If the states are the laboratories for the federal government, Washington should be paying close attention to California and Texas right now. California is losing businesses and tax revenue (despite raising taxes) and Texas is gaining businesses and tax revenue without raising taxes. Now California has tried a new approach.
Yesterday the Daily Caller reported that California Governor Jerry Brown signed a bill into law that requires online businesses to collect sales tax. In response, Amazon.com and other online retailers have declared that they no longer see the business sense in remaining in the state of California. Amazon.com and Overstock.com both announced that they will be closing out all of their affiliates in California (affiliates are small business that sell products through Amazon and other online sites and receive a small commission). Congratulations, Governor Brown, you just created more unemployment.
The article quotes the statement of Amazon.com to their affiliates:
""We oppose this bill because it is unconstitutional and counterproductive," Amazon said in an email to its affiliates. "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.""
Raising taxes (or instituting new taxes) does not raise revenue--it only causes people to change their behavior to avoid those taxes. At a time when some Democrat Senators are accusing the Republicans of sabotaging the economy, those Senators need to look at the results of the actions of Governor Jerry Brown. I don't think the Democrats are purposely ruining the economy; I just think that their policies automatically do that.
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