Analysis: Amazon’s tax battle with California

Posted by David Gomez

Whether you choose to admit it or not, America is stuck in a dangerous economic loop. That’s why Amazon’s tax battles with states like California are so important.

No matter what anyone wants to tell you we are still in a recession. According to economist Robert P. Murphy, the government misrepresents the unemployment rate and their attempts to stimulate job growth is only making things worse. And it’s prolonging this recession we're in.

Since so many people are out of work, big spending state governments like California are having a hard time bleeding tax dollars out of their citizens for their budgets. Instead of balancing their budget and cutting spending like any sane person would, they’ve decided they want to keep increasing their spending.

Public officials in California now have to be crafty and find new sources of revenue to maintain their spending.
    
That’s where Internet shopping giant Amazon comes in. Since they’re doing so well at selling people items over the Internet the California government has targeted them for wealth redistribution.  
    
NBC LA is saying that California could get up to $1 billion a year in tax revenue from Amazon and other online retailers if a bill approved by the Assembly becomes law. Sure this bill is going after all of the online retailers who are able to “dodge” taxes in California, but who do you think will end up paying the most?
    
Amazon will pay the most because they’re the biggest and most successful online retailer. And if this bill clears all of the hurdles and passes into law California will make them pay a substantial portion of that $1 billion in tax revenue.
    
Amazon’s likely reaction will be to flip California the bird and end all of the business relationships that they have with the state. Amazon will take all of their jobs with them and it will still be hard for California to fund their adventures in government.
    
And Amazon might not be the only business who leaves. Smaller business will think about leaving too. Especially if there are still places that don’t have those kind of tax laws for online retailers.

Economic policies like these are popular in modern government. Most state governments are full of economically clueless public officials who love taking on debt as a solution to the problems that concern the people.  

It’s easy for politicians to promise solutions when they are operating in a system where resources are unlimited. But don’t live in a world with unlimited resources we live in a world of scarcity, and politicians in California refuse to accept this.

They continue to spend money like it will never run out and they don’t seem to think that they need to take a look at all of their spending.

Nope, to fix the problem their big government spending causes they just turn successful parts of the private sector into the scapegoat. They make claims that Amazon is just a bunch of greedy bastards who don’t want to pay their fair share.

Amazon is good at what they do and they should continue to fight the states who want them to pay all of these new taxes. The tax system needs to be reformed because the way it is now is causing companies to leave states and the US altogether.

Big government spending and taxation is responsible for California’s budget woes, not Amazon. If you are getting tired of being taxed to pay for government waste then it is in your best interest for Amazon to win this battle. Believe it or not, it has huge implications for the rest of us.

The more governments like California are allowed to spend and tax, the more jobs they will destroy. Who is causing more harm to Californians right now, Amazon or the California government?