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Amazon Blamed For $1 Billion In Lost Revenue - Empty Shop Property Taxes

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Amazon Blamed for $1 Billion in Lost Tax Revenue in 2014

Amazon is frequently blamed for reducing tax revenue in states where it doesn't collect online sales tax, but a new report points to another way the company could be hurting state and local government coffers: lost property taxes.

An organization called Civic Economics says in 2014, Amazon cost state and local governments $1 billion. It estimated that Amazon avoided paying $625 million in state and local sales taxes, and another $420 million in property taxes.

Here's how it calculated the latter figure. Civic Economics estimated that Amazon sold $44.1 billion worth of retail goods nationwide - "These sales are the equivalent of 3,215 retail storefronts or 107 million square feet of commercial space, which might have paid $420 million in property taxes."

Amazon also has a negative impact on American jobs, the organization said:

"Amazon also operated 65 million square feet of distribution space, employing roughly 30,000 full-time workers and 104,000 part-time and seasonal workers. Even counting all the jobs in Amazon distribution centers, Amazon sales produced a net loss of 135,973 retail jobs nationwide."

Amazon declined to comment on the study, which was released in a report called "Amazon and Empty Storefronts" on January 24 at a meeting of the American Booksellers Association, a longtime partner.

In the introduction to the report, the organization writes, "The American Booksellers Association and Civic Economics have long collaborated to study and describe the state of independent retail in America, but until now those efforts have focused on various classes of bricks and mortar stores.

This report takes that research into a new era. It is designed to provide policymakers and consumers with a better understanding of the impact at the state and local level of the growth of online retail as a substitute for storefront purchases.".....

Edited by Saving For a Space Ship

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"Amazon also operated 65 million square feet of distribution space, employing roughly 30,000 full-time workers and 104,000 part-time and seasonal workers. Even counting all the jobs in Amazon distribution centers, Amazon sales produced a net loss of 135,973 retail jobs nationwide."

Seriously ? - so how many retail jobs did sears and robuck destroy when they invented the mail order catalogue ?? perhaps they should have banned that as well.

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in other news, tax man cries as millions made workless in the fields due to mechanisation on the farm.

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This study was done by booksellers not the government. There's no official government comment on this. Just bear in mind.

in other news, tax man cries as millions made workless in the fields due to mechanisation on the farm.

"Amazon also operated 65 million square feet of distribution space, employing roughly 30,000 full-time workers and 104,000 part-time and seasonal workers. Even counting all the jobs in Amazon distribution centers, Amazon sales produced a net loss of 135,973 retail jobs nationwide."

Seriously ? - so how many retail jobs did sears and robuck destroy when they invented the mail order catalogue ?? perhaps they should have banned that as well.

On the other hand, the report does point out some important downsides to ever increasingly efficient industries.

Job destruction.

Inefficiency creates work. Despite what you may think, or what you have been taught about free markets and capitalism and productivity, it a fact that as companies chase dwindling margins through efficiency, offshorisation and robotics, jobs will be inevitably lost. We are not living in 1901, where new industries are being created, creating value and employment. We have invented most of the things we want or need, and the market is saturated. What's left is overproducing industries chasing a saturated market. The downside of this is that factories and retailers want to reduce their staff numbers, which in turn decreases the number of consumers and increases the welfare hand outs.

Tax Destruction

As TheCountOfNowehere correctly says, taxes are not a divine right of the government. Notwithstanding, taxes are necessary to maintain the infrastructure's of nations. Without them we would live in the stone age. You can argue that lower taxes are good for all if applied equally, but no taxes, or taxes burdened by some and not others, are not good for a country. As companies like Amazon, Tesco Direct, and others, move towards a delivery style system for their goods, less tax is going to be paid in the form of Income Tax (less workers needed to supply market) and Taxes derived from profits from landowners.

The good part of this is that at least, rentiers of commercial property are going to loose out, as I believe these make a living of the back of others. A form of land-usury. I would be in favour of high land taxes but low wage taxes, this would encourage the best efficiency of land, not penalising hard graft and taxing monarchic land rights.

