California To Impose Internet Tax – Amazon Shuts Down California Retailers

Today I received the following email from the Amazon Associates Team:

Hello,

For well over a decade, the Amazon Associates Program has worked with thousands of California residents. Unfortunately, a potential new law that may be signed by Governor Brown compels us to terminate this program for California-based participants. It specifically imposes the collection of taxes from consumers on sales by online retailers – including but not limited to those referred by California-based marketing affiliates like you – even if those retailers have no physical presence in the state.

We oppose this bill because it is unconstitutional and counterproductive. It is supported by big-box retailers, most of which are based outside California, that seek to harm the affiliate advertising programs of their competitors. Similar legislation in other states has led to job and income losses, and little, if any, new tax revenue. We deeply regret that we must take this action.

As a result, we will terminate contracts with all California residents that are participants in the Amazon Associates Program as of the date (if any) that the California law becomes effective. We will send a follow-up notice to you confirming the termination date if the California law is enacted. In the event that the California law does not become effective before September 30, 2011, we withdraw this notice. As of the termination date, California residents will no longer receive advertising fees for sales referred to Amazon.com [ http://www.amazon.com/ ], Endless.com [ http://www.endless.com/ ], MYHABIT.COM [ http://www.myhabit.com/ ] or SmallParts.com [ http://www.smallparts.com/ ]. Please be assured that all qualifying advertising fees earned on or before the termination date will be processed and paid in full in accordance with the regular payment schedule.

You are receiving this email because our records indicate that you are a resident of California. If you are not currently a resident of California, or if you are relocating to another state in the near future, you can manage the details of your Associates account here [ https://affiliate-program.amazon.com/gp/associates/network/your-account/payee-info.html ]. And if you relocate to another state in the near future please contact us [ https://affiliate-program.amazon.com/gp/associates/contact?subject=&ie=UTF8 ] for reinstatement into the Amazon Associates Program.

To avoid confusion, we would like to clarify that this development will only impact our ability to offer the Associates Program to California residents and will not affect their ability to purchase from Amazon.com [ http://www.amazon.com/ ], Endless.com [ http://www.endless.com/ ], MYHABIT.COM [ http://www.myhabit.com/ ] or SmallParts.com [ http://www.smallparts.com/ ].

We have enjoyed working with you and other California-based participants in the Amazon Associates Program and, if this situation is rectified, would very much welcome the opportunity to re-open our Associates Program to California residents. We are also working on alternative ways to help California residents monetize their websites and we will be sure to contact you when these become available.

Regards,

The Amazon Associates Team

The government is a group of people that aggressively extorts money from a defenseless and largely disarmed majority. They use it to protect and cement the privileged position of established and campaign-financing organizations who fear competition from those annoying, small, and dynamic entrepreneurs who push down prices.

In the process it always cripples commerce to one degree or another. So long as the tax livestock remains productive and obedient, such occurrences can be shrugged off as regrettable but “necessary” collateral damage.

I submit the letter above as yet another piece of evidence in the long list of items that corroborate this thesis.

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California Budget Showdown – Schwarzenegger Courageously Holds the Line

Governor Schwarzenegger says Democrats are wasting time on flawed budget plans:

Reporting from Sacramento — With only days before the state begins issuing IOUs, Gov. Arnold Schwarzenegger scolded Democrats Monday for “wasting time” on budget fixes he won’t support while they accused him of making unreasonable demands.

Democrats in the state Senate passed proposals to balance the state’s books with the help of $2 billion in new taxes. But Schwarzenegger had already promised to veto the plan, which the Assembly approved Sunday night.

“I will never sign those kind of things, so why waste the time and why run out of time and then all of a sudden we have to hand out the IOUs?” Schwarzenegger told reporters.

“We are on the brink,” said Sen. Denise Moreno Ducheny (D-San Diego) during the Senate floor debate. “. . . We’re passing it to make sure that we’ve done our job,” she said.

My comment: What Sen. Ducheney is completely oblivious to: They have NOT done their job. In fact they have done the opposite. They have not balanced the budget, they have not cut Californians’ record high taxes, they have not addressed any long term structural issues. She is trying to fool the people into believing that her and her fellow Democrats have done what they could. This kind of mentality is sadly what one has to expect from an average California legislator these days.

