President Trump has picked back up on what thus far has amounted to little more than a one-sided Twitter feud with Amazon.
On Thursday, Trump tweeted about the internet giant again, saying “I have stated my concerns with Amazon long before the Election. Unlike others, they pay little or no taxes to state & local governments, use our Postal System as their Delivery Boy (causing tremendous loss to the U.S.), and are putting many thousands of retailers out of business!”
While it’s not clear what prompted this specific comment, Trump has demonstrated time and again that once he zeros in on a target, he is unlikely to ever remove it from his sights, and Amazon seems to be a favor subject.
When he raised questions about Amazon’s tax collection in 2017 via another tweet, The New York Times was quick to call the claim “outdated.”
The retailer does pay taxes, both state and local, where it’s required to do so—though it’s true to say that it didn’t always. The caveat is that it only pays on direct sales, not on those made by its third-party vendors. Sellers on the marketplace determine whether they collect taxes on sales or not.
It’s also true that Amazon, as well as other online retailers, may not pay taxes in some areas, but that’s because the laws there haven’t kept pace with technology, according to the Institute on Taxation and Economic Policy.
Trump’s claim that Amazon is to blame for the U.S. Postal Service’s woes dates back to December, when he said via Twitter that Amazon’s deal, which includes Sunday delivery via the regular mail, was making it “richer and the Post Office dumber and poorer.” He added, “Should be charging MUCH MORE!”
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. Among the challenges that the postal service faces is its duty to serve the entire country. Another is the internet, of course. Given that so much correspondence takes place on the Web, there are simply fewer letters and direct mail pieces flowing through the system.
On the other hand, online sales have perked up volume for packages, at least.
When the Sunday delivery deal was announced in 2013, the Washington Post said it offered the post office “hope.” While U.S. News & World Report said the arrangement had “clear benefits” for both parties, coming as it did at a time when the USPS was considering cutting back on delivery days to help its bottom line and Amazon was attempting to find ways to fuel consumers’ online shopping dependence.
Further, a recent Bloomberg article said “the e-commerce giant got the Postal Service off life support.”
A report by Citi Research published last year shows that the president could be right on one point though. The USPS could charge more. It said, in part, “by charging below market rates on parcel volume (mainly eCommerce) the Post Office has essentially turned free shipping into a future tax payers’ burden.”
Though it’s unclear how much of a boon, if any, Amazon has turned out to be, the postal service is better off today than it was before. In 2013, it reported a net loss of $4.98 billion, according the USPS annual report. In 2017, the loss was $2.74 billion.