10 ms·

Amazon Offers To Hire 7,000 If California Waits On Sales Tax

14 points by zackbelow 15y ago

crxpandion 15y ago
http://www.forbes.com/sites/ericsavitz/2011/09/02/amazon-offers-to-hire-7000-if-california-waits-on-sales-tax/ http://www.forbes.com/sites/ericsavitz/2011/09/02/amazon-off... is the correct link
- zackbelow 15y ago
  thanks!
wccrawford 15y ago
I wonder if there isn't a hidden threat there, too... That they'll pull jobs from California if they don't get their way? They're obviously able to choose where the jobs go, or this offer wouldn't make sense at all.
- masterzora 15y ago
  That's not a hidden threat; that's been an open threat for ages. Amazon has a history of pulling out operations in states that try to pass similar laws and they said they'd do the same in California. This offer was an attempt to avoid that.
guywithabike 15y ago
It's a sad day when corporations can openly blackmail the government.
- solson 15y ago
  Why? It is fair play. The government has been openly coercing and blackmailing private individuals and businesses since the beginning of governments.
- hexis 15y ago
  This might be characterized as a bribe, but how could it be blackmail?
- redsymbol 15y ago
  Oh come on. This isn't blackmail, it's offering an exchange that's win-win. California wants - actually, badly NEEDS - jobs; Amazon wants to avoid or at least delay the sales tax. They have every ethical and legal right to make the proposal. If I'm selling burgers for $5, and you give me $5 for one because you're hungry, am I "blackmailing" you to get your cash? Perhaps I'm missing something? If so, please point it out.
  - joezydeco 15y ago
    They're "blackmailing" the politicians by making it look like they don't want jobs in California. That's a pretty sensitive subject to be voting against...at least when Amazon frames the argument that way. The reality is that the jobs brought in will amount to about 2% of the sales tax revenue that would be brought in. But do you think the public will understand the math, or the phrase "voted against job creation"?
    - redsymbol 15y ago
      How do you get the 2% number? From what I found, the Governor's office expects $200million in extra tax revenue per year from doing this [0]. 7,000 jobs [1] is $350million per year, if the jobs pay about $40K/year (which means the cost to the employer, after payroll taxes and overhead, is at least $50K... 7K * 50K == 350mill.) [0] http://jan.ocregister.com/2011/06/29/amazon-terminates-deal-with-25000-calif-affiliates/60971/ http://jan.ocregister.com/2011/06/29/amazon-terminates-deal-... [1] http://www.forbes.com/sites/ericsavitz/2011/09/02/amazon-offers-to-hire-7000-if-california-waits-on-sales-tax/ http://www.forbes.com/sites/ericsavitz/2011/09/02/amazon-off...
      - joezydeco 15y ago
        The 2% was from an NPR Marketplace story I heard on the radio last night. http://marketplace.publicradio.org/display/web/2011/09/01/pm-amazons-jobs-power-play/ http://marketplace.publicradio.org/display/web/2011/09/01/pm... "The state estimates sales tax would bring in around $83 million from Amazon alone -- $317 million from all Internet retailers. Income tax from Amazon's promised 7,000 jobs might add up to 2.5 percent of that." What we're comparing here is how much sales tax California would pull in from online retailers vs how much income tax those 7,000 new workers would pay to CA. You can't compare the gross payroll amount to the sales tax.
- temphn 15y ago
  Government agents have guns. Amazon does not. Who's really threatening who? The only card Amazon has to play is to leave.
- thisuser 15y ago
  Exactly. Texas called Amazon's bluff. Amazon folded.
snorkel 15y ago
Unlikely to deter the tax. 7000 added jobs not much compared to the hundreds of millions California projects to earn from the ecommerce tax.
- warmfuzzykitten 15y ago
  It's a whole lot more than the zero California will earn from the ecommerce tax. California still has no authority to enforce a sales tax outside its borders. Amazon now has no physical presence in California. So far the only effect of the tax is to lose jobs in California.
michaelpinto 15y ago
It was just a few weeks ago I was watching Steve Jobs give his pitch for Apple's new campus in California -- at one point Jobs broke out the idea that the benefit to the state was Apple paying their taxes. In other words the way a company is a good corporate citizen is by increasing the tax base. What's sad here is that Jobs was talking about payroll tax, not even sales tax. The right thing for Amazon to do is to collect that tax instead of cheating the kids of California. Also special deals for big companies (be it Amazon or Walmart) are always unfair to small companies that don't get the same breaks. If you're going to give a sales tax holiday to anyone it should be startup companies in California that can use the boost.
- jinushaun 15y ago
  In a state like CA which manages to be on the brink of bankruptcy despite pulling in the largest amount of tax revenue in the US, I think the solution is cutting spending, not throwing more money down the drain.
  - derobert 15y ago
    California is also the most populous state in the US. Looking at one figure without the other is rather silly. Per capita, California does not bring in the highest amount of revenue of any state. In 2008 (the latest year I could quickly find data for), its #8 (#9 if you include DC). As a portion of personal income, CA is #11 or #12 (with DC). Sources: http://www.taxpolicycenter.org/taxfacts/displayafact.cfm?Docid=513 http://www.taxpolicycenter.org/taxfacts/displayafact.cfm?Doc... http://www.taxpolicycenter.org/taxfacts/displayafact.cfm?DocID=531&Topic2id=90&Topic3id=92 http://www.taxpolicycenter.org/taxfacts/displayafact.cfm?Doc...
- InclinedPlane 15y ago
  State governments do not have the right to collect sales tax from companies that have no presence in their state.
- matwood 15y ago
  Interesting that you think it's Amazon that is cheating the kids in CA and not the politicians (or other huge lobby siphoning money from the CA tax payers). With that said, state sales tax has always been about collecting tax if the business has a presence in the state. This works for Amazon all the way down to the mom and pop that sells across the internet to people in another state. Most (all?) states have a line item on their tax forms where the tax payer can write in a value on items they purchased out of state and need to pay taxes on. I'm guessing very few people fill that line in. It touches on another problem that no one wants to pay taxes (they always want someone else to pay), yet they want more and more services from the government.
zackbelow 15y ago
On top of the ridiculous sales tax bill have you seen the Babysitter bill? http://www.theunion.com/ARTICLE/20110830/BREAKINGNEWS/110839991/-1/RSS http://www.theunion.com/ARTICLE/20110830/BREAKINGNEWS/110839... It is a bill being considered that says that if you hire a babysitter, you've got to provide breaks every 2 hours (which means you've got to hire another babysitter), plus pay for workman's compensation and keep track of taxes.
- deleted 15y ago
  [deleted]
- jinushaun 15y ago
  I agree that it's a stupid bill, but don't be so sensational. The bill only applies to babysitters over 18, which are typically professional care givers (i.e., nannies).
  - bradleyland 15y ago
    "which are typically professional care givers" There's nothing sensational about calling that bill ridiculous. Not everyone who is over 18 and watches children on occasion for money is a professional care giver. Most of my friends have a 20-something friend that will watch their kids for them on date-night. They prefer the 20-something friend to a much younger babysitter because of maturity and responsibility. This person has a day-job, but they don't mind watching their friends' kids from time to time.
    - jinushaun 15y ago
      Your friends ask you for money to watch your kids? Wow.
      - Hyena 15y ago
        It's perfectly acceptable. In my experience, it's better to exchange money for labor in certain cases because it helps to define an activity away from the friendship and so prevents it from becoming precedential.

