How to Get Less of Something

Tax it.

If you want less alcohol being sold, tax it.  Same with cigarettes.  Do you wanna have fewer homes built in a certain area?  Tax new home construction.  This is true of all things.  People will buy less of something when that thing is more expensive.  This concept is very powerful; and should be equally obvious.  When you ask someone on the street to identify their favorite beer and then present them with the option of buying as many of them as they want at $10 a pop, think they’ll buy more or less than if you offered that same beer at $0.50 a bottle?  Right.  Me too.

However, when you get politicians involved you get different responses that you might expect.  Now, I’m not sure why this is the case, but I suspect that it has more to do with politicians enjoying the fruits of power than anything else.  But, you could also argue that politicians are just like everybody else and they just don’t KNOW certain things.  And so it should not be surprising when corporations walk away from States who want to tax business.  Remember, when you tax a thing, you get less of it.

The law hasn’t even passed yet and already North Carolina is getting “less of it”.

Amazon.com said Friday it has pulled the plug on commissions for North Carolina Web sites that make referrals to the online retailer, because a law designed to collect taxes on some of its sales transactions could soon be enacted.

Seattle-based Amazon said it wrote to Web site operators, telling them its “Associates program” will end after Friday. Web sites that posted links to the company about its products have received up to a 15 percent cut on sales.

As I mentioned, this law is only being considered at this time, it hasn’t been voted on or sent to the Governor.

But the Legislature is considering a provision in its final budget plan designed to collect sales taxes on these so-called “click-through” transactions.

Competing House and Senate plans both contain the provision, so it’s likely to be in the compromise budget proposal that could be approved in the next several days.

Rather than driving money OUT of North Carolina, how about our State Government just reduce our spend, by, say:

North Carolina expects to collect an additional $13.2 million in the coming fiscal year on the “click-through” transactions and by companies collecting sales taxes on music, video and software downloads purchased electronically, according to a legislative fiscal analysis.

I don’t know, 13.2 million?

Just another example of our Government trying to do too much.

Leave a Reply

Your email address will not be published. Required fields are marked *