The Amazon tax
Archived — this story has rotated out of today’s deck. It is kept here in full.
The gist
Amazon earns nearly $1 billion weekly from search ads, which Seth Godin calls legal theft.
The ads distort search results, raising costs for consumers and harming product quality.
Background
Seth Godin's blog post criticizes Amazon's search advertising model, arguing it functions as a 'tax' on consumers by making search results less useful and forcing sellers to pay for ads to protect sales. He cites that Amazon makes nearly a billion dollars a week from search ads, and a study suggests ecommerce sites with search ads sell fewer items. This comes amid broader scrutiny of Amazon's tax practices and its receipt of $17.4 billion in federal tax breaks in 2025.
How it unfolded
- Aug 12, 2026Amazon's new distribution center in Niagara sees development costs rise, with a request to increase sales tax exemptions from $26 million to $29 million.
- Aug 14, 2026ITEP reports Amazon received $17.4 billion in federal income tax breaks in 2025, part of $83 billion across six companies.
- Aug 17, 2026Action Network petition urges Amazon shareholders to vote for tax transparency proposal at May 25th meeting.
- Aug 18, 2026Seth Godin publishes 'The Amazon tax' blog post, criticizing Amazon's search ad model as 'legal theft'.
Who’s saying what
- Critic
- Seth Godin argues Amazon's search ads are a form of theft that makes products more expensive and degrades quality.
- Analysts
- ITEP analysts highlight that Amazon and other tech giants received massive tax breaks, questioning fairness.
- Support
- Amazon's request for increased tax exemptions in Niagara is framed as necessary to complete a major development project.
Still unverified
Seth Godin's claim that Amazon's search ads are 'legal theft' is an opinion, not a legal finding. The study he cites argues search ads reduce sales, but its methodology is not detailed in the material.