Amazon

Donald Trump Unambiguously Condemns…Amazon

Today's presidential tweet about the online retail giant is wrong about taxes, jobs, and the future.

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President Donald Trump woke up this morning and decided to tweet about how much he dislikes a major American corporation.

This is pretty normal for the president, who has been singling out companies for praise and blame since the earliest days of his presidential campaign. Trump's unique spin on cronyism typically involves more public bullying than his predecessors, but he's hardly the first to use the power of the presidency to try to dictate firms' internal decisions about where to locate factories, whom to hire and fire, how to file tax returns, or what to produce. Sometimes his signature variant of corporate authoritarianism rises to the level of state action, in the form of subsidies, threatened investigations, or withdrawal of government contracts. Sometimes it sticks to the rhetorical realm.

Amazon shareholders seemed worried about the former this morning, though I suspect the stock price will bounce back. (I'm not the first person to only semi-jokingly suggest an investment strategy based around buying the reflexively tanking stocks of the companies bashed by Trump on Twitter and then selling when they recover.)

Chris Kleponis—CNP/Sipa USA/Newscom

Today's entry into the genre of bullying tweets seems to be based on a misunderstanding, however: Amazon hasn't always broadly collected sales tax, since the law and mechanism for tax collection on internet purchases is still evolving. But since April, the retailer collects taxes in every state where it has a physical presence. A 1992 Supreme Court ruling, Quill Corporation vs. North Dakota, prohibits states from extracting taxes from companies that don't have a physical location within their borders.

It seems likely that Trump is confused about the facts here, but if he's not, then perhaps he's making the same argument that Republicans love to mock when the Democratic counterparts make it: That businesses should pay more tax than they are legally required to by ignoring loopholes or other technicalities, because there's something shady or un-American about minimizing tax burden. Trump should be wary of making such arguments, since his as-yet-unreleased tax returns almost certainly reveal similar techniques. He also shouldn't make such arguments because they are simple wrong—paying the amount of tax the law requires and not a penny more is not only legal but morally commendable, especially if you believe your tax money is going to waste or to fund activities that are harmful. Amazon is just the latest scapegoat in a long line of large successful firms that have shifted the way the retail sector functions, including Walmart, Borders Books, and more.

Trump's tweet is nicely calibrated to play on existing confusion between the economic health of a municipality and the level of tax collection, as well as the relationship between state and local income taxes and job creation. It true: More efficient means of warehousing and distributing goods will mean fewer jobs in the sub-set of the retail sector previously dedicated to warehousing and distributing goods. But that tells us nothing about tax revenues, and even less about the broader economic health of the nation.

Politicians of both parties love to traffic in static thinking about the tax base. Some of those politicians actually believe their own story that if the small businessman on Main Street stops paying sales tax on the stuff he sells to his neighbors in meatspace, the state's tax base will collapse and no one will have jobs anymore. Others know that the labor market and the sources of tax revenue are more complex and dynamic than that, but play on the public's ignorance and blurry thinking about these questions.

An alternate explanation: Donald Trump already has a history of vaguely threatening The Washington Post, which is owned by Amazon's Jeff Bezos. It may well be that this tweet is just a slightly more successfully veiled attempt to discredit his journalistic enemies than his previous direct hits. Stay tuned for a WaPo scoop?

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  1. So we’re still breaking down Trump tweets? Politicians have been picking winners and losers in the marketplace since forever. Trump is just too dumb to be subtle about it.

    1. And literally to a man (or woman,) they’ve been wrong.

      Trump almost lost my vote during the campaign when he started blathering about ‘saving jobs’ and ‘bringing jobs back to America’ by imposing tariffs on foreign exporters.

      Ken Fisher should be Trump’s financial and economic advisor or Trump should read all of Ken’s books before shooting his mouth (or his Tweets) off, and he should also log onto YouTube and watch ALL of Milton Friedman’s lectures and commentary.

      THEN, and only then, will I have any hope for America’s economic future.

      Economic Illiteracy in ALL of our elected officials will kill us all.

  2. Donald Trump Unambiguously Condemns…Amazon

    Because, why not? Right?

    Today’s presidential tweet about the online retail giant is wrong about taxes, jobs, and the future

    Just as he is wrong on trade, wages, immigration, Mexican rapists, who his enemies are, who his friends are, the weather…

