Hot Air has a segment up about the recent move by Amazon to drop its affiliate shops in Illinois because Illinois levied a tax, a sales tax, on Internet purchases and why this is an awful thing. They quote a story from NPR:
TONY ARNOLD: Brad Wilson runs the aptly named bradsdeals.com — a coupon web site based in downtown Chicago.
BRAD WILSON: Ultimately, Amazon and Overstock hold the trump card in this situation.
Wilson says after today — Amazon will boycott business with BradsDeals — and roughly 9,000 other retailers in Illinois to skirt the tax. Illinois residents can still go online and get the latest best seller from Amazon, they just won’t be getting that book from any Amazon affiliate in Illinois.
WILSON: We’re looking at a lot of options that I wouldn’t want to have ever had to think of, unfortunately.
Wilson says he’s considering picking up shop and relocating to another state to make up for the money he’ll lose. He wouldn’t say how much.
Fair enough, right? If you were a businessman in Illinois and wanted continue making money doing what you were doing, you’d go to another state, like how one retailer did, right?
But, the “tax holiday” granted to Amazon and Overstock could simply be ended at the national level. That’s what Sen. Dick Durban from Illinois wants to do. He’s in the “gang of six” charged with finding new ways to restore balance to the budget and handle the deficit. He outlines his plan to the New York Post:
My emphasis added
The e-tax man cometh.
As early as this week, Sen. Dick Durbin (D-Ill.) told The Post he will propose sweeping legislation to tax all online purchases — in a move aimed at closing state budget shortfalls.
Such a tax would plow more than $1 billion in tax revenues into the state coffers for the 2012 budget, according to some estimates.
William Fox, University of Tennessee economics professor, says that based on his own estimates, New York lost about $865.5 million in tax revenues in 2010 — almost enough to close that year’s $1 billion budget deficit — based on its 4 percent tax rate.
Well, Hot Air cries murder:
“But Patrick,” you say, “surely Illinois would just lift the job-destroying taxes they’ve imposed.” But nay, friends, we must remember the challenge. Why would Illinois’s political class fix its state’s problem, when they can make its problem America’s problem…..
Leaving Illinois because its economic policies are destroying you? No worries. Illinois will come to you.
These internet startups were granted this tax holiday when they were incorporated so that they could prosper. And prosper they have. While NO ONE likes paying extra taxes (self included), Hot Air, among many other sources have called for an end to the green energy tax subsidies, such as ethanol, as a way to decrease the deficit:
My emphasis added
Assuming that the tax credit stays in place, it will have cost us almost $31 billion since it began in 2005. Even if the credit made sense, a GAO report from March explained that the time has passed for it. The industry needed to make the product price competitive while it invested heavily in its capital infrastructure, but that investment has come and gone. Now those credits work as a purely winner-picking mechanism that makes ethanol falsely competitive with other energy sources.
While I may not agree with their ideology about cutting EtOH subsidies, I certainly don’t agree with their logical reasoning skills. In the overall scheme of things, which is more important to survive: Internet Moguls or Sustainable Energy?