Greed drives anti-Amazon tax campaign
Greed and fear are the appropriate tags to place on Amazon.com, as well as on eBay, Overstock Inc. and other big Internet-only merchants opposed to playing on a level field with brick-and-mortar outfits that actually pay rent or property taxes in California.
The so-called "Amazon tax," adopted by state legislators and signed into law by Gov. Jerry Brown as part of California's newest budget, is not a new levy. This is a tax-fairness measure, seeking only to make sure that almost everyone selling in California pays the same basic share of the freight.
Amazon, of course, tries to frame its opposition differently as it begins a drive toward placing a referendum on next November's ballot to reverse the new law requiring online merchants to collect a basic 7.25 percent sales tax on goods sold to Californians.
"This is a referendum on jobs and investment in California," claimed Paul Misener, Amazon's vice president of global public policy.
Actually, no, it's a referendum on whether people who buy from Amazon, eBay and other online sellers, should continue to pay at least 7.25 percent less than folks who buy at Wal-Mart or your local hardware store. Amazon wants its customers to pay less than others for the same goods because that assures it a larger share of the market. An uneven playing field is part of the firm's basic business model.
To see how predatory this company is, look no farther than the action it took the day after the law passed. Amazon immediately severed connections with about 10,000 California affiliates - individuals, businesses and nonprofits - that earned commissions by referring customers to Amazon via links on their own Web sites. Dumping those affiliates was Amazon's way of eliminating any semblance of a physical presence in California, which would force it to collect sales tax.
This was, simply put, action aimed at setting a precedent for other states, to warn them off attempting anything similar, just like the company did when New York imposed a similar level-ground tax law that Amazon is now fighting in court.
Amazon has long avoided locating its warehouses in states that might force it to charge tax, instead placing them in states like Pennsylvania and Kentucky, whose laws differ.
Putting this whole thing in its proper perspective was Edward Lampert, chairman of Sears Holdings Corp., who wrote to his shareholders that, "Either all retailers should be required to collect sales taxes or none should ..."
The real question here is why politicians don't seem to realize that police and fire protection, parks, street cleaning, sewer service and other basics of government are funded at least in part by sales taxes.
Warnings that the Amazon tax will cost thousands of jobs are premature, at best. No one yet knows how this will work out.
But if forcing customers of Amazon and other Web merchants to pay sales tax should drive buyers away from those firms and into brick-and-mortar stores where they can actually see and feel what they're buying, new jobs will be created there.