Amazon pulls out of Texas

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Zamfir
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Re: Amazon pulls out of Texas

Postby Zamfir » Mon Feb 14, 2011 2:12 pm UTC

Thesh wrote:We can make up for it with income tax; it's more stable (i.e. you can generally predict with high confidence what next years income tax revenue will be) and more progressive (sales tax tends to get fairly regressive).

I don't think European countries have problems with the predictability of VAT, and they rely on it for something like half of their tax income. If US states have such problems, that problem lies presumably not in the tax itself.

The progressivity is an interesting one. The main reason Europe gets away with it is that the total system of all taxes and spending is rather progressive. The US probably have a more progressive system of taxation than most European countries. But European countries simply tax and spend more, and that compensates. If you introduce a regressive tax and use the result to pay for equal access to healthcare for everyone, the system as a whole is more equal, even if your tax system is now more regressive.

Of course, if you do not want to expand total expenditure, you can still introduce a regressive tax and compensate by making other taxes more progressive, or to change spending in ways that benefit lower incomes.

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Re: Amazon pulls out of Texas

Postby Adacore » Mon Feb 14, 2011 2:16 pm UTC

On the Amazon issue in Europe, I know they do the same thing, at least to an extent, in the UK. Lots of their UK sales go through a Jersey-based 'preferred partner' company, and Jersey has no VAT, so they can offer products 15-20% cheaper than anyone else (except the other companies that also use Channel Islands bases for their online businesses, like HMV).

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Re: Amazon pulls out of Texas

Postby Thesh » Mon Feb 14, 2011 2:37 pm UTC

Zamfir wrote:The progressivity is an interesting one. The main reason Europe gets away with it is that the total system of all taxes and spending is rather progressive. The US probably have a more progressive system of taxation than most European countries. But European countries simply tax and spend more, and that compensates. If you introduce a regressive tax and use the result to pay for equal access to healthcare for everyone, the system as a whole is more equal, even if your tax system is now more regressive.


The US system would be fairly progressive if capital gains were treated as normal income. As it stands now, people who get most of their income from dividends and stock trading (generally people with the highest income) tend to pay a significantly reduced tax rate.

Zamfir wrote: If you introduce a regressive tax and use the result to pay for equal access to healthcare for everyone, the system as a whole is more equal, even if your tax system is now more regressive.


I can agree with that. High sales tax is a lot less of a burden if you have a lot of social programs to help out the people that are hit hardest by it. On the other hand, if there was less of a tax burden for the lower class then welfare programs might be less expensive. It's very difficult to say for sure.
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Endless Mike
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Re: Amazon pulls out of Texas

Postby Endless Mike » Mon Feb 14, 2011 3:00 pm UTC

netcrusher88 wrote:
Endless Mike wrote:I don't think I've ever had anything shipped from that distro center, though, now that I think about it.

That doesn't matter. I get stuff shipped from Amazon from all over and I pay Washington sales tax on every penny.

I know. I just hadn't thought about it until then. Most of my packages come from the PA distro.

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Zamfir
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Re: Amazon pulls out of Texas

Postby Zamfir » Mon Feb 14, 2011 3:07 pm UTC

Thesh wrote:On the other hand, if there was less of a tax burden for the lower class then welfare programs might be less expensive. It's very difficult to say for sure.

Nah, that one is pretty easy. In the US, just like nearly everywhere else, the poorest people pay very little in taxes. Raising taxes to pay for social insurance systems is almost always a boon for poor people. Unless you very carefully design the tax to hit poor people and design the insurance system to exclude poor people.

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Re: Amazon pulls out of Texas

Postby lowbart » Mon Feb 14, 2011 4:54 pm UTC

KnightExemplar wrote:
Yakk wrote:On the other hand, being willing to pull out of a state due to this kind of thing encourages other states not to do this kind of thing.

Why do you think New Jersey has 0% sales taxes ??

I'm glad you brought up the example of New Jersey. See, what Amazon is doing is effectively forcing a 0% sales tax on all the major state governments. And look how that's working out for New Jersey[/quote]

I don't know why you think Jersey has a 0% sales tax. It's 7%. Are you maybe thinking of Delaware, home of every credit card corporation in America?
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Re: Amazon pulls out of Texas

Postby TheSkyMovesSideways » Mon Feb 14, 2011 10:53 pm UTC

nbonaparte wrote:In a relatively isolated country like the US, shipping costs (usually from europe or asia) are more prohibitive than sales tax. I'd think you'd know about that, being from Australia. What Zamfir is saying about the EU is necessary because that's a bunch of countries near each other, with lower shipping costs between them.

That depends... Shipping from the UK (Royal Mail, I think) seems quite cheap, and is often less than our 10% sales tax ("GST"), whereas shipping from the US tends to be quite expensive, as almost all companies there insist on using expensive courier companies rather than USPS. In either case, the lower retail prices before tax more than make up for the cost of shipping.

What I'm wondering is whether there is significant benefit to having sales taxes over just increased income taxes.
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Re: Amazon pulls out of Texas

Postby EdgarJPublius » Tue Feb 15, 2011 3:18 am UTC

The USPS doesn't readily compare to the Royal Mail. The major difference is likely the size and geographical extent of the U.S. vs. the U.K. which complicates fast and efficient delivery. I'm not familiar with how the Royal Mail operates, but by reputation I would guess that it is better managed than the USPS as well.
In the U.S. parcel delivery is expensive, slow and unreliable, private courier and parcel delivery services are actually competitive with the USPS and in many cases can consistently offer better reliability and/or price and/or delivery schedules (frequently all three)
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