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Froma Harrop — Amazon rules the sales tax avoidance jungle

SEATTLE — Lunch hour in the South Lake Union neighborhood. Workers walk dogs they can take to the office. Lines form in hip restaurants. Something big is going on here, but the only sure sign of a major employer is the many blue ID cards hanging out of jackets.
The corporate master here is Amazon, the world's largest online retailer. Amazon does not put its name on its collection of new buildings in these once-grungy environs, not even the trademark smile logo. The reason for this faux secrecy remains subject to speculation.
Anyhow, the king of cyberspace commerce chose a city tied to its identity as a liberal and quirky center of tech savvy. It revels in bistros serving locally grown arugula to young creatives eager to reunite with their corgis. But underneath these soft atmospherics stands a corporation in iron battle against paying state taxes and dismissive of hometown philanthropy, as described in a Seattle Times series, "Behind the Amazon.com Smile."
Something tells me that Amazon founder and corporate mastermind Jeff Bezos would not dislike that contrast. After all, the company's business model is based largely on taking the "local" out of shopping.
Amazon's aversion to paying taxes would play well in conservative America, except for this: The new "Red State model" is to rely less on state income taxes and more on sales taxes. A 1992 Supreme Court decision, written with mail-order merchants in mind, frees cyber-retailers from having to collect sales taxes in states where they do not have a physical presence.
So, with a few exceptions, Amazon does not burden out-of-state shoppers with sales taxes. This gives it a significant advantage over brick-and-mortar stores that must tack on such taxes. Amazon understandably likes it that way.
But this is a major-league problem in states dependent on sales taxes — especially as online shopping gains retail market share.
In Kansas, Louisiana and Nebraska, for example, Republican governors want to cut or banish their states' income taxes and replace the lost revenues with higher sales taxes.
On this matter, Amazon can play rough. South Carolina offered Amazon $33 million in free land, property-tax cuts and payroll-tax credits to build a warehouse there. It even exempted the company from Lexington County "blue laws," thus letting the warehouse stay open on Sunday mornings.
But Amazon wanted more. It wanted immunity from collecting the 6 percent sales tax on stuff bought by South Carolinians, something the state would be entitled to once Amazon had a warehouse there. The state legislature rejected that request, at which point Amazon stopped construction on the facility and threatened to abandon the project. The state then gave the company a five-year exemption on collecting sales taxes.
Amazon has gone so far as to give its employees color-coded maps, dividing the United States between green and red states. In this case, the red stands not for Republican, but states where the presence of Amazon workers might unleash a tax liability. The employees must seek special permission before venturing into the red areas.
King County is known for strong corporate philanthropy — led by Microsoft, Boeing and Nordstrom — but Amazon has been a relative no-show on contributions to Seattle-area causes. Amazon argues with some reason that it contributes valuable jobs. Yes, but so do the others.
The museums, the symphony and other civic amenities help make Seattle the cultural cauldron from which Amazon finds its cool people. Meanwhile, the laws protecting Amazon and other online retailers from having to collect sales taxes are helping bankrupt many other local governments.
Sure, Amazon is a great success story and has a right to think itself special. It just shouldn't be that special.
(A member of the Providence Journal editorial board, Froma Harrop writes a nationally syndicated column from that city. She has written for such diverse publications as The New York Times, Harper's Bazaar and Institutional Investor.)

Last Updated on Wednesday, 31 December 1969 07:00

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Roy Sanborn - Expect the unexpected

