Hacker News Reader

Comment by rfrey | Hacker News Reader

Seems like the protection laws were enacted with the goal of ensuring access to books in small towns. Big stores are prevented from discounting books (more than 5%) with the idea that small stores will go out of business from price pressure, then selection will be limited to what the big stores have, which is less than the aggregate of the small stores.

Seems reasonable, but does that still apply to Amazon? Even if critics of Amazon are correct, and Amazon raises prices after small businesses are gone, consumers are no worse off than they are now, when discounts are prohibited.

I can't see how anybody other than the booksellers are being advantaged here, with the cost being paid by consumers.

View on HN

Seems like the protection laws were enacted with the goal of ensuring access to books in small towns.

I've lived much of my life in small towns in the US, and honestly, the single best thing about Amazon is that it massively increased my access to books. Small-town bookstores never carried more than a handful of programming books, a couple of short shelves of science fiction, and none of the strange specialist material I buy today (books on purely functional data structures, bilingual French/hieroglyphic texts, and so on—everybody wants something out on the long tail, but the details obviously vary).

Right now, my least favorite thing about the French book market is the near-impossibility of buying French-language ebooks from overseas, assuming I want more than Le Petit Prince or a bunch of public domain classics. The only French publishing niche that has this figured out is long-form comics (aka bandes dessinées). There, the publishers banded together to create the massively awesome online distributor Izneo, which sucks up more of my book budget than I'd care to admit, and which allows me to buy from anywhere in the world: http://www.izneo.com/

On the other hand, the French tradition of aggressive law-making means that they can actually decide to create a 4-year startup visa, then go ahead and actually do it.

I think most of those small town stores would have been happy to order you whatever (of course only if they could find it in a catalog). That's still less convenient than internet shopping though.

I had a similar experience living in a non-anglophone country ordering english books. Whenever I heard "we can order it" I stopped listening. It always arrived in more than a month, cost tons, got stuck in customs, and wasn't in the catalog anyway.

That can depend on how religious the owner/runner of the bookshop is and if your own relgious views matter. Science verses Relgion. One Reglion is the locale area, your own is another etc etc

> I've lived much of my life in small towns in the US, and honestly, the single best thing about Amazon is that it massively increased my access to books.

Certainly, but having small local bookshops doesn't preclude also having Amazon.

> Small-town bookstores never carried more than a handful of programming books, a couple of short shelves of science fiction, and none of the strange specialist material I buy today

When did you start buying? I lived in a small town (roughly 40,000 people) and in 1981 I could buy Lance A. Leventhal's "6809 Assembly Language Programming" on order in less than a week. The 6502 version was in stock.

The problem is that chain bookstores emerged right around this point in the local malls (Waldenbooks, for my local area) and killed the local bookstores.

So, in my town, the local bookstore, right off the downtown park, went under in favor of the chain store in the local mall--neither of which now exist. So, now the damage can't be undone without a significant investment by somebody, but the upside profit is limited by whether Amazon is willing to undercut you.

Don't get me wrong. I loathe most local businesses in small towns. It used to be that they were slow, but they were reliable. If they said it would be done on date X two weeks out, it would be done on date X or they would start moving heaven and earth. Now, they tend to be slow and unreliable. The last car repair I had to deal with was: "Well, it didn't come in the shipment. It will be another week." "Um, no. Get the part tomorrow." "Not gonna happen." "Actually, yes, the part will be here tomorrow because I'm having it FedEx'd in. And me, my lawyer, your manager, the dealership owner, and GM are going to have a conference call while you are fixing the car you've already had for a week." Those kinds of businesses should go under post haste.

Nevertheless, there are some local businesses that get it and do a great job serving the local area. They don't deserve to get wiped out because WalMart, Amazon, etc. can force things that the smaller businesses cannot.

Actually the number of indy bookstores is on the rise, and has been for several years.

They do compete with Amazon, of course, but not nearly as directly as they do with Borders and Barnes & Noble. Borders is gone and B&N is closing stores, which means better times for the indy shops.

And this magically happened just after Amazon had to actually start paying sales tax.

