Amazon.com, California Thanks You for Potholes

Amazon.com ruined my day today. I was walking around Lake Merritt, as I do every day with my friend, Susan Southwick. I was approached by a dweeby looking guy with a clip board asking me to sign my support for an initiative that would allow Amazon.com to continue evading the collection of California sales tax, as they have done since their inception in 1996. The dweeby guy said that the initiative would lower taxes and create jobs. Instead of walking away, I decided that I would scream at him and proceeded to do so for 10-15 minutes. I accused him of …well, I won’t bore you….pretty much everything in the book.  I felt really great and  energized when I finally told him that I had nothing but contempt for his pathetic, impoverished, morally bankrupt life. I had a few more nuggets to tell him after that, but Susan had become embarrassed by the scene and had started briskly walking away down the path.

 

Let’s back up. Recently California passed a law requiring Amazon to hand over the estimated $83,000,000  in  uncollected sales tax revenue for 2011  and to start collecting from California customers  going forward.  A number of states have decided that it is time to have Amazon do its duty. After all Amazon benefits immeasurably from the maintenance of roads which   allows Amazon to deliver their goods to customers. The company profits  from the sales tax support of public education that creates consumers of books. And let’s not forget that sales tax help  pay for police, fire, and emergency services that give us the basis of an orderly society, without which no commerce – no civilization even — could exist.

 

 When the new California law was passed and signed by the governor, Amazon within hours cut off the thousands of “associates” in California, many of them PTAs and non-profits who direct sales to Amazon and get commissions to fund their good works. In a breathtaking exercise of shameless chutzpah, Amazon claimed that by allowing  the world’s largest online company to evade sales tax so that they can unfairly compete against local business, the state is  harming small businesses and killing jobs in California. Many of the associates who  unceremoniously had their commissions from Amazon cut off with 12 hours notice seem to be buying this argument. A classic example of victims identifying with the executioner.

 

Which brings us back to the dweeb at Lake Merritt. Not content with pulling the plug on the associates, Amazon has bankrolled a ballot measure with a sort of Orwellian name like “tax fairness initiative”. And so the California initiative process, originally created to give power to the people, once again is being manipulated by big out of state business to harm the people in  the state.

 

Let’s engage in a mental exercise. California claims that Amazon owes $83,000,000 for sales tax for 2011 alone. Let’s estimate that in the last five years Amazon has evaded conservatively $300,000,000 in sales tax collection. Here is what California could have done with the money.

 

  • Hired 3000 elementary school teachers.
  • Hired 2000 police officers
  • Funded music programs in 1000 schools
  • Fixed 3,000,000 pot holes
  • Hired 2000 university professors
  • Provided academic scholarships  for 7500 students
  • Saved the lives of 1,500,000 puppies
  • Funded 1000 homeless shelters
  • Paid for school lunches for 300,000 needy kids
  • Bought 10,000,000 books for schools and libraries (And if those books were bought from local independent book stores, it would create thousands more jobs for people who pay taxes to California. And I might add allow those stores to survive and thrive and offer a richness to local communities that Amazon cannot match.)

 

Tax fairness, indeed!

Helping small business, indeed!

More jobs in California, indeed!

 

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11 Responses to “Amazon.com, California Thanks You for Potholes”

  1. Kay Elam Says:

    Well said. I admit I like buying things online when I don’t have to pay sales tax (or shipping, but that’s another story), but I can see the big picture. Our society has got to stop the “something for nothing” mentality and start taking personal fiscal responsibility. I’ll gladly pay sales tax to Amazon, but would rather have paid it to my local Borders that closed. Did I order from Amazon instead of running to Borders prior to its closure. Sure, but it wasn’t because I didn’t have to pay sales tax, it was a matter of convenience. Now I no longer have that choice.

  2. Paul Rauber Says:

    You tell ’em, Andy! I’ll yell at the next one I meet too.

  3. Gilles Poitras Says:

    Not to mention that every customer has been required by law to pay the use tax on those purchases. How many people even know they are required to do so?

    I make a point of only ordering from (very few) small businesses online. I save all the receipts and pay the use tax each year when I file my state income tax paperwork. I’d rather the retailer collect the money from me so I don’t have to go through extra work.

  4. LupLun Says:

    You lie. There’s no way there are 1,500,000 stray puppies in California.

    -LupLun
    Lupines and Lunatics

  5. Joe Says:

    As an affiliate marketer on the East Coast which has seen clickthroughs and revenues to my site rise since the law was passed, I thank California. The extra money I’m getting in my business is helping me hire new employees and give my existing employees much-deserved raises and bonuses. In turn, they pay more income taxes to my state.

    Instead of extracting tax money from sources you’re not entitled to (claiming that a work-at-home affiliate marketer forms a tax nexus is really a stretch), why not encourage more entrepreneurship and creation of value?

    You claim to be a literary agent. But I would think twice about hiring an agent that thinks that my profits should be taxed by states that have nothing to do with me and that I have nothing to do with.

    • andyrossagency Says:

      Joe,

      You are certainly welcome to work with any literary agent you please, but I think you are confused about the issue. You are assuming that California is “extracting” tax revenue from Amazon, an out of state corporation. That isn’t technically correct. The state is requiring that Amazon only collect sales tax from California purchasers. There is no tax on Amazon and there is no reason to believe that such a requirement to collect tax which is legally due the state in any way harms competitiveness.

  6. Ilana DeBare Says:

    Go Andy! I am conducting a one person boycott of Amazon since they started their sales tax war on the people of California. I buy a lot of books in indie bookstores but when I need to shop online, I now go to BN.com.

  7. Beth Says:

    I couldn’t agree more, Andy. Thanks for the rant.

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