By JOHN SEILER

L.A. Times columnist Tim Rutten continues his tax obsession in “Amazon’s shameful California tax dodge.” He just has it in for Amazon.com. He makes a weird comparison:

At the turn of the last century, as the robber barons’ first gilded age lingered on, many Californians came to regard one powerful enterprise as the symbol of oppressive avarice and of big money’s corrupt appropriation of the political process.

That company was the Southern Pacific, whose railways kept a stranglehold on commerce and whose operatives dominated state government. The firm’s malevolent influence was the inspiration for one of California’s first literary classics, Frank Norris’ “The Octopus,” which — along with Upton Sinclair’s “The Jungle” — helped usher in a period of progressive reforms. 

Rutten ends his screed:

If Jeff Bezos, Amazon’s founder and chief executive, has a spare moment there in Seattle, he might go on his website and buy a copy of Norris’ “The Octopus.” (As a resident of Washington state, he’ll have to pay sales tax.) In any event, he might skip to the end of the first chapter and consider how it might feel to have Amazon regarded as the poet-narrator describes the Southern Pacific:

“The leviathan, with tentacles of steel clutching into the soil, the soulless Force, the iron-hearted Power, the monster, the Colossus, the Octopus.”

It’s a happy day when a columnist can show off his literary acumen. But as a journalist, he also should have done some research. Back before the Internet, research was difficult. You had to walk over to the newspaper library, find a reference book, such as one listing the top U.S. retailers, and Xerox the page.

Nowadays, things are much easier. It took less than a minute for me to Google “top retailers” and get this page.

It lists Amazon, for 2010, as the 19th biggest retailer in the USA, with $18.5 billion in sales. The biggest — no surprise — was Wal-Mart, at $307.7 billion.

So, Amazon.com’s sales are 1/17th those of Wal-Mart. If there’s an “Octopus” here, it obviously is Wal-Mart.

No doubt Amazon has sold more so far in 2011. It grew 40 percent in 2010, and probably is growing that fast this year. But it still would enjoy but a fraction of Wal-Mart’s sales.

The Biggest Octopus

Moreover, there are a lot bigger octopodes that even Wal-Mart. A century ago, governments still were pretty small. Americans lived in freedom.

Today, just for California, Amazon sold about $2 billion in 2010. California’s state budget now is $86 billion, or 43 times as big.

And as to Amazon’s $19.5 billion in U.S. sales last year, the U.S. federal budget now is $4 trillion — 205 times as big.

Rutten is upset that Amazon is using the initiative process, created a century ago by the progressives who battled Southern Pacific, to thwart the recent Amazon tax. (The tax actually hits 25,000 small “affiliates” a lot more than it does Amazon because Amazon and other companies fired their affiliates.) But until now, Amazon has had close to zero political involvement in California. It’s only involved because it was attacked by Rutten and crew.

Wal-Mart and Property Rights

By contrast, Wal-Mart long has been deeply involved in California politics. As a reporter, Rutten should know that.

I’ve written about Wal-Mart’s actions for years, especially during my 19 years as an editorial writer at The Orange County Register. Sometimes I have defended Wal-Mart, as when unions have thwarted its expansion plans because the company mostly is non-union.

But I’ve also attacked Wal-Mart when it has used its immense powers to manipulate local governments to abuse eminent domain and other political tricks to its advantage. My principle is simple: the same property rights for everybody. Wal-Mart should not use its clout to trample on the little guys’ property rights. But powerful unions shouldn’t revoke Wal-Mart’s property rights.

Rutten also is upset that federal laws and court decisions prevent sales taxes being grabbed across state lines, unless a company has a “nexus” — a physical location — in the taxing state. He says this means California loses $2 billion in tax revenue a year.

The number is dubious because, if inter-state sales taxation were allowed in the United States, then shipments from California to other states would be taxed more often, reducing the sales of our companies. But Rutten thinks statically, not dynamically. He’s living in a 1993, pre-Internet world.

Commerce Clause

But he should have noted that the law and court decisions are firmly grounded in the “Commerce Clause” of the U.S. Constitution, which was designed to prevent the states from erecting protectionist borders against each other. The Founding Fathers saw how Europe’s numerous small states attacked one another with protectionist barriers, and wanted to prevent similar battles here. That’s one part of the Constitution that has worked well, and has been a foundation of our national prosperity.

