There are contrasting takes on the “Internet sales tax” bill being considered by the Senate at the Washington Post and the Wall Street Journal.
There’s something that appears to go unmentioned in both articles. I understand how requiring online vendors to collect and remit sales taxes will improve the balance sheets of state and city governments. How will reducing retail sales improve the lots of consumers or perk up the economy?
It would also move at least some business to brick and mortar stores, which tend to support more jobs than online businesses. Amazon’s revenue per employee is roughly three times that of Walmart.
It would move at least some business to brick and mortar stores, which tend to support more jobs than online businesses. Amazon’s revenue per employee is roughly three times that of Walmart.
It wont.
Let me fix that for you,
.
Sure. Thanks for the correction.
What do you think is the right policy decision in this case?
Tough to say in that state and local governments need the revenue…things at that level are often wildly out of whack. And one way to get them back closer to sustainability is to add revenues. Of course, that ignores how they got into such a mess to begin with: unsustainable policies, mostly retirement plans for state employees.
On the other hand, more economic activity is almost always a good thing and this could reduce that. Not sure how much this would help brick and mortar as they’d also have the tax burden. It is possible internet businesses cut back more than is gained from brick and mortar.
Probably the ideal approach would be to keep the total level of taxation constant, lowering the tax rate overall, while expanding the number of businesses taxed. Not likely to happen in the context of federal legislation, but states could do it.
I also wonder if the revenue expectations from internet taxation is too high. On an average week, I buy nothing from the internet and I’m probably closer to the norm than most bloggers, etc.
Legal Insurrection adds the following to the Marketplace Fairness Act dialogue, now up for consideration:
EBay is fighting it. Amazon is now supporting it, as is the prez.
Personally, I don’t see how state and local sales taxes can work long-term without something that accounts for internet sales. Internet commerce is only going to grow.
In the case of Amazon – and let’s face it, that’s who we’re talking about – it will slow Amazon’s attempt to quite literally obliterate all competition. People need to understand something: Amazon is not a competitor, Amazon is the fwcking Mongols. They are out to rape and pillage and destroy. Part of what allows them to play Genghis is the edge they gain from a situation that requires their competitors to pay sales tax which they avoid.
I use the Mongols advisedly. When Genghis started out no one knew what they were up against. People thought he could be bought off, they thought he could be taken on, they thought he might be raiding for a few goats. But he was out to destroy everything and everyone in his path and the world had never seen his like before.
That’s Amazon.
The government is giving Amazon an edge, an unfair advantage. Turn it around the other way and government is penalizing everyone but Amazon. They need to stop.
@michael, I’d say amazon is supporting an internet tax now (as opposed to in the past) because it helps amazon maintain a competitive advantage on any potential rival. There are two phases to conquest, destroy the status quo, then create a new status quo. An internet tax seals amazon’s dominance under the new status quo, since startups will have another hurdle to overcome, both in the lack of the tax advantage amazon had when it started, but also lack of amazon’s institutional knowledge of state tax/regulatory compliance. Many internet retailers will probably find it easier to outsource the compliance matters to amazon.
@Michael Reynolds,
Correct, and I say that as an avid Amazon user. Beezos has been blessed with an unfair advantage and has exploited it to become a behemoth crushing everything in his path.
But this is still an increase in taxation at a time the non-government sector can ill-afford a reduction in incomes. The measure should be offset by a tax cut elsewhere or a spending increase. Doesn’t matter which, the two are identical.
@michael reynolds
Genghis would give a city the opportunity to surrender. If they refused, they would kill almost everybody and destroy everything. Those alive would spread the word. They usually did have to make a few examples, but if a city or state paid the yearly tribute, they would be mostly left alone.
Genghis did take the best craftsmen and artists to his court as slaves, but they were treated well. Genghis was a Renaissance man before the Renaissance. He welcomed various religions, and I think he tried to kidnap the Pope. Under Genghis, the Silk Road was also re-established.
I think the Borg is more apt.
Amazon has two somewhat conflicting primary business lines, not one.
On the one hand, it’s the largest Internet retailer. On the other it’s the largest provider of services to online retailers. I think that Amazon’s support for extending local taxes to Internet sales is an instance of Amazon being willing to sacrifice some of its own retail sales to extend its services business. Which should tell you which way the wind is blowing.
Speaking of obliterating the competition…
“We come from the land of the ice and snow
from the midnight sun where the hot springs blow
Camber of the course would drive our ships to new lands
To fight the horde and sing and cry, Valhalla, I am coming
On we sweep with, with threshing oar
Our only goal will be the western shore
Ah-ah-ahh-ah, ah-ah-ahh-ah
We come from the land of the ice and snow
from the midnight sun where the hot springs FLOW
Such a field, so green
can whisper tales of gore, of howling calmed and tides of war
We are your overlords
On we sweep with, with threshing oar
Our only goal will be the western shore
S-so now you better stop and rebuild all your ruins…………
Ah, yes. Another late, late night of travel hell……
Genghis was Hitler. He committed arguably (stats are understandably sketchy) the greatest mass-murder in human history. We’re now trying to rehab Genghis a bit because, well, time has passed. But the reason the Mongols were able to establish trade routes was because they had murdered everyone along the route and thus had little to fear from bandits. A favorite Mongol trick was to put a city to the sword, leave, let the few survivors creep back in from the fields and forest, then come back a week later to murder them.
So, not nice people, and their “accomplishments” are much like Mussolini’s ability to make the trains run on time.
Amazon is out to destroy. They can’t turn a profit until they destroy all competitors. Once that’s done they’ll have an effective monopoly and I’m no economist but I’m pretty sure monopolies don’t lower prices.
The only question is how long stockholders will continue to tolerate Amazon’s con game. If gravity reasserts itself and Amazon has to actually show a profit, they’ll be stopped. If not they will destroy vast swathes of business and put lots of people out of work and then bend the consumer over and give it to ’em good and hard.
@michael reynolds
My knowledge of Genghis was obtained long ago, and I am unaware of rehabilitation efforts. His exploits never bothered me. He was a man of his time. It was a brutal time, and he was the most brutal. The Mongols rode hard and fast. Anything that got in their way they slaughtered. Anything that stayed out of their way they mostly left alone.
History should be considered in the time of the events. In Hitler’s time, slaughtering people was not considered a good idea. This idea probably began some time after the Renaissance, but I do not have time to study it.
I will note that for all the modern horror at mass violence little is actually done about it.
I have thought little about Amazon. They are shaking up the publishing world, and I think it needs some shaking. I have read a few negative things about the Amazon Marketplace, and it is troubling. Since they track all sales, they know which products are selling, and I have read that they then sell the same product cheaper.
I do not believe that a monopoly can be sustained without government support. Amazon may be using some government regulation, subsidy, or something to enhance its competitive advantage. The solution is to remove the advantage. I have no doubt that Amazon will use the tax issue to remove competition.
Although I’m the one who brought Amazon into this, I’m sort of regretting it now. They support this bill – belatedly, of course – for the reasons Dave and PD Shaw get at: it helps them in the long run.
But the bigger question to me, which no one else seems to be addressing, is how current policy on this topic picks winners and losers in the economy – with the losers being the firms more likely to generate employment.
I don’t expect brick & mortar to have a huge rebound if the sales tax is evened out, because there’s plenty of other reasons why people shop online. But it’s one more factor that contributes to the ongoing labor market problems.
But the bigger question to me, which no one else seems to be addressing, is how current policy on this topic picks winners and losers in the economy – with the losers being the firms more likely to generate employment.
When have winners and losers not been chosen in human history? Power wielded by those that have it will be used against those who do not.
And thus shall ever be.