California will begin issuing IOUs for some of its bills Thursday, according to Controller John Chiang.

Democratic leaders used a series of legal maneuvers to push the levies through without the GOP votes normally required to raise taxes. The package includes a tax increase of $1.50 per pack of cigarettes, a new 9.9% extraction tax on oil companies, a $15 vehicle license fee surcharge to fund state parks and a new charge on homeowner insurance premiums to pay for emergency response systems.

My comment: So the plan is to raise taxes on the most taxed state in the country, and that in the midst of one of the worst recessions in decades. Is there one person who seriously believes that this will help us solve the problems at hand?

Schwarzenegger has drawn several lines in the sand: He says he will not raise taxes, wants to address California’s entire projected $24-billion deficit at once and wants a number of fundamental changes to state government.

That stance does not sit well with the majority Democrats.

“I’ve never quite heard of a negotiating strategy that says, ‘I want $24 billion my way, and I want all my reforms over the next 37 hours,’ ” Senate President Pro Tem Darrell Steinberg (D-Sacramento) said in an interview Monday. “That’s not helpful.”

Steinberg said Democrats would be willing to meet Schwarzenegger “more than halfway,” even on a deficit-reduction plan without taxes. No such plan has been publicly released by the Democrats.

My comment: But these kinds of “half way” games are what brought California to where it was. If anything, Californians need someone who firmly stands up for the right thing and refuses to play games with a corrupt legislature.

Steinberg, meanwhile, was pressing Senate Republicans on Monday evening to agree to cut roughly $3 billion from education and push other education costs into the future. The Senate planned to meet into the night to consider that proposal, which was approved last week on a bipartisan vote of the Assembly but blocked by Republicans in the Senate.

Schwarzenegger has promised to veto that plan as well, calling it a “piecemeal approach.”

It must be signed into law by midnight tonight or the potential savings expire with the end of the fiscal year.

Meanwhile, some looming budget cuts were already being prepared. Regulators on Monday voted to freeze enrollment, starting in mid-July, in Healthy Families, the state’s decade-old health program for the poor.

The decision could deny coverage to nearly 350,000 children around the state over the next year if money cannot be found to enroll them.

Advocates hope that the state’s First 5 program, which collects nearly $600 million each year in tobacco taxes for children’s programs, can ride to the rescue. In December, First 5 provided $17 million in funding to help the Healthy Families program stave off cuts.

My comment: … so Californians, please make sure you all smoke a few extra packs a day, so your kids are covered.

Even if the tax hikes were to go through somehow, they will not solve any problems. We will back to the same debate in no time at all, discussing how to address the next shortfall.

As I wrote in January:

California has to wake up to reality. Whether we like it or not, the state needs to stop paying unionized workers outrageous wages. Instead of reducing expenses for some departments and programs, it needs to dismantle and abolish entire departments and programs. It needs to stop funding unsustainable pension plans. In return it needs to drastically cut the overwhelming taxes and fees that are stifling its economy.

If it doesn’t do it now, then it will have to do it later, by declaring bankruptcy, which will completely wipe out all programs and departmens that can then no longer be funded anyway.

…I consider the commencement of IOU issuance nothing but insolvency, for all intents and purposes a declaration of bankruptcy.

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California Legistlature Seeks to Introduce Internet Tax

CommissionJunction sent out a call to action today:

Dear California Publisher,

ALL HANDS ON DECK! California’s budget tax bill now includes “affiliate nexus” language and could be voted on as early as next week! Commission Junction is opposed to the internet retail tax and this language in general, and we strongly encourage you to send a letter of opposition to Senator Denise Moreno Ducheny ([email protected]). But don’t stop there:

  • Navigate to the California State Assembly web site
  • Use the “Find My District” link on the left of the home page and then type in your address and zip code to find your district number. Close that window.
  • Use the “Assembly Roster” link on the home page to find links to email your assembly member.

We encourage you to use email and phone calls to express your opposition.