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I get that outfits like Amazon don't feel they should pay any tax and would avoid all taxes if they could get away with doing so-that's fair enough- what I don't get is why they would call the cops if I broke into one of their warehouses- or the fire brigade if I started a fire while I was in there. And I assume Bezos would expect an ambulance to turn up if he got hit by a bus in london.

But since they don't believe in principle in funding these services, why would they expect to make use of them?

After all we are told that their only duty in relation to taxation is to maximize the return to their shareholders- and that duty is to pay as little tax as legally possible- and if that amount was zero then that is what they would pay. Fine- but what about the emergency services, do they have a duty to Amazon, to protect it's property and it's interests? Apparently they do.

So there is an asymmetry here- it turns out that Society owes something to Amazon et al- yet they owe nothing to society- WTF is that about?

When did it become acceptable for a corporation to deny any moral obligation to support the society in which it operates?

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It's the government's job to create a tax code that is fit-for-purpose, not Amazon's. Expecting corporations to pay a "moral" amount of tax is absurd. Just improve the rules and enforce them.

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in other news, tax man cries as millions made workless in the fields due to mechanisation on the farm.

I totally very that point and agree with it. Argos or mail order companies have also had that effect.

However Amazon do not just divert tax offshore, by using a tax haven (Luxembourg) they are able to use the very generous tax to subsidise pricing by allowing them to maintain a profit after tax target with lower shop prices.

This makes them even more competitive compared to bookshops and would logically drive even more out of business.

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It's the government's job to create a tax code that is fit-for-purpose, not Amazon's. Expecting corporations to pay a "moral" amount of tax is absurd. Just improve the rules and enforce them.

Well said.

The only comment I would add to this is that the tax laws are developed in consultation with the big accountancy firms which are then in position to work around them. (aka "Regulatory Capture").

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It's the government's job to create a tax code that is fit-for-purpose, not Amazon's. Expecting corporations to pay a "moral" amount of tax is absurd. Just improve the rules and enforce them

My point is that companies like Amazon operate on the principle that they should pay as little tax as possible and so do everything they can to avoid doing so- short of breaking the law. And that is a perfectly valid point of view- one that I see you support.

However they also feel that they have a right to call upon such tax funded services as law and order, the fire service and the national health service- not to mention their free access to the road network and other transport infrastructure.

So my argument is with the hypocrisy of their outlook which is essentially a freeloaders mentality that involves taking the maximum out while putting the minimum in- a mindset that we commonly attribute to benefit scroungers- only in this case the scrounger in question was- until recently- the fifth richest man on the planet ( He's lost that place to Zuckerberg recently and is now languishing somewhere around the sixth or seventh richest- maybe a whip round is in order?)

So why is it ok for a billionaire to take the the view that he should give as little as possible and take as much as possible when we endlessly complain about benefit scroungers who share exactly the same view? If it's unacceptable for the poor to take this position why is it acceptable for the rich?

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My point is that companies like Amazon operate on the principle that they should pay as little tax as possible and so do everything they can to avoid doing so- short of breaking the law. And that is a perfectly valid point of view- one that I see you support.

I don't support it or not support it, i'm just describing the way things work in the real world. Amazon exists as a company because it's able to sell things cheaply. If it raised its prices in order to voluntarily pay more tax it would be outcompeted by another less "moral" company that chose not to do that. Then you'd be right back where you started.

Why would the owners and employees of Amazon voluntarily choose to destroy the company that puts food on their family's table? They wouldn't. You can spout about morality and hypocrisy all you want but it won't change the fact that in the real world people act in their own self interest. Society needs rules based on how people actually work.

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We are not living in 1901, where new industries are being created, creating value and employment.

Oh really? In 1901 if you'd said that the most valuable company in the world in 2016 wouldn't be in mining, steel, iron, rubber, transport, tobacco or cars , but instead in the business of locating information while giving most of its core services for free, they wouldn't have understood you, let alone believed you.

