Hacker News Reader

Comment by LightG | Hacker News Reader

It's a catch-22 ... would Amazon be this innovative had it been nationalised?

At what point do you nationalise? Is there a next technology which will be stifled if it was nationalise?

Does nationalisation sttifle innovation?

I've been wrestling with these questions as I actually don't like Amazon for all the reasons that have been well publicised ... but their customer service is excellent.

Which sets me against a string of recent bad experiences with local suppliers, getting stung, and thinking ... well, if Amazon treat me better, why shouldn't I move away from local suppliers and stick with the monopoly? Which goes against a lot I believe in.

I guess the problem is it's putting a lot of trust in Amazon. Which is itself an argument for nationalisation. I don't know.

View on HN

Amazon the marketplace isn’t terribly innovative. It’s a marketplace supported by fantastic logistics, and most of it is backed by USPS anyways. There’s only so much you can do to remove the pains from buyers, sounds like we’re there.

"Innovation" refers to practices like staying in the red for a decade and bypassing antitrust laws by owning (rather than monopolizing) markets.

It has little to do with technological innovation.

Precisely. Much of the "innovations" and "efficiencies" touted (by Amazon and by many other players) are actually not any material/physical/technical improvements, but financial games, buying competitors, operating at a loss, regulatory evasion, monopolisation, etc.

I mean, business/financial innovation is a legitimate kind of innovation. I'm not harping on Amazon for that. I just think that discussions about "loss of innovation" smuggle in some irrational fears about loss of technology when there are no real reasons to.

Right. I wonder how much competition Amazon has eliminated over the years with their shady business practices. That competition may have driven innovation even further.

> It’s a marketplace supported by fantastic logistics, and most of it is backed by USPS anyways.

Not any more, USPS was only used for shipping anyway.

Amazon has shifted to vertical integration wherever they can - they run everything they can, from air freight (with https://en.wikipedia.org/wiki/Amazon_Air) over their infamous warehouses to last-mile delivery with either in-house staff or "contractor" schemes set up to avoid labor regulations.

That last bit is an "innovation" I would (and have, when I could) pay many for to avoid. My mailman knows where I live, can enter the building with a key and knows my door. Amazon contractors keep calling me an hour ahead "will I be there?" then can't deliver the parcel to a nearby post office when I'm not. Over the last year of work-from-home this wasn't much of an issue but when you have a regular office job it can take a few days to get that parcel.

It's pretty amazing to me how unsophisticated the filters and search criteria are. There are so many products where I'd like to filter or sort on weight (for instance) and it simply isn't possible.

Nonetheless as a semi-monopoly you are rarely compelled to innovate like a smaller company is.

They can do better, no doubt, but it is a problem that sounds like it should be easy to solve, but becomes really rather tricky at Amazon’s scale and with their catalogue size, speed of updates to it, and general dependency on the quality of data provided by the sellers. Try defining good filter values when you have thousands of product categories with millions of products, many of which have poorly defined attributes, while all of this is subject to constant change. Quite a task.

Nothing is trivial at that size but given the immense resources and market power at their disposal, I find it more convincing that it's just not a priority because their market position is already too secure.

I heard similar excuses back in the IE6 heyday for how improving the browser was "hard". Realistically 94% market share just meant that it wasn't broken from Microsoft's perspective.

> and most of it is backed by USPS anyways

Amazon does not do business in US only

Yes, in UK wr have royal mail, and every other functional country has it's equivalent

> Amazon the marketplace isn’t terribly innovative. It’s a marketplace supported by fantastic logistics

These two statements contradict each other. The thing that Amazon does extremely well is logistics and that is core to their marketplace, not something else to the side.

Amazon.com in my opinion is a logistics company who happens to have a Website that sells products.

Amazon moves an item from point a to point b, and they do it fast and efficient enough that people go back to them again and again.

Last month, I ordered two pairs of jeans and a t-shirt from Eddie Bauer. They arrived in three different packages after about 10 days. With Amazon, it would have been 1 package that arrives the next morning or the following day.

If Amazon is abusing its position, substantial fines or regulations are the right solution in my opinion. I’m absolutely not in favor of nationalization. Any kind of government run facility, in my experience, is mind mumbling horrible at their job. They have no incentive to compete - which might eliminate bad behavior but it also makes for a terrible customer experience. Nationalizing Amazon is no different than just killing the company entirely.

Jeff Bezos will testify in front of congress that he will cease to be innovative if required to pay taxes.

Sounds like extortion to me.

How so? Whether or not amazon innovates should have no bearing on a decision by congress to levy additional taxes against them. If amazon decides to become shittier as a result, someone else can fill that void.

not sure which party you're talking about here

Does this imply he sees his ability to evade taxes as his only worthwhile innovation?

I think it implies that amazon can't both spend everything that would be profit on innovation while also paying the same money on taxes

Amazon pays mountains of payroll taxes, as they are one of the largest employers in the world.