14 points by zackbelow 15y ago

http://www.forbes.com/sites/ericsavitz/2011/09/02/amazon-offers-to-hire-7000-if-california-waits-on-sales-tax/ http://www.forbes.com/sites/ericsavitz/2011/09/02/amazon-off... is the correct link

zackbelow 15y ago
thanks!

wccrawford 15y ago

I wonder if there isn't a hidden threat there, too... That they'll pull jobs from California if they don't get their way? They're obviously able to choose where the jobs go, or this offer wouldn't make sense at all.

masterzora 15y ago
That's not a hidden threat; that's been an open threat for ages. Amazon has a history of pulling out operations in states that try to pass similar laws and they said they'd do the same in California. This offer was an attempt to avoid that.

guywithabike 15y ago

It's a sad day when corporations can openly blackmail the government.

solson 15y ago
Why? It is fair play. The government has been openly coercing and blackmailing private individuals and businesses since the beginning of governments.
hexis 15y ago
This might be characterized as a bribe, but how could it be blackmail?
redsymbol 15y ago
Oh come on. This isn't blackmail, it's offering an exchange that's win-win. California wants - actually, badly NEEDS - jobs; Amazon wants to avoid or at least delay the sales tax. They have every ethical and legal right to make the proposal. If I'm selling burgers for $5, and you give me $5 for one because you're hungry, am I "blackmailing" you to get your cash? Perhaps I'm missing something? If so, please point it out.
- joezydeco 15y ago
  They're "blackmailing" the politicians by making it look like they don't want jobs in California. That's a pretty sensitive subject to be voting against...at least when Amazon frames the argument that way. The reality is that the jobs brought in will amount to about 2% of the sales tax revenue that would be brought in. But do you think the public will understand the math, or the phrase "voted against job creation"?
  - redsymbol 15y ago
    How do you get the 2% number? From what I found, the Governor's office expects $200million in extra tax revenue per year from doing this [0]. 7,000 jobs [1] is $350million per year, if the jobs pay about $40K/year (which means the cost to the employer, after payroll taxes and overhead, is at least $50K... 7K * 50K == 350mill.) [0] http://jan.ocregister.com/2011/06/29/amazon-terminates-deal-with-25000-calif-affiliates/60971/ http://jan.ocregister.com/2011/06/29/amazon-terminates-deal-... [1] http://www.forbes.com/sites/ericsavitz/2011/09/02/amazon-offers-to-hire-7000-if-california-waits-on-sales-tax/ http://www.forbes.com/sites/ericsavitz/2011/09/02/amazon-off...
    - joezydeco 15y ago
      The 2% was from an NPR Marketplace story I heard on the radio last night. http://marketplace.publicradio.org/display/web/2011/09/01/pm-amazons-jobs-power-play/ http://marketplace.publicradio.org/display/web/2011/09/01/pm... "The state estimates sales tax would bring in around $83 million from Amazon alone -- $317 million from all Internet retailers. Income tax from Amazon's promised 7,000 jobs might add up to 2.5 percent of that." What we're comparing here is how much sales tax California would pull in from online retailers vs how much income tax those 7,000 new workers would pay to CA. You can't compare the gross payroll amount to the sales tax.
temphn 15y ago
Government agents have guns. Amazon does not. Who's really threatening who? The only card Amazon has to play is to leave.
thisuser 15y ago
Exactly. Texas called Amazon's bluff. Amazon folded.

