Retail Giants Lobby To Raise Your Taxes And Kill Your Online Income
Big Retailers Including Wal-Mart Want Amazon Sales Taxed Now!
Success Comes With Pain!
There is an unpleasant reality in life, that unfortunately, is all too common. When an individual or a business does something really, really, well success is likely to follow. Whether it's an entrepreneur who comes up with an innovative idea that yields a superior product or service, or the dedicated and savvy employee who climbs the corporate ladder to become CEO, great rewards can follow hard work, creativity, and perseverance. However there are also downsides to success. Along the way competitors operating in the same industry, will end up losing sales that were once theirs because they fail to adapt to the changing business trends brought on by entrepreneurial creativity. Of course those who end up on the losing end of entrepreneurial progress are often not thrilled by losing their position to a new competitor. Simply put success can be a thrilling experience, but on the negative side of things it is likely to breed some jealous haters and enemies. Though wounded these enemies can still be powerful and dangerous enough to pose a threat to the successful competitor that has bested them fair and square in the market. That is exactly what this hub is about. Powerful forces, stunned by the rise of new empire, but still seeking to protect their turf from the progress and innovation that has recently occurred in their own industry.
The Story Of An E-Commerce Legend
Once upon a time in the .com boom of the 1990s there was a man named Jeff Bezos who had a vision. His vision was simple, yet unconventional at the time. He believed that by selling books over the internet instead of through brick-and-mortar locations, allot of overhead costs could be eliminated and a good portion of the savings could be passed on to consumers. So he made the decision to risk everything on his idea, drive across the United States to Seattle, and work like mad to turn his vision into a reality. The rest is history, Bezos's company, Amazon.com, would go on to become the largest online bookstore and eventually the largest e-commerce site as Bezos took the company's successful business model and applied it to electronics, toys, and other consumer products. Through Amazon's tremendous success many people have benefitted. Consumers have saved money, jobs have been created, many small businesses have been created using Amazon's independent seller arrangements, people have earned extra income online as Amazon affiliates, authors have a new way to promote their books that they never had before, and the shipping industry has gained a substantial amount of revenue. Who wouldn't be happy with all of these beneficial developments. Well there is one group has not reaped any gains from the rise of Amazon. That group would of course be their competitors. Especially those that are big brand name, brick-and-mortar operations. Indeed these traditional retailers have lost sales and business as a result of the Amazon success story. Amazon has been so successful that even large retail chains like Target, Wal-Mart, Barnes & Noble, and Best Buy have all started to take notice and they appear to be nervous and threatened by the high growth model that they see. That brings to a recent development in Amazon's ongoing story.
Attacked For Being Great
It turns out that Amazon is a great example of my point above that greatness often attracts enemies. At the moment the large multi-national retail chains appear to flexing their considerable muscle and at the same time identifying themselves as formidable enemies for Amazon to contend with. A recent article in the Wall Street Journal describes how Wal-Mart, Home Depot, Target, Sears, and Best Buy among others are on are in fact on the warpath against the e-commerce giant's business model, which has benefitted so many. Part of the savings that consumers enjoy when they shop on Amazon, is due to the fact, that the majority of purchases are free of any sales taxes. The big retailers want to use government as a tool to stop this, by lobbying elected officials and publically crying foul over the exemption from sales taxes that most online consumers enjoy. In order to make sure consumers have to pay sales taxes on internet purchases, the big boys of retail have thrown their support behind a shady political coalition called the Alliance for Main Street Fairness (of all the deceiving names), that is working to get sales taxes charged to all online sales (real fair for consumers). The group is actively trying to make these changes in 12 different states including California. However it doesn't end there, as mentioned the big retailers are even taking their own shots at the current system. Wal-Mart's executive vice president of global e-commerce, Raul Vazquez has even made public accusations that his company is operating under a competitive disadvantage because Amazon sales are not taxed. In the article, he is quoted as saying:
"The rules today don't allow brick-and-mortar retailers to compete evenly with online retailers, and that needs to be addressed."
Disastrous Results So Far
Although most Amazon sales are still free of sales tax burdens, big retail's campaign to tax online sales has had some initial victories and the results have been very destructive for a number of parties. For example in the state of Illinois the retail market is supposedly more of an even playing field, since Amazon is now forced to collect sales taxes if it employs affiliates within the state. Of you may want to try convincing the former Amazon affiliates from Illinois who the online retailer let go as a result of the new legislation. In Texas something similar happened. The state decided to slap Amazon with a $269 million bill for uncollected sales taxes on the basis that they are due the money because Amazon has a distributor center located in the state. Sadly, the e-commerce giant announced recently that their Texas distribution center will be closed. Bye, bye jobs for the state of Texas!
So will forcing sales taxes on all internet sales create a level playing field that's really more fair? Who will it more fair for? Will Consumers benefit? I say none of the above. Tax free e-commerce has saved consumers tons of money and created all kinds of opportunities and jobs. The evidence already shows that some if this progress is being reversed and opportunities lost due to tax burdens being placed on internet sales. It all comes down to desperate state governments (broke due to mismanagement) and envious retail giants colluding together to create policies that will not make things fair, but instead increase costs, and harm Amazon's thriving business. The big retail establishment sees an opportunity. States are on the brink of insolvency so now will be a great time to make the case that online sales should be taxed, taking away one of Amazon's and other online retailer's key advantages. These interests aren't out for fairness though, it's anything but. Just ask yourself this. Are more taxes and more money in the hands of state governments who have spent their way into insolvency better for the average person? No but if it means you're more likely to choose Wal-Mart, Target and others over Amazon, then who cares about you or me, they are all for it!
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