Donald Trump bashed Amazon earlier today. This is, according to CNBC, the fourth time in seven days the POTUS has criticized the Jeff Bezos-owned e-commerce giant. In a Twitter message, the President said that Amazon is taking advantage of the United States Post Office and using it as a “delivery boy.” More importantly, he implied that Amazon is costing American taxpayers “many billions of dollars.” Ironically however, the Trump Administration’s corporate tax cuts have been, are, and unless things significantly change, will continue to do wonders for Amazon. Senior fellow at the Institute on Taxation and Economic Policy, Matthew Gardner, explained this in a February blog post.
“Incredibly, Amazon’s corporate tax goose egg for 2017 doesn’t include the effect of a second big tax disclosure: the $789 million one-time tax break the company projects it will receive due to the new tax law. While the Trump Administration’s corporate tax cuts generally took effect on January 1st, the law includes a grandfather clause for companies that (like Amazon) have managed to defer or postpone tax liability from prior years. Instead of paying these deferred taxes at the previous 35 percent rate, Amazon now gets an extra reward for postponing the taxation of this income: a 40 percent discount from 35 to 21 percent.”
How deep is the President’s understanding of his own economic policies? Furthermore, are his claims about Amazon using the United States Post Office as a “delivery boy” true? An anonymous source, allegedly close to the White House, told Axios that the POTUS doesn’t quite understand “the whole post office thing,” and that it has been “explained to him in multiple meetings that his perception is inaccurate and that the post office actually makes a ton of money from Amazon.”
While it is true that the USPS posted a net loss of $540 million in the first quarter of 2018, that is probably due to their, currently unsustainable, business model, according to an Edward Jones analyst. “Trump is trying to say that Amazon is the reason the Post Office is losing millions of dollars and, in reality, that’s not the case,” Logan Purk told Business Insider today.
Donald Trump famously promised huge middle class tax cuts via Twitter, but are his policies in line with his rhetoric? In a column published in January, the Atlantic‘s David Graham called Donald Trump “the President who doesn’t understand his own positions,” and argued “if foreign leaders, members of Congress in both parties, and voters cannot tell what the U.S. government’s policy is, the government effectively has no policy at all.”
Corporations may have their own reasons to applaud the Trump Administration’s tax bill, but there has been a lot of criticism. For instance, back in January this year, Senator Claire McCaskill told the Huffington Post that the President’s tax cut is a “debt-inducing, make-rich-people-richer” bill. CNN‘s national poll from December 2017 shows that the opposition to Trump’s legislation keeps growing. At the time, 60 percent of surveyed middle class Republicans were against it, as well as 64 percent of surveyed Independents, and 95 percent of surveyed Democrats.
In an extensive piece published yesterday, Vanity Fair‘s Gabriel Sherman alleged that Donald Trump is contemplating a full-blown campaign against Jeff Bezos and his company. “He gets obsessed with something, and now he’s obsessed with Bezos,” sources told Vanity Fair, adding that the President, referring to Bezos, asked “How can I f*** with him?”
According to Fortune, Jeff Bezos, the world’s richest man, lost over 10 billion in net worth after the President tweeted about his company.