Comment by gojomo | Hacker News Reader

Comment by gojomo | Hacker News Reader

The battle over similar issues in Texas has also been fun:

• Amazon has a distribution center in Irving, Texas but argued its clever legal structure freed it from having to pay sales taxes.

• The Republican Comptroller Susan Combs insisted on payment of a past tax bill, based on these operations.

• Amazon said it'd thus need to close the facility, and Republican Governor Rick Perry announced his opposition to the Comptroller's decision.

• The Republican-dominated legislature then passed a bill, similar to this California bill, further establishing Amazon's sales tax obligations, for not just the distribution center but the affiliates.

• Perry vetoed it.

• Amazon's hometown newspaper, the Seattle Times, then editorialized that it should stop dodging state sales taxes nationwide.

• The Texas legislature started working on a veto-proof way to obligate Amazon, perhaps by attaching the obligation to a larger budget bill.

• Amazon offered the legislature a bigger new distribution center, with 5000 (and then 6000) new jobs, in return for a full legislative exemption from sales taxes for the next few years.

The part-time legislature, which usually only meets every other year and (with no state income tax) takes sales taxes very seriously, has so far declined Amazon's offers.

Some of the coverage:

http://www.techflash.com/seattle/2011/02/texas-governor-back...

http://www.statesman.com/news/texas-politics/amazon-sweetens...

Good for Texas.

Elsewhere on HN, I've read Amazon's claim that they would be happy to pay sales taxes, but that dealing with all the local taxing authorities would be a nightmare. If this is true, it makes me quite sympathetic to their position.

But if I understood you right, it looks like Amazon outright attempted to bribe the legislature for special treatment which other retailers in the state don't get. I realize this kind of shit happens all the time, but that doesn't make it right.

And the Texas legislature refused to play ball. If I lived in Texas I would be standing in line to re-elect these people.

why? i'd rather keep the money than give it to the state. why vote for people who want to tax you more? i realize it's nice to believe in integrity but i don't think this is an example of it

Tax money goes to good locations, and things you or people you know use every day. Roads, schools, and the local law enforcement come to mind.

ah - you don't live in massachusetts then :-)

Used to live in Florida. Immaculate roads, whenever they were finished, and a school system that desperately needed more money than it was given.

I live in Florida. We are middle of the pack as far as per student funding goes. Since $10,878 per student per year is insufficient, what funding level would you recommend?

http://www2.census.gov/govs/school/07f33pub.pdf

Tax money is taken from good locations, and goes to the prison industrial complex, failing schools, and corrupt public employee unions.

Failing schools, in part because of their lack of funding.

That's an old saw, but can you prove it? Can you prove a correlation between per student funding and student scores, graduation rates, or some other measure? Can you even prove that schools have reduced per student funding over the last years?

http://super-economy.blogspot.com/2011/01/education-spending...

Looks like there is a correlation between test scores and funding, but it's not statistically significant.

According to a review of over 400 studies, "there is not a strong or consistent relationship between student performance and school resources, at least after variations in family input are taken into account," according to a paper published in the journal Educational Evaluation and Policy Analysis.

This chart, http://www.heritage.org/static/reportimages/796DF8C7C231CFFE..., would seem to suggest while per-student education spending has doubled between 1970 and 2005, scores haven't really improved.

Do you have any evidence that increasing funding will improve results?

http://www.nytimes.com/2011/03/13/opinion/13kristof.html

Pay particular attention to the McKinsey report results, which found that a teacher that is a standard deviation better than the norm adds $20k to a student's lifetime earnings. Two standard deviations gets you $32k, or $640,000 for a class of 20. Teachers' starting salaries are $39k/year in the U.S., but in educationally top performing places like South Korea and Singapore teachers earn more on average than lawyers and engineers.

The school district that spends the most (D.C.) per pupil is one of the worst. Adding money to something with a broken process doesn't really help. Heck, there are a number of startups to use as examples.

Unfortunately, some tax money also goes to bad locations, like people who abuse welfare and commit fraud, payoffs to politicians' allies, and overseas junkets for elected officials and their mistresses.

I'm sure glad I don't get all the law enforcement I pay for.

Not that I'm a fan of taxes, but if people keep avoiding sales tax how are states to maintain infrastructure and services?

in theory, your income taxes are supposed to funnel back down to your state (same way state taxes go back to your city). you also pay a lot of money for state income tax, property tax, tax on every gallon of gas you use, heavy taxes on booze and cigarettes, taxes on utilities, taxes on your cell phone and cable bill, excise tax if applicable, tolls, parking and speeding tickets if you get them, and fees for doing just about anything related to the government (including fighting traffic and parking tickets).

i refuse to believe taxing out of state corporations is going to make a big difference. there's already plenty there, it's just used in the least efficient way possible. this whole thing with the affiliate programs is either a really lame money grab or good lobbying by big box stores.

