Mish's Global Economic Trend Analysis

Alliance for Main Street (Walmart and Target) Press Amazon on Taxes; In Praise of Amazon
Qaddafi Pledges "Long War"; Photographs of the Wreckage; Usurpation of Legislative Power
Ben Bernnake Ponders Food Prices

Alliance for Main Street (Walmart and Target) Press Amazon on Taxes; In Praise of Amazon

Posted: 20 Mar 2011 06:43 PM PDT

Mom and pop bookstores and other retailers have had enough. They cry foul on Amazon for not collecting state sales taxes. Moreover, Walmart and Target have now entered the battle and have sided with mom and pop against purported evil-doers like Amazon that have an unfair advantage.

The Wall Street Journal reports Retailers Push Amazon on Taxes

Wal-Mart Stores Inc., Target Corp. and other large retailers are ratcheting up a political campaign to force Amazon.com Inc. to collect sales taxes, sensing opportunity in the budget crises gripping statehouses nationwide.

The big-box stores are backing a coalition called the Alliance for Main Street Fairness, which is leading efforts to change sales-tax laws in more than a dozen states including Texas and California.

Until now, the group has been largely associated with mom-and-pop stores, spotlighting stories of small toy shops and booksellers who argue Internet merchants that aren't legally required to collect sales taxes enjoy an unfair advantage with shoppers.

"The rules today don't allow brick-and-mortar retailers to compete evenly with online retailers, and that needs to be addressed," said Raul Vazquez, Wal-Mart's executive vice president of global e-commerce.

Amazon has feverishly fought efforts to compel it to collect sales taxes. The Seattle-based online retailer says it complies with the law. Under a 1992 U.S. Supreme Court ruling, only merchants who have a physical presence, such as stores, in a state have to collect sales taxes. Amazon currently gathers those taxes in just five states: Kansas, Kentucky, North Dakota, its home base of Washington, and New York.

U.S. Sens. Richard Durbin, an Illinois Democrat, and Mike Enzi, a Wyoming Republican, are considering more direct legislation to force online retailers to collect sales taxes, people familiar with the matter said.

Hours after Illinois Gov. Pat Quinn, a Democrat, signed the Internet sales-tax law last week, Amazon cut ties with its roughly 9,000 Illinois affiliates to avoid collection there. Amazon took similar actions in Hawaii, North Carolina and Rhode Island after those states passed legislation similar to the New York law, which Amazon is challenging in court.

Wal-Mart, Sears and other store chains publicly offered to work with the Amazon affiliates. A group representing the affiliates estimates they paid $18 million to Illinois in the form of income taxes, and are likely to see that amount drop by 25% to 30% this year.

Targeting affiliates is just one of the tactics retailers are supporting to pressure Amazon.

In states including Texas and Arkansas, store chains are also backing legislation that seeks to make clear that Amazon must collect sales taxes if it controls in-state warehouses through related companies.

Amazon last month said it would close a Texas distribution center amid a tax dispute with Republican State Comptroller Susan Combs, who contends that Amazon owes $269 million in uncollected sales tax because of the facility's physical presence in the state.

"Amazon is choosing to be a bully" by dropping affiliates instead of collecting taxes, said California Assemblywoman Nancy Skinner, a Democrat who is carrying legislation supported by Wal-Mart and other retail chains, similar to what became law in New York and Illinois.

I Commend Amazon

I commend Amazon. The real bullies are the states raping taxpayers and handing money over to pubic unions for untenable pension benefits.

Regardless of how you feel about that statement, mom and pop stores are for the most part dead. Ironically, most blame stores like Walmart, Target, and Amazon.

However, If you want to blame someone, blame consumers. They are the ones shopping at Walmart, hoping to save a buck. They are the ones using a Kindle or an iPad instead of buying a book. They are the ones shopping at Amazon.

I happen to think Walmart is a godsend. The country needs lower prices. Walmart provides them. If you disagree, you are free to shop elsewhere. For the record, I generally shop elsewhere, but my vote is meaningless in the grand scheme of things. I am outvoted by Walmart lovers but I am with the Amazon lovers.

Affiliates Dropped, Including Me

If anyone is entitled to speak out as to who is the bully is, then I am. Every month I get an affiliate check from Amazon. Rather I used to.

Here are my last three checks.

$214.99
$356.47
$246.62

The average of those is $818.08 or $3272.32 annually. Thus, I expect this move by Amazon will cost me somewhere between $3,000 and $4000 a year.

Do I feel bullied? Yes, I do, but not by Amazon. I feel bullied by California Assemblywoman Nancy Skinner and by Illinois Governor Pat Quinn.

Am I going to stop linking to Amazon? No I am not, unless Amazon service degrades or some other issue props up.

Meanwhile, I will be out $3000 to $4000 annually and Illinois will be out taxes on that amount (multiplied by everyone who feels the same as I do). Thus, instead of Illinois getting any benefit from my affiliation with Amazon, the money will all go to Amazon because I am still going to promote them unless and until I have a reason not to.

Amazon provides excellent service to me (I use them all the time) and I assume they provide excellent service to everyone who orders from my book list on the left as well. That is what matters to me, not $3,000.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
Click Here To Scroll Thru My Recent Post List

Qaddafi Pledges "Long War"; Photographs of the Wreckage; Usurpation of Legislative Power

Posted: 20 Mar 2011 12:24 PM PDT

Once again the New York Times leads the way with excellent coverage of happenings in the Mideast and Africa. Please consider Qaddafi Pledges 'Long War' as Allies Pursue Air Assault on Libya

A day after American and European forces began a broad campaign of strikes against the government of Col. Muammar el-Qaddafi, the Libyan leader delivered a fresh and defiant tirade on Sunday, pledging retaliation and saying his forces would fight a long war to victory.

