Golden state, stupid state

Posted by: Phineas on June 30, 2011 at 2:01 pm

**Posted by Phineas

Regular readers know I often recommend books in my posts. If you’ve ever clicked on the links, you also sent a few pennies my way, due  to my participation in Amazon’s “affiliate program.” I got even more if you actually bought something. It never amounted to much, just a few dollars a year, but it enabled me to get something here and there on Amazon that I might otherwise have passed on, thanks to you.

Now Amazon is shutting that program down, thanks to the State of California:

Unfortunately, Governor Brown has signed into law the bill that we emailed you about earlier today. As a result of this, contracts with all California residents participating in the Amazon Associates Program are terminated effective today, June 29, 2011. Those California residents will no longer receive advertising fees for sales referred to Amazon.com, Endless.com, MYHABIT.COM or SmallParts.com. Please be assured that all qualifying advertising fees earned before today will be processed and paid in full in accordance with the regular payment schedule.

That was part of an email I received yesterday from Amazon. The law in question is AB 27 X1, part of a budget deal to produce a balanced budget as required by law (and so legislators can start getting paid again, once the final budget is signed). Brown and the Democratic majority expect this extension of the sales tax to bring in about $200 million. I’d like to know what they were smoking, because Amazon hasn’t needed the revenue from Affiliates in years, but kept the program running as a way to build goodwill and customer loyalty. Since they didn’t need the revenue, and since California has now raised the cost of the program to more than Amazon was willing to pay, the company did what was predictable by anyone except a California Democrat — they pulled the plug. Sacramento won’t see a dime of that $200 million.

But wait, it gets better!

While my earnings were small potatoes (1), quite a few people made a business out of sending customers to Amazon. According to Moe Lane, California collected about $124 million in income tax revenue from people in the referral program. So, not only will they not get the $200 million, but they’ll lose the income tax money, too.

Genius, sheer genius. 

I’ve long said that to be a liberal Democrat requires one to forget even the basics of  economics; this would be the tax policy equivalent. Common sense tells you that, if you make the cost of business too high, the business will go away. We’ve already seen a lot of that in California, and this is another example because taxes and tax-handling are a cost of business.

California may once have been “The Golden State,” but the people who run it are treating it like the goose that laid the golden eggs, instead. Keep it up, and they’ll soon learn its moral.

The hard way.

LINKS: William Jacobson calls it the Revolt of the Amazon Kulaks. At Afterthoughts, Brandy feels like she’s been fired. Stacy McCain says Amazon has “gone Galt” and left Zimbabwe-on-the-Pacific. Katy Grimes of The Washington Examiner thinks this bill will cost California 25,000 small businesses. Way to go, Democrats! 

Footnotes:

(1) Well, really just a single, tiny potato…

(Crossposted at Public Secrets)

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  • 18 Responses to “Golden state, stupid state”

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    1. Tina F. says:

      People, as a forensic accountant for the state of California, the state currently has a $500 billion unfunded pension liability. People don’t realize this. At the current rate California’s private sector will pay 212% of 100% of their revenue or salary by 2018 which is impossible but yet is the model being defended across the nation by those who don’t understand basic socio-economics. Loans, grants, bond sale authorizations from the Federal Government to California are over and done. The State is now negotiating with which banks will cash or negotiate the pensioners’ compensation or basically IOU’s. The State is technically 64 months behind in payments to the private sector and just a matter of time before the rest of the private sector stops doing business with the State which they are by droves. My advice to Pensioners across the Nation? Just please prepared. Assume for just one moment there will be no next check. Your State or local government along with labor promised this not the tax payer. Please allow me to repeat this most important thought, the private sector didn’t promise these pensions, your local political representative and labor leaders did and now this sector is now demanding that the private sector pay up on a contract they had nothing to do with? Which is the way the private sector is viewing this? What is happening in California is happening across the nation. The private sector is saying no and moving either to another state or offshore and there isn’t a big enough kinetic force to change their minds. There is no win here. The new budget for California is an exercise in futility trying to give those who don’t know the warm and fuzzies. We’re broke as a State, as a Nation as there are no checks left in the checkbook with the tax payer credit card maxed and canceled. Life as we all once knew it is over and to think the private sector will tirelessly tread water to ensure no hick-ups in the pension arena is not only folly but dangerous. Stay tuned……

    2. Ceemack says:

      After Nov. 2008, some have suggested that Presidential candidates be required to present their birth certificates before running.

