Posted on 08/24/2011 12:42:32 PM PDT by americanophile
California recently instituted as part of its budget solution an “Amazon Tax” aimed at forcing out-of-state, online retailers with no physical presence in the Golden State to collect and remit sales tax in respect of goods sold to Californians where the retailer in question advertises, or maintains an “affiliate” referral relationship, with websites based within state lines.
Prior to passage of the bill obligating collection and remittance in such circumstances, prominent online retailers including Amazon.com and Overstock.com had threatened to terminate relationships with affiliates, if the legislation became law. Now that it has, and affiliate relationships are being severed, something critics of the legislation say was entirely foreseeable is occurring: Online businesses and entrepreneurs are leaving the state, thus risking an actual reduction, as opposed to marginal increase, in California’s tax revenue.
Last month, news broke of one California-based online entrepreneur who had decided to ditch California and move to Nevada in the aftermath of Gov. Jerry Brown signing the law. ”I always figured that in California, home to Silicon Valley and a million tech startups, they’d never pass a law like this,” said Nick Loper, who formerly operated ShoesRUs and has now opened a new venture, ShoeSniper.
Per the piece in which Loper is quoted, more than 70 affiliates had at that stage already left California, according to online businesses.
(Excerpt) Read more at biggovernment.com ...
If you tax them they will leave.
If output can be achieved with fewer people, the people whose jobs are eliminated can (must) find something else to do to create value. When this is done, we are ALL much richer (same number of people working - more goods and services to go around.) Mechanization, automation, computerization and robits is why we don't all work the fields all day to provide ourselves enough food to stay alive. A few people can provide food while others perform a million different functions to serve their fellow man.
“”Bottom line — California loses out on the state income tax that the affiliate would have paid.””
There are still a few states with no sales taxes....
Exactly!
As a small business owner who has to make decisions daily, some of which are far-reaching, I MUST look at situations and ask: What is the best scenario? What is the worst scenario?
I contend that almost all business decisions are risk/reward.
I almost never hear our politicians (especially here in California!) discuss possible "unintended consequences," and it is that that always kills us.
In my business, if I were to always put a positive spin on everything, I would soon be out of business ...because there are REAL consequences to my decisions, and these most certainly include the unintended consequences.
In a practical sense, we need a lot more pragmatic business owners running for office and a whole lot fewer lawyers. Ah, but I digress...
Universal truths are universal truths, regardless of whose name gets affixed.
Yeah, I forgot about Laffer.
Looking up “Laffer curve debunked” it’s obvious that naysayers are unaware that we’re on the upper side of the curve, and it’s obvious that if taxes are cut enough then federal tax revenue will, of course, decrease.
Right!
It not then you have robbed all those people of jobs.
Of course, that would mean that not many people would have mugs. And probably there would be no coffee. And there would be no Internet. No computers. No electricity. No cars. No steel plows.
In fact, we will have to get rid of plows all together since with them one man and a team of horses can do the work of ten men and so he is depriving those nine men of jobs.
Wagons will have to go too. They can carry more then one man can and so you are putting bearers out of work.
So I guess we will go back to living in huts, digging little holes with pointed sticks to plant seeds and grind our grain on two flat rocks BUT EVERBODY WILL HAVE A JOB.
Sounds like paradise doesn't it?
I had a vendor that made a special RS232 to multi-point printer protocol translator. It was slow and unreliable. I build a small C program that did the job from inside the UNIX machine. Bye bye vendor. The C program logged the data to the hard disk in the machine, so we could "replay" all the traffic if necessary. A capability the dedicated device could never do.
Lots of other big money savers inside the PacBell machine room. Suffice to say, my group returned a savings of $6 for every $1 expended on our salaries.
NEWSFLASH: CALIFORNIA IS A BUST.
Two things are certain ~ DEATH and TAXES.
You are stuck.
They avoided hiring well over 250,000 people at $40,000 per employee per year, or $10,000,000,000 perannum for an average of 17.5 years. That is a huge amount of money ~ $175,000,000,000 ~ worth just a bit more than two full years of total postal operating costs.
Frankly, I'm still mildly upset about not having gotten a special performance award for the effort ~ or maybe promotion to the top job at the age of 23 or so.
One of the problems you have with government work is that most folks involved in it actually imagine that the reason your idea was successful is that you were simply in the right place ~ not that you were a bright person who worked hard.
One of the guys who several years later created some useful enhancements to the basic device did end up as Deputy Postmaster General ~ and that was the end of his career. Bright guy; creative; but the Board of Governors has never approved of either attribute.
My film production unit is in Hollywood, but all of our accounting, legal, corporate work, insurance, and everything else we can possibly do is handled in the Hollywood of the Midwest . . . Dayton, OH :)
In a very real way I think liberals are demented, in that they literally cannot conceive of bad things happening in the first place. In the second place, they cannot conceive bad things would ever happen to them. And in the third, and this one is the scariest of all, they literally cannot believe that the actions liberals take can cause harm to others.
Their world view is twisted.
“...to collect and remit sales tax in respect of goods sold to Californians where the retailer in question advertises, or maintains an “affiliate” referral relationship, with websites based within state lines.”
Where the retailer *advertises*??? Does this mean if a online retailer in another state pays a California-based website to display an ad they have to charge sales tax to all California customers?
Those vain politicians tried, even though it failed in other states before. Watch, if Congress passes a bill to force buyers to pay the tax. The remedy will be far better against that move.
As we speak, a relative, one of the wiz kids of defense contracting, is on a world walk-about to establish his headquarters and manufacturing outside the US. He will still sell toys to the USDOD through black budget contracts but he will be free of the "accumulation-of-wealth" restraints currently being practiced by the Obama administration.
this not only hurts the sales tax.
the state income tax gets hit too. (why do they even have one?)
Then there are those businesses which move out taking the jobs and or workers with them.
How did they propose to enforce a state law on a business outside the state?
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