In a recent article, California Board of Equalization member George Runner—one of the most vocal opponents of the Amazon Tax—listed dozens of online sellers who have terminated their relationships with affiliate sellers in California. Each of those companies represents hundreds if not thousands of individuals who made some part of their income via online sales.
But Amazon hasn’t thrown in the towel completely. Ten days after the Amazon Tax bill was signed, the company filed a referendum to take the issue before voters and repeal the law. Once again, the people—and business community—have been forced to turn to the direct vote of the initiative process because the shortsighted greed of the legislature is stifling economic prosperity.
How sad for California that the people have to once again sidestep their legislature in order to make meaningful reforms. Corrupt, greedy politicians and special interests have created such a spider’s web of gerrymandering and restrictive election financing laws that the only recourse the people have is direct democracy. While certainly not the most desirable means of governance, this is what it has come to in the former Golden State.
The implications of this epic battle between California’s government and retailers like Amazon cannot be overlooked. How ironic that one of the industries that caused the state’s economy to thrive and brought in such rich revenues for state coffers is now the very industry state leaders are driving away.
In fact, Amazon CEO Jeff Bezos once considered establishing the company’s corporate headquarters in Silicon Valley because it’s “the single best source for technical talent.” But knowing the company would be forced to collect a sales tax in its home state, Amazon opted for the tech-friendly alternative of Washington.
If only California legislators were wise enough to understand the ramifications of Amazon’s decision. Bezos knew the best talent was in California and could have created thousands of jobs there. But it was the government’s tax policies that drove the company into the arms of another state. Instead of settling for a measly $200 million, imagine the millions more generated by having even more Internet companies—and their accompanying jobs—based in California.