      Looking at this law, I’d say we need to require our legislative (and gubernatorial) candidates to present the results of an IQ test before running. Clearly, triple-digit IQs are very scarce in Sacramoscow.

      As ST said, the state won’t see an additional dime in sales tax, but will lose a bunch of income tax revenue–and a lot of families will lose a key source of income.

    3. Tango says:

      ….there is an old (but true) saying: “as California goes, so goes the nation!”

    4. Dave Minnich says:

      @ Tango said
      “….there is an old (but true) saying: “as California goes, so goes the nation!”

      Fortunately, this hasn’t been true for over two decades now. California has become New York with a tan, and the rest of the country, save for a few states, has been backpedaling away from their “vision” as fast as they can.

    5. Ryan says:

      Pretty soon California companies won’t be able to pay out the bonuses and stock options that are a big help for people to afford homes in places like the Bay Area.

      But hey, at least our sales tax drops a little in a day. Nevermind it’s still way too high!

    6. Great White Rat says:

      Phineas, your problem is that you think these liberals put these policies in place because they’re trying to raise revenue, and are just too dumb and shortsighted to see that the opposite occurs. That’s not their goal at all.

      Do you remember during the 2008 campaign, when someone at a presser pointed out to Obama that federal revenues would drop if he got his way and raised the capital gains tax? Do you remember his response? He said it didn’t bother him because to him, it was all about fairness. Not whether the government can pay its bills. Fairness.

      To translate, it’s about stoking class warfare hatred in an effort to distract voters from the left’s disastrous economic failures and about retaining power. Always remember what’s most important to a leftist. Not a strong national economy. Not strong national security. Not moral values or principles. It’s always power.

      Remember Alinsky’s dedication in Rules for Radicals? It was to Lucifer – who would rather rule in hell than serve in heaven. That’s the quintessential liberal for you…it doesn’t matter to them if they turn the nation into hell, as long as they’re in charge.

    7. eeyore says:

      I’ve long said that to be a liberal Democrat requires one to forget even the basics of economics

      Actually, it kinda requires assiduously avoiding ever learning them. Gets in the way of the whole “staying on message” thing.

    8. John A says:

      It is not as if California pols did not know Amazon (and others, such as Overstock.com) would do this, they’ve done it before – incuding in my State, Rhode Island. And it is silly – if I buy something via an advert on the LA Times website, is the Times supposed to report the purchase to Rhode Island?

      But I must admit to some schadenfreude. Where were all these people when various States were [successfully! Well, other than Reservation sites – see gambling casinos as well] going after tobacco sales records? I wonder how much the gas station in South Carolina from which I used to by via their Internet site lost, and how much South Carolina lost in tax on that business` income? Or even how much the Federal government lost in Customs/Duty assessments, since the brand I most often purchased was imported?

    9. Swede says:

      Fortunately, I escaped Caleeforneea in 1958. Best move ever made. Just reading about it is a daily plethora of comedy. You’ve got Pelosi and Schwarzenscrewer..Could you wish for anything more??

    10. ron8072 says:

      :( As I live in a flyover state, (GA), I am unaccustomed to decisions made by looneytune governors. Wait, what am I saying? We have Rino looneytune governors also. They all make bad decisions off the cuff and never consider the bigger picture. Sorry, ST, you are one of the latest recipient of stupid decisions. Hope you can survive without ‘potatoes’ until your patch gets replanted and the harvest starts coming in.

    11. captaingrumpy says:

      The way this labor government in Australia is going we will be in the same boat as America.The stupid ones in power still want cap and trade.

    12. Coastal Eddie says:

      There is a model for economic recovery, and raising taxes sure is not it. We can certainly hope that a medical procedure is developed allowing the removal of the head from the posterior to make reality easier to see.

    13. PE says:

      California. State of the Divine Wind. Banzai!! Banzai!! Tojours Banzai! Whatever

    14. Dana says:

      Now you know why I refer to the state of my birth as the Pyrite State.

    15. George Robinson says:

      Please guys, don’t stop the lunacy. We Texans love it as every day a business or two moves here from your “Golden”
      tax abuser heaven. What happens is they come to survive, when they find out what free enterprise actually is they start to grow like crazy, Y’all had some good stuff.