August 16, 2011

California Dems and the "Amazon tax"

Liberals have a consistent blind spot: They believe that if they pass laws or regulations to take more money from people, the people will keep doing exactly the same things, in the same quantities and locations, as they did before the libs upped the taxes or regs or whatever.

Case in point: Companies that sell their products in the state where they're located understandably have to collect and remit state sales tax. But companies that sell their product out of state can't be compelled to do that when they sell to a resident of another state.

When internet-based companies started booming several years ago, lots of states tried to force those companies to remit sales taxes even if they were located in another state. Supreme Court told 'em to F. O.

Now comes California: Scores of billions in debt, the Dem legislature tried a variation: They claimed that out of state companies that had "affiliates" in CA were actually located there, and thus that the parent companies had to collect the tax on sales to CA residents.

Amazon and other big internet companies claimed this was unconstitutional, but that even before it went to court, they'd simply sever affiliate ties in that state.

The Dems passed the law anyway, calling their bluff.

Except the companies weren't bluffing, and now the state has seen several either leave or sever profitable affiliate relationships within the state.

Governor Brown and the California Democrats failed--as they always fail--to recognize that people change their behavior if government changes the rules on their efforts.

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