    1. Whether it’s wrong to lust after your daughter. How many Nazis are good people. I could go on.

  3. “paying the amount of tax the law requires and not a penny more is not only legal but morally commendable, especially if you believe your tax money is going to waste or to fund activities that are harmful.” If only libertarians would follow this maxim ! Trying to convince establishment libs of the liberating truth of the income tax is hard, hard work! I blog about it because libertarians because they are so poorly informed! My latest post is entitled ” Brian Doherty used to understand the income tax, I think”. The post dissects a 2004 Hit and Run Piece he wrote called “You don’t have to pay income tax, damnit”! I show where he is at least more informed then than most libertarian establishment writers, but still has plenty of misconceptions.
    Doherty stopped writing about tax honesty in 2007. Too bad. In 2003 a non-establishment libertarian named Pete Hendrickson changed Tax Honesty because he no longer advocated civil disobedience, (dont file and dont pay) but instead advocated using the IRS forms and procedures against them. Since then, people who use his methodology have had over 12 million dollars of federal and state income tax , including payroll taxes, refunded to them. But libertarians continue to cling to the constructive fraud that is being perpetrated on them. Question authority, heh? For establishment libs, not so much. http://www.nontaxpayersforronpaul.blogspot.com

  4. Uh oh, looks like someone didn’t get free shipping on his bronzer order this morning!

  5. Is Trump talking about sales tax here?

    Or is he talking about the fact that a handful of Amazon distribution centers compete with thousands of small retail shops around the country… shops that pay local property taxes, buy supplies and services locally, hire local people who contribute to the local economy and pay local taxes,

    I’m sure that amazon has a similar but more disbursed effect to that of Walmart and Home Depot. The small specialty hobby shop that little towns have scattered around the country are probably marginal businesses at best. Now they have to compete on price with Amazon. I’m sure it is the same for dozens of different niche businesses.

    I’m not on his side on this one (or most of the other ones for that matter), but there is no question that internet retailers in general, and Amazon in particular are changing the landscape of retail in America and around the world. With that comes a lot of failed businesses and lost jobs. It goes with the territory.

    I think the argument here is the same as the Walmart argument from 20 years ago. Sure, Walmart runs a bunch of small businesses off when they come to a little town, but the people there get a much wider selection of goods at a much cheaper price. Amazon is multiplying this equation. There is sure to be angst about this – particularly in the heartland. It seems like that is what Trump is trying to tap into.

    1. Because channeling the working classes’ resentment of success is what will help them /sarc.

      1. Populists gonna populist, yo!

        1. “IT’S NOT FAIR!!”

          -Populist war-cry

          1. Indeed, usually a war cry heard from the left, surprised it’s coming from the right now. Times be a changin’

    2. I’m baffled why the same Progressives who bemoan Wal-Mart (as Wal-Mart has spent YEARS sucking up to them) have a hard-on of love for Amazon.

      Doesn’t EVERY criticism of Wal-Mart apply to Amazon as well, except they employ fewer?

      The “robber barons” of the early 20th Century were infinitely better for the country and far better philanthropists than our current robber barons.

      1. I think the contention that Progressives have this love affair with Amazon is a bit overblown. One of the most consistent stories that has come out about their distribution centers is how high the turnover rate is and how shitty the working conditions are. The company basically treats their factory workers like industrial automatons, and this has been pretty well-documented the last few years by left-wing media outlets.

        However, I think you’re right in the sense that it’s not something that is really on their radar–Elizabeth Warren, for example, gave a speech in the Senate last year calling out Google, Amazon, Wal-Mart, etc, for monopolistic behavior, but it barely registered across the media landscape (I only found out about it recently because I was curious if she had even brought it up in the first place). If it was that much of priority to them, her speech would have gotten FAR more attention than it did.

        What WalMart and Amazon are essentially banking on is that no one in the government will examine how their business model has affected the retail landscape in this country and suddenly decide that an anti-monopoly lawsuit is in order.

    3. Amazon refuse to abide by Minimum AdvertisedPricing agreements of the manufacturers. They undercut the retailers to badly retailers can no longer sell those products at the price manufacturers demand they sell them….. and for some strange reason those manufacturers are afraid to call Amazon on their MAP violations, so Amazon end up with the sales due to their illegal price cutting. Many items are sold nationwide at MAP, same price at TJ Max, Target, WalMart, Macy’s, JCPenney, Krogers, Bed Bath and Beyond…. but is 20 to 30% less on Amazon.

      HOW can Amazon get off with such radical undercutting? Consider, too, that even whem Amazon collect sales tax (and they DO) they collect it on their radically discounted price, thus ripping off the states for not leeting them collect the taxes on full price for the items. Another part of their scam.

  6. What a dipshit. The tax in question isn’t collected from the seller, it’s collected from the buyer by the seller.

    What the states and municipalities need to do is encourage neighbors to rat each other out for not paying use tax. I see a future with goons rummaging through recycling bins looking for Amazon boxes, then dragging citizens off for not paying that $1.75 in use tax due on the extra HDMI cable they ordered.

    1. Fuck that. If my state/county/city doesn’t want to create the bare minimum infrastructure necessary for me to be able to acquire a used copy of Fight Club, thru don’t deserve 30 cents.

  7. So now paying taxes is a virtue for this epic slimebag.

    1. It seems that both parties have jumped on the anti-capitalist train. Why both parties would want to spite the very citizens that they claim to serve by constantly attacking capitalism, the ONE force that has lifted BILLIONS out of dire straits and into prosperity.

