December 1, 2011 archive and eBay Take Their Online Sales Tax Fight to Washington


You remember the Flap which was sort of resolved in California a few months ago.

Now, the conflict is being staged in Washington and in the Congress.

A Capitol Hill clash between and eBay complicates California’s hopes for an online sales-tax fix.

The fight flared Wednesday, underscoring how big differences between the Internet sales giants stand in the way of congressional efforts to help California and other states collect hundreds of millions of dollars in taxes.

Each side has its respective political champions, and each side wants small businesses exempt from the burdens of collecting state taxes for online sales. They diverge sharply, though, over what “small” means.

“We want to stand with the little guys,” Rep. Zoe Lofgren, D-San Jose, noted at a hearing Wednesday in the House of Representatives, “and the difficulty is, who is that?”

The Seattle-based Amazon wants a much more limited small-business exemption than eBay, which is based in Lofgren’s hometown. So long as the companies remain apart, they can’t put their combined weight behind an online sales-tax bill, versions of which have been floating around Congress for years.

The differences and the delays matter because the clock is ticking, particularly in California.

As I have said before, I don’t really think the various online retailers will be able to work out any legislative compromise particularly going into an election year. There really needs to be a national solution to the collection of state sales taxes for online businesses, but I do not foresee it anytime soon.

The federal courts may eventually decide the issue, but this will take many years and lots of expensive litigation.

States drool with anticipation of receiving a piece of the online sales tax pie, but to capture tax revenue from customers of companies that do not have a physical presence in their state, they will have to wait.

Is this fair?

I suppose it depends upon your business interests and your own TURF.


President 2012 California Poll Watch: Obama Leads Romney and Gingrich But Job Approval Lackluster


US President Barack Obama speaks on payroll tax cuts at Scranton High School in Scranton, Pennsylvania, November 30, 2011

According to the latest California Field Poll.

Only 45% of California voters say they are inclined to have Barack Obama serve another term as President. But his reelection prospects improve greatly when he is paired against each of his two leading GOP challengers in general election match-ups. Obama now leads Mitt Romney by ten points (50% to 40%) and holds a more commanding twenty-point lead over former House Speaker Newt Gingrich (55% to 35%) in general election trial heats.

Obama’s job ratings in this state remain lackluster, with 48% approving and 44% disapproving. However, these marks are somewhat better than what he is receiving nationally, where the average of his poll ratings are 44% approve and 51% disapprove.

In respect to how voters here think about the overall direction of the U.S., 70% believe the country is seriously off on the wrong track. This appraisal is virtually the same as Californians’ assessments of the direction the country was heading during the last year of the George W. Bush administration.

These results come from a statewide survey among a representative sample of 1,000 California voters conducted November 15-27.

President Obama owns California, should win handily, but there is some danger for California Democrats who are down ticket. If there is no great enthusiasm to re-elect Obama, California voters are apt to stay home and not bother to vote.

This will help California GOP candidates who may be running in districts that have close Democrat Vs. Republican registration numbers.


Flap’s California Morning Collection: December 1, 2011


Baker, California (where I will be tomorrow on the way to Las Vegas, Nevada)

The California Legislature is not in session.

On to today’s headlines:

Campaign to repeal California death penalty nets nearly $1.2 million

A group seeking to ask California voters to repeal the death penalty has netted nearly $1.2 million in recent weeks to aid its drive to qualify for the 2012 ballot.

The contributions, made to a committee created to fund the proposed ballot measure, were reported this week in campaign finance filings posted on the secretary of state website.

Major donors listed in the report include several California branches of the American Civil Liberties Union ($41,770), Google executive Robert Alan Eustace ($125,000), Hyatt Development Corporation CEO Nicholas Pritzker ($500,000), and Netflix CEO Reed Hastings ($125,000).

Jerry Brown to pitch tax plan to voters

In the latest proposed fix for California’s fiscal crisis, Gov. Jerry Brown is expected to announce a multibillion-dollar tax initiative in the coming days, asking voters to raise levies on upper-income earners and increase the state’s sales tax by half a cent.

The levies would expire at the end of 2016, said sources with direct knowledge of the plan. The governor’s office has been fine-tuning the tax measure for weeks with its labor allies. It hopes to file language with the attorney general’s office as early as Friday so it can start gathering the signatures needed to place the measure on the November 2012 ballot.

The proposal comes as a host of groups race to qualify tax measures for next year’s ballot, all aimed at preventing deeper cuts to state services. Democrats hope the governor’s backing will help clear the field and avoid a tax glut on the November ballot.

After the state enacted an austere state budget this year, the nonpartisan Legislative Analyst’s Office said California is likely to be $3.7 billion short of balancing its books in the current fiscal year. That probably will trigger a new round of reductions that could mean a shorter school year in some districts and millions of dollars slashed from public universities, child-care programs and services for the disabled. Even then, California could face a $13-billion shortfall in the next fiscal year, the analyst said.

Brown’s plan, developed in a series of closed-door meetings between his senior staff,  labor leaders and representatives of Democratic legislative leaders, would add an extra 1% tax on individual income above $250,000 a year. Individuals making between $300,000 and $500,000 would be taxed an additional 1.5% for that income. And those making more than $500,000 would see an additional 2% hike.

Those hikes, coupled with the sales tax increase, could raise about $7 billion.

The Crowding Field of 2012 Tax Initiatives

California voters have long had a reputation as anti-tax, a reputation that explains why so many proposals either fizzle before ever making it to the ballot… or are roundly rejected on Election Day.

But the November 2012 ballot appears poised to put that theory to the test, with an ever growing number of initiatives designed to raise revenues to pay for deficit-shrunk government services.

Two distinct proposals both popped up today, following the recent buzz over a $10 billion tax proposal crafted by a group of prominent Californians. And they proceed an expected revenue proposal from Governor Jerry Brown, one which everyone assumes will be unveiled in the very near future.

The first of the new initiatives filed with the Attorney General’s office for formal title and summary is a tax increase earmarked exclusively for K-12 schools. Its proponent is attorney Molly Munger, a Californian probably most notable for her financial pedigree. Her father, Charles Munger, is a longtime top associate of billionaire financier Warren Buffett; her brother, Charles Munger, Jr., is best known for bankrolling the two successful initiatives that wrested redistricting away from the Legislature.

California rapped for low spending on anti-smoking programs

California had one of the nation’s first state-financed anti-smoking programs, but it is now being criticized by a national health coalition for its relatively low level of spending.

The Campaign for Tobacco-Free Kids says in a new nationwide report that California ranks 22nd in the nation by spending just 15.8 percent of what the U.S. Centers for Disease Control and Prevention recommends on smoking prevention.

The state’s spending on anti-tobacco programs, $70 million a year, is financed entirely by a special increase in cigarette taxes in 1999. The coalition is critical of California and other states for not spending more from a massive, multibillion-dollar national settlement of a lawsuit against tobacco companies. The state is now receiving $1.7 billion a year from that settlement but, like most other states, is using the money for general purposes.

The Tobacco-Free Kids group, a coalition of health and children’s advocacy groups, contends that 13.8 percent of California’s high school students smoke. However, smoking has plummeted in California in recent years to the second lowest level of any state, 12.8 percent of adults. Only Utah, at 9.8 percent, is lower.

The issue is likely to be rejoined next year because a measure has qualified for the June primary ballot that would increase California’s cigarette tax by $1 per pack to finance cancer research and anti-smoking programs.

Enjoy your morning!


Dilbert December 1, 2011 – Say GoodBye


Dilbert by Scott Adams

Dilbert, better hit SAVE……