Opinion L.A.

Observations and provocations
from The Times' Opinion staff

Category: Tax Loopholes

Straight-shooting Republicans keep hitting themselves in the foot

Mitt Romney in Maine
If you want keen observations on Campaign 2012, you'll want to read the columns by my colleague Doyle McManus.

For example, in Sunday's column, McManus pointed out that the drawn-out and increasingly negative Republican presidential race will take its toll on Mitt Romney among independent voters.

Lo and behold, on Monday The Times reported on new poll results:

President Obama for the first time has opened a sizable lead over his most likely Republican opponents, thanks to growing support among independent voters, according to a new Pew Research Center poll….

Obama led [Rick] Santorum by 10 points among registered voters nationwide (53%-43%) and led [Mitt] Romney by 8 points (52%-44%). Obama’s lead over Newt Gingrich, who has faded in the GOP race, was 18 points (57%-39%). In previous polls in November and January, Romney and Obama were roughly tied. Obama has moved up because of support from independent voters, 51% of whom now back him against Romney, a gain of 11 points since last month.

Now, had you read McManus, you would have already had that information, gleaned from an insider: 

"The long primary fight is driving independent voters away from Romney," the Obama campaign's senior strategist, David Axelrod, told me last week.

The question, though, is why?

I mean, it's strange, really, how an entire party can be driven to political suicide by a small number of fervent "true believers."

Democrats saw it many years ago with George McGovern. Republicans went through it before with Barry Goldwater.

And here we are again. The Republican Party of today appears increasingly tone deaf when it comes to appealing to independent voters, much less swaying any Democrats.

Take this statement from House Speaker John A. Boeher on Monday, regarding the Republicans’ acceptance of the Democrats' goal of extending the payroll tax cut for middle-class Americans:

"This is not our first choice," said Boehner and his leadership team, including Majority Leader Eric Cantor (R-Va.), in a joint statement. "But in the face of the Democrats’ stonewalling and obstructionism, we are prepared to act to protect small businesses and our economy from the consequences of Washington Democrats’ political games."

Sorry, John, you lost me at "not our first choice." 

Now, I'm sure many Americans will appreciate the Republicans' efforts on behalf of small businesses -- whatever that means -- and they'll also appreciate how hard it must be to put up with those stonewalling Democrats, who have the nerve to want to keep a tax break for regular working folks.

And I'm also sure that Sarah Palin and Santorum and the other tea partyers who live in what is apparently a parallel universe will vote Republican in November, even if that means voting for Romney.

But the race is won in the middle, where the independents hang out, and nothing the Republicans are doing right now has much appeal to those folks.

But don't take my word for it.

Just read Doyle McManus.


Carmen 'I am a liar' Trutanich

Obama, Romney and the battle of the bands

Santorum blames his wife for his criticism of those radical feminists 

-- Paul Whitefield

Photo: Republican presidential candidate Mitt Romney campaigns in Portland, Maine. Credit: Robert F. Bukaty / Associated Press

What does Romney's refusal to release his tax returns say about him?

Mitt Romney
The easiest thing to say about Mitt Romney's tax returns is that he should release them. Now, not in April. He can always supplement the document dump with his 2011 return when it's ready. Besides, by admitting  that he is taxed at the 15% rate imposed on capital gains, he already has confirmed suspicions that he belongs to the much-reviled 1%.  How much worse can the returns be? At this point he has the worst of both worlds: self-exposed as a fat cat and open to the charge of evasion. 

The second easiest thing to say about the controversy is that it is more proof of Romney's political tone-deafness.  After the offer of a $10,000 bet, the revelation that he once worried about pink slips,  his admission that he liked to fire people (I know -- he was talking about insurance companies) and his suggestion that he didn't make much in speaker's fees ($370,000), you'd think he or his media advisors would think twice about saying or doing anything that would exacerbate what the Republicans call class envy, especially before a vital primary election.  (They might also have contrived to leak to the media information about his generosity to the Mormon Church, though that might have been a mixed blessing with the evangelical vote.) 

The real question is whether Romney's ineptitude says anything about his qualifications for president or the policies he would pursue in the White House. Somewhat.  An  understanding of the current political environment  and care with language are important job requirements for a president. At least when Newt Gingrich offends people, he knows he's doing it.  But what about the "out of touch" argument -- that Romney's wealth irredeemably disconnects him from ordinary people (like George H.W. Bush's ignorance of supermarket scanners)  and, more provocatively, inclines him to positions like support for the lower capital-gains rate -- which benefits him? 

This is trickier terrain. FDR and, to a lesser extent, JFK demonstrated that you can be rich and sensitive to the problems of the down-and-out.  As for Romney's positions, armchair psychologists can attribute them to his privileged upbringing, but it's more likely that a) he actually believes in them or b) is pandering to Republicans more conservative than his secret self.  You don't have to be rich to buy the argument that a lower tax rate on capital gains encourages investment and thereby uplifts the economy. Rich people have the same right to be wrong (and Republican) as the rest of us.


