Published: Mon, April 02, 2018
Finance | By Cynthia Curry

Trump takes aim at Amazon again

Trump takes aim at Amazon again

Trump tweeted Thursday that he had voiced concerns about the company before his election. Sellers on the marketplace determine whether they collect taxes on sales or not. Toys R Us and other retailers that have filed for bankruptcy or gone out of business have said that Amazon's low prices were hard to compete with.

And for all the hipster antitrust talk of Amazon as a unsafe monopoly, it was only responsible previous year for 4% of total U.S. retail sales (though that is an impressive number).

Trump has repeatedly attacked Amazon and its Chief Executive Jeff Bezos, who owns the Washington Post, which the Republican president also has disparaged.

But prevailing antitrust law in the US focuses on harm to consumers, not raw market power.

Two, localities that aren't able to collect sales tax from online retailers may be at a disadvantage in the near future as Congress and the U.S. Supreme Court are considering expanding state and local sales tax collection authority, ITEP said.

"Amazon doesn't collect sales taxes on goods sold by third-party affiliates, unless it is contracted to do so by those sellers", the official said. Now the company charges sales taxes in the 45 states that have them and the District of Columbia. Separate figures in the report show it was expecting to pay $100 million to $200 million in taxes at the USA state level in 2017.

In other words, the discounts a company like Amazon receives from USPS can't exceed the money the postal service saves when that company helps out with some of the logistical work required to ship packages. A 2016 report found that Amazon got at least $613 million in subsidies from local governments for its package facilities from 2005 to 2014, plus another $147 million for its data centers.

Michael Pachter, a former tax attorney who is now a financial analyst with Wedbush Securities, said Trump's information about Amazon's tax status is likely outdated.

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Even with those powers, Trump's ability to act has limits.

Trump's attacks on Amazon reflect a broader debate about its effect on the United States economy. But his Twitter post lacked important context about the Postal Service and relied on outdated and incorrect facts regarding Amazon's taxes.

"With Facebook and regulatory worries, the last thing nervous tech investors wanted to see was news that Trump is targeting Bezos and Amazon over the coming months as this remains a lingering cloud over the stock and heightens the risk profile in the eyes of the Street", GBH Insights analyst Daniel Ives said. The US president pointed out that Amazon does not pay enough taxes, hurts traders, and receives an unfair advantage at the back of the US Post Office.

In his tweet, Trump also took aim at the company's use of the postal service is "causing tremendous loss", but that too is misleading.

In another financial report past year, USPS said growth in its package business was "a result of our successful efforts to compete in the ground shipping services and "last mile" e-commerce fulfillment markets, including Sunday delivery". The postal service's contract with Amazon must be approved by regulators and must generate a profit for the service.

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 undoubtedly contributed to the closure of many brick-and-mortar stores and the bankruptcy of some chains as more people shop online instead of in malls. "I don't think it can be stopped but I don't think he can target one company".

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