Trump blasts Amazon for hurting the postal service. Is that true?

Robyn Valdez
April 2, 2018

Cloudtail, appointed a senior Amazon executive Sumit Sahay as its CEO a year ago, is the most important seller for Amazon in India and the company relies heavily on it to push top selling categories. A report released March 26 by the left-leaning Institute on Taxation and Economic Policy said Amazon either doesn't collect and remit local sales tax or is charging a lower sales tax rate than traditional retailers in seven states: Alabama, Alaska, Idaho, Iowa, Mississippi, New Mexico, and Pennsylvania.

Trump's tweet is the latest signal that the White House supports efforts to undo a 26-year-old precedent in Quill Corp v.

One explanation: According to Axios, Trump hates Amazon (and the "Amazon Washington Post"), and Bezos, but never brings up Facebook or Zuckerberg. The president would love to clip CEO Jeff Bezos wings.

The U.S. Postal Service has been roiled by the same gale-force technology winds, as Americans abandoned mail for email and other electronic communication.

Trump has targeted Amazon for other reasons in the past: its founder and CEO Jeff Bezos personally owns The Washington Post, and Trump has called the newspaper "fake news" and a "guardian of Amazon" after it published unfavorable stories about him or his administration.

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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.

But what measures can he actually take against the online retail giant? "Right now, there is no internet sales tax, and, as a result, companies like Amazon can buy and sell goods without having to pay basic retail taxes".

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.

Amazon is only set to get bigger as it moves into the grocery market.

But despite Amazon's seemingly inexorable growth - including its buildup in groceries, entertainment and health care - there's very little the president or the federal government could do under current antitrust practices. The company previously reported paying $412 million in income taxes in 2016, $273 million in 2015 and $177 million in 2014, according to the commission.

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What about Donald Trump's claim that Amazon is a burden on the USA postal system?

Amazon does in fact collect sales tax on its direct sales in every state that has one, but it may not be collecting local, municipal sales taxes. But its line of business for shipping and packages has been a bright spot in recent years, with revenue increasing by $2.1 billion, to $19.5 billion, in fiscal 2017. 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.

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

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. The postal service's contract with Amazon must be approved by regulators and must generate a profit for the service.

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.

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Amazon, among tech companies, is Trump's favorite target, and not just for package delivery. Led by former Obama Administration press secretary Jay Carney, Amazon's D.C. unit past year deployed 30 in-house lobbyists.

Other reports by Info About Network

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