President Trump yesterday accused Amazon of hurting local retailers and jobs by not paying taxes, leading to a slide in Amazon shares in pre-market trading.
''Amazon is doing great damage to tax paying retailers. Towns, cities and states throughout the US are being hurt - many jobs being lost!'' Trump tweeted, repeating his earlier characterisations of the company as a ''no-tax monopoly'' that did not pay ''internet taxes.''
Trump's suggestion that Amazon does not pay taxes is not true. According to its latest annual report to the Securities and Exchange Commission, it paid $177 million in income taxes in 2014, $273 million in 2015 and $412 million last year.
According to S&P Global Market Intelligence, Amazon paid an average tax rate covering federal, state, local and foreign taxes of 13 per cent from 2007 to 2015, on the basis analysis provided to The New York Times. That was a smaller share as against Standard & Poor's 500-stock average of 26.9 per cent, and the federal corporate tax rate of 35 per cent, but on par with Trump's proposed 15 per cent rate.
However, it is true that Amazon did not once collect sales taxes, which are owed by the purchaser and collected by the retailer.
According to commentators, Trump's reference to ''great damage'' might have much to do with the sentiment in Washington and academic circles that Amazon and other technology companies may have become too big and powerful. With Apple Inc Alphabet Inc, Microsoft Corp, Facebook Inc and Amazon becoming the biggest companies the world by market cap and dominating many facets of everyday life, there have been calls for breaking them up.
Trump had claimed during his presidential campaign that Amazon was a monopoly that he would go after for antitrust violations if he were elected. Amazon accounts for over 70 per cent of all e-book sales and 30 per cent of all US e-commerce. ''Believe me, if I become president, do they have problems. They're going to have such problems,'' Trump said in February 2016.