On Wednesday, Amazon shares fell by 7% which erased $52 billion from the company’s market value. Trump wants to change the Amazon tax treatment method. According to him, Amazon is affecting his business and reducing shopping malls and tax-paying retailers.
According to Axios report, Trump wants to “go after” this giant e-commerce company. He did this with the reference of five sources who have talked about Amazon with him. There is no change in US policy with regards to Amazon at this moment.
The Treasury Secretary Steven Mnuchin
The Treasury Secretary Steven Mnuchin indicated that administration may soon take an action on tax collection policy of Amazon’s. Treasury secretary was asked by Joe Manchin about his view on internet state sales taxes at a Senate hearing on July 26.
According to them, the issue is being looked out very carefully within the administration and will provide some solution. He further says that he is satisfied that Amazon started charging tax. He believes on their own sale rather than that of a marketplace. But there is plenty of money which is not being collected in the state.
Mnuchin further referred to Amazon third-party marketplace where other companies are selling goods on its website. While in first-party business the internet company sells products directly to the customers. In the Committee hearing held in February, he revealed that the administration also feels the same. The government should imply the sales tax on internet e-commerce followed by Amazon Tax Treatment policy.
Many states have passed the laws in which internet e-commerce need to collect sales taxes on behalf of its third-party sellers. These include Washington, Minnesota and Rhode Island in the list. This issue came in when tech stocks are already affected by the Facebook acknowledgment over the data breach.
Trump targeting Bezos and Amazon
Trump is targeting Bezos and Amazon from past few months. He also criticized Amazon and its founder and Chief Executive Jeff Bezos. Jeff is the richest person in the world with a net income of more than $100 billion. He has criticized Amazon on the basis of taxes and jobs in the past, without any critical evidences. Bezos owns The Washington Post newspaper which is repeatedly criticized by Trump in media.
Last year an issue was raised by Trump publicly. The issue called for an internet tax on all online retailers. Amazon already collects sales tax on the products which are sold directly to the customers. One of the White House officials revealed that the Trump has always been complaining about Amazon in his sessions. He believes that Amazon has become too powerful in internet e-commerce. According to him, Amazon Chief Executive Jeff Bezos is the private owner of the Washington Post is fake news. In his Twitter post, he called the newspaper as a mouthpiece for Bezos for the business interests calling it AmazonWashingtonPost.
A decline in Amazon stock
In past Amazon’s stock fell to $1,386.17 but on Wednesday it fell down to 4.6 percent at $1,427.83. This tremendous fall in shares was never witnessed by Amazon over the last three years. However, they tried to recover some amount of the stock. This change in stock value also affected Amazon’s founder Jeff Bezos’s personal wealth. According to Forbes Real Time Billionaire Index, his personal wealth is reduced by $ 3.5 billion(Rs.23 thousand crores). However, no strict decision is taken against Amazon till now.
Amazon has recently invested an additional amount of Rs 1,680 crores in India. According to his commitment, it invested $5 billion to expand its business in India. Amazon will continue to invest in order to expand its infrastructure. It will bring out solutions to enhance the experience of consumer and seller in the country.