Funny how you can actually compete when your biggest competitor loses its 5-8% retail cost advantage.

I realize that it's fashionable to blame Amazon for everything, but in fact the number of indy bookstores has been increasing since 2009, and took a big jump after Borders closed in 2011.

Amazon pays taxes in every state where it has a presence, and doesn't in states where it doesn't. Just like every business (and individual) since, well, ever.

It will be interesting to see how the theory that you're obliged to obey all the laws of every state plays out when it's applied on a more general level. You're okay with that, I guess?

> Amazon pays taxes in every state where it has a presence, and doesn't in states where it doesn't. Just like every business (and individual) since, well, ever.

Um, you do realize that this has also been ILLEGAL forever, right?

You, as an individual, are supposed to pay sales tax on your purchases. Period. That is the law.

The fact that the appearance of Amazon allowed millions of people to break that law when the local businesses could not is why the states went after Amazon directly.

Would you much rather that we start convicting people for not paying sales tax? This is the alternative.

Amazon offering zillions of books in stock is disruption. Amazon offering overnight delivery is disruption.

Amazon enabling millions of people to dodge their sales tax isn't disruption--it's called being a jerk.

"Um, you do realize that this has also been ILLEGAL forever, right?"

Um, no it isn't.

"You, as an individual, are supposed to pay sales tax on your purchases."

You, as an individual, are an entirely different entity from Amazon, which is a company located in another state.

"Would you much rather that we start convicting people for not paying sales tax?"

Sure I would. Why are you advocating that the burden be put on the entity that isn't breaking the law rather than the one that is? Why are you advocating that states be able to place the burden of enforcing their local laws on an entity located in another state?

"Amazon enabling millions of people to dodge their sales tax isn't disruption"

Amazon isn't the first company to sell stuff by mail order, dude. The Sears Catalog first came out in the 19th century.

And yes, high-tax states whined about it back then, too.

Powell's Books: http://www.powells.com/info/salestax.html does not collect sales tax.

AbeBooks: http://www.abebooks.com/docs/BooksellerPolicies/4.shtml does not collect sales tax.

Apple did not collect sales tax until they started opening Apple Stores in other states.

I live in a small town (13k city, 68k county) and sadly the closest thing we have to a non-religious bookstore is a Walmart.

I buy practically everything online, mostly from Amazon.

Essentially any profit made by Amazon in Europe is faux booked to a Luxembourg office where it is then off-shored to another tax-haven. It then just sits there till Amazon can buy Congress to let them bring it back to US shareholders. That money is effectively removed from the economy.

Any profit made in a local bookstore meanwhile will support the jobs of more people and will be taxed and will recirculate when those employees spend that money. Its because they are part of society and pay their way that Amazon can undercut them.

What about money spent by Amazon employees?

They are exceptionally poorly paid and insecure. Here in the UK most of them are on benefits. Effectively my taxes are subsidising their profits.

As someone in the UK, I'm quite happy for amazon to provide me with low cost items on this basis. The tax is fixed rate VAT here in the UK so everything I buy from a tax dodge means I'm effectively getting a small rebate against my nearly £3375 a month (including income tax, NI and VAT) contribution to the state every month versus spinning another 20% into VAT.

Then when I snuff it, capital gains time...

Well, the people who work in the fulfillment centers are poorly paid. The software engineers, managers, and other employees that work within the organization are generally paid very competitively with companies like google etc.

The technical side in Amazon also report being under staffed and highly stressed comparied with google/apple etc.

Your taxes (as well as mine) are subsidizing the profits of a heck of a lot of firms.

If they were unemployed, certainly they would be collecting even more benefits. If anything Amazon is subsidizing your tax burden.

They are exceptionally poorly paid and insecure.

So you'll be happy when they're all replaced by robots? This is Amazon, so that's going to happen fairly soon.

Amazon can't evade taxes for money earned in France. If you operate in France, and your business earns revenue in France, you pay French taxes. You can't magically offshore it without paying taxes and then expect to still operate there.

What actually happens is that Amazon makes no profit, and thus does not get taxed on profits. But it still pays VAT, Property, B&O, etc.

