A modest proposal to Amazon.com or California big-box outlets.

Jul 24 2011 Published by under Current events, Passing thoughts, Politics

... whichever can muster a shred of corporate social responsibility.

As has been noted elsewhere, Amazon.com is put out that states are asking it to collect sales tax on online purchases. You may have had occasion to notice that most states are still experiencing major economic difficulties. Especially given major anti-tax sentiments among lawmakers, the states are relying on sales taxes for an ever increasing proportion of state revenue.

Yes, sales taxes are regressive, and tend to hit the poor more heavily than the rich. But my guess is that some non-negligible proportion of Californians making online purchases with Amazon are living comfortably above the poverty line.

Amazon.com is so committed to not collecting California sales tax that it is prepared to spend several buckets of money to get a measure on the ballot to free it from having to collect the sales tax.

Meanwhile, word on the streets is that the brick-and-mortar big-box retailers that are Amazon's biggest competition here -- who, naturally, collect sales tax on purchases -- are prepared to spend their own buckets of money to urge a "no" vote on the ballot measure.

I offer this proposal in the hopes of being able to dodge yet another situation where we're calling for a plague on both your houses.

The state of California needs that sales tax revenue at the moment, surely more than Jeff Bezos needs it. California consumers (at least the ones who still have disposable income to spend) are sold on the convenience you offer and the wide range of goods you sell. They happily pay sales tax on online purchases they make with other retailers. You won't lose them by collecting sales tax, at least, not too many of them.

However, you may lose a bunch of them if you pour lots of money into a ballot measure. The whole governing-by-ballot-measure thing has gotten pretty tired, and it's expensive, and we don't love it when big corporations buy all that commercial time to lie to us about our best interests.

So, why not collect that sales tax and look like a benevolent corporate entity rather than greed made flesh (or whatever the cyber-retail equivalent of "flesh" might be)? Heck, you could even just meet us halfway and create a sales tax opt-in toggle for California consumers who would like to avail themselves of Amazon's selection and convenience without feeling like greedhead-supporting scumbags?

Big-box retailers in California:
I get where you're coming from here. You're not wrong that Amazon gets an unfair advantage by dodging collecting California sales tax. And undoubtedly the Amazon-bankrolled ballot measure will be supported by all sorts of misleading (and self-serving) claims that you'll want to counter.

But this is a golden opportunity to be the less evil of corporate entities here. That might reward you with dividends, whether from California consumers, or communities who make zoning decisions, or lawmakers, down the road.

Why not take that money that you're prepared to spend to defeat the get-Amazon-out-of-sales-tax-collection ballot measure and use it to create jobs in California communities?

I reckon that embarking on such an unorthodox move would get you all sorts of free publicity from reporters on the economic and political beats, among others. Probably some bloggers would talk it up, too.

The California budget is broken enough that we need every dollar we can get to support crumbling infrastructure, essential services to the poor and the sick, little things like education. This is not an auspicious time to be pouring money into fighting about whether Amazon.com can keep stiffing California. The corporate entity that steps away from the expensive game of chicken and uses its power and money for good may end up winning lots goodwill from California consumers -- goodwill that carries over to better economic times (assuming someday we'll have those) when people have more money to spend and want to feel good about where they're spending it.

On the other hand, both sides can stay the course and help Californians feel better about pulling back from consumer culture.

4 responses so far

  • gerty-z says:

    it makes me a little sad that there is no way in hell that your proposal would ever be actually considered by either of these groups.

  • Jim Thomerson says:

    We are having a go round with Amazon in Texas. It is my understanding that if a company has a physical presence in a state, then it pays sales tax on sales made in that state. That Amazon is not doing so is an example of the New Golden rule. "Them as has the gold, they makes the rules." If enough states go after Amazon, then maybe Amazon will not be able to find refuge.

  • Anonymous says:

    The problem here is that California has dug itself a huge grave. The government is unwilling to make positive changes; it just wants more of the same. More taxes, more spending, more taxes, etc. Like many governments across the USA, California is just looking for more ways to drain more money from its citizens--both consumers and entrepreneurs. Amazon is trying to make a stand and say "We're not going to tolerate the government engulfing every aspect of our lives anymore."

  • jbmohler says:

    In my opinion, the real racket is that it's already legally required for these Californians to pay use tax if they didn't pay the sales tax to the vendor. In other words, there is no legal cost advantage to the consumer by shopping at amazon. However, use tax remains unenforced and probably unenforceable.

    So, while we're talking about touchy-feely do-goodisms like making jobs and moral high roads for rich corporations, I'd think we're well with-in bounds to ask all the Californians to make their legally required use tax payments to their bankrupt state.