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newsmoments.net April 25, 2018


Trump takes aim at Amazon again

02 April 2018, 12:45 | Lorenzo Hawkins

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"I have stated my concerns with Amazon long before the Election".

"Trump's deep-seated antipathy toward Amazon surfaces when discussing tax policy and anti-trust cases". But is Amazon paying little or no taxes to states and local governments?

But it wasn't clear whether this was because of some of Amazon's actual practices, or perhaps because Jeff Bezos, the Amazon CEO, also happens to own the Washington Post. Some states require this by law; in other states, Amazon does it voluntarily.

Earlier disclosures submitted to the US Senate showed that Amazon employs about 15 lobbyists, with another 15 outside lobbying firms who each assign more lobbyists to work on behalf of the company. Amazon does not have to collect taxes on third-party sellers using its Marketplace service. "Amazon vendors that can run through the Amazon Marketplace. don't collect the sales tax".

It's important to note that none of this is part of Amazon's own tax burden.

What's more, e-commerce - and Amazon was responsible for about 44% of all USA e-commerce sales previous year - is a sizable job creator. It paid $412 million in 2016 and $273 million in 2015. "Towns, cities and states throughout the US are being hurt - many jobs being lost!"

On top of this, the company may get a historic tax-break package when it chooses a site for its second headquarters. "But some cities aren't going to see a dime in new revenue unless state or local laws are updated". During the first quarter, that segment declined by 2 billion, or 5%.


A representative for Amazon declined to comment except to say the company collects billions of dollars in sales taxes every year.

Analysts at Stifel said the president's tweets on the topics does not seem "detrimental to Amazon".

How outdated? In 2012, Amazon began collecting and paying state taxes in California.

It's unclear what that obsession might translate to should Trump try to aim the powers of the executive branch at the company.

An analysis published in February by the Institute on Taxation and Economic Policy, a left-leaning research group, concluded that Amazon did not pay any federal taxes in 2017.

However, package volumes grew by 11.4 percent, according to USPS. "This means the company was able to shelter more than two-thirds of its profits from tax during that five-year period".

What about Donald Trump's claim that Amazon is a burden on the USA postal system? Of course, Amazon might not even need the Post Office when its fleet of drones takes flight.


In a week when Facebook was the focus of much criticism amid data security concerns, it was another internet giant that felt the full force of the President's ire.

"He's obsessed with Amazon", one source told Axios. The Post Office lost $2.7 billion past year, but "Shipping and packages were a rare bright spot for USPS in 2017, one of two sub-categories of mail for which revenue increased, rather than declined", according to Quartz.

It is true the Postal Service has consistently reported net losses for a decade; the last time it reported net income from its operations was the 2006 fiscal year. Amazon has acknowledged in the past that it has an arrangement with the Postal Service, but it has refuted the idea that its shipments are being subsidized by the agency. The Postal Service in a recent regulatory filing described such arrangements with online retailers as a synergy.

When the Sunday delivery deal was announced in 2013, the Washington Post said it offered the post office "hope".

On the other hand, online sales have perked up volume for packages, at least. "To accommodate the surge in volume and to avoid service disruptions during the holiday season, we have increased Sunday delivery service for some of our customers in limited USA markets and are again adding employees for the holiday season". Three nominees are awaiting hearings in the Senate.

When he raised questions about Amazon's tax collection in 2017 via another tweet, The New York Times was quick to call the claim "outdated".

There has been talk in Washington of taxing online commerce more. These are larger than Trump allows.


Amazon could hurt the postal service - and other package companies - if it successfully shifts more of its delivery to its own delivery network, which it's been slowly building out over the past few years. But that's not the whole story.



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