The temporary tax hikes rammed down upon us in California by the crooked lawyers that run our state expired yesterday. In order to pass a budget this year, they needed to come up with another way to raise revenues.
They could try tax hikes again, but after California taxpayers such as myself were violently impaled in the back by crooked Republican lawyers in the California legislature that said they would never raise taxes and signed a promise to that effect (Et tu brute?), those same crooked lawyers are loath to try that again.
So did California do the right thing, the logical thing, and cut back on spending, cut back on government pensions and benefits and on social welfare programs? NO. Instead, California did what every socialist loving state tries to do, they raise taxes everywhere else they can. So as of yesterday, California warned on-line retailers like Amazon.com (and Overstock and eventually the millions of other on-line retailers you can think of) that they would be receiving an invoice from the state of California for its 7.25% sales tax of all sales originating from California and they expect Amazon to pay it. And where would Amazon get that tax revenue? From US of course! So California managed to figure out how to tax us anyway.
As a consequence, which the lawyers that run this state don’t care about, Amazon immediately severed their ties with over 10,000 small businesses and individuals in California who are affiliates of Amazon. An affiliate has links on their website that drives traffic to Amazon. In return for the traffic, Amazon pays them a commission. Amazon terminated all 10,000 agreements, which means 10,000 small businesses and individuals in California just lost a nice chunk of income they received from Amazon because of this new law. That was income that was subject to California income tax, but now that income is wiped out so there won’t be anything for California to tax and since the affiliate ties have been severed there is no incentive for anyone to link to Amazon since they don’t get a commission anymore.
In other words, California thought by passing this law they would generate $300M in taxes, but now they get a big fat zero, and they used that $300M number to “close the budget gap.” How can you use a $0 increase in revenue to close a budget gap? You can’t…unless you’re a crooked lawyer politician in California.
But California politicians don’t care about that, they want the deep pockets of Amazon. They don’t care that they just screwed 10,000 people in California out of millions of dollars which now won’t be spent in California, which won’t be taxed for California, and which was only there in the first place because of the entrepreneurs who were ambitious enough to create the websites, to create income for themselves and their families, to be forward thinking businessmen and women with ideas turned into businesses.
At every turn, California penalizes, abuses, dismantles and steals from businesses and ambitious entrepreneurs and yet it is these very kinds of people who create the jobs, that creates the salaries, that creates the tax revenues. Why are socialists at the state and federal level so hell bent on punishing and destroying the producers in this country? If all of the producers threw their hands in the air and closed up their shops tomorrow and retired to Tahiti, who would be left to create any of the jobs? Government workers? People on welfare? Who? Who would be left to PRODUCE in a state or country that would have nothing left behind but the Consumers?
As an American, I am proud to say that Amazon responded with a politically correct but no less affirmative, middle finger. Amazon stated they would not pay or collect any taxes from their customers and are willing to go to court to defend that position (which they are currently doing in New York, one of the other broke-as-a-joke
communist socialist states in our Union).
From Home Media Magazine…
“An Amazon letter to affiliates reads. ‘Similar legislation in other states has led to job and income losses, and little, if any, new tax revenue. We deeply regret that we must take this action.'”
Overstock was quick to cut all of their affiliate ties as well stating…
“The bill will result in our discontinuation of the services of California-based internet advertizing affiliates,” Mark Griffin, VP of legal at O.co, said in a statement. “That effect may be small as we have observed in these instances that the ad business terminated, goes to advertisers in other states and the ad traffic to our site continues. It is unfortunate that the bill targeted California business, but we believe the law is unconstitutional and necessitated this decision.
Steve DelBianco, executive director of NetChoice had this to say…
“The only loser in this is California,” he said, explaining that the law would not bring in any new out-of-state revenue, and that any new taxes would be paid by Californians. “They’ll have to explain why they’re raising the taxes of their constituents.”
So what we have here is a socialist state suffering from rapidly declining tax revenues to the tune of billions of dollars in losses each year that is desperately attempting a Mafia style shakedown (I take that back, that is disrespectful to the Mafia) of on-line retailers for more money to continue California’s subsidization of the lazy, the unambitious, the fraudulent and for the bloated public union salaries, bonuses, early retirement benefits, pensions and healthcare plans…you know…the never ending and ever increasing subsidization of the elite and privileged Consumer Class.