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You can spout about morality and hypocrisy all you want but it won't change the fact that in the real world people act in their own self interest.

Of course- my point is that we are operating a double standard here- when a poor man acts in their own self interest by gaming the benefits system you would probably condemn him for it- but when a rich guy like Bezos acts in his own self interest by gaming the tax system you seem to want to defend him.

In both cases the intent is to exploit loopholes and weakness's in the system for reasons of self interest- does that mean it's ok to game the benefits system in your view? Or do you feel there is some moral obligation not to do so?

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Of course- my point is that we are operating a double standard here- when a poor man acts in their own self interest by gaming the benefits system you would probably condemn him for it- but when a rich guy like Bezos acts in his own self interest by gaming the tax system you seem to want to defend him.

In both cases the intent is to exploit loopholes and weakness's in the system for reasons of self interest- does that mean it's ok to game the benefits system in your view? Or do you feel there is some moral obligation not to do so?

Only if the state stops gaming it for their own interests.

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I don't support it or not support it, i'm just describing the way things work in the real world. Amazon exists as a company because it's able to sell things cheaply. If it raised its prices in order to voluntarily pay more tax it would be outcompeted by another less "moral" company that chose not to do that. Then you'd be right back where you started.

Why would the owners and employees of Amazon voluntarily choose to destroy the company that puts food on their family's table? They wouldn't. You can spout about morality and hypocrisy all you want but it won't change the fact that in the real world people act in their own self interest. Society needs rules based on how people actually work.

Running a corporation & online retailing appears increasingly to be so horribly complicated & counter intuitive. Corp self interest appears to override traditional PR sense, so amazon tax arrogance damages image to buyers leading to boycotts etc.

Imo, they should declare more profits & pay more tax to protect their image. Perhaps they are too big (ebay / Az duopoly) , feel untouchable, or too arrogant to care.

I recently left amazon after many yrs as a marketplace seller. I'll detail it somewhere if i have time, as a lot has changed recently re; AZ.

Even my 12 yr old niece said at xmas that amazon were a bad co. who mistreated their warehouse workers

on a separate note. This is an interesting az forum thread re: feedback system

A Competitor keeps having there feedback removed

https://sellercentral-europe.amazon.com/forums/thread.jspa?threadID=113432&start=0&tstart=0&sortBy=date

Edited by Saving For a Space Ship

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Running a corporation & online retailing appears increasingly to be so horribly complicated & counter intuitive. Corp self interest appears to override traditional PR sense, so amazon tax arrogance damages image to buyers leading to boycotts etc.

Even my 12 yr old niece said at xmas that amazon were a bad co. who mistreated their warehouse workers

on a separate note. This is an interesting az forum thread re: feedback system

A Competitor keeps having there feedback removed

https://sellercentral-europe.amazon.com/forums/thread.jspa?threadID=113432&start=0&tstart=0&sortBy=date

I think Amazon are particularly egregious tax dodgers (ALL big corporations do that of course, Amazon are the ones in the spotlight) and I also think that they treat their unskilled workers pretty badly (again, as do pretty much all large global corps) but guess what? At the end of the day I don't give a monkey's and happily spend a large part of my consumer dollar with them because they have a great choice, decent prices and fantastic logistic system which gives me an excellent experience as a customer.

I suspect a lot of people don't even give that moments consideration about tax dodging and crap treatment of unskilled labour before doing likewise.

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I think Amazon are particularly egregious tax dodgers

But Amazon genuinely doesn't make big profits. That's one of the main criticisms levelled at them by shareholders. They spend all their income on trying to grow and enter new markets.

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It's the government's job to create a tax code that is fit-for-purpose, not Amazon's. Expecting corporations to pay a "moral" amount of tax is absurd. Just improve the rules and enforce them.

+1

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But Amazon genuinely doesn't make big profits. That's one of the main criticisms levelled at them by shareholders. They spend all their income on trying to grow and enter new markets.

But try getting those who think that sales and profits are the same thing. Of course the government do get the VAT on sales, much more than any amount of tax of profits could conceivably be. :)

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