Amazon.com, California Thanks You for Potholes

By Andy Ross

From: Ask the Agent

Amazon.com ruined my day today. I was walking around Lake Merritt, as I do every day with my friend, Susan Southwick. I was approached by a dweeby looking guy with a clip board asking me to sign my support for an initiative that would allow Amazon.com to continue evading the collection of California sales tax, as they have done since their inception in 1996. The dweeby guy said that the initiative would lower taxes and create jobs. Instead of walking away, I decided that I would scream at him and proceeded to do so for 10-15 minutes. I accused him of …well, I won't bore you….pretty much everything in the book. I felt really great and energized when I finally told him that I had nothing but contempt for his pathetic, impoverished, morally bankrupt life. I had a few more nuggets to tell him after that, but Susan had become embarrassed by the scene and had started briskly walking away down the path.

Let's back up. Recently California passed a law requiring Amazon to hand over the estimated $83,000,000 in uncollected sales tax revenue for 2011 and to start collecting from California customers going forward. A number of states have decided that it is time to have Amazon do its duty. After all Amazon benefits immeasurably from the maintenance of roads which allows Amazon to deliver their goods to customers. The company profits from the sales tax support of public education that creates consumers of books. And let's not forget that sales tax help pay for police, fire, and emergency services that give us the basis of an orderly society, without which no commerce – no civilization even -- could exist.

When the new California law was passed and signed by the governor, Amazon within hours cut off the thousands of "associates" in California, many of them PTAs and non-profits who direct sales to Amazon and get commissions to fund their good works. In a breathtaking exercise of shameless chutzpah, Amazon claimed that by allowing the world's largest online company to evade sales tax so that they can unfairly compete against local business, the state is harming small businesses and killing jobs in California. Many of the associates who unceremoniously had their commissions from Amazon cut off with 12 hours notice seem to be buying this argument. A classic example of the victim identifying with the executioner.

Which brings us back to the dweeb at Lake Merritt. Not content with pulling the plug on the associates, Amazon has bankrolled a ballot measure with a sort of Orwellian name like "tax fairness initiative". And so the California initiative process, originally created to give power to the people, once again is being manipulated by a big out of state business to harm the people in the state.

Let's engage in a mental exercise. California claims that Amazon owes $83,000,000 for sales tax for 2011 alone. Let's estimate that in the last five years Amazon has evaded conservatively $300,000,000 in sales tax collection. Here is what California could have done with the money.

• Hired 3000 elementary school teachers.
• Hired 2000 police officers
• Funded music programs in 1000 schools
• Fixed 3,000,000 pot holes
• Hired 2000 university professors
• Provided academic scholarships for 7500 students
• Saved the lives of 1,500,000 puppies
• Funded 1000 homeless shelters
• Paid for school lunches for 300,000 needy kids
• Bought 10,000,000 books for schools and libraries (And if those books were bought from local independent book stores, it would create thousands more jobs for people who pay taxes to California. And I might add allow those stores to survive and thrive and offer a richness to local communities that Amazon cannot match.)

Tax fairness, indeed!

Helping small business, indeed!

More jobs in California, indeed!