It seems like every day you hear about something unexpected happening. Like the unexpected rise in unemployment claims, or the unexpected drop in the nation's gross domestic product, or that the Pope unexpectedly is going to step down. Well, two out of three have pretty much become expected. But just to keep it rolling, unexpectedly there was only one waterfront home sold on Lake Winnipesaukee in January. I expect that kind of thing on Squam or Winnisquam (which also only had one sale,) but not on Winnipesaukee. This is not the way we should be starting off the New Year after finishing up 2012 with an unexpected 22 percent increase in waterfront sales over the prior year.
The only sale on Winnipesaukee in January was at 11 Craig Way in Tuftonboro near Melvin Village. This is kind of a neat property as it consists of a vintage 1935 main home and two cottages on a .41 acre lot with 95-feet of frontage, a beach, a 40-foot dock, and southwesterly sunset views. There wasn't a lot of info given on the MLS sheet but the pictures revealed that the charming main cottage has cathedral ceilings, a rustic knotty pine interior, a large brick fireplace, two first floor bedrooms plus two more in the loft, and a great deck. The two three bedroom cottages seemed to be a little more modern but also are very appealing... at least from the pictures. We'll get back to that in a moment. The listing agent noted that it was unknown if the cottages were year round or seasonal, but I would bet the lack of insulation and heating systems might limit the usage to the summer months. If you thought otherwise, you would be unexpectedly leaving for warmer places come November. This property was originally listed at $625,000 and was on the market for 215 days before finding a buyer at $535,000. The tax assessed value is listed at $761,800.
The only sale on Winnisquam was at 20 Winnicoash St. in Laconia. Look for a Winnebego in the yard. I don't really expect one to be there, but I liked the near-alliteration. This home is a turn of the century, three bedroom, two bath New Englander with 1,624-square-feet of living space. This charming older home has a newly remodeled kitchen, a formal dining room, hardwood floors, a new roof (so if it leaks, well that's unexpected,) a one car garage, and a nice lawn leading down to 78-feet of frontage with sunset views and a new dock. This home was on the market for 210 days starting at $525,000, then was reduced down to $449,000, and sold for an even $400,000. The tax assessment was shown as $487,400.
There were no sales on Squam Lake in January which was kind of expected given the few sales we see up there.
There are some other things in real estate that are definitely not unexpected anymore: (a) low ball offers, (b) low appraisals, (c) appraisals being rejected due to totally unexpected issues in underwriting, and (d) buyers being vaporized by unseen forces. These examples have all gone from the realm of unexpected to almost always expected.
But there are still some unexpected things going on. Buyers often find the unexpected when they go to look at property. Like finding a badger in the basement or a home that is much nicer on the inside than the outside (or vice versa.) Many times the pictures on the MLS don't reflect how really nice or how disappointing a property might be. Real estate agents have an amazing knack for making homes look really nice in pictures. Consequently, you should go see a property in person before you rule it out. And remember, never judge a book by its cover. For example, some buyers might have ruled out this home after they did a drive by. But a good REALTOR® would have encouraged them to go inside because he had seen it. See, you must always be prepared for the unexpected...
Please feel free to visit ww.lakesregionhome.com to learn more about the Lakes Region real estate market and comment on this article and others. Data was compiled as of 2/13/13 using the Northern New England Real Estate MLS System. Roy Sanborn is a REALTOR® at Roche Realty Group and can be reached at 603-677-8420

Last Updated on Friday, 15 February 2013 23:19

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Michael Barone - Gangster government operates above the law

The presidents' State of the Union addresses are delivered in the chamber of the House of Representatives in the Capitol. The classical majesty of this building where laws are made symbolizes the idea that we live under the rule of law.
Unfortunately, the 44th president is running an administration that too often seems to ignore the rule of law.
"We can't wait," Barack Obama took to saying after the Republicans captured a majority in the House and refused to pass laws he wanted. He would act to get what he wanted regardless of law.
One example: his recess appointments in January 2012 of three members of the National Labor Relations Board and the head of the Consumer FinancialProtection Bureau. Last month, the U.S. Court of Appeals for the District of Columbia ruled unanimously that the NLRB recess appointments were unconstitutional.
The decision, written by Judge David Sentelle, noted that the Constitution speaks of "the recess," not "a recess," and reasoned that it could only be referring to the recess between annual sessions of Congress.
Obama, like many presidents before him, interpreted the phrase as referring to any recess during which Congress is not in session. But he went one step further. When Harry Reid became Senate majority leader in 2007, he started holding pro forma meetings of the Senate every three days and stating that the Senate was not in recess. George W. Bush, who had made recess appointments before, stopped doing so.
Bush took the view that, since the Constitution says that each branch of Congress makes its own rules, the Senate was in session if the Senate said so. Obama took the view that he would decide whether the Senate was in session. Who cares what the Constitution says?
As Sentelle pointed out, Obama's view would entitle the president to make a recess appointment any time the Senate broke for lunch. "This cannot be the law," the judge wrote.
Critics of his decision argue that under it the recess appointment power would be vanishingly small. But under Obama's view, the Senate's power to advise and consent could effectively vanish. The Framers contemplated that the Congress would take long recesses (as for many years it did) and that it could take months for senators to return to Washington to act on appointments. It's plausible that the Framers would have considered recess appointments unnecessary in an era of jet travel. It's not plausible that they would have approved of getting rid of the Senate's power to vote on appointments altogether.
Meanwhile, decisions of the NLRB and the CFPB are in legal limbo, pending a Supreme Court decision. Hundreds of thousands of people and are affected and millions of dollars are at stake. There is a price for not observing the rule of law.
There are other examples. For several years, the Obama administration has refused to obey a law requiring the president's budget to be submitted on a certain date. As Budget Director, Treasury nominee Jack Lew refused to obey the law requiring him to issue a report in response to the trustees' report on Medicare.
During the 2012 campaign, the Pentagon told defense contractors not to inform employees that they may be laid off if the sequester took effect as required by the WARN Act. They were even told that the government would pay any fines for not complying. What law authorizes that?
Similarly, Health and Human Services has stated that the federal government can fund health insurance exchanges run by the feds for states that refuse to create their own exchanges. But nowhere does the Democrats' hastily crafted ObamaCare legislation say that.
In spring 2009, we got our first glimmers of this modus operandi. In arranging the Chrysler bankruptcy, administration officials brushed aside the rights of secured creditors in order to pay off the United Auto Workers. University of Pennsylvania law professor David Skeel pointed out that this violated the standard rules of bankruptcy law established, interestingly, during the New Deal.
"We have just seen an episode of gangster government," I wrote at the time. "It is likely to be a continuing series."
It looks like that's one prediction I got right. This president, like all his predecessors since Woodrow Wilson started delivering these speeches in person, looks magnificent in the temple where laws are made. But he doesn't seem to consider himself bound by them.
(Syndicated columnist Michael Barone is senior political analyst for The Washington Examiner, is a resident fellow at the American Enterprise Institute, a Fox News Channel contributor and co-author of The Almanac of American Politics.)