Goldberg: People Inc.

Do voters care about Romney's tax returns?

Is Romney really the only GOP candidate who can beat Obama?

 -- Michael McGough

Photo: Mitt Romney holds a campaign rally at Winthorp University in Rock Hill, South Carolina, on Jan. 18. Credit: Emmanuel Dunand/AFP/Getty Images

Michele Bachmann and me -- like twins!

 Michele Bachmann

Michele Bachmann, my political soul sister!

I've been saying for weeks that Democrats are missing a huge opportunity if they don't make these six words the centerpiece of their economic campaign:

"Bring back the Reagan tax rates."

And now I see that GOP presidential candidate Bachmann agrees with me.

"For my tax plan, I take a page out of one of my great economists that I admire, Ronald Reagan," Bachmann told Fox News. "And under my tax plan, I want to adopt the Reagan tax plan. It brought the economic miracle of the 1980s. Why not go with what works? I want to reinstitute the Reagan tax model from the 1980s."

So do a lot of Democrats, Rep. Bachmann, including the Democrat in chief, President Obama. Tax rates in the Reagan presidency were almost without exception higher than they are now.

And Reagan used the "f-word" –- fair, the same word Obama has invoked –- in June 1985 to explain why the rich should pay more:

"We’re going to close the unproductive tax loopholes that allow some of the truly wealthy to avoid paying their fair share. In theory, some of those loopholes were understandable, but in practice they sometimes made it possible for millionaires to pay nothing, while a bus driver was paying 10% of his salary, and that's crazy. [...] Do you think the millionaire ought to pay more in taxes than the bus driver or less?"

Here's the video: Ronald Reagan, starring on a progressive website. Who'd a thunk?

That Ronald Reagan –- such a class warrior. No wonder Republicans can't stand him.

Bachmann should know her stuff on taxes because, as she puts it blandly, she was a federal tax attorney.

That's how she nuances the years, from 1988 to 1993, that she spent working for the Internal Revenue Service, an agency not exactly dear to the hearts of potential Bachmann voters.

This isn't the only time Bachmann has been tapping into my brain, if you want to be conspiracy-minded about it.

When Herman Cain unveiled his "9-9-9" tax plan, she and I both thought of the same quotation -- from the King James Bible:

"Here is wisdom. Let him that hath understanding count the number of the beast: for it is the number of a man; and his number is six hundred threescore and six."

It's from the Book of Revelations, and from that verse, believers have concluded that 6-6-6 are evil digits incarnate, the "Mark of the Beast."

"You turn the '9-9-9' plan upside down," said Bachmann with a twinkle, "and the devil's in the details."

But Cain's tax plan also prompted me to think of a second quotation, one that probably didn't pop into Bachmann's head.

It's from the sardonic journalist H.L. Mencken, the late "Sage of Baltimore," and it's one that's worth remembering as we embark aboard SS Election Year 2012:

"For every complex problem, there is an answer that is clear, simple -– and wrong."


Michele Bachmann gets a tame reception in San Francisco

Ron Paul thinks now is the time to make his move

Washington-hater Rick Perry pays a call on D.C. insiders

-- Patt Morrison

Photo: Rep. Michele Bachmann (R-Minn.) speaks at the Commonwealth Club in San Francisco. Credit: Jeff Chiu / Associated Press

IRS puts the bite on Canadians

Canadian Money

I cannot explain, I cannot even adequately summarize, this story about a U.S. government agency staging a virtual invasion of Canada -- at least of its residents' wallets. You should read it for yourself.

Canada's finance minister has had something to say about this too.

Really, IRS? Really, Congress?

We have a tax code designed to look the other way so that, while big companies can thump their chests and call themselves "American," at the same time they can also rent a post office box in the Caymans to dodge the tax responsibility that goes along with being American.

That entire corporate tax-dodge figure may hover around $100 billion -– more than the bill for the entire stimulus/bailout package.

The GAO, in a 2008 report, referred to one building in the Caymans. This building, Ugland House, which President Obama referred to as "[either] the biggest building in the world or the biggest tax scam in the world,'' was then home to 18,857 businesses, many of them subsidiaries of American companies -– a few of the very same companies that would be soon receiving federal bailout money. It wasn't a massive building; most of those thousands of businesses were "headquartered" in a single P.O. box, an address that allows them to "off-shore" profits.

