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A Citigroup analysis finds each box gets a $1.46 subsidy.

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posted on Jul, 13 2017 @ 08:41 PM
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This is why modern capitalism is not capitalism as it was meant to be.


In 2007 the Postal Service and its regulator determined that, at a minimum, 5.5% of the agency’s fixed costs must be allocated to packages and similar products. A decade later, around 25% of its revenue comes from packages, but their share of fixed costs has not kept pace. First-class mail effectively subsidizes the national network, and the packages get a free ride. An April analysis from Citigroup estimates that if costs were fairly allocated, on average parcels would cost $1.46 more to deliver. It is as if every Amazon box comes with a dollar or two stapled to the packing slip—a gift card from Uncle Sam.


Nowadays, I find it almost enraging that the term "Uncle Sam" is loosely thrown around in reference to a separate sentient being that we just put up with. In this case, it is quite literally tied to the funding of the entity and guess who that is. You and I. The better term is we. We not only get to unwillingly, and in some part willingly should you order through Amazon, enrich the company through tax means.

This is not how it is supposed to work IMO.


Amazon is big enough to take full advantage of “postal injection,” and that has tipped the scales in the internet giant’s favor. Select high-volume shippers are able to drop off presorted packages at the local Postal Service depot for “last mile” delivery at cut-rate prices. With high volumes and warehouses near the local depots, Amazon enjoys low rates unavailable to its competitors. My analysis of available data suggests that around two-thirds of Amazon’s domestic deliveries are made by the Postal Service. It’s as if Amazon gets a subsidized space on every mail truck.


Source

This on its own isn't that huge of a deal. While not optimally the way our government should be backing up corporations, it is as the cliche goes, drops in a bucket.

However.

Michigan tax dollars will fund $18.5 million of the investment to bring Amazon's new distribution warehouse to Romulus. The company estimates the move is valued at $140 million, a pricetag that officials in Wayne County say could finally generate more development in the I-94/I-275 corridor with the "transformational" deal.

Source


Amazon is a worldwide multi-billion dollar corporation. Where does the sense collide with their ability to sustain themselves fall on taxpayers backs?


edit on 13-7-2017 by JinMI because: (no reason given)




posted on Jul, 13 2017 @ 08:53 PM
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a reply to: JinMI

Corps tip the game to favor them, in fact there are business strategies that count on govt services to keep their employees eating and living indoors (walmart).

The solution is called anti-trust. And it needs to apply more and more to these huge multinationals. But they lobby and it is going to be a rough road to get any action on. Our system is broken.
edit on 13-7-2017 by seasonal because: (no reason given)



posted on Jul, 13 2017 @ 08:59 PM
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a reply to: seasonal

Amazon ships mostly FedEx...



posted on Jul, 13 2017 @ 08:59 PM
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a reply to: seasonal

I agree. It needs to be pointed out and some action needs to be seen. My opinion is that this would be a valuable first step in the right direction instead of the constant blathering over welfare and social security. While those should be tackled, these are much bigger burdens.



posted on Jul, 13 2017 @ 09:35 PM
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a reply to: seasonal




in fact there are business strategies that count on govt services to keep their employees eating


Like Elon Musk's "Tesla" for example... without Government Subsidies this company would have gone under ages ago



posted on Jul, 13 2017 @ 10:00 PM
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a reply to: FamCore

One average Musk receives 1 million $ in tax money every business day.



posted on Jul, 17 2017 @ 04:35 PM
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originally posted by: lordcomac
a reply to: seasonal

Amazon ships mostly FedEx...

FedEx is on distribution side. USPS does the "last mile".

Amazon is getting into the distribution business with their aircraft. That will take a lot of business away from FedEx and UPS. The last mile will still go to USPS.



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