Trump takes aim at Amazon – but should Jeff Bezos be worried?
It’s no secret that some technology stocks have faced difficulty so far this year, but one which has shown incredible resilience is Amazon. That might change if the current U.S. president has any say in the matter.
In a method that is becoming commonplace for Mr. Trump, he took to twitter to air his concerns, writing: “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 U.S.), and are putting many thousands of retailers out of business!”
Despite Mr. Trump’s tweets, Amazon’s share price is still up by 24% so far this year
SOURCE: Yahoo Finance
Despite Mr. Trump’s assertions, Amazon does collect sales tax in every state that has one. The “loophole” responsible for angering the president is that Amazon’s policies don’t apply to third-party sellers. These third parties are responsible for their own sales tax, and many of them fall short of those responsibilities. Whitehouse spokesman Raj Shah explained Trump’s main tax issue further:
“The president has talked about the need to have tax parity between online retailers and brick-and-mortar retailers. Right now, there is no internet sales tax and as a result companies like Amazon can buy and sell goods without having to pay basic retail taxes.”
Gene Munster, managing partner at Loup Ventures, spoke to Bloomberg TV, and explained why he thinks Mr. Bezos can rest easy, despite Mr. Trump’s “obsession” with regulating Amazon:
“At the end of the day, the standard rule, the standard of care, is: Are consumers better off? And ultimately I think consumers are better off with Amazon and I think that will prevail with this debate.”
Dominion holds Amazon in its Global Trends Ecommerce Fund.
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