Last Updated on Wednesday, 31 December 1969 07:00

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Froma Harrop - Republicans plagued by good news

MEDFORD, Oregon — "Obama says he's going to make middle-class jobs," the breakfast room troubadour bellowed at the Holiday Inn Express to those who wanted to listen — and to those who didn't. "Did he make your job?" he went on, cornering a female employee. "Private companies make jobs."
The commentary was not entirely wrong. Private enterprise creates the great majority of jobs in this country. But the baritone assumes that entrepreneurs can easily grow good jobs in a world filled with smart young people working for less money.
Every successful rich country — Germany, for example — has a government actively building the right economic environment, including an educated workforce able to fill good jobs. It has low unemployment, high wages and a sturdy social safety net.
In his State of the Union address, President Obama proposed "a Fix-It-First program to put people to work as soon as possible on our most urgent repairs, like the nearly 70,000 structurally deficient bridges across the country." A modern country needs a modern infrastructure. It helps the makers make more.
Here in the Northwest, the aging I-5 bridge over the Columbia River is a major worry for both Oregon and Washington state. It needs rebuilding — and, for that, a good chunk of federal money.
If in the course of rebuilding these bridges, thousands of jobs are made, that's what we call a win-win situation. That taxpayer dollars are involved is no reason to hate the program.
Public investment in energy technology is today's moonshot. Not withstanding some bad bets, such as Solyndra, it multiplies private-sector jobs. It is partly why American manufacturers are selling cars again and why, as Obama noted, wind and solar energy has doubled.
Technology is why, as Obama also pointed out, Caterpillar, Ford, Intel and Apple are opening plants in the United States, rather than in China, Mexico and other lower-wage countries.
Robots are allowing us to compete.
Now Obama does play fast and loose with some numbers, according to the fact-checkers. While wind and solar energy production is way up, it still represents a very small piece of the energy mix — even the renewable energy mix (which includes hydropower and ethanol). But these technologies are still relatively new, and they're way up from nothing.
Obama breaks the truth-meter when he claims that "we have doubled the distance our cars will go on a gallon of gas." If only. He was talking about his administration's call for raising fuel economy standards by 2025 — a bold goal that carmakers may or may not be able to reach. Suffice it to say, though, the 17 percent rise in fuel efficiency over the last four years is very, very impressive.
Most viewers weren't dining with the fact-checkers, but even if they had, the news sounded pretty good. Over half a million new jobs, more American cars sold, less foreign oil used, a housing market on the mend. As Obama reminded everyone, "We have cleared away the rubble of crisis" created by you-know-who.
Sitting behind Obama, Republican House Speaker John Boehner stoically listened to the progress reports. Next to him, Vice President Joe Biden seemed paralyzed in a grin.
Much of the Republican reaction was self-pity. Official responder Florida Sen. Marco Rubio offered a long list of fictional accusations. Example: When Republicans say that "government can't control the weather" (not quite true with global warming), "he accuses us of wanting dirty water and dirty air."
Hey, it was a tough night for Republicans. Their big voices on the radio and in motel breakfast rooms have little recourse but to raise the volume.
(A member of the Providence Journal editorial board, Froma Harrop writes a nationally syndicated column from that city. She has written for such diverse publications as The New York Times, Harper's Bazaar and Institutional Investor.)

