President Trump Just Confirmed the Report He Wants to 'Go After' Amazon
02 April, 2018, 11:23 | Author: Barbara Daniel
Trump on Thursday accusedAmazon of not paying enough taxes, exploiting the USA postal system and putting small retailers out of business, but did not present evidence to back up claims or suggest any specific actions.
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 US should be taxed as though it was from there, regardless of where the buyer was from.
Trump has this backwards: Amazon supports a law requiring all online retailers to collect those taxes (though probably out of self-interest - the law would provide a barrier to potential challengers). But what measures can he actually take against the online retail giant?
The reality, however, is that Amazon has little to do with why USPS has been bleeding red ink.
A spokesman for the U.S. Postal Service declined to comment. It is well known that there is a personal feud between Trump and Amazon founder Jeff Bezos, who now also owns The Washington Post. Such sales make up about half of the company's volume. Merchants and industry sources, said Amazon is facing a tough task to transform the overall shopper experience from sellers conducting their business independently. "He has made it clear that his concerns - you know, some users of Amazon are not paying state sales taxes, which is putting many brick and mortar retailers out of business", she alleged.
Treasury Secretary Steven Mnuchin has said that the White House favours an internet sales tax. North Dakota ruling, which found that only retailers with a physical presence in a state were required to collect sales taxes, observed Joyce Beebe, a fellow in public finance at Rice University's Baker Institute for Public Policy.
It's important to note that none of this is part of Amazon's own tax burden. There have been efforts in Congress to force all e-commerce companies to collect state sales tax, but Amazon already does that. "States are increasingly frustrated that out-of-state businesses are not collecting the same amount of sales taxes that local businesses have been collecting for decades".
If that is the case, Amazon, widely believed to be one of the Postal Service's biggest customers, certainly benefits.
On top of this, the company may get a historic tax-break package when it chooses a site for its second headquarters. During the first quarter, that segment declined by 2 billion, or 5%.
Amazon.com Inc. did not respond to a request for comment.
"Tax policy, and other policy, has to catch up.so those who are competing with Amazon are on a level playing field", Shah said on Fox News show "Fox & Friends". Amazon's stock, which is up more than 65 percent in the last 12 months, rose 1 percent to close at $1,447.34 Thursday. The USPS could charge more. "This means the company was able to shelter more than two-thirds of its profits from tax during that five-year period". 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 President has expressed his concerns with Amazon". During his presidential election campaign days, Trump had said, The Washington Post had a team of some 20 reporters to write stories against him. In the 2017 fiscal year, the agency reported a net loss of $2.7 billion; the previous three years, it incurred losses of almost twice that amount. 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.
The Postal Service has been hemorrhaging cash for years. Its revenue from shipping and packages in fiscal 2017 was $19.5 billion, up 13 percent from the previous year. It's likely that Amazon has a pretty good deal, based on the company's negotiating power, logistical resources, and the landmark agreement Amazon and USPS reached to deliver packages on Sundays back in 2013. Notably, packages and shipping are areas of growth for the Postal Service that have offset its general shortfalls in revenue. "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.
Stifel analyst Scott Devitt said the e-retailer collects sales taxes in the 45 states that have state sales taxes and the District of Columbia.
In classic Trump fashion, the facts aren't exactly on his side.
There has been talk in Washington of taxing online commerce more. That doesn't erase its state and local tax bills.
Amazon boxes are seen stacked for delivery in Manhattan, New York, U.S., January 29, 2016. The Postal Service reported a net loss in 2017, and it does offer Amazon cut rates.
Given that they follow the same model one would think Donald Trump would have more respect for Amazon but he's clearly not a fan.
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