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Thanks, that's the argument exactly, specifically the second part. Regarding the static model, it's not so much that it's a static model as that for the overwh

by jbooth 15y ago

Thanks, that's the argument exactly, specifically the second part. Regarding the static model, it's not so much that it's a static model as that for the overwhelming majority of online purchases, it's displacing a local purchase. It's actually a more capitalist economy from a certain point of view to make online and local purchasing compete on the same ground, especially when the market distortion (which yes stems from sales taxes' existence in the first place, coupled with the commerce clause) discriminates against your voters.

jwhite 15y ago
It may be displacing a local purchase... in a third, unrelated state. Only the affiliate lives in Connecticut, the purchaser may live in Colorado... or Czech Republic, for that matter. I think you have the argument about capitalism backwards. Any time someone says "that's unfair, we should change the laws to help (inefficient business X) compete more effectively with (efficient business Y)", they are directly contradicting the idea of capitalism. Where the social good lies is sometimes hard to work out; but I'd guess in this case Connecticut residents would be better off with an efficient Amazon and the ability to become Amazon Affiliates than with the small amount of tax revenue that this legislation tries to capture.
yummyfajitas 15y ago
Online and local purchasing do compete on the same ground. A local store uses CT state services and pays taxes to support them. An online store does not use CT state services and does not pay taxes to support them. Similarly, many companies use Microsoft software and pay license fees. My company does not. Would it be "more capitalist" if we were forced to pay a Microsoft tax, to eliminate the "market distortion" of using lower cost software?
- crasshopper 15y ago
  yummyfajitas, I think by "more capitalist" jbooth means "more competitive". You are obviously right that forcing companies to use higher-cost inputs is inefficient, but taxes are not an input -- they're a necessary burden meant to be shared. To take an extreme example, using a tax shelter could lower the cost of a company's services while decreasing the efficiency of the economy.
  - yummyfajitas 15y ago
    Of course taxes pay for inputs - the inputs are public goods. Taxes are compulsory only to prevent freeloading - you might enjoy the benefits of the CT state police without paying for them. Amazon doesn't enjoy the benefit of the CT state police. Hence, it is not efficient to force them to pay for it. A tax shelter is only inefficient if it allows a company to consume services while forcing others to pay for them. If a company does not consume those services, it is inefficient to force the company to pay for them.
    - crasshopper 15y ago
      yummyfajitas, can you give a real-world example of a tax haven which is Pareto equivalent or superior to the company paying its taxes? Also, who says Amazon pays the tax? Insert elasticity argument.
      - yummyfajitas 15y ago
        In the real world nothing is Pareto equivalent or superior to anything else, except maybe for gifts given to hermits. Pareto efficiency is a purely theoretical construct.
        crasshopper 15y ago
        You're dodging the essence of the question. Give us one real world example of a case where tax evasion has been A Good Thing. yummyfajitas, it frankly sounds like you're econtrolling. I looked at your profile and you seem like a smart, educated person, so I'll respond in good faith so you can see how weak your arguments sound. > Taxes are compulsory only to prevent freeloading Says who? This sounds like a stylised model from Econ 101. > A tax shelter is only inefficient if it allows a company to consume services while forcing others to pay for them. Prove it. > Amazon doesn't enjoy the benefit of the CT state police. I don't use the Merritt Parkway but that doesn't mean I don't owe tax on it. > Pareto efficiency is a purely theoretical construct. This from someone who just boiled the entire political economy of Connecticut down to a prisoner's dilemma? > If a company does not consume those services, it is inefficient to force the company to pay for them. What is your reasoning? Perhaps you are sharing these thoughts before giving them a sound-check? I don't mean to be rude but what you're saying doesn't make sense coming from someone of your educational background.
temphn 15y ago
Hmmm. "More capitalist" would be to eliminate local sales tax to allow businesses to compete.

by jbooth 15y ago

jwhite 15y ago

It may be displacing a local purchase... in a third, unrelated state. Only the affiliate lives in Connecticut, the purchaser may live in Colorado... or Czech Republic, for that matter. I think you have the argument about capitalism backwards. Any time someone says "that's unfair, we should change the laws to help (inefficient business X) compete more effectively with (efficient business Y)", they are directly contradicting the idea of capitalism. Where the social good lies is sometimes hard to work out; but I'd guess in this case Connecticut residents would be better off with an efficient Amazon and the ability to become Amazon Affiliates than with the small amount of tax revenue that this legislation tries to capture.

yummyfajitas 15y ago

Online and local purchasing do compete on the same ground. A local store uses CT state services and pays taxes to support them. An online store does not use CT state services and does not pay taxes to support them. Similarly, many companies use Microsoft software and pay license fees. My company does not. Would it be "more capitalist" if we were forced to pay a Microsoft tax, to eliminate the "market distortion" of using lower cost software?

crasshopper 15y ago
yummyfajitas, I think by "more capitalist" jbooth means "more competitive". You are obviously right that forcing companies to use higher-cost inputs is inefficient, but taxes are not an input -- they're a necessary burden meant to be shared. To take an extreme example, using a tax shelter could lower the cost of a company's services while decreasing the efficiency of the economy.
- yummyfajitas 15y ago
  Of course taxes pay for inputs - the inputs are public goods. Taxes are compulsory only to prevent freeloading - you might enjoy the benefits of the CT state police without paying for them. Amazon doesn't enjoy the benefit of the CT state police. Hence, it is not efficient to force them to pay for it. A tax shelter is only inefficient if it allows a company to consume services while forcing others to pay for them. If a company does not consume those services, it is inefficient to force the company to pay for them.
  - crasshopper 15y ago
    yummyfajitas, can you give a real-world example of a tax haven which is Pareto equivalent or superior to the company paying its taxes? Also, who says Amazon pays the tax? Insert elasticity argument.
    - yummyfajitas 15y ago
      In the real world nothing is Pareto equivalent or superior to anything else, except maybe for gifts given to hermits. Pareto efficiency is a purely theoretical construct.
      - crasshopper 15y ago
        You're dodging the essence of the question. Give us one real world example of a case where tax evasion has been A Good Thing. yummyfajitas, it frankly sounds like you're econtrolling. I looked at your profile and you seem like a smart, educated person, so I'll respond in good faith so you can see how weak your arguments sound. > Taxes are compulsory only to prevent freeloading Says who? This sounds like a stylised model from Econ 101. > A tax shelter is only inefficient if it allows a company to consume services while forcing others to pay for them. Prove it. > Amazon doesn't enjoy the benefit of the CT state police. I don't use the Merritt Parkway but that doesn't mean I don't owe tax on it. > Pareto efficiency is a purely theoretical construct. This from someone who just boiled the entire political economy of Connecticut down to a prisoner's dilemma? > If a company does not consume those services, it is inefficient to force the company to pay for them. What is your reasoning? Perhaps you are sharing these thoughts before giving them a sound-check? I don't mean to be rude but what you're saying doesn't make sense coming from someone of your educational background.

temphn 15y ago

Hmmm. "More capitalist" would be to eliminate local sales tax to allow businesses to compete.