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It is made to be a barrier to competition. Good luck setting up an in compliance web store based on the current sales tax rules that Amazon basically brought to

It is made to be a barrier to competition. Good luck setting up an in compliance web store based on the current sales tax rules that Amazon basically brought to us.

Timon3 3y ago
Could you try to clearly explain how regulation against vertical integration raises the barrier to competition? I can't come up with any explanation where it doesn't lower the barrier.
- naveen99 3y ago
  Vertical integration is a value add. By restricting it, you make it harder for challengers who want to start with vertical integration. Example: vertical integration restrictions prohibit car manufacturers from operating dealerships. Tesla used vertical integration in other states to lower costs and create a cheaper electric car business. With tighter rules against vertical integration you may not have tesla.
  - Timon3 3y ago
    If the goal of regulation is to prevent vertical integration, it is not really helpful to say "oh, but doing this will prevent vertical integration!". Yes, of course it will, that's what we said it should do. You might think this is a bad idea, but it's not a downside of the regulation.
    - naveen99 3y ago
      Vertical integration isn’t an end goal of businesses or regulation. it’s also hard to even define.
      - Timon3 3y ago
        If I introduce regulation to prevent vertical integration, how is preventing vertical integration not the end goal of that regulation? I really don't understand what you're trying to say.
        naveen99 3y ago
        It’s hard to have an undefined goal. Where do you put the horizontal lines ?
        Timon3 3y ago
        I don't think it's an undefined goal, so I don't worry about the difficulty. :)
        ThunderSizzle 3y ago
        It's easy to say it's defined until your forced to define it to others. If vertical integration is illegal, does that mean: 1) Farms can't sell directly to customers via their own store? 2) A restaurant or grocery store needs to use Uber or Door Dash to deliver? 3) A logistics company can't own any warehouses 4) A store can't own any distribution centers or logistic systems. 5) A website can't self-host, either on their own server or via a dedicated server. It must be hosted via SaaS. I'm sure there's more examples that blur the line of vertical integration that can be hard to determine in a fair, just manner.
- drdec 3y ago
  What about industries where it is difficult or impossible to crack without a large investment? In that case, new competitors might arise from established companies expanding vertically, but very few can come from brand new companies. Might be the kind of thing where more nuanced legislation helps, e.g. allowing vertical expansion if there are few existing competitors but disallowing it for healthy markets.
  - Timon3 3y ago
    > What about industries where it is difficult or impossible to crack without a large investment? In that case, new competitors might arise from established companies expanding vertically, but very few can come from brand new companies. Established companies are always free to create a new company which is structured in a way that it is not vertically integrated. And so what if a large investment is required? If established companies cannot integrate vertically, the field is open for investments by people who cannot subsidize their prices to beat the competition.
    - drdec 3y ago
      I fear that structuring the companies that way will eliminate the advantage of being vertical and so the investment would revert to not being worth it.
      - Timon3 3y ago
        Do you maybe have concrete examples for industries with margins so small that vertical integration is the only way for viable investments?
briHass 3y ago
Blame the state and local governments (and especially the disparity among them) for that. Amazon and other big realtailers just said it's not fair that we have to deal with sales tax if smallecommerce.com doesn't. Sales tax is a perfect example of how the government will never give up tax revenue it has come to depend on. The original proposal is that sales tax was fair, because the local business is using local resources (land, employees, infrastructure). Obviously not true with an out-of-state web store. Delivery companies already pay local taxes for the actual shipping, so there shouldn't be any claim against the retailer itself. Use tax, in many areas, was already designed to handle this case, but the government decided that it's easier to go after Amazon than to rely on taxpayers being honest.

It is made to be a barrier to competition. Good luck setting up an in compliance web store based on the current sales tax rules that Amazon basically brought to us.

Timon3 3y ago

Could you try to clearly explain how regulation against vertical integration raises the barrier to competition? I can't come up with any explanation where it doesn't lower the barrier.

naveen99 3y ago
Vertical integration is a value add. By restricting it, you make it harder for challengers who want to start with vertical integration. Example: vertical integration restrictions prohibit car manufacturers from operating dealerships. Tesla used vertical integration in other states to lower costs and create a cheaper electric car business. With tighter rules against vertical integration you may not have tesla.
- Timon3 3y ago
  If the goal of regulation is to prevent vertical integration, it is not really helpful to say "oh, but doing this will prevent vertical integration!". Yes, of course it will, that's what we said it should do. You might think this is a bad idea, but it's not a downside of the regulation.
  - naveen99 3y ago
    Vertical integration isn’t an end goal of businesses or regulation. it’s also hard to even define.
    - Timon3 3y ago
      If I introduce regulation to prevent vertical integration, how is preventing vertical integration not the end goal of that regulation? I really don't understand what you're trying to say.
      - naveen99 3y ago
        It’s hard to have an undefined goal. Where do you put the horizontal lines ?
        Timon3 3y ago
        I don't think it's an undefined goal, so I don't worry about the difficulty. :)
        ThunderSizzle 3y ago
        It's easy to say it's defined until your forced to define it to others. If vertical integration is illegal, does that mean: 1) Farms can't sell directly to customers via their own store? 2) A restaurant or grocery store needs to use Uber or Door Dash to deliver? 3) A logistics company can't own any warehouses 4) A store can't own any distribution centers or logistic systems. 5) A website can't self-host, either on their own server or via a dedicated server. It must be hosted via SaaS. I'm sure there's more examples that blur the line of vertical integration that can be hard to determine in a fair, just manner.
drdec 3y ago
What about industries where it is difficult or impossible to crack without a large investment? In that case, new competitors might arise from established companies expanding vertically, but very few can come from brand new companies. Might be the kind of thing where more nuanced legislation helps, e.g. allowing vertical expansion if there are few existing competitors but disallowing it for healthy markets.
- Timon3 3y ago
  > What about industries where it is difficult or impossible to crack without a large investment? In that case, new competitors might arise from established companies expanding vertically, but very few can come from brand new companies. Established companies are always free to create a new company which is structured in a way that it is not vertically integrated. And so what if a large investment is required? If established companies cannot integrate vertically, the field is open for investments by people who cannot subsidize their prices to beat the competition.
  - drdec 3y ago
    I fear that structuring the companies that way will eliminate the advantage of being vertical and so the investment would revert to not being worth it.
    - Timon3 3y ago
      Do you maybe have concrete examples for industries with margins so small that vertical integration is the only way for viable investments?

briHass 3y ago

Blame the state and local governments (and especially the disparity among them) for that. Amazon and other big realtailers just said it's not fair that we have to deal with sales tax if smallecommerce.com doesn't. Sales tax is a perfect example of how the government will never give up tax revenue it has come to depend on. The original proposal is that sales tax was fair, because the local business is using local resources (land, employees, infrastructure). Obviously not true with an out-of-state web store. Delivery companies already pay local taxes for the actual shipping, so there shouldn't be any claim against the retailer itself. Use tax, in many areas, was already designed to handle this case, but the government decided that it's easier to go after Amazon than to rely on taxpayers being honest.