What’s good for Amazon.com may not be good for California (or America)

Even though I just used this phrase (“What good for [company X] is good for America”] when looking at the impact of AT&T on American history, I agree that the deal Amazon is trying to offer California, jobs for no sales tax, is a bit strange:

Amazon has spent more than $5 million loading up their More Jobs Not Taxes campaign for a referendum that would repeal the legislation that started charging them taxes. Meanwhile, the latest turn in the political fight has been that Amazon offered to create 7,000 jobs if the state postpones enforcing its sales tax on the company until 2014.
Here’s why that offer is a big deal. It transforms a debate that is fundamentally about a value — fairness — into a numbers game. The next step will be that Amazon’s political operatives will plant the seed that the bill will kill jobs, probably a nice round number like 7,000 of them. According to our calculations, the politicos will say, California is killing the exact number of jobs that Amazon offered to add! Taxes are bad!
I don’t mean to pick on Amazon here. Every company is after as many tax advantages as they can get. Walmart, for example, which pushed the effort to get the Amazon sales tax bill passed, skirts some online sales taxes, too. And every company has realized that it is good politics to say that taxes kill jobs, whether they have real evidence for it or not…
Now, by transforming tax fights into skirmishes over how many jobs this or that tax will “kill,” every single tax becomes something that hurts America. The narrow (and self-serving) interests of every tax-fighting corporation become part of our national project. And the battlefield becomes the competing spreadsheets of political opponents who say that one plan or another will create more jobs, when it’s pretty obvious that no one knows precisely how that whole mechanism works.

Some observations:

1. Perhaps taxes are supposed to be about fairness – but corporations and municipalities have been playing this tax break game for years. Why wouldn’t Amazon think that it has enough clout to pull this off? Many communities and governmental bodies have been more than willing to give in to others.

2. The math is interesting: no sales tax = 7,000 jobs. I haven’t seen many details about this: does the value of these jobs equal the sales tax revenue that would be lost without Amazon? Couldn’t California hold out for more jobs or make this information public to try to worsen Amazon’s hand?

3. It is interesting that this battle about sales tax revenue between California and Amazon is getting attention; a number of states have already gone through this. Granted, California is bigger so perhaps this is about more money than elsewhere. But, additionally, California was home to some of the biggest property-tax revolts in the United States several decades ago, meaning that homeowners, and not just corporations, are interested in paying fewer taxes.

0 thoughts on “What’s good for Amazon.com may not be good for California (or America)

  1. Pingback: Whether corporate tax breaks help the average citizen | Legally Sociable

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