Slashdot Mirror
Amazon Folds In California Sales Tax Deal
theodp writes "In a deal indicating all sides appear ready to call a truce, the San Jose Mercury News reports that Amazon.com is offering to back down from its referendum drive to repeal an online sales tax in exchange for a one-year moratorium on collecting the tax. Under the deal, Amazon would agree to begin collecting the tax from California residents in September 2012, unless Congress takes action on Internet sales taxes before then. The development comes a day after a NY Times editorial ripped Amazon over its sales 'tax dodge.'"
One more reason to leave California.
I once took an excursion to Reddit, and later HN. Unlimited up/down voting sucks when dealing with a hive-mind.
The consumers who are purchasing from Amazon and sites like it are dodging sales tax, not Amazon.
Those people have a LEGAL requirement to self-report those taxable items on their yearly tax returns and pay any and all sales tax due on said items at that time.
Just because those people aren't doing so, doesn't put Amazon and other online sites in the wrong.
Amazon also agreed to join with brick & mortar stores to begin lobbying Washington for a national internet sales tax. Think about that.
Sales tax is the most regressive form of taxation in the United States. If sales tax is 30%, that means the poorest of the poor are paying an effective tax rate of 30%, because they need to spend every penny they make in order to survive. Meanwhile, if you look at someone who makes $30 million a year, spends $2 million on taxable goods, and invests or saves the other $28 million, they end up paying an effective 2% tax rate.
It's obviously not "fair" to tax each person the same dollar amount. Why do people think it's "fair" to tax each person the same percentage? I'd call it most fair to impose the same financial burden on each person through taxes, which means that we're able to take a much, much larger percentage of a very rich person's income before they're seriously inconvenienced by it.
All this occurred because customers flock to Amazon like buzzards to a carcass so they can buy merchandise without having to pay tax (outside of WA).
I don't buy books from Amazon because I avoid taxes, I buy from them for the convince of wanting something and having it two days later without having to waste an hour to go get it. I like local bookstores for when I don't know what I want, and just want to browse... Borders did not deliver well on either use case.
Thus is Borders dilemma - why would I support them over Amazon? You get none of the happy feeling of supporting a small local bookstore. Yet you get none of the vastly larger selection that Amazon has. Borders were huge, but what was really in there? I always found a better selection either at a small local bookstore or as I said Amazon, and that was what really killed them.. there is no room in the middle for something inherently specialized where small local businesses can do a better job addressing regional tastes in books than a large chain.
"There is more worth loving than we have strength to love." - Brian Jay Stanley
In case anyone forgot, the US gov't - and by extension the states - aren't automagically entitled to a piece of everything.
Property taxes are generally to provide for local services, police, fire, streets, education.
Income taxes are generally meant to fund the operation of government, and its (allegedly) limited functions.
Gas taxes are essentially a user fee, to fund use of the highway system (and ironically to help fund the poor struggling oil companies through tax breaks).
Sales taxes are likewise LOCAL in function - they're justified by the 'infrastructure' that allows commerce to happen.
So why should internet retailers pay local or state sales tax? Everything's already been paid for at least once.
In terms of the bandwidth needed to secure the transaction and the shopper, both the shopper (through his internet fees) and the vendor (through his bandwidth charges, etc) are already paying for the hardware - wires, property easements, hefty communication taxes. In terms of shipping the goods from the vendor to the customer, someone on one end or the other is paying postage that supposedly already covers this. The seller, through the price of his goods, covers his business costs, property taxes (and the concomitant services already covered therein), etc.
About the only thing that isn't explicitly or implicitly paid for in an internet sale is the bureaucracy involved in administering, levying, and collecting the tax. Put another way: without internet sales existing, government operates, and provides a certain level of services to the public. This should be covered by tax revenues. Now add internet sales to the picture. What specific service is the state providing that it didn't provide before? I can't think of a one. Sure, the police have started branching out their pedo squads to the interwebs, and the state Attorneys General have some more fraud cases to investigate, but I doubt either of those functions have been a net increase in manpower or services - rather, they've drawn resources from other functions already performed to add these to the mix.
Yes, cue the Liberal Left posters who cheerfully want to pay more taxes. I invite them to do so. But the fact is that the US and State governments are not entitled by their very existence to a piece of every transaction that takes place in this country.
We the people need to fund our government adequately, and we do so through a varied panoply of taxes. But a bewildering array of taxes doesn't mean that we need to sit back passively and let ourselves be double-dipped just because legislators have built too confusing a structure to figure out.
-Styopa
My guess is that they have a better plan up their sleeve.
Presumably they're thinking Congress will do something before the 1 year wait is over.
Yea, congress is going to effectively increase taxes in an election year. Sure thing.
I don't know, but it works for me.
Sales tax does not work for securities and investments.
If securities were taxed at 30% when you purchased it, it would mean that you have to get a 30% return on your money to break even. Stock traders would not exists because they would have to pay taxes every time the purchase something, even if they lose money. Commodity markets will fail for similar reasoning. If you are a middle man who can add 10% value to a product and resale it, you would still lose money.
Income tax is much more appropriate in these scenarios because you only are taxed on the money you gains. If you buy something at $100 and sell it at $110, you are only taxed on 10 dollars of income. With a sales tax, you make $10 in income but have to pay $30 in taxes resulting in a net loss of $20.
This issue isn't really Amazon's or California's fault. California wants to tax online purchases (especially Amazon's) because it is a profitable income source they have not been tapping into. Amazon wants to avoid it because they profit of off their customers preferentially buying online to avoid state taxes.
I think what this really highlights is the difference of opinion between American citizens and the state governments on sales taxes. People feel that they already pay an income tax and don't want to get taxed again when they buy things. The cash-strapped (and mismanaged) government doesn't want to lose that income source.
Personally, I am disappointed that Amazon is caving. I was hoping for their referendum to make it to a vote to see the actually CA public opinion on this issue. But then again, I never think it is a good idea to give more money to any organization (private, state or federal) that cannot balance its current budget.