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Amazon: The World's Most Dangerous Crony Capitalist

The bedrock of American commerce – and of the broader capitalist experiment – has always been competition.  If you can build a better mousetrap, invent a longer-lasting light bulb or more efficiently churn out widgets (or in this case, clichés), odds are your endeavor will encounter success.

It doesn’t matter who you are, where you come from, what you look like or what you believe - what matters is what you can produce.

Competition fuels all of the forces that drive our free market – inspiration, innovation, efficiency, accessibility, profitability and prosperity.  It is what cures diseases, crosses continents, crushes despots, cradles civilizations and – just to make sure we aren’t forgetting the point here –creates wealth.

Capitalism is the great invention that makes all other inventions possible – which is precisely why it must be protected from crony capitalist companies like Amazon.

Amazon is not operating on a level playing field.  Not only that, it is rigging many once-level commercial playing fields in favor of larger retailers – secure in the knowledge that it will get a larger slice of profits if it picks winners and losers based on volume.

It is also picking up government subsidies at a bargain basement price.  Since 2000, the company has received an astounding $1.5 billion in taxpayer subsidies from state and local governments.  Amazon promotes the fact that they collect state sales taxes on remote Internet sales, but the reality is with the subsidies they receive, its likely a wash or a loss to state and local governments.   Not only that, last year the company paid absolutely nothing in federal taxes – despite generating an estimated $177 billion in revenue.  From 2008 to 2016, brick-and-mortar retailer Walmart paid $64 billion in corporate income taxes.  Amazon – which added the value of Walmart to its market capitalization over that time period – paid only $1.4 billion.

Just this month, it was revealed that a $10 billion Department of Defense contract related to cloud-based data storage contained “a host of technical stipulations that only Amazon can meet.”  Not only that, congressional staffers warned of “serious and possible criminal violations related to the Amazon cloud DOD contract process.”

At seemingly every turn, the company is either receiving direct subsidies from taxpayers or evading taxes other retailers have to pay.  Or rigging government contracts so that only it can win them.  Not a bad return for an annual lobbying investment of “only” $10 million at state capitols around the country.

“It is time for public officials to stand up to Amazon on behalf of local communities and small businesses,” Richard Engel of the Free & Fair Markets Initiative wrote recently.  “Enough is enough.”

Engel is absolutely correct.  Make no mistake: Amazon represents a clear and present danger to American commerce – especially to the small businesses which drive employment and income growth in our nation.   These are the businesses being driven out of business in America, not because Amazon built a better mousetrap – but because it continues to rig the game.