Essentially any profit made by Amazon in Europe is faux booked to a Luxembourg office where it is then off-shored to another tax-haven. It then just sits there till Amazon can buy Congress to let them bring it back to US shareholders.
That money is effectively removed from the economy.
Any profit made in a local bookstore meanwhile will support the jobs of more people and will be taxed and will recirculate when those employees spend that money. Its because they are part of society and pay their way that Amazon can undercut them.
Your remark sounds as if it is the company's fault to act like this.
1) The first part is exactly how the EU was designed: operate from one country, reduce your overhead. Maybe it is not Amazon's fault that they comply with the rules?
2) The second part is exactly how the Congress wanted its tax laws: if you bring money home, pay your taxes, if you don't, we are not involved. Maybe it is not Amazon's fault that they comply with the rules?
That's fine, they act within the rules, but the rules are not set in stone, and neither does their public image depend solely on not breaking the law. The conversation is not about whether companies should voluntarily act in a certain way, it's whether the laws need to be changed. Or, on occasion, if the law cannot be changed, whether consumers can force change in an organized way, thereby making it profitable for the company to alter its behaviour. Companies are constantly shifting in response to campaigns, or in general to improve their image. It's not a legal requirement to use recycled cups or Fairtrade coffee, but many cafes will do that to look good. Companies shouldn't be surprised if the same sort of reputational damage applies to how they treat their workers or whether they pay a lot less tax than their rivals.
> That money is effectively removed from the economy.
Not really. If that money is stored in a bank, most of it will be loaned out. If it is used to buy bonds (including but not limited to government bonds) then it goes to the issuer. And so on.
Even if Amazon actually removed it from the economy by putting it under Bezos' mattress, that would boost the value of all remaining fiat, increasing purchasing power for everyone else. So consumers would gain a temporary burst of value, which they can utilize today; when the state then devalues fiat over time, Amazon's money will lose value, while the consumer will have locked in that higher purchasing power.
There is no scenario under which Amazon actually hurts anybody by 'removing' money from the economy. Money and wealth are not fixed sums anyway.
Bank lending to small businesses is way down since the start of the recession, and if they were inclined to start again they could borrow at nearly zero percent anyway. Bank leadership has been saying they don't see good opportunities. In that climate, Amazon's account makes no difference.
Amazon can't evade taxes for money earned in France. If you operate in France, and your business earns revenue in France, you pay French taxes. You can't magically offshore it without paying taxes and then expect to still operate there.
What actually happens is that Amazon makes no profit, and thus does not get taxed on profits. But it still pays VAT, Property, B&O, etc.
It's actually quite easy to evade taxes on money earned in a particular country, as you are allowed to subtract inputs from your tax burden.
So the French subsidiary buys very expensive inputs from the Luxembourg subsidiary, meaning the French subsidiary doesn't show a profit, mon dieu how could that have happened, such a shame!
Fortunately, the Luxembourg subsidiary is very profitable, exclusively from "sales" to the French subsidiary.
Obviously all of this typically happens only on paper.
The problem you raise is actually three problems. First is tax-avoidance by Amazon. Second is a massive online seller replacing many employees at the local level with fewer employees at a central location. Third is that the retailer is foreign.
The first problem seems better addressed by tax reform, since it impacts many industries other than book selling, and this measure won't stop it with Amazon anyhow.
The second problem is one of increased efficiency (to use an economist's definition) causing disruption. The French seem to have been resistant to that since the industrial revolution, so it might be helpful to understand this law in that context. It's hard to see how they're going to win that one in the long run, although prolonged skepticism to the benefits of efficiency might have helped create some of the social benefits in France. From the outside though it looks like this social bias has hurt France more than helped it (other countries have maintained robust social programmes without rejecting technological disruption) so I wouldn't welcome laws promoting it.
The third problem is not just a case of nationalism, but because it makes it harder to soften the blow of disruption by pointing to other local jobs in technology. It's comes down to an argument on globalization. The jury is still out on whether globalization will be a net positive or negative. To me it seems unstoppable, though, and I don't think it's wise to be on the wrong side of the trend.
As someone in the UK, I'm quite happy for amazon to provide me with low cost items on this basis. The tax is fixed rate VAT here in the UK so everything I buy from a tax dodge means I'm effectively getting a small rebate against my nearly £3375 a month (including income tax, NI and VAT) contribution to the state every month versus spinning another 20% into VAT.
Well, the people who work in the fulfillment centers are poorly paid. The software engineers, managers, and other employees that work within the organization are generally paid very competitively with companies like google etc.
Any profit made in a local bookstore meanwhile will support the jobs of more people and will be taxed and will recirculate when those employees spend that money. Its because they are part of society and pay their way that Amazon can undercut them.