The Supreme Court ruled yesterday that states can collect taxes on e-commerce sales, even from retailers with no presence in their jurisdictions.
The WSJ reports that state tax officials are already revving their engines, and may act within weeks. President Trump, who has criticized Amazon for dominating e-commerce and eroding American jobs, tweeted support for the ruling.
It sounds like bad news for online retailers, and stock prices dropped at many of them. But small retailers are likely to suffer more than giants like Amazon, as are consumers.
Buyers in states with high sales taxes, Jessica Melugin of the Competitive Enterprise Institute argues in an NYT Op-Ed, are losing the option to “vote with their wallets” by choosing online retailers based elsewhere:
It is the online equivalent of the gas station attendant calculating your tax based on where you live, not where you are pumping gas.
And Bloomberg Opinion’s Sarah Halzack explains why Amazon has little to fear:
Increasingly, Amazon’s value proposition to shoppers is as much — if not more — about its vast selection and its speedy delivery than it is about rock-bottom prices. This decision does nothing to alter the convenience of shopping at Amazon, meaning it leaves Amazon’s most important advantage intact.
Banks didn’t sweat in the latest stress tests
Nearly all of the big American banks passed the Fed’s latest check of their financial health with flying colors. So they could keep lending even if the economy went south. (The only small stumbles were by Goldman Sachs and Morgan Stanley; that could affect their ability to pay dividends.)
Wall Street’s take? That the government can, and should, now let banks take more risks. Regulators appear amenable: “We want to tailor those regulations for institutions,” Jerome Powell, the Fed’s chairman, said earlier this month.
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Continue reading the main story
Peter Eavis’s take: The robust health of banks is in stark contrast to their near-death state a decade ago. But the resurgence is evidence to some that the post-crisis rules haven’t stopped lenders from making good money. To some industry skeptics, that suggests restrictions should remain.
Trump’s trade war could hurt American innovation
The Trump administration has repeated its argument that a trade battle is necessary to stop China stealing American intellectual property, and using it to dominate the industries of the future. The president demonstrably has valid concerns — but his approach may backfire.
One example: Paul Mozur of the NYT describes a heist of American intellectual property, in which engineers at a Taiwanese semiconductor company tried to smuggle designs from Micron Technology into China.
But Jim Tankersley and Cade Metz of the NYT explain that the administration’s focus on tariffs may be misplaced:
Experts in artificial intelligence say the administration should push for more investment in academic and government research, instead of cutting back on scientific research across the government.
Elsewhere in trade: The European Union has struck back at the U.S. by introducing tariffs on $3.2 billion worth of American goods. Commerce Secretary Wilbur Ross argued that the trade wars aren’t hurting the U.S. economy, and that America has “more bullets” left. And how the global trade fight and uncertainty over the Iran sanctions are hurting Italy.
Shelters for migrant children are a billion-dollar business
An NYT investigation into the scale of the operations used to house, transport and watch over migrant children detained along the southwest U.S. border contains eye-popping numbers.