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Trump Attacks Amazon, Saying It Does Not Pay Enough Taxes Trump Attacks Amazon, Saying It Does Not Pay Enough Taxes
(about 7 hours later)
WASHINGTON — President Trump escalated his attack on Amazon on Thursday, saying that the online behemoth does not pay enough taxes — and strongly suggesting that he may try to rein in the e-commerce business. WASHINGTON — President Trump escalated his attack on Amazon on Thursday, saying in an early-morning tweet that the online retail behemoth does not pay enough taxes — and strongly suggesting that he may use the power of his office to rein in the nation’s largest e-commerce business.
The president’s commentary was made in a Twitter post in which he accused Amazon of putting thousands of local retailers out of business and of using the United States Postal Service as “their Delivery Boy.” Mr. Trump accused Amazon, one of the country’s most recognizable and successful brands, of putting thousands of local retailers out of business and said the company was using the United States Postal Service as its “Delivery Boy.”
Amazon and the company’s founder, Jeff Bezos, are among Mr. Trump’s regular Twitter targets. In December, Mr. Trump questioned whether the United States Post Office charges Amazon enough for package deliveries. And in August, Mr. Trump said Amazon hurts taxpaying businesses. The president has lashed out publicly against the giant company and its chief executive, Jeff Bezos, on Twitter more than a dozen times since 2015. And privately, people close to him said, Mr. Trump repeatedly brings up his disdain for the company, often set off by his anger at negative stories in The Washington Post, which is owned by Mr. Bezos.
Amazon, however, does pay taxes — $412 million in 2016, for instance, according to the company’s report to the Securities and Exchange Commission. By focusing on the threat to small businesses, Mr. Trump has touched on the unease of Amazon’s disruptive force. The company has changed industries as varied as publishing, groceries and health care. That has helped the company grow to be worth more than $700 billion, but it has also made it a convenient target.
Mr. Trump has attacked Amazon on Twitter more than a dozen times since late 2015, months after he had launched his presidential campaign. Many of those tweets seem to have been prompted by critical coverage in The Washington Post, the news organization that Mr. Bezos acquired personally in 2013 for $250 million. The president has little clear authority to take action against the company. Some Amazon critics have suggested antitrust actions against the company, but the moves would need to come from the independent Federal Trade Commission or the Justice Department, where officials have promised to keep politics out of its corporate competition cases.
Mr. Trump has repeatedly accused Mr. Bezos of using The Post as a tool to intimidate opponents in Washington into treating Amazon more favorably, although editors at the newspaper say Mr. Bezos plays no role in directing its news coverage. Lindsay Walters, a White House spokeswoman, told reporters on Thursday that “the president has expressed his concerns with Amazon. We have no actions at this time.”
The president’s latest broadside did not mention The Post, instead focusing on a handful of issues he has previously cited to criticize Amazon. While Amazon once widely avoided collecting sales tax in states, it now collects them in every state that has one for goods that it sells from its own inventory. Still, Mr. Trump’s willingness to again single out Amazon and characterize it as a tax cheat and a job killer is a remarkable use of the presidential bully pulpit that could have serious implications for the company even without any formal moves by the federal government.
Some municipalities, however, have complained that Amazon does not collect local taxes under its agreements with states. And in most states Amazon does not collect sales taxes on sales of goods sold by third parties on its platform. His comments have already spooked investors, sending Amazon stocks tumbling Wednesday after an article on the website Axios about his anger toward the company. The stock fell further after his tweet on Thursday, though prices rebounded later.
The tech industry is increasingly on the defensive. Facebook is under attack in Washington for its handling of personal data and the social network’s role in the 2016 election. And the recent death of a pedestrian by a self-driving car has renewed criticism of Uber.
“The general principle that I know deeply concerns the president is that we need to live in a world where the government sets a level playing field between internet vendors and mom and pop stores,” Kevin Hassett, the chair of the president’s council on economic advisers, said Thursday on Fox Business.
Drew Herdener, an Amazon spokesman, declined to comment.Drew Herdener, an Amazon spokesman, declined to comment.
The media company Axios reported on Wednesday that Mr. Trump has wondered aloud whether Amazon could be vulnerable to antitrust or competition laws. Amazon shares fell almost 5 percent after the Axios article was published. In afternoon trading Thursday, they were down more than 1 percent. Several current and former officials said that Mr. Trump regularly conflates Amazon with The Post. Mr. Bezos owns the paper privately, separate from his role at Amazon.
Raj Shah, a deputy White House press secretary, said that Mr. Trump “has talked about the need to have tax parity between online retailers and brick-and-mortar retailers.” Brad Parscale, the president’s 2020 campaign manager, on Thursday channeled Mr. Trump’s anger about The Post in a tweet of his own, saying: “Do not forget to mention that @amazon has probably 10x the data on every American that @facebook does. All that data and own a political newspaper, The @washingtonpost. Hmm…”
Mr. Shah, speaking Thursday morning on the program, “Fox & Friends,” said this was something Congress could help facilitate and that the president would support. And far-right, conspiracy-fanning websites — some of which Mr. Trump is known to read — have for months stoked the idea that The Post is in cahoots with the C.I.A. because the agency contracts with Amazon to provide cloud-based data storage. Last November, a headline at one of those sites, Infowars, said: “BEZOS & DEEP STATE UNITE: AMAZON LAUNCHES CLOUD SERVICE FOR CIA.”
