Oh, Amazon, You Crafty Devil
By Ken Magill
What was that? Why, that was the sound of my fat ass hitting the floor after I laughed so hard I fell out of my chair.
Amazon.com is in the midst of negotiating deals in which it may get to keep the lion’s share of sales taxes it collects in California.
And I think it’s hilarious.
The online retailer plans to open two new fulfillment centers in California over the next year, a move in response to an online sales tax deal between Amazon and the Fiscal Idiocy State.
The move comes after California Gov. Jerry Brown signed a law in September requiring large online retailers to begin collecting sales tax from state residents next year.
Amazon won a postponement of the sales-tax collection requirement after promising to build warehouses in the state, which will create at least 10,000 new full-time jobs and 25,000 seasonal jobs by the end of 2015.
The warehouses are expected to be built in San Bernardino in Southern California and Patterson just east of the San Francisco Bay area.
So what’s so funny? Well, sales to Amazon customers throughout California will reportedly be deemed to take place in the municipalities where its fulfillment centers are located, so all the sales tax earmarked for local government operations will go to those two cities.
And those two cities want the fulfillment centers so much they are reportedly negotiating deals where Amazon will get to pocket most of the money.
Talks with Amazon about a so-called sales-tax rebate are still in the early stages, reported the L.A. Times.
“But in Patterson, a struggling Central California community of 21,000, Mayor Luis I. Molina said he's ready to do what it takes to help his city,” the L.A. Times reported.
"’This is huge. This is monumental, not only for the city but for the county and the region,’ he said. We're up to 20 percent unemployment, and this is going to make a dent.’"
People who advocate screwing Amazon because it’s big and successful are reportedly aghast.
"The tax is supposed to be supporting government," said Lenny Goldberg, executive director of the California Tax Reform Association, according to the L.A. Times. "Instead, it's going back into Amazon's pocket."
Uh, yeppers. That’s where it’s going alright, Lenny.
Critics of the deal apparently can’t think deeply enough to understand that the jobs it creates will be far more beneficial to the state and its residents than immediate sales-tax cash.
Will these warehouse workers get rich? No, but they’ll have a hell of a lot more than the nothing they’ve got now.
What’s more, they’ll buy stuff they otherwise wouldn’t have bought, helping to create jobs for other people who will also buy stuff they otherwise wouldn’t have bought.
And all of these people will pay sales taxes on their local purchases and state taxes on their incomes.
And presumably, a significant percentage of Amazon.com’s newly employed would otherwise be consuming government resources rather than contributing to them.
Moreover, Amazon will use its new revenue stream to continue building its business, maybe even in California if the state doesn’t do anything stupid.
So as inconceivable as this may sound, California may actually net more money by letting Amazon keep most of the sales taxes it collects than it would if Amazon simply forked over the cash.
Companies don’t pay taxes, folks. Oh they might write some checks, but it’s us who pay the taxes through higher prices.
So if the choice is between Amazon collecting sales taxes from consumers and shoveling the money into California’s state-government black hole or using it to create thousands of jobs, I’ll take the jobs.
Plus, I love the idea of a bunch of legislators who have demonstrated they can’t spend money responsibly slobbering over the millions they think they’ll get from Amazon’s sales, and then just as they can smell it, having it snatched from their grasp.