Wednesday, July 13, 2011

Sales tax and California

Ran across this today about Amazon's behavior:

In other words, this isn't an argument between two equally reasonable positions. It's an argument between reason and emotion, between your brain and your gut. Amazon has no intellectually sound arguments against collecting taxes from residents—by all ethical and civic standards, its position is unsound. Instead, Amazon is counting on our emotions prevailing—on loyal, tax-savvy customers like me lashing out at our price-hiking legislators. I worry that there's a good chance Amazon—and people like me—will prevail.
That's why Amazon is launching a second front in the battle against sales tax. On Monday, it announced that it would support a ballot initiative to overturn California's law. Amazon's vice president of public policy, Paul Misener (aptronym alert!), put out a statement that borrows from the rhetoric of the Tea Party. The ballot initiative is "a referendum on jobs and investment in California," he said, and "with unemployment at well over 11 percent, Californians deserve a voice and a choice about jobs, investment, and the state's economic future." If Amazon spends substantial sums to push such a ballot measure next fall, it's hard to see how it could lose. The ads write themselves: Don't let greedy lawmakers tax your Internet purchases!

Though I doubt most voters would care to pick apart such a populist message, such a sound bite falls apart under scrutiny. For example, the idea that Amazon is an "out-of-state" retailer in California is a complete fiction. Amazon owns several subsidiaries whose primary offices are located in the state. Within a 30-minute drive from my home, I can visit some of Amazon's most important divisions—A9, which builds its product search engine, is located in Palo Alto, while Lab 126, the Amazon office that designs the Kindle, is in Cupertino. Amazon has also repeatedly claimed that the California law is unconstitutional, but it has not (yet) filed suit against the measure. I suspect it's afraid it might lose on the merits—that any judge who hears that Amazon builds its most successful product in the state will declare the company to be as Californian as Apple Inc.

<idle musing>
Be sure to read the whole thing. The bottom line is we, as a nation, need to decide whether we are in favor of the common good, or are we in favor of our own little slice of whatever. Of course, if we decide on the slice, it will disappear; look up "tragedy of the commons" on a search depravity is real.
</idle musing>

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