Why Americans Love Amazon, and Why Trump Is Wrong to Attack It

[EasyAce]

By Michael D. Tanner
https://www.cato.org/publications/commentary/why-americans-love-amazon-why-trump-wrong-attack-it

I have firsthand knowledge that President Trump is right. For years, the tech giant Amazon has been carrying out a nefarious plot to sell me things I want at a price I like. How evil can they get?

Many commentators have noted that the president was wrong about almost everything he said in attacking Amazon. For instance, the president says that “only fools” believe that Amazon doesn’t cost the postal service money. However, the Post Office is losing money because of sweetheart labor deals, rising health and pension costs, and the decline in first-class mail. Delivering packages, like those for Amazon, is actually one of the few bright spots for the Post Office. Revenue from package delivery was up $2.1 billion last year, nearly a 12 percent hike. There’s even evidence suggesting that Amazon, through practices such as its Sunday delivery, may be driving an increase in postal customers. Yes, Amazon does receive a bulk discount because it ships so many packages, but, by law, that deal cannot reduce Amazon’s payments below the postal service’s costs.

Similarly, the president is wrong about whether Amazon pays taxes. In reality, Amazon pays sales taxes for its products in all 45 states that impose a sales tax. This year, state taxes paid by Amazon totaled roughly $211 million. Amazon does devolve responsibility to the vendors themselves for payment of sales taxes by third-party vendors that use its platform, but that is not at all an unusual arrangement. Ebay, for example, operates in a similar fashion . . .

. . . The big problem with Trump’s view of Amazon is not that he gets his facts wrong . . . And commentators are probably wrong that Trump’s attacks on Amazon stem solely from pique at aggressive media coverage from the Washington Post, which is owned by Amazon founder Jeff Bezos. Trump has been attacking Amazon for years, starting long before Bezos bought the Post.

The much bigger issue is Trump’s Bernie Sanders-style misunderstanding of economics and his nostalgia for an imagined 1950s America . . .

[jmyrlefuller]

Similarly, the president is wrong about whether Amazon pays taxes. In reality, Amazon pays sales taxes for its products in all 45 states that impose a sales tax. This year, state taxes paid by Amazon totaled roughly $211 million.

That's their argument? 

First off, Amazon, like most other e-commerce retailers, only pays state sales tax if they have physical operations in a state. Second, that sales tax isn't paid by Amazon, it's passed onto and paid by the consumer who buys the product.

Third, by deflecting to sales tax, they tacitly admit they use the Double Irish/Dutch Sandwich tax avoidance scheme to zero out their income tax liability.

[EasyAce]

From the article:

It’s true that Amazon did not pay federal income tax last year, because of a series of credits and exemptions. But it paid a total of $1.2 billion in federal taxes from 2015 to 2017. Over the past decade, Amazon paid an average effective federal tax rate of 13 percent, somewhat lower than the corporate average but not out of line for a company that reinvests so much of its revenue into expanding the business. Besides, hasn’t President Trump been concerned about overtaxing American business? Remember last year’s tax bill?