Amazon.com, Inc. (NASDAQ:AMZN) is one of the growth stories of 2017, despite all of the headwinds it has faced in the last few months. One of the bigger risks facing the firm going forward, at least according to some analysts, is poitical. On Wednesday morning the firm’s political problems appeared to get a whole lot worse.
Amazon is doing great damage to tax paying retailers. Towns, cities and states throughout the U.S. are being hurt – many jobs being lost!
— Donald J. Trump (@realDonaldTrump) August 16, 2017
The President of the United States made a special point to attack the firm on Wednesday morning. The impetus behind the attack wasn’t clear, however. Amazon doesn’t seem to have done anything in particular to offend the President in recent days. The firm’s founder, however, is also the owner of the Washington Post newspaper. The outlet has been a frequent critic of President Trump.
Amazon.com, Inc. does pay taxes
As is almost always the case, it’s difficult to tell what President Trump is trying to communicate in this tweet. The most common explanation has been that he believes Amazon.com, Inc. (NASDAQ:AMZN) doesn’t pay sales taxes. Though the firm has had a spotty history on that front in the past, it says that it now pays sales tax in each of the states where it’s applicable.
That has only been true across the nation since about last April, however, so it’s possible that President Trump hasn’t had the motivation to glance over the figures.
On the other hand, President Trump may be hitting at something more extreme. Amazon pays very little in corporation tax because it doesn’t make much of a profit. Its shareholders willingness to allow it to break even more or less. Since it’s not pushed to be profitable, the firm has managed to out-compete almost the entire rest of the US retail sector.
As he’s pushing some kind of corporate tax reform, it’s possible that President Trump’s plan could include some sort of measure to tackle this issue. Unfortunately, as with so much of the politician’s promises, we don’t have any details about what a tax plan could look like.
Amazon stock could crumble because of politics
It doesn’t seem all that likely that President Trump will attack Amazon.com, Inc. (NASDAQ:AMZN) with anything stronger than a tweet. Looking at his long history of early morning targets shows that he has rarely followed up on his threats. He has even appeared apparently amiably in person with people that he has attacked previously.
Despite the low probability of an attack from Trump, Amazon still faces some pretty major political problems. The firm’s market power has become so great that one Federal Reserve Board member is wondering if it’s good for the economy as a whole. At the same time, some academics are trying to change competition law in order to have the firm considered abusive.
According to Douglas Kass there is talk at high levels of government about bringing a Federal Trade Commission case against Jeff Bezos’ company. That case isn’t likely to be as dramatic as an early morning Twitter rant from the president, but it could be a whole lot more damaging.
With so much management acumen behind it, and such an incredible record of growth, the state may be the only force strong enough to push back Amazon.com, Inc. (NASDAQ:AMZN). The firm will be hoping that President Trump, or his rivals on the other side of the aisle, never gather that strength to make a push against it.