US president Donald Trump accused Amazon.com on Thursday of not paying sufficient tax, exploiting the US postal system and putting small retailers out of business, but he offered no evidence to back up his criticisms and did not suggest any actions he would take, according to a Reuters report.
Trump has attacked Amazon and its chief executive Jeff Bezos several times, and his latest comment came a day after news website Axios reported he was obsessed with the world’s largest online retailer and wanted to rein in its growing power, possibly with federal antitrust or competition laws, said Reuters.
“I have stated my concerns with Amazon long before the Election. Unlike others, they pay little or no taxes to state and local governments, use our Postal System as their Delivery Boy (causing tremendous loss to the US), and are putting many thousands of retailers out of business!” Trump tweeted early on Thursday.
Reuters reported that Amazon shares fell as much as 4.5 percent in morning trade, but recovered and closed up just over 1 percent. The stock dropped 5 percent on Wednesday following the Axios report. Amazon declined to comment on the tweet, said Reuters.
The retailer and cloud computing pioneer is the latest company Trump has singled out for praise or condemnation, although the effect on stock prices of his targets is generally short-lived.
Trump’s criticism did not diminish US fund managers’ long-term enthusiasm for Amazon, whose stock has risen more than five-fold in the last five years, according to Reuters.
“If there really was teeth or real concern that something would come out of the government and regulatory oversight, Amazon’s stock drop would be a lot lower than it is today,” said Robert Bacarella, portfolio manager at Monetta Financial Services in Wheaton, Illinois, which holds Amazon shares.
Trump’s attacks on Amazon reflect a broader debate about its effect on the U.S. economy. It employs many of its 566,000 full and part-time staff in the United States and has allowed some small vendors to thrive on its service, but it has also been blamed by some for putting brick-and-mortar stores out of business as more people shop online.
The Seattle-based company has promised to create 50,000 new jobs as it invests $5 billion in a second headquarters in North America. Amazon’s choice of location for the new campus, winnowed to 20 candidates in January, has sparked fierce competition between state and local governments offering extensive tax breaks, according to Reuters.
Trump does not have any new policies planned that would affect Amazon, a White House official said on Thursday, adding that Trump was prompted to speak out on the subject in reaction to news reports this week.
Amazon has been criticized for attempting to skirt state sales taxes, but since April last year it has voluntarily collected state sales tax on items it sells direct to customers in all 45 states that have one. Amazon does not have to collect taxes on third-party sellers using its Marketplace service.
That issue was the cause of some of Trump’s ire, White House Council of Economic Advisers Chairman Kevin Hassett told Fox Business Network. “Amazon vendors that can run through the Amazon Marketplace … don’t collect the sales tax. And that’s about half of their sales,” he said.
Washington and Pennsylvania recently enacted laws requiring collection of third-party merchants’ sales taxes, and other states are expected to follow.
The issue is still being disputed at the federal level, with the US Supreme Court set to hear oral arguments on April 17 in a case which could reverse a 1992 decision that only companies with a physical presence in a state are required to collect state sales tax, reported Reuters.