He also should have noted that, with Republicans in charge of the U.S. House of Representatives until at least 2015, there’s no chance they would pass a law allowing inter-state taxing of sales. And even Democrats, when they ran all of Congress from 2007-2010, didn’t dare allow that tax increase.

Moreover, the  five states with no sales tax are represented in the U.S. Senate by eight Democrats and just two Republicans. Those eight Democrats — including Sen. Max Baucas of Montana, chairman of the powerful Senate Finance Committee — would join with all 47 Republicans in the Senate to block any change in tax law that could potentially slam their states.

As to the Amazon initiative here in California, it’s not a sure thing anyway — something “Octopus” Rutten should have pointed out. Two-thirds of initiatives fail. Powerful opponents of an Amazon initiative would include Wal-Mart and other major retailers, the L.A. Times and other liberal newspapers and the state’s powerful government-worker unions — always salivating like Pavlov’s dog for more of our tax money.

On Amazon’s side is its good image and the convenient service it has provided to millions of Californians, anti-tax groups, the vast majority of those 25,000 fired affiliates who would want their livelihoods back — as well as the negative image voters have of Gov. Jerry “Jobs Killer” Brown, the greedy unions, the state Legislature and government in general.

Voters — over-taxed, over-regulated and under-employed — are in a foul mood. They’re starting to understand that government, the real deadly octopus, is not their friend, but their enemy. And that raising taxes only feeds the octopus.

Finally, Rutten says Bezos should go to the Amazon.com site and buy a copy of “The Octopus”: “As a resident of Washington state, he’ll have to pay sales tax.” That’s more defective research. Amazon.com offers a free copy, on which no sales tax is charged anywhere — for now.

The L.A. Times’ tax obsession goes back decades. I remember back when George Deukmejian was governor (1982-1990), the Times was especially fanatical about increasing taxes. So one of the governor’s advisers sent the Times management an unofficial bill for its share of the new taxes the Times wanted — which the Times, hypocritically, never paid.

Now the Times’ staff has gone beserker over the tax increases. Wikipedia writes of the berserkers (that’s a picture of them above):

Berserkers (or berserks) were Norse warriors who are reported in the Old Norse literature to have fought in a nearly uncontrollable, trance-like fury….

Now, he’s what the L.A. Times’ Tax Berserkers have been writing.

Tax berserker Timothy Rutten today:

the governor and the Democrats’ legislative majority need to shake themselves free of the direct democracy delusion, and that process begins with abandoning efforts to put budget-balancing tax extensions before the voters, as then-candidate Brown promised.

Tax berserker Michael Hiltzik today backs not only Brown’s $12 billion tax increase, but

other sources of revenue that other states exploit but California ignores, such as an oil severance tax and a fairer approach to assessing commercial and industrial property.

The phrase “a fairer approach to assessing commercial and industrial property” is a euphemism for attacking Proposition 13 with what’s called a split roll, meaning business and industrial property would be taxed at higher rates. Just what California’s severely anti-business climate needs: even more anti-business taxes.

And tax berserker Steve Lopez yesterday lamented that teachers will have to be fired if taxes aren’t increased:

How about an oil excise tax, with the proceeds going to education? How about some of the other things I’ve talked about, like tinkering with Proposition 13, particularly on the commercial side? How about a relatively fair balance of spending cuts and temporary extension of existing tax increases, so we don’t have to destroy our K-12 schools with an extra $4 billion to $5 billion in cuts?

But as someone named Bully4You noted in the comments section:

How about teachers take a 5% paycut, and pay 5% towards health insurance?

Problem solved.

Commentator benjamin1 wrote:

I found a way to save the teachers.  Say it with me now; end the pensions, give ALL public employees 401k accounts and have them make 75% of the contributions to said accounts just like EVERYBODY else, then see how many teachers you need to actually lay off.  My guess is Mr. Yee will keep his job either way though.  Gov. Brown would never dream about having any of his beloved public employees actually feel any effects of the recession.

Both are sensible suggestions. The private sector sure has taken a hit in recent years, with many salaries slashed and positions eliminated. Given that the private sector supports the public sector, when the taxpayers get hit hard, then the tax-takers should get hit hard, too. If the host shrinks, then so should the parasite.

Well, at least the Times allowed these comments on their Web site. The comments also show that Californians no longer can be conned by Brown and the berserker L.A. Times, Rutten, Hiltzik and Lopez.