**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.
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!
(1) Well, really just a single, tiny potato…
(Crossposted at Public Secrets)