Jerry Brown Killed This Business

Gov. Jerry “Jobs Killer” Brown quickly is replacing departed adulterer Gov. Arnold Schwarzenegger as California’s second-worst governor. (Gov. Earl Warren always will be the state’s worst governor for stuffing loyal Japanese-Americans into concentration camps during World War II.)

The Mercury writes about how the “Amazon tax” Brown signed into law destroyed one small business — which is moving to Nevada:

It wasn’t the Great Recession that killed Nick Loper’s business. It was a flick of Jerry Brown’s wrist.

When the governor signed the state’s new online-sales tax law last month, Seattle-based Amazon and other out-of-state Web retailers immediately severed ties with thousands of California affiliates, arguing the move would put them beyond the reach of the state’s taxman. Among the victims: ShoesRUs, Loper’s comparison shopping website for shoes, confronting the Livermore entrepreneur with a life-changing reboot.

After six years of growing what started as a $200-a-month business into a profitable full-time gig, Loper said he had no choice but to shutter his site, suddenly deprived of 70 percent of the commissions he’d earned sending customers to the big retailers via click-through ads on his site.

Loper then made an argument I’ve been making for years. That California, supposedly the epicenter of Internet technology, should be the last place to increase taxes on anything to do with the Internet. It’s as dumb as Michigan favoring a $10-a-gallon new gas tax.

“I always figured that in California, home to Silicon Valley and a million tech startups, they’d never pass a law like this,” said Loper, 28, who’s moving to Nevada, which has no online sales tax, to run his newest online venture, ShoeSniper

Loper never figured that Californians would elect as governor a jobs-killing, business-hating Luddite — Jerry “Jobs Killer” Brown.

The Mercury also provided a concise explanation of what these affiliates do:

Loper’s site is fairly typical of those of affiliate marketers, who set up a website about fly-fishing, say, blog about the subject to draw readers in, then hope they click on an ad for FlyFishUsa, go to that site, and buy a fly reel, generating a commission of up to 20 percent for the affiliate.

Note that Loper doesn’t have any actual, physical stock that he ships. That means moving his business to Nevada means stuffing his laptop into a backpack and getting out of Dodge.

Goodbye, Mr. Loper. And good luck in your new state, whose great new governor, Brian Sandoval, likes businesses and jobs. Here’s what Sandoval did back in January, when Brown was scheming to destroy California businesses with higher taxes and regulations:

CARSON CITY — Moments after being sworn into office Monday, Gov. Brian Sandoval signed an executive order that he said will help show prospective businesses that Nevada is a business-friendly state.

“The key is getting people back to work,” said Sandoval as he signed an order suspending any new executive branch regulations until 2012.

Sandoval said he wants to show business owners considering Nevada that the state will not impose any additional regulations or costs that would dissuade them from moving here.

“The worse thing that could happen is raising taxes in our state,” he said.

In the meantime, he wants state agencies to review regulations and rescind those that harm businesses.

July 29, 2011

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  1. David
    David 29 July, 2011, 11:41

    So , let me understand your position. You are saying that when something is sold on the internet rather than in a store, the purchaser should not have to pay sales tax, even though it is exactly the same item. If that continues, won’t people tend to purchase things over the internet rather than through actual stores, due to the price differential? It seems to me your position, not Brown’s, is the job-killer. You are advocating an unfair tax difference that will have the effect of driving stores out of business, and their employees out of jobs.

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  2. Val
    Val 29 July, 2011, 17:04

    David your idea would have merit if purchasing through the internet wasn’t so convoluted. Sales tax for states are collected upon distribution within the state. For instance if I have a brick and mortar shop that sells toys I have to collect sales tax on each sold item (note it is the buyer that submits this tax to me) to submit to the state. In the case of an affiliate he is linking to a distribution center that is not necessarily in the state or potentially even in the country, nor is he the point of the actual sale but rather an advertiser of the sale. If the distribution center is a place where no sales tax is collected due to lack of jurisdiction or other laws, then forcing the host (in this case Amazon) to collect sales tax from its members is ludicrous since they would need to keep track of hundreds of different forms of tax laws.

    If anything state governments need to realize just how complicated e-commerce really is.

    Reply this comment
  3. cloudshe
    cloudshe 30 July, 2011, 18:32

    dear gov brown

    this is exactly how “tax the rich” works in reality. hope your supporters don’t figure this out, it would be the ole Gray Davis redux

    apparently, the guy who said “you can’t fix stupid” was right

    Reply this comment

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