The president has been on a tear against the nation’s leading online retailer lately, suggesting in a series of tweets and comments that Amazon doesn’t pay sales taxes and takes advantage of special low prices from the United States Postal Service.
These allegations are false. But more to the point, it is wrong for the president to target a specific company in this fashion — particularly since Trump has openly tied his anti-Amazon crusade to his hatred of the Washington Post, a newspaper owned by Amazon head Jeff Bezos.
First, a word on the substance of the allegations. It is true that Amazon did not collect sales taxes in many states for much of its history, for the simple reason that the law did not require it to: As the Supreme Court has found, states have no authority to tax companies with no in-state physical presence.
In recent years, however, Amazon has expanded its operations in numerous states and faced legal pressure to collect sales tax. As a result, today Amazon collects sales tax in every state that has one (though it does not do so on behalf of its third-party sellers). In fact, it has lobbied for a law requiring its competitors to collect sales tax everywhere in the country as well.
Amazon also does not receive any special favors from the United States Postal Service. Trump’s allegation stems from a Citigroup report finding that USPS undercharges for packages in general, not just for Amazon shipments. Further, USPS itself says its relationship with Amazon is profitable, and analysts at Piper Jaffray contend that Amazon would find cheaper shipping elsewhere if USPS raised its rates.
To be sure, these and other Amazon-related policies deserve a debate. Congress should develop a fair way to handle sales taxes on online purchases. The long-ailing Postal Service needs an equitable and sustainable revenue model. And some have called for a major revision of antitrust law undertaken with the tech sector in mind, drawing attention to the aggressive moves that companies such as Amazon and Google have made against their smaller competitors.
We have our own views on these matters. We would tax online sales in the state of the seller, for example, and we would leave the antitrust laws the way they are, as there is no evidence that the tech companies’ behavior is harming consumers. But these policy reevaluations should not take place in the context of a politicized campaign against one company.
The reality is that Amazon is a success story of American capitalism. Bezos and his team have revolutionized retail and branched out, reinvesting the money they make in new ventures. This has brought efficiency and high-paying jobs to the U.S.
The president has repeatedly and explicitly connected his disdain for Amazon with his well-known animosity toward the Washington Post, sometimes simply combining the names into “Amazon Washington Post.” “If I win the election,” he warned as far back as February 2016, “oh, do they have problems.” This is not how things work in a country that respects the rule of law and the freedom of the press.
The reality is that Amazon is a success story of American capitalism. Bezos and his team have revolutionized retail — just as the big-box stores did decades ago — and branched out into numerous other areas as well, reinvesting the money they make in new ventures. This has brought efficiency and high-paying jobs to the U.S. and, yes, seriously challenged older and less efficient retailers.
The company should be celebrated, not targeted for a presidential jeremiad, whatever the Washington Post decides to publish.