The Post declined to comment.
One person close to Mr. Trump, who asked for anonymity to discuss private discussions in the Oval Office, said that the president mused about the issue of Amazon and taxes at least a half-dozen times in the last six months. The president has repeatedly claimed that Amazon costs the Postal Service money even though officials have explained to him that is not the case. Amazon has said that the Postal Regulatory Commission, which oversees the service, has consistently found that its contracts with Amazon are profitable.
People close to Mr. Trump say the president is convinced that Amazon unfairly benefits from tax laws. The internet giant collects sales taxes on its own products in all 45 states that have one, but third-party vendors who sell products on the site often do not collect sales tax, a fact that rivals say is unfair. In addition, some municipalities complain that the company does not collect local taxes.
In April, the Supreme Court will hear arguments in an case on whether to allow states to impose sales taxes on all internet sales. Many observers believe the justices are poised to reverse its 1992 ruling that exempted online retailers with no physical presence in a state.
Mr. Trump hears the sales tax complaints frequently during visits with his wealthy friends at his Mar-a-Lago estate in Florida, and in meetings at the White House, several aides and associates said. One person familiar with his thinking said that the president believes many of his core supporters are hurt when Amazon disrupts the local businesses where they live.
The president’s critique is shared by some of his usual adversaries in the Democratic Party. Like many of Mr. Trump’s wealthy Republican friends, Representative Keith Ellison, Democrat of Minnesota, has been critical of Amazon’s growing power in the marketplace.
“The Trump administration should rein in giants like Amazon because they have an unfair stranglehold on the competition, not because the president has a personal feud with a company’s C.E.O.,” Mr. Ellison said in a statement on Thursday.
There was also some irony in the criticism coming from Mr. Trump, who has boasted about his dexterity in avoiding paying taxes. “This is the guy who said that not paying taxes ‘makes me smart,’” said Matt Gardner, senior fellow at the Institute on Taxation and Economic Policy, a nonpartisan research organization.
How the president could slow Amazon, beyond take to Twitter or complain about the company in speeches, is unclear.
If Mr. Trump were to pressure the Justice Department to pursue antitrust enforcement action against Amazon, it would be a sharp break from tradition, experts say, because the White House has kept a far distance from those cases for decades.
“It would be a gross violation and abuse of our due process,” said Diana Moss, president of the American Antitrust Institute.
But the president has repeatedly crossed lines that his predecessors have observed. In the investigation into Russian meddling in the 2016 election, he has pressured Justice Department officials to investigate his Democratic rivals and to abandon the investigation of himself and his associates.
AT&T and Time Warner have suggested Mr. Trump played a role in the Justice Department’s decision to block the companies’ $85.4 billion media merger. Makan Delrahim, the head of antitrust at the Justice Department, has said under oath in Congress that he would not allow the White House to impact his decisions over that merger or any other cases.
Mr. Trump also surprised antitrust experts with his swift decision to block Broadcom’s merger with Qualcomm earlier this month, after a review by a government panel on foreign investments. The president has direct authority to block a merger with foreign companies that pose national security concerns.
The company has tried, through lobbyists and outside consultants, to meet with administration officials and members of Congress to counter arguments about the company’s tax collection and its relationship with the Postal Service.
The size of company’s lobbying staff has ballooned in recent years, according to public filings, focusing largely on drones, transportation, taxes and cybersecurity. It has hired antitrust consultants over the past year.
In 2015, shortly after Mr. Trump started his attacks against the company, Mr. Bezos joked on Twitter about sending the candidate into space on a rocket made by Blue Origin, a space exploration start-up Mr. Bezos owns.In 2015, shortly after Mr. Trump started his attacks against the company, Mr. Bezos joked on Twitter about sending the candidate into space on a rocket made by Blue Origin, a space exploration start-up Mr. Bezos owns.
But since Mr. Trump became president, Mr. Bezos and Amazon have become much quieter about his attacks. The company has refused to comment publicly about them. People who work there say privately that, while they do not enjoy Mr. Trump’s tweets, they are more likely to prompt eye rolling rather than some form of crisis control. But when Mr. Trump became the Republican nominee and then president, Mr. Bezos and Amazon stopped responding to his attacks, seeing little upside in a public quarrel with him, according to two people briefed on the decision. The people, who spoke on condition of anonymity because the conversations were private, said that these days, Mr. Trump’s tweets were more likely to prompt eye-rolling inside the company than any serious effort at crisis control.
Mr. Trump’s latest criticism come as the tech industry is facing a backlash to its power and influence. Facebook, Twitter and Google have come under particularly harsh scrutiny for their role in the 2016 presidential election, when people tied to Russia used the services to spread political messages and misinformation.
The focus on Facebook has intensified this month, after reports that Cambridge Analytica, a political consulting firm, improperly harvested the information of 50 million users of the social network.