California has some of the highest taxes in the U.S., from high sales taxes to high property taxes (due not so much the rate, but because of high property values) to high state income tax. Registering a car is outrageously expensive. The tax structure has driven many private businesses out of California to other states with more friendly tax systems. Those businesses are employing people, who then can contribute to those states via taxes.

What's nutty about this is that anyone with half a brain can simply order off the Internet from a non-California company that doesn't collect California sales tax. So, forcing a company like Amazon, which has no physical presence in California itself, but does have "affiliates" in California, to collect the tax would simply disadvantage Amazon, which then will dump it's affiliates, putting those people out of work. Thus, instead of creating a tax structure to encourage continued growth and investment in California, the State is instead moving forward in a short-sighted way to collect more money whilst simultaneously driving away the people from whom they intend to collect the money.

Only dumbass politicians would overestimate how much more money can be collected by creating more unemployment and driving businesses elsewhere. Pretty soon here in California, the state government will be able to collect everything from nobody.

Give business an ultimatum: They have 90 days to start collecting local taxes properly, or force a 20% flat tax on all Internet business. Then stand back and watch how fast they all figure out how to collect proper local taxes on all Internet sales...

I buy plenty from Amazon too, just to save tax and gas.

The real problem is people don't want a fair tax system. People want to be personally advantaged. And that's why we are in the financial mess we are in. Obviously that is not sustainable.

The easiest fair tax is a flat tax. But people don't want fair. They want to be personally advantaged and screw the rest.

Agreed. It needs a national solution.

@Mihuel
Interesting opinion.
But I recommend you to imagine USA without their current war machine.
After you'll do this you'll understand that every dollar they spend on this is very good spent dollar.

@MrAnthony

We are going back to old discussion here.
To be short - real estate loand and mortage are not problem cause, instead it had been problems solution. But as any pyramid it tends to end, of course you can blame gas prices for it or even UFOs :-)

In my view this is a strong political gesture by Amazon who have been forced to act after years of threats by state. If it isn't a political gesture, and it actually costs more to run the affiliate scheme with this tax law than the benefits of running it all then it is a very sad day for the internet.

Run small business or work in mall? I know which is more constructive for general population and indeed world at large and it isn't 'a job in McDonalds or 'working for the man'. We have far too many grumpy shop workers working for corporations who should be part of nice family business.

If you visit Taiwan you will see strong entrepreneurial spirit and a family run business almost ever step of the way along major streets even in the capital city Taipei.

It is always better to use one's talent for family's gain, rather than for the gain of a fat rich man sat on a yacht somewhere.

>It is always better to use one's talent for family's gain, rather than for the gain of a fat rich man sat on a yacht somewhere.
@EOSHD: I must respectfully disagree. The economy is not a zero sum game, or we'd all be still living at a barely above subsistence level. A family can have all the problems of a big corporation, while some corporations (properly run) can perform just like a happy family. There's no reason why we can't all be rich fat people (if that's what you want) with happy families. Given enough energy supplies, we can all be wealthy, healthy and happy. Moreover, there are advantages/benefits to large businesses that a family business cannot easily provide--the ability to specialize, coverage for vacations, retirement, flexible work schedules, etc. And frankly, some people would only be able to work for a corporation willing to tolerate their problems (e.g. a large corporation can handle a mediocre employee with a drinking problem; for a family-based business, this could be a disaster). Plus, if you're able to share in the success of a large business, you might be able to better provide for your family. If you excel at your job, where are the opportunities to "move up"--in a family or in something bigger? Of course, I'm not naive there are huge downsides for big business or government, but those downsides shouldn't mean that you can paint such a black/white picture. I think life is a lot more complicated than family business always being better than working for someone else.

In the case of Amazon, Amazon is a cash cow that a bunch of politicians see as ripe for milking via taxes. Like any good business, it wants to maintain its advantage, which is that unlike a brick and mortar store, it doesn't pay sales taxes (increasing customer base) and doesn't need to maintain the accounting system to pay those sales taxes (lower overhead). This is inherently unfair to a physical store in a state, true. At the same time, politicians don't seem to understand that the rules of the game are changing, and that traditional sales tax models won't work any more because consumers have choices that didn't exist 20 years ago. They should consider that driving businesses away or out of business is bad for state revenue and employment. Instead, they need to consider that direct sales taxes in some instances should be lower or non-existent to lure businesses/companies and employment into their state, and increase the state incomes via the increased revenue from more people/businesses paying income taxes, gasoline taxes, fees, property taxes, etc.

The California-Amazon situation is a good example of this. For the sake of collecting a hypothetical amount of money, they want to tax Internet sales for anything with an affiliate in California. Well, guess what...they've just put a bunch of people out of work (more unemployment), they won't have an income (less money from income taxes), people will buy less while looking for new jobs (less money from sales taxes), etc. In effect, they're not increasing income, they've probably decreased it, put people out of work, and driven business/employment to other states.

Instead, why didn't those politicians think about how to create even more affiliates for Internet-based businesses in California? They might actually hire and pay people...who pay income taxes, buy homes and cars, drive the cars (paying gas taxes), and shop in brick and mortar stores (sales taxes) for things you can't easily get off the Internet (think: home improvement products, for example).

It isn't that hard, but it does require more imagination than just seeing a cash cow and trying to tax it. We need new models, new ways of thinking. The 1950's style of government and management just won't cut it anymore.