He was speaking in a telephone call to state television, which, apparently for security reasons, did not disclose his whereabouts. The Libyan leader has not been seen in public since the United States and European countries unleashed warplanes and missiles in a military intervention on a scale unparalleled in the Arab world since the Iraq war. On Sunday, American B-2 stealth bombers were reported to have struck a major Libyan airfield.

In a first assessment from Washington, Adm. Mike Mullen, the chairman of the Joint Chiefs of Staff, said the first day of "operations yesterday went very well," news reports said. Speaking to NBC's "Meet the Press," he said a no-flight zone over Libya to ground Colonel Qaddafi's warplanes — a prime goal of the attacks — was "effectively" in place and that a loyalist advance on the eastern rebel stronghold of Benghazi had been halted.

Despite those major setbacks, Colonel Qaddafi said his forces on the ground would win in the end. And he repeated an assertion made on Saturday that he had opened military depots to his supporters and the Libyan people were now fully armed. Instead of an image of the Libyan leader, state television showed a statue of a golden fist clutching a crumpled American fighter plane, a monument to an American strike on his compound in 1986.

Speaking of a "long war," Colonel Qaddafi said: "We will not leave our land and we will liberate it."

In a Field of Flowers, the Wreckage of War in Libya

Please consider In a Field of Flowers, the Wreckage of War in Libya.

Rebel fighters watched burning vehicles belonging to loyalist forces after an air`strike near Benghazi on Sunday. Image by Goran Tomasevic/Reuters

The attack seemed to have come out of clear skies onto a field of wildflowers.

Littered across the landscape, some 30 miles south of Benghazi, the detritus of the allied airstrikes on Saturday and Sunday morning offered a panorama of destruction: tanks, charred and battered, their turrets blasted clean off, one with a body still caught in its remnants; a small Toyota truck with its roof torn away; a tank transporter still on fire. But it did not end there.

For miles leading south, the roadsides were littered with burned trucks and burned civilian cars. In some places battle tanks had simply been abandoned, intact, as their crews fled. One thing, though, seemed evident: the units closest to Benghazi seemed to have been hit with their cannons and machine guns still pointing toward the rebel capital.

To the south, though, many had been hit as they headed away from the city in a headlong dash for escape on the long road leading to a distant Tripoli.

"They were retreating," said Col. Abdullah al-Shafi, an officer in the rebel forces, which had clamored desperately for the allied air help that arrived on Saturday. "Soldiers had taken civilians' cars and fled. They were ditching their fatigues."

"This is all France," a rebel fighter, Tahir Sassi, told a Reuters correspondent as he surveyed the devastation on Sunday. "Today we came through and saw the road open."

The monuments to the loyalists' last maneuver were not the victory so often trumpeted in their propaganda. Empty ammunition boxes lay discarded among the flowers. Armored personnel carriers still smoldered alongside wrecked rocket-launchers. Craters pitted the fields, as if there had been multiple strikes, apparently by the pilots of the French warplanes that took credit for firing the first shots in the international, American-backed effort to contain Colonel Qaddafi's forces.

There is much more information in the above articles that inquiring minds may wish to read.

Images of War

Here are a few images from Detritus of War, an excellent slideshow series of 10 images on the allied attack.

A bomb from an allied aircraft exploded among vehicles belonging to forces loyal to Col. Muammar el-Qaddafi during an airstrike Sunday on the highway outside of Benghazi. Credit: Goran Tomasevic/Reuters

The air strikes seem to have halted the loyalist advance on the eastern rebel stronghold of Benghazi. Rebel fighters celebrated along the highway. Credit: Goran Tomasevic/Reuters

A rebel supporter waved the rebellion flag atop a burned tank. Credit: Patrick Baz/Agence France-Presse — Getty Images

Usurpation of Legislative Power

However just this course of action may be, bombing airfields in another country is clearly an act of war. However, only Congress has the power to declare war. For a discussion please consider Declaration of war by the United States

Missing Pieces

What makes this war different from President George W. Bush's war in Iraq is an outright request for action from the Arab League, a buy-in from the UN Security council, a buy-in from neighboring countries, and a request from Great Britain and France.

It is near-miraculous to get a buy-in from Russia and China on this. Five Nations abstained but neither Russia nor China vetoed the action.

However, where where was the debate in the US? How are we going to pay for this? How long will it last? How much can we spend?

Questions abound.

We were not attacked and there was clearly enough time for the president and Hillary Clinton to make the case to Congress and the citizens of the United States.

Slowly but surely, powers granted Congress in the constitution have been steadily usurped by the executive branch. This sad state of affairs applies to Republican and Democratic president alike.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
Click Here To Scroll Thru My Recent Post List

Ben Bernnake Ponders Food Prices

Posted: 20 Mar 2011 10:28 AM PDT

It's been a while since my last Sunday Funnies. Here is a timely submission from reader Bill regarding Ben Bernanke, bank bailouts, and food prices.

If you wish to contribute, please do so. The cartoon must be yours, not something you saw elsewhere.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
Click Here To Scroll Thru My Recent Post List

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Mish's Global Economic Trend Analysis

Mish's Global Economic Trend Analysis

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