For many years now I have been a grateful subscriber to Randy Cassingham’s This Is True. The little pieces he shares in his newsletter are often disturbing and at the minimum thought provoking. Do yourself a favor and sign up for, at the very least, the Free version of the newsletter here.
I don’t often share stories from Randy, rather I encourage people to sign up for the newsletter themselves. But this week, the lead article brings home the mind numbing stupidity so common in government circles.
UNINTENDED CONSEQUENCES: Several states, feeling a pinch in tax revenues,
have enacted what has become known as the “Amazon Tax” — rules that
try to force online mega-retailer Amazon.com to collect sales tax in
states where they have no physical presence, which has long been a
requirement for making a business collect tax for a state. The theory:
Amazon “affiliates,” who help the company get sales for a small
percentage of the gross, create “nexus” (or “presence”) for Amazon,
thus subjecting them to the law. Illinois is one state that tried it.
Sen. John Cullerton of Chicago said the law would generate $150 million
for the state, which would “prevent millions of dollars in cuts to
public safety, health care, and education.” Two years later, how much
of that $150 million has Amazon collected for the state? None: the
retailer simply fired all of its Illinois-based affiliates so there is
no nexus — just as it has done in other states that tried the gambit.
Because affiliates are no longer earning money from Amazon, not only
are most of these states missing out on the projected millions in sales
taxes, but now they’re not getting income taxes from affiliates on
millions of dollars in lost income, for a net reduction in revenues
thanks to the new laws. (RC/Chicago Tribune) …Problem: income is
lower than expenditures. Political fix: try to force someone to give
them more money. Common sense fix: spend less money.
Thanks Randy for all the eye openers you shine the light on.