Last Updated on Wednesday, 31 December 1969 07:00

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Jim Hightower - Drones coming home to roost

For nearly four years, President Obama refused to admit a foreign-policy "secret" that was widely known here and throughout the world — namely, that the White House, Pentagon and CIA are engaged in ethically questionable and rapidly escalating drone warfare that's killing innocent civilians as well as enemy soldiers in Afghanistan, Yemen and elsewhere. But by nominating John Brennan, the architect of this high-tech kill policy, to head the CIA, the president has let the drone out of the bag.
In the past few days, both Brennan and the policy have been getting a grilling from members of both parties on Capitol Hill, with lots of media also questioning the use of unmanned, remote-controlled aircraft to strike people with rockets launched by technicians viewing computer screens and wielding joysticks from bunkers on air bases back here in the U.S.A.
As Congress, the media and the public ponder the merits of that, however, how about noticing another deeply troubling policy secret looming ever larger on our horizon: the domestic deployment of drones. From Homeland Security officials and the FBI to your state police and county sheriff, these inherently invasive "unmanned aerial vehicles" are being spread across our Land of the Free — and aimed at us.
Shouldn't we get answers to a few basic questions before authorities swarm these "Orwellian gnats" into our skies? For example, what's the cost of this (in liberty and lucre), what's the purpose, and what are the rules to prevent abuses?
Cheap, small, noiseless and practically invisible, drones take snooping to a whole new level. Equipped with super-high-powered lenses, infrared and ultraviolet imaging, radar that can see through walls, video analytics and "swarm" technologies that use a group of drones that operate in concert to allow surveillers to watch an entire city, these devices are made to be intrusive. And, of course, they can be "weaponized" to let police agents advance from intrusion to repression.
In other words, we are on a fast track to becoming a society under routine, pervasive surveillance. As the ACLU put it in an excellent December 2011 report on the UAV threat, such a development "would profoundly change the character of public life in the United States."
It's worth adding that public authorities are not the only ones getting UAVs.
Corporations have a keen interest in their potential for surreptitious monitoring of environmentalists, union leaders, protesters and competitors. Plus, those being watched might well want to keep track of those who are tracking them. Divorce lawyers, private investigators, political operatives and others who snoop for a living will surely find drones attractive. Individuals — from hobbyists to survivalists — are already building their own. And won't criminals get them, too?
The goal of drone pushers is to have a startling 30,000 of these pilotless contrivances zipping through the air by 2020. Holy moly! Our nation's entire commercial fleet of passenger and cargo planes numbers only about 7,000. And lest you think that 30,000 drones is an industry fantasy, a map compiled from military records discloses that as of last June the Pentagon alone already had 64 drone bases throughout our country, with another 22 bases planned. The Posse Comitatus Act of 1878 prohibits the military from operating on American soil, but there it is. What are they doing? We don't know. But it's time to ask.
The good news is that the industry and its cohorts have been recently stunned by a remarkable left-right counterpunch. They are not only being confronted by such progressive opponents of their liberty-busting gambit as the ACLU, CodePink and Democratic Rep. Ed Markey of Massachusetts in the U.S. House and Ron Wyden of Oregon in the Senate, but also a determined bunch of Republican privacy defenders in Congress and the media, including Kentucky Sen. Rand Paul, "Morning Joe" Scarborough on MSNBC, Bloomberg columnist Ramesh Ponnuru and even far-right Fox commentator Charles Krauthammer, who says: "I don't want restrictions (on drones) — I want a ban."
Americans of all political stripes (from Greens to Libertarians) hold the rights of privacy, free assembly and speech dear. Republican Rep. Ted Poe of Texas, for example, is a hard-right conservative, but he gets it that nothing could be more genuinely conservative than conserving those fundamental rights. Last July 24, Poe took to the House floor to shout out to all of us citizens a timely update of Paul Revere's legendary cry: "The drones are coming!"
He's chairman of the subcommittee on homeland security, so he's not just pissing in the wind. He, Markey, Paul and others are sponsoring similar bills to rein in the harum-scarum drive to infest our skies and society with drones.
Not only is this a fight that grassroots people can win against the profiteers and privacy invaders, but it's one we must win. For more information, go to epic.org.
(Jim Hightower has been called American's most popular populist. The radio commentator and former Texas Commissioner of Agriculture is author of seven books, including "There's Nothing In the Middle of Road but Yellow Stripes and Dead Armadillos" and his new work, "Swim Against the Current: Even Dead Fish Can Go With The Flow".)

Last Updated on Wednesday, 31 December 1969 07:00

Hits: 476

 
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