Please visit this page and scroll to the California Internet Retail Tax section to find a template you can use and modify accordingly for your email as well as the Senator’s email address.

Let’s join together to oppose this bill!

Sincerely,

The Commission Junction Team

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Schwarzenegger Plays Hardball with California Legislature

With California operating in de-facto bankruptcy mode, Schwarzenegger threatens to shut down state government:

Gov. Arnold Schwarzenegger vowed Wednesday to let California government come to a “grinding halt” rather than agree to a high-interest loan to keep the state afloat if he and the Legislature do not close the yawning budget gap in coming weeks.

(…)

State finance officials say California coffers will be empty in late July unless the projected $24-billion budget shortfall is resolved quickly. Schwarzenegger said that emergency borrowing would be too expensive and that his threat to block it was necessary to prod lawmakers into swift action.

A loan would only “give them another reason why we don’t have to do it now,” the governor said. “What we need to do is just to basically cut off all the funding and just let them have a taste of what it is like when the state comes to a shutdown — grinding halt.”

(…)

In the Senate, Democrats have sketched a counter-proposal that would drain the state’s reserves and rely on hopes for a rosier economic future to hold off the deepest of the cuts. Their plan would resolve up to $20 billion of the projected $24-billion deficit.

The governor called that approach “hallucinatory” on Tuesday and “irresponsible” on Wednesday. “We have not hit the bottom” of the economic crisis, he told The Times.

Some rank-and-file Democrats are holding out hope of raising taxes to close the deficit. And the state’s largest labor group, the Service Employees International Union, launched a $1-million TV advertising campaign Wednesday to press for more taxes on oil, tobacco and liquor.

Eliseo Medina, SEIU’s national executive vice president, said the governor “ought to be worrying about trying to maintain services instead of trying to kill the messenger.”

I say: Eliseo Medina is the one who ought to be worrying … about having his head examined. California is suffocating from over regulation and over taxation. It is already the highest taxed state in the country. And his recommendation to fix a structural budget problem is more taxes. You can’t make this stuff up …

Schwarzenegger said the financial crisis should be the impetus for a leaner and more functional state government. But he said he had no confidence in the Legislature to change the status quo and hoped a constitutional convention — the radical notion of tossing out California’s oft-amended legal framework to start from scratch — would.

I applaud Schwarzenegger for the unmistakable stance he is taking. Unlike other politicians he is not trying to use the financial crisis as an opportunity and an excuse to expand government powers, he is actually trying to do the exact opposite, to finally dismantle its bureaucracies and shrink its size and scope. This is what will have to happen eventually sooner or later anyway.

What is also interesting is that he is actually one of the few politicians who realize that we have not even come close to a bottom and that there is more pain to come.

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California Voters Smack Down Fiscal Nonsense

A few days ago I wrote

Governments in spendthrift states, such as New Jersey and California, have to come to their senses, cut their excessive spending, their lavish pension plans, and unsustainable union wages. It is safe to assume that a major wave of municipal and state bankruptcies is bound to unravel sooner or later.

But until then they will of course continue to bleed the taxpayer for as long as they can. Expect them to introduce more and more “temporary” taxes and fees over the next months and years. (Of course “temporary” in government lingo always equals “permanent”.)

Californians do have the chance to send a message: Vote No on Prop 1A through 1E and Yes on 1F.

I also wrote before that:

…a time will come, when Californians will stand up against these depredations. Let’s make sure it happens rather sooner than later.

Please also consider California – What Has Become of You?

Enough is enough! California, Please Send a Message!

Luckily, Californians did send a message: California voters kill budget measures:

Despite a big advantage in cash and manpower, the campaign failed to gain traction from the start. Polls throughout the race showed all the ballot measures — except Proposition 1F — losing badly, as voters expressed equal parts confusion over the package and disdain for the Sacramento politicians who crafted it.

Californians seemed upset partly by Sacramento’s call for more money at a time when employment was sagging, retirement accounts were plunging and the average resident was struggling. Others expressed irritationat being called back to the polls just months after a presidential election.

Now the ball is in the legislatures court. The mandate is simple: No more taxes, no more borrowing, cut spending to get your lousy budget in order!

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