      1. Bothsidesism does not work here either. Concentrate, Drumpf said that he did not pay taxes because of the laws, because he is a clever businessman. Why then, is a hypocrite?

    2. “So now paying taxes is a virtue for this epic slimebag.”

      No, shithead. He is speaking of a competitive disadvantage inherent in the current tax structure. Perhaps he was advocating for, you know, a level playing field. Why not wait to see what his proposed solution would be before spouting idiocy.

      Is your comprehension that poor and/or your bias that great?

  8. Oh, and I forgot my main point. Did Bezos quit some economic council or say something about Trump.

    The tit-for-tat tweet storm is standard Trump procedure for people who are “disloyal” and criticize him.

  9. Given that the Bezos Blog (aka the Washington Post) unambiguously condemns Trump, I’m not entirely surprised. Tease a lion, get eaten.

    1. And this is the answer, leaving arguments about the validity of taxation aside. Trump is telling Bezos to knock it off with his personal propaganda machine or Trump will find a way to make Amazon play by the same rules as local retailers, which wouldn’t be good for Amazon.

      1. Amazon supports taxing online sales in part because it’s a greater burden for a smaller online seller to have to comply with multiple state sales tax laws than it is for a larger seller that’s already competing in multiple states.

  10. Aside from all the above mentioned, this all falls in line with Trumps larger (false) narrative of rolling back the economic and technology clock. We can either have pipe dreams about the past economy that didn’t have today’s level of automation and tech, or embrace a likely exciting future where we can leverage these changes to create new job sectors and new ways of looking at everything. Trump is selling his followers a pipe dream.

  11. It may well be that this tweet is just a slightly more successfully veiled attempt to discredit his journalistic enemies than his previous direct hits. Stay tuned for a WaPo scoop?

    Cripple fight!

  12. Amazon is doing great damage to brick and mortar retailers…but times be a changin’ and biz needs to adapt, as does government’s fleecing the consumer with sales tax….10% in some places!

  13. If we don’t get the local sales tax revenue, how will we build the new football stadium?

    1. Bond issue

  14. RE; Donald Trump Unambiguously Condemns…Amazon
    Today’s presidential tweet about the online retail giant is wrong about taxes, jobs, and the future.

    “Donald Trump Unambiguously Condemns…Amazon
    Today’s presidential tweet about the online retail giant is wrong about taxes, jobs, and the future.”

    It was one of the few sane decisions the SCOTUS has made in the past quarter century.

  15. An alternate explanation: Donald Trump already has a history of vaguely threatening The Washington Post, which is owned by Amazon’s Jeff Bezos

    The irony of this is that Bezos’ purchase of the Washington Post was alluded to in that self-serving documentary “Don’t Speak” as an example of corporate billionaires buying out media outlets to serve as their propaganda organs, rather than maintaining the integrity of “independent (haha) journalism”.

  16. trolling WaPo.

  17. The only jobs taxes create are government jobs, not jobs beneficial to consumers.

  18. let me describe one way Amazon does precisely what Mr. Trump claims they do: hurt local retailers.

    Most quality product lines enforce a Minimum Advertised Price schedule, and require all their retailers/dealers to abide by that price structure. At that price, there is a reasonable margin in the sale that can allow a small profit for the retailer.

    Amazon systematically refuse to abide by these pricing structures. So what? you say… Here is what: When a retailer abides by MAP of the manufacturer, and every retailer in a brick and mortar store also abides by it, and Amazon refuse to abide by it, selling products at so far below MAP that buyers OF COURSE buy an Amazon because it is 20 to 30% cheaper there, (and it is…) HOW can the local retailers, or even national chains liike WalMart, Home Depot, Bed Bath and Beyond, Macy’s, sell the product? They cannot, and do not.

    So Mr. Trunp’s accusations against Amazon are 100% factual and correct. They HURT every local business by underselling the identical products at radically reduced prices….. in VIOLATION of the manufacturer’s Minimum Advertised Pricing policies. I am talking about the identical item, same UPC, same manufacturer’s packaging, models, item numbers….

    1. So Mr. Trunp’s accusations against Amazon are 100% factual and correct. They HURT every local business by underselling the identical products at radically reduced prices….. in VIOLATION of the manufacturer’s Minimum Advertised Pricing policies

      No you moron, Drumpf’s complaint is that they are undercutting retailers, by not paying taxes. Taxes are the buyer’s burden.

      1. Hey, you waste of carbon molecules, maybe you should exercise some reading comprehension:

        let me describe one way Amazon does precisely what Mr. Trump claims they do: hurt local retailers.

        Do you understand how distinctions are made in the English language, or did that tramautic brain injury that occurred when your daddy shook you as a baby prevent that from developing?

  19. Wacky. Now Reason loves crony capitalism when it allows them to sneer at Trump.

    Distorting the market by giving tax breaks to internet sales. So much free market. So much rule of law.

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