Friday, September 23, 2011

Governor Brown signs Amazon "delay bill"

It is generally not a good idea to raise taxes in the middle of a recession, but cash-starved Sacramento did just that when it took steps to start taxing e-commerce sites like Amazon, which have a decided advantage over traditional brick and mortar businesses to the extent they have no real physical presence in the state; if no physical presence exists, then there are no sales taxes. Upon hearing the news that new taxes would be imposed, Amazon promptly withdrew their relationship with all their "affiliate" sites in the state, resulting in a loss of further income -- and jobs -- in California. The upshot is that everyone gets a one-year reprieve in a sort of standstill arrangement. Punting of this nature seems the norm for most important political and economic decisions these days. Why take a tough decision now, when you can kick the proverbial can down the road?


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