligation
c. competitors pay in taxes
d. allow to pay for lobbying
True/False
1. Tax avoidance is an illegal practice.
2. Amazon’s actions are justifiable because it doesn’t benefit from public goods.
3. Amazon uses techniques like tax shelters to avoid paying more in taxes.
Collins, Business Ethics 3e
SAGE Publishing, 2021
4. Taxation is how society distributes costs associated with public goods.
5. When large corporations avoid paying taxes, the burden is shifted to the public.
Essay
1. What incentivizes Amazon to engage in tax avoidance?
2. How might you argue that Amazon is defrauding the public?
3. Describe the social contract between corporations and society.
Collins, Business Ethics 3e
SAGE Publishing, 2021
4. Why is tax avoidance unethical but not illegal?
5. If you were in charge of one of the cities interested in HQ2, how would you have
handled negotiations with Amazon given their history of tax avoidance?