Welcome new reader!

Financial news I consider important, with my opinion, which is worth as much as you paid for it.
Please click HERE to read a synopsis of my view of the financial situation.

Friday, March 4, 2011

Once again, technology to break inefficient systems

The advent of the internet, and computer based systems that provide efficient virtual stores and delivery processes are creating ways for companies to avoid state taxes.

Amazon.com for example, avoids taxation by states by not being located in the state is ships to. States with budgetary problems are trying to come after companies for sales taxes.

Kudos for Amazon to respond by leaving the state of any shred of presence in the states that challenge it. Recently Texas came after Amazon, so Amazon is shutting down it's distribution system in that state.

The net effect is people working at that location will be unemployed, and shipping rates to people in Texas are likely to go up if they buy from Amazon. The state seems to think because Amazon is efficient, it is "taking away sales" from local Texas businesses.

How IRONIC we have "Free trade" agreements with China, but not similar agreement between the US states.

Kudos for Amazon to lead the charge in breaking the states of relying on inefficiency to justify the cost of sales tax. Technology over time will break these systems, and state funding will have to come from different sources.

No comments:

Post a Comment