It's actually quite easy to evade taxes on money earned in a particular country, as you are allowed to subtract inputs from your tax burden.

So the French subsidiary buys very expensive inputs from the Luxembourg subsidiary, meaning the French subsidiary doesn't show a profit, mon dieu how could that have happened, such a shame!

Fortunately, the Luxembourg subsidiary is very profitable, exclusively from "sales" to the French subsidiary.

Obviously all of this typically happens only on paper.

This is worth clarifying because all multi-nationals operate that way.

Say Starbucks-France makes 10 billion in profit in a year.

Then that year Starbucks-Luxembourg will send it an invoice saying "You owe us 10 billion for a license to use the name Starbucks".

That way SB-France, on paper, made no profit and pays no income tax.

Amazon customers pay VAT. Amazon collects it from the customer.

The problem you raise is actually three problems. First is tax-avoidance by Amazon. Second is a massive online seller replacing many employees at the local level with fewer employees at a central location. Third is that the retailer is foreign.

The first problem seems better addressed by tax reform, since it impacts many industries other than book selling, and this measure won't stop it with Amazon anyhow.

The second problem is one of increased efficiency (to use an economist's definition) causing disruption. The French seem to have been resistant to that since the industrial revolution, so it might be helpful to understand this law in that context. It's hard to see how they're going to win that one in the long run, although prolonged skepticism to the benefits of efficiency might have helped create some of the social benefits in France. From the outside though it looks like this social bias has hurt France more than helped it (other countries have maintained robust social programmes without rejecting technological disruption) so I wouldn't welcome laws promoting it.

The third problem is not just a case of nationalism, but because it makes it harder to soften the blow of disruption by pointing to other local jobs in technology. It's comes down to an argument on globalization. The jury is still out on whether globalization will be a net positive or negative. To me it seems unstoppable, though, and I don't think it's wise to be on the wrong side of the trend.

Your remark sounds as if it is the company's fault to act like this.

1) The first part is exactly how the EU was designed: operate from one country, reduce your overhead. Maybe it is not Amazon's fault that they comply with the rules?

2) The second part is exactly how the Congress wanted its tax laws: if you bring money home, pay your taxes, if you don't, we are not involved. Maybe it is not Amazon's fault that they comply with the rules?

That's fine, they act within the rules, but the rules are not set in stone, and neither does their public image depend solely on not breaking the law. The conversation is not about whether companies should voluntarily act in a certain way, it's whether the laws need to be changed. Or, on occasion, if the law cannot be changed, whether consumers can force change in an organized way, thereby making it profitable for the company to alter its behaviour. Companies are constantly shifting in response to campaigns, or in general to improve their image. It's not a legal requirement to use recycled cups or Fairtrade coffee, but many cafes will do that to look good. Companies shouldn't be surprised if the same sort of reputational damage applies to how they treat their workers or whether they pay a lot less tax than their rivals.

> That money is effectively removed from the economy.

Not really. If that money is stored in a bank, most of it will be loaned out. If it is used to buy bonds (including but not limited to government bonds) then it goes to the issuer. And so on.

This is the only correct answer.

Even if Amazon actually removed it from the economy by putting it under Bezos' mattress, that would boost the value of all remaining fiat, increasing purchasing power for everyone else. So consumers would gain a temporary burst of value, which they can utilize today; when the state then devalues fiat over time, Amazon's money will lose value, while the consumer will have locked in that higher purchasing power.

There is no scenario under which Amazon actually hurts anybody by 'removing' money from the economy. Money and wealth are not fixed sums anyway.

Bank lending to small businesses is way down since the start of the recession, and if they were inclined to start again they could borrow at nearly zero percent anyway. Bank leadership has been saying they don't see good opportunities. In that climate, Amazon's account makes no difference.

See for example

http://www.inc.com/jeremy-quittner/wells-fargo-earnings-and-...

http://in.reuters.com/article/2014/07/12/eu-banks-dijsselblo...

http://www.forbes.com/sites/cherylsnappconner/2014/07/11/str...

> Seems reasonable

No it doesn't.

Reply on news.ycombinator.com