You're not taxing the corporations. You're taxing the people, as they would be if they bought the exact same thing locally.

It doesn't really make sense, though, to charge the same level of tax for a store that has a significantly lower impact on local infrastructure. Amazon doesn't have to build space-wasting parking lots, drive one car per person to the store, etc. The significantly more efficient distribution model should be taxed in consideration of its reduced resource use.

This argument assumes there are no societal benefits from having local infrastructure though, which I wouldn't agree with. Amazon may be more directly resource efficient, but I don't think that argument taken to its logical conclusion would build a community in which I'd want to live.

I don't mean to suggest that there should be no local infrastructure, only that the maintenance costs of any infrastructure that exists would be reduced, allowing a city/county/state to function with reduced tax income. Also, the land that would be used for parking lots could be used for other revenue-generating purposes.

You're advocating that there be no tax on consumer goods from other states. That's fine, but it's a different issue. There is tax on goods from other states, it's just that there's a lot of, ahem, non-compliance.

Your argument also assumes that the business is a net drag on the local environment unless it charges a sales tax. But I strongly doubt that the sales tax revenue a business generates is much more than the other economic benefits it brings (e.g. jobs). This is why so many local governments are willing to provide tax credits to businesses that move or start in their districts.

Do you drive on a road? Does the USDA inspect your meat? Did you or any of your kids attend a public school?

This demagoguing of taxes is getting a bit old. Reagan, Ike, and Nixon would all be chased out of the party at this point. Taxes are the price we pay for living in a society.

Edit for clarification: Obviously not all taxes are good, similarly not all taxes are bad. That is my point. Life is rarely black and white. I also think tax laws should apply equally and Amazon shouldn't be given any breaks that others aren't.

This is a false dilemma. It's not a question of whether taxes can be justified at all, but more of a question of whether all taxes and government expenditures can be justified. Certainly, there are some things that governments that are essential. However, I think it is folly to believe that all government expenditures are prudent.

"However, I think it is folly to believe that all government expenditures are prudent."

Agreed; however, for things such as schools and roads and a police-force, this is part of how they earn their money, so when you say no to sales taxes, you're not only saying no to all of its abuses, but you're saying no to the things that actually need it.

The problem isn't with the taxes, the problem is with where the taxes go; and if we don't like where taxes are going, then we need to vote with the mind to change it, and petition our elected officials to change their spending practices.

Will it work? Probably not, sadly, and I don't know where that leaves us.

End withholding taxes, just give people a big bill at the end of the year, and ensure that the names and faces of their elected representatives are on that bill, so they can be reminded of what magnificent service has been received that year.

Maybe, change tax due dates from April to the 3rd week of October?

Spending priorities will change rapidly.

That is actually a splendid idea. A quick Google search revealed it to be very easy to find where the US Government spends most of its money, but more difficult to find where individual states put the money they get. This would be incredibly interesting to see.

I, like most other working, educated people, pay every year more in taxes than I pay for food, clothing, vacations, gas and entertainment-- all combined. That's a big price to pay for driving on roads and inspecting my meat. You know why? B/c gov doesn't give a crap about efficiency or saving my money.

The problem here is that your reply is also demagoguery: no amount of taxes would be too much. No matter what the tax rate was, you could ask if folks like living in a modern society.

Very, very rarely do I find people who want no government or crippling taxes. The question, as you point out, becomes "how much is too much?"

So can we please stop describing other people's opinions in extreme ways? (I mean that for both sides)

I'm in favor of allocating a certain percentage of GDP to various governments. Say 15% to national, 5% to state, and 2% to local governments. Let the governments themselves decide how to collect it.

This does two things: it gives a real number instead of a bunch of arm-waving, and it puts government on a budget. Historical records show us that you're not getting much more than 20% out of a population anyway (and that's forgetting the Laffer curve)

You can always argue for more or less government and taxes. Both positions are perfectly fine. What's not fine is making this out to be socialism versus anarchy. It's really much more a conversation about finding compromise and being able to spend as much as you tax, instead of having politicians vote for programs nobody can afford and then pointing their fingers at the other guy when the bill comes due.

As for your question about living in a modern society, I'd argue we're paying about 20x more than we need to for these services, mainly because there's no choice involved. As governments continue to clamp down with taxes and more "help", there will be less and less choice, thereby making the multiplier even higher.

