Sunday, July 3, 2011

Spin Starts on California "Amazon" Tax Being Bad for Small Businesses

It's already started, and I guess we should have expected it.  The "Amazon" tax is bad for small businesses--Amazon affiliates.  So therefore, California shouldn't tax Amazon. So here's the spin: take a little truth, Amazon affiliates in California will be hurt, and then make it the whole argument.  Amazon has dropped California affiliates unceremoniously.  Did it have to? No, they could have just payed local taxes.  So of course, government, not Amazon will take the blame.

I do feel empathy for those who were dropped.  Don't get me wrong.  I feel their pain.  I also don't buy the argument that I suspect is coming from the other side--that it isn't that much money anyway.  For some of us, that few hundred or few thousand bucks a year or month makes a big difference. I regret that they will be impacted.  I'm sure that they have put lots of work into their websites.

Yet, Amazon as well as its affiliates have had an unfair advantage over the competition for years by Amazon not having to pay local taxes.  Why should Amazon, with representative with a website selling books locally not have to pay taxes when the person with the bricks and mortar store down the street has to?

I'm not going to argue constitutionality issues. I don't pretend to be a legal scholar.  But neither is Jeff Bezos.  Ultimately, this to me is about right and wrong and the future.  The world has rightfully embraced the Internet.  But, as Bezos and other Internet businesses capture more of the market through this unfair advantage, what is going to be sacrificed when fewer and fewer businesses are paying taxes?  Our schools, our roads, our critical infrastructure.  We can save with Amazon in the short term, but pay big time as our schools and infrastructure crumble, all in the name of a cheaper price.  Local taxes are some of the most visible tax dollars, and some of the most important. Just pay them Bezos.  Until he does, we shoppers have to take the high ground and buy local.  Which we should be doing anyway.

Let's look at it this way.  Say you live in a small town.  Now imagine that Walmart has driven out all of the locally owned small businesses with cheaper prices.  The only local retail store is Walmart.  Now, what if Walmart didn't pay any taxes?  Get the point?  No infrastructure.  Just pay the taxes Bezos.  For the rest of us, make the right decision. Don't buy Amazon. Shop local.  For books, and if you care about your neighborhood or town, for all retail.

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