The "Amazon pays no taxes" meme is a false one.

I think the meme is "Amazon pays no federal taxes on it's profits", and that is a correct statement.

If that were the meme, I wouldn't be trying to dispel it.

Even that is not really true. They paid no federal income tax in 2017 and 2018, but have before and since.

I'm no fan of Amazon, but you have to admit there is a pretty large distance between "Amazon pays no tax" and "Amazon pays billions in tax, but they didn't pay this one specific kind of tax a couple years ago".

https://www.cnbc.com/2020/02/04/amazon-had-to-pay-federal-in...

I think income tax is the most impactful and expensive tax we have in the US, it's the one everyone thinks of when someone says "doing your taxes".

The fact that Amazon just this year after not paying for 2 years had to pay a measly 1.6% in taxes does not really negate the argument.

Edit: 4 years -> 2 years

It really feels like you're twisting reality.

Amazon went 2 years without paying _income_ tax, not 4.

Amazon paid $3.5 billion in taxes in 2019 (some of which was differed, but still owed). That is over 25% of their income that year. Their federal income tax rate came out to 1.6%, but its borderline lying to say "they paid a measly 1.6% in taxes".

Amazon is an awful company. There is no reason to bend the truth to try and show how awful they are. Being disingenuous only makes your argument weaker.

I misread the article, and I'll correct the 4 to 2 years now.

Income is income though, not sales or payroll which are the expected and manageable operating costs of overhead and human resources.

If I win the lottery, almost 50% of my winnings go back to the state, and I haven't even bought anything with those winnings. What's different about Amazon having a banner year?

Because that's how lotteries work in the US. Companies don't have to be behemoths to pay no tax on income. They just have to post no profits by spending all the money they make on opex and capex.

I understand the system, I just want to be clear how broken this is.

Both are windfalls, one gets taxed immediately, the other gets taxed if they don't use up all their profits reinvesting in themselves by the end of the year.

I don't see how you can think this is broken. Think about the implications if it wasn't like this. Bankruptcy would be rampant and R&D investment would be impossible for everyone but the largest companies.

I disagree, as these companies already calculate how much they need to spend to prevent having to pay taxes.

That doesn't matter. They're still spending it, rather than keeping it as profit.

Well yes, governments tend to like their industrial bases growing and are willing to wait for bigger gains over a longer time period. That isn't broken it is by design.

How are they windfalls? For whom?

> What's different about Amazon having a banner year?

The big difference is that Amazon is a company.

If Amazon decides to pay out large bonuses or dividends with its surplus, that gets taxed at the same rate as your lottery winnings. Before that happens, the income is Amazon's and not an individual's. There is no reason to expect the corporate income tax to behave the same way as individual's income tax.

This is quite pendandic. When you calculate your tax rate do you also include GST(VAT)? Because this is essentially the same thing.

I guess it depends on the context. When I am filing my income tax, I am focused on that. But when budgeting or discussing tax liability in general, I certainly don't forget about the tens of thousands of dollars I pay in local, sales, SS, etc taxes.

I would certainly not make the claim "I paid no taxes this year" if I managed to skirt only federal income tax.

Isn't that also incorrect? It would presumably pay the normal corporate tax on it's profits. It's just that Amazon reinvests it's revenue and thus has no (or little) profit.

Isn't it the workers who (whom? I never know) pay the payroll tax? That's their money, in exchange for their time spent on work, that's not Amazon's money. This doesn't make sense to me.

In the US, "payroll" taxes are split between employer and employee. The biggest items that fall into payroll are Social Security and Medicare.

https://www.taxpolicycenter.org/briefing-book/what-are-major...

in USA it works like: pay is $100. then take home is $80 because $20 is taken out for various payroll taxes. then also the company pays $20 for their portion. employees only see the -20 from them, not the +20 from Company on wage stubs.

also, if the company has profits there is some tax on that (well, my little C-corp did)

(numbers are made up to show process)

> Does nationalisation stifle innovation?

I would argue that it does not. We have a lot of innovations from the last 100 years that have come from state-run projects / endeavors.

The more I think about it the more it looks as though private ownership stifles innovation if there isn't a direct profit motive for it.

Being a monopoly of any kind stifles innovation.

It's often better for the state to react to private monopolies/oligopolies by entering the space and competing with a bare bones service. This has worked in banking, telecoms, land development, housing, etc. It often works better than taking over the monopoly directly. It's one of the reasons (IMHO) Singapore has such an effective private market.

Often private companies lobby for laws restricting the level that they can compete - this is a signal that it's an effective tactic.

If USPS were given a mandate and the cash it could absolutely build a marketplace that could compete and it would probably kick start Amazon into being a better and cheaper retailer. Unfortunately it's being whittled down to a husk of its former self.

Reply on news.ycombinator.com