NEW YORK CITY – President Donald Trump’s view of Amazon is well documented, but reports about the president’s desire to alter tax treatments and sent Amazon shares into rough waters as a result of the heightened political risk.
“Axios is reporting that Trump wants to “go after” the e-commerce giant, citing five sources who have talked about Amazon with him.
“He’s obsessed with Amazon,” one source told the media outlet. “Obsessed.”
Trump has discussed altering the company’s tax treatment because several of his friends told him Amazon is hurting their businesses and “killing shopping malls and brick-and-mortar retailers,” according to Axios.
Amazon shares fell 4.6 percent Wednesday after the report, wiping out more than $33 billion in shareholder value.”
Amazon and others like Facebook and Google have largely operated in a laissez faire market and now are increasingly coming under populist and government pressure. Trump is threatening Amazon, Facebook is being called to explain itself before Congress, Google faces anti-trust pressure – all represent the opening volley against the titans of tech.
But the pressure is not necessarily good for the consumer or, more importantly, liberty.
Beyond the immediate hit to Amazon’s stock price, actual follow through on Trump’s suggestions would breach the boundary of excessive government control and set a precedent for future interference and coercion of businesses by an executive.
It is counter to the ideas of limited government and a free market to single out one company for such treatment, but the Trump administration is intent on applying government pressure to the sprawling company.
“”So this is an issue that we’ve been looking at very carefully within the administration, and we expect to come out with a position shortly,” Mnuchin said. “I am encouraged that Amazon is now charging tax, I believe, on their own sales but not the marketplace. I’m not sure I understand the consistency on that, but I respect the states’ ability that there’s an awful lot of money that’s not being collected.”
Mnuchin was referring to e-commerce giant’s “third-party” marketplace, where other firms sell goods on Amazon’s website. In its “first-party” business, the internet company sell products directly to customers.
More recently, Mnuchin told the House Ways and Means Committee hearing in February that the administration “feels strongly” the government should institute a sales tax on internet e-commerce.”
In as much as the focus and pressure on Amazon, Facebook and others represents a trend to curb their heretofore ascendant success and perceived influence, the costs of the Big Government moves will ultimately be born by consumers.
Read more about Trump’s view of Amazon here.