snorkel 15y ago

Unlikely to deter the tax. 7000 added jobs not much compared to the hundreds of millions California projects to earn from the ecommerce tax.

warmfuzzykitten 15y ago
It's a whole lot more than the zero California will earn from the ecommerce tax. California still has no authority to enforce a sales tax outside its borders. Amazon now has no physical presence in California. So far the only effect of the tax is to lose jobs in California.

michaelpinto 15y ago

It was just a few weeks ago I was watching Steve Jobs give his pitch for Apple's new campus in California -- at one point Jobs broke out the idea that the benefit to the state was Apple paying their taxes. In other words the way a company is a good corporate citizen is by increasing the tax base. What's sad here is that Jobs was talking about payroll tax, not even sales tax. The right thing for Amazon to do is to collect that tax instead of cheating the kids of California. Also special deals for big companies (be it Amazon or Walmart) are always unfair to small companies that don't get the same breaks. If you're going to give a sales tax holiday to anyone it should be startup companies in California that can use the boost.

jinushaun 15y ago
In a state like CA which manages to be on the brink of bankruptcy despite pulling in the largest amount of tax revenue in the US, I think the solution is cutting spending, not throwing more money down the drain.
- derobert 15y ago
  California is also the most populous state in the US. Looking at one figure without the other is rather silly. Per capita, California does not bring in the highest amount of revenue of any state. In 2008 (the latest year I could quickly find data for), its #8 (#9 if you include DC). As a portion of personal income, CA is #11 or #12 (with DC). Sources: http://www.taxpolicycenter.org/taxfacts/displayafact.cfm?Docid=513 http://www.taxpolicycenter.org/taxfacts/displayafact.cfm?Doc... http://www.taxpolicycenter.org/taxfacts/displayafact.cfm?DocID=531&Topic2id=90&Topic3id=92 http://www.taxpolicycenter.org/taxfacts/displayafact.cfm?Doc...
InclinedPlane 15y ago
State governments do not have the right to collect sales tax from companies that have no presence in their state.
matwood 15y ago
Interesting that you think it's Amazon that is cheating the kids in CA and not the politicians (or other huge lobby siphoning money from the CA tax payers). With that said, state sales tax has always been about collecting tax if the business has a presence in the state. This works for Amazon all the way down to the mom and pop that sells across the internet to people in another state. Most (all?) states have a line item on their tax forms where the tax payer can write in a value on items they purchased out of state and need to pay taxes on. I'm guessing very few people fill that line in. It touches on another problem that no one wants to pay taxes (they always want someone else to pay), yet they want more and more services from the government.

zackbelow 15y ago

On top of the ridiculous sales tax bill have you seen the Babysitter bill? http://www.theunion.com/ARTICLE/20110830/BREAKINGNEWS/110839991/-1/RSS http://www.theunion.com/ARTICLE/20110830/BREAKINGNEWS/110839... It is a bill being considered that says that if you hire a babysitter, you've got to provide breaks every 2 hours (which means you've got to hire another babysitter), plus pay for workman's compensation and keep track of taxes.

deleted 15y ago
[deleted]
jinushaun 15y ago
I agree that it's a stupid bill, but don't be so sensational. The bill only applies to babysitters over 18, which are typically professional care givers (i.e., nannies).
- bradleyland 15y ago
  "which are typically professional care givers" There's nothing sensational about calling that bill ridiculous. Not everyone who is over 18 and watches children on occasion for money is a professional care giver. Most of my friends have a 20-something friend that will watch their kids for them on date-night. They prefer the 20-something friend to a much younger babysitter because of maturity and responsibility. This person has a day-job, but they don't mind watching their friends' kids from time to time.
  - jinushaun 15y ago
    Your friends ask you for money to watch your kids? Wow.
    - Hyena 15y ago
      It's perfectly acceptable. In my experience, it's better to exchange money for labor in certain cases because it helps to define an activity away from the friendship and so prevents it from becoming precedential.