Trump tweet goes after a favorite target, Amazon

Trump on Thursday accused Amazon of not paying enough taxes, exploiting the US postal system and putting small retailers out of business, but did not present evidence to back up claims or suggest any specific actions.

Trump also wants to change Amazon's tax treatment, the report said, an issue the president raised publicly a year ago when he called for an internet tax for online retailers, even though Amazon already collects sales tax on items it sells direct to customers.

Deliveries for Amazon and other online retailers are the fastest-growing part of USPS' business, helping offset a sharp decline in regular first-class mail.

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

President Donald Trump had some harsh words for Amazon last week. There is an argument that the rise of Amazon has actually benefitted the postal service.

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.

Brick-and-mortar stores have closed by the hundreds, as retail chains struggle to compete with the convenience of online shopping, a transformation led and dominated by Amazon.

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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. There have been efforts in Congress to force all e-commerce companies to collect state sales tax, but Amazon already does that. "Towns, cities and states throughout the US are being hurt - many jobs being lost!" In other cases, state law requires sales tax to be assessed based on the location of the seller rather than the buyer.

Overall, the Twitter attacks by the president do "not seem well-informed or detrimental to Amazon", said Devitt, who has a Buy recommendation on Amazon shares with a target price of $1,800. Soon after Trump's tweet, the White House indicated imposing taxes on such companies.

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

Since his most recent tweet on the subject, many have been quick to point out that the issues plaguing the USPS predate the Amazon deal.

Sources say Amazon had cut ties from the lobbying firms last Friday and in their place hired Paul Brathwaite of Federal Street Strategies LLC and Josh Holly of Holly Strategies Inc, both of whom have previously worked as outside lobbyists for Airbnb Inc and Oracle. 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. Partly because of the large volume of packages it sends, Amazon gets discounted shipping rates from the post office.

The Postal Service declined to comment on Trump's tweet. Although the service is certainly losing money, the delivery of packages increased by 589m in 2017, which can be partially accredited to Amazon. The postal service's contract with Amazon must be approved by regulators and must generate a profit for the service.

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. The online retail giant clearly leverages many tools to keep the tax man at bay.


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