There's nothing wrong with believing that yes, we need these things, but no, this is not the way to have them. Doing the wrong thing with good intentions and a good goal is still the wrong thing. :)

> Does the USDA inspect your meat?

Not like they used to.

According to my grandfather (now 89 years old), who was a USDA inspector at a couple of meat processing plans from the end of WWII until he retired (in the late 1980s): There used to be an independent USDA inspector in virtually every processing plant. That inspector could shutdown the entire facility if he saw fit. Now most plants are self-regulating and only get pre-scheduled spot checks by the USDA.

He was pretty upset by the change in the system and the associated decline in the safety and quality of meats.

If you sincerely want the legislature to tax you less, you should ask it to reduce or eliminate sales taxes on all retailers, not just on Amazon and not just on online retailers. To grant an exemption to one company or to one industry, the legislature would have to decide which lucky company or industry deserves it. The government thereby picks a winner before the market gets a vote. When they try this, governments usually pick wrong.

i agree on the overall sales tax issue (and in MA a year or two ago there was a ballot issue to eliminate it -- and for some reason beyond me, people voted to keep it). but if there's a loophole that lets me pay less, i'm going to take advantage of it and i'm not going to give the guys who closed it a pat on the back.

This is a reason towns exist on the NH border. it was shocking the first time I went. Cross the border and bam there are a dozen big box stores.

Well, technically you (the consumer) should be recording your Amazon purchases and paying the state your self-calculated sales tax. So, the rate does not change, only the responsibility for ensuring it is paid.

That said, almost no one bothers doing so, so in theory the rate would go up. However the rate would not be the "tax rate" but instead the "rate of taxes owed which are ultimately paid".

I don't think that's really a fair treatment of the issue.

It probably doesn't make sense, from a business standpoint, for Amazon to maintain their facilities there if Texas can make them collect sales tax. So Amazon would probably save money by moving the facility. But it still costs money for them to move, which they'd rather not do.

So consider these two options:

A) Amazon is forced to collect sales tax. Amazon moves the facilities to a different state. Texas still doesn't collect sales tax, and also loses 5,000 jobs! Amazon has to pay for new facilities/relocation.

B) Amazon isn't forced to collect sales tax. Amazon stays. Texas retains the 5,000 jobs, but also gains 5,000 new jobs. Amazon doesn't have to pay to relocate.

Either way, the state isn't going to collect sales tax. So why bother enacting the law? It's really a choice between keeping or losing the jobs, not between collecting or not collecting sales tax.

Amazon recognizes this. So rather than both lose money, Amazon proposes to Texas that they invest more in their infrastructure their, create new jobs, and indirectly fund the Texas government through income and property taxes.

(It may also make sense for Texas to pursue enforcement as a way to blackmail Amazon into investing more into their state.)

Politicians would do well to recognize that their actions don't exist in a vacuum. Businesses will react to maximize profits. So even though something might on paper bring in money, it's possible that in reality it will only cost money.

Amazon doesn't lose money necessarily, it just becomes less competitive (especially with vendors that are have charge sales tax). Boohoo.

I had thought sales taxes were the darlings of the anti-tax crowd ... because, you know, they're so "fair".

A straight, simple nation-wide sales tax with the proper exemptions and prebate system in place would go a long way towards making the tax code in the country reasonable and, yes, fair.

But to say that the mess of the current per-state sales tax system has any relation to the FairTax is nonsensical.

A nation-wide sales tax would be hazardous because it requires Congress to be involved in the restructuring. These are the same people responsible for the Internal Revenue Code and even after 90 years of experience, the Code fails to meet any normal standards for a simple, efficient, and effective tax on income.

Texas doesn't have income tax.

Amazon promised 5000 jobs but they actually only employ 119 people in Texas:

"Deuell also said he was skeptical that Amazon could deliver on its promise of 5,000 jobs and $300 million in capital investments by the end of 2013.

"I don't see how in the world they can provide 5,000 jobs at distribution centers. Those operate very efficiently, with computers and mechanized things," Deuell said. "I don't want to doubt their word and their intentions; I just don't see how they bring 5,000 jobs to the state."

Texas and Amazon have been at odds over the collection of online sales taxes since last September, when Comptroller Susan Combs sent Amazon the $269 million bill, covering sales taxes it failed to collect from 2005 to 2009.

Amazon responded by saying it would close the Irving facility, eliminating 119 jobs. Amazon also said it was scrapping other plans to expand in Texas, accusing the state of having "an unfavorable regulatory climate.""

It appears that the measure died. The enrolled form of SB1 (the Fiscal Matters bill) that was sent to the Governor today doesn't seem to include the sales tax provision.

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