Trump Fires Another Round at Amazon Over Postal Rates, Taxes

Share

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.

Trump has repeatedly attacked Amazon Chief Executive Jeff Bezos, who also holds the Washington Post, a publication that is quite critical of the President's administration.

Some retail competitors believe the third-party vendor policy gives the retail giant an unfair advantage, which may very well be true - Amazon reported a provisional tax expense of roughly $200m in U.S. state taxes previous year, pennies against their $177.9B annual sales.

"If Mr. Trump's point was that Amazon did not collect sales taxes - which are owed by the purchaser and collected by the retailer - it is true that the company once avoided doing so".

States could gain anywhere from US$8.5 billion to $13.4 billion in additional revenue if they were allowed to mandate sales tax collection from all remote sellers, including B2B and B2C companies, according to a Government Accountability Office study released last fall.

"If there really was teeth or real concern that something would come out of the government and regulatory oversight, Amazon's stock drop would be a lot lower than it is today", said Robert Bacarella, portfolio manager at Monetta Financial Services in Wheaton, Illinois, which holds Amazon shares.

The service has a decade-long string of fiscal net losses, which has led to more than $120 billion in unfunded liabilities, mostly retirement health and pension benefits.

How outdated?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

Amazon is one of the biggest companies in the world, and its financials are fair game for critics, but Trump's distortions don't add up and are worthy of Three Pinocchios. Some in Congress support legislation to require all e-commerce companies collect state sales tax.

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.

Russia's Strategic Rocket Force Tests Ejection of Deadly Sarmat Intercontinental Ballistic Missile
Russian news agency Sputnik said it was the second successful test of the Sarmat missile, with the first one being in December. Sarmat is meant to replace the Soviet-designed Voyevoda, the world's heaviest ICBM that is known as "Satan" in the West.

"Trump's deep-seated antipathy toward Amazon surfaces when discussing tax policy and anti-trust cases".

Meanwhile, Amazon may not be paying its share of local sales taxes.

For a time, many people selling things on Amazon would set themselves up in states with little or no state income tax, and then declare that all the income they earned in the USA should be taxed as though it was from there, regardless of where the buyer was from. Third party sellers have been crying foul over these sellers getting preferential treatment from the company but Amazon has always maintained it treats every merchant on its platform under the same policy. During its most recent fiscal year, which ended in September, the USPS reported a total annual revenue of $69.7 billion, which was less than the $71.4 billion recorded in fiscal year 2016.

"Though imperfect, the deal is mutually beneficial", said the The Wall Street Journal editorial board.

The reality, however, is that Amazon has little to do with why USPS has been bleeding red ink.

"They're not making money in retail, and they're putting retailers out of business", Simon told CNBC.

The company - or more specifically its CEO Jeff Bezos - is a frequent target of the president.

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.

Amazon founder Bezos also privately owns the Washington Post, which won a Pulitzer Prize past year for its investigation of Trump's donations to charities. "It's really about policy".

Share