Can anyone believe these companies are actually pulling out the checkbooks and ponying up what they owe when the IRS comes knocking? Is the IRS even bothering to pound on the doors of the companies that own those little post office boxes? But the IRS is sure shaking down the low-hanging fruit, the ordinary citizens of the sleeping giant to our north, where, if I remember, the much-mocked Canadian dollar recently and briefly nosed ahead of the U.S. dollar in value.

These Canadians are understandably flabbergasted at this IRS strong-arm trick-or-treating of taxation without representation; for them, the U.S. government is acting rather like the British monarchy this country threw off well over 200 years ago. If they decided to retaliate by stopping shipments of maple sugar, actors, game-show hosts and comedians, I wouldn't blame them a bit.

These people are Canadian, but they're being classified as Americans by the IRS. What a contrast to huge companies that claim to be proudly American -– but when it's tax time, they act like anything but.


Meddling with monetary policy

Reasons against taxing the super-rich

Taxing the wealthy to stimulate the economy?

-- Patt Morrison

Photo: A Canadian fifty-dollar bill. Credit: Brent Lewin / Bloomberg

Less government is more? Ask the people of San Bruno

San Bruno pipeline blast 
Is the best government one that governs the least? 

Many Republicans today argue yes. 

If so, they have their wish, both in Washington and in California.

We may not have the small government they want, but we certainly have a government that doesn't govern much.

Nothing is too big, or too small, to fight over in Washington today.  Disaster aid for victims of Hurricane Irene?  Not so fast, says House GOP leader Eric Cantor.

The president wants to address Congress  on jobs -– everyone's No. 1 issue?  Not so fast, says House Speaker John Boehner.  

It's smart politics by Republicans, who want to win back the presidency in 2012 and see no reason to help out President Obama and the Democrats.

And if the GOP succeeds in 2012?  Then Democrats will take on the obstructionist role. 

And if the GOP fails?  Well, why would it help a second-term Obama, when there's always 2016 to look forward to?

As my dad used to say: We're in for a long, cold winter.

But does it really matter? After all, Democrats pushed for an economic stimulus, but the economy is still struggling and unemployment remains high.

Republicans say government can't create jobs.  Of course, to spur job creation, they push for lower taxes, which they got through the extension of the Bush tax cuts. But the economy is still struggling and unemployment remains high.

So, if Obama is reelected, should we try another stimulus?

And, if a Republican wins, should we cut taxes?

Isn't one definition of insanity "doing the same thing over and over again but expecting different results"?

OK, we can’t expect government to help us out on the big issues.  What about the smaller stuff?

A conservative mantra, especially in California, is that government is strangling business with regulations.

As a counterpoint, talk to the people of San Bruno. As The Times reported this week:

In a scathing critique, federal investigators blamed Pacific Gas & Electric Co. for what one official called "baffling" mistakes that led to a gas pipeline explosion last September that killed eight people and destroyed 38 homes in the Bay Area last year.

The National Transportation Safety Board also said PG&E exploited the lack of monitoring by regulators, who mistakenly placed "blind trust" in the utility. ... 

The NTSB also took aim at the California Public Utilities Commission and the federal Pipeline and Hazardous Materials Safety Administration for contributing to the tragedy. They said that in 1961 the utilities commission exempted all natural gas pipelines built before 1961 from pressure testing. The federal government did the same for pipelines built before 1970. ...    

The NTSB estimates that about half the natural gas pipelines in the United States or about 150,000 miles of lines were built before 1970. Because of the exemptions, the NTSB said it was impossible to determine the safety levels of those lines. According to the agency, PG&E has assessed only about 65 feet of the 47 miles of gas pipeline it operates through San Bruno and the western part of the Bay Area. ...

Board members said they were dismayed that the resources for regulatory agencies have been reduced over the years, forcing inspectors to rely increasingly on representations and self-assessments from utilities that they are doing the right thing.

Hmmm. Sounds to me like PG&E wasn't exactly strangled by regulations. Sounds to me more like everyone involved, in business and government, played Russian roulette with the safety of the good folks of San Bruno, and lots of other people as well.

So let's ask that question again: Is the best government one that governs the least? 


How to pay for disasters

August sales at major retailers beat expectations

S.C. governor rejects health insurance exchange funds

Taxpayers will foot big share of post-Irene flooding costs

Our next Republican president should favor smaller government

-- Paul Whitefield
Photo: A PG&E inspector scrutinizes a portion of the gas main the day after the pipeline explosion in September 2010 that killed eight people and destroyed 38 homes in San Bruno. Credit: Don Bartletti / Los Angeles Times

Is it time to reform the tax code? [Most commented]

Warren Buffett 
Republicans criticizing Warren Buffett's complaints about the tax code don't seem to realize that his  ideas are similar to Ronald Reagan's, The Times' editorial board wrote in an editorial Thursday. Buffet wrote in a New York Times op-ed that when it comes to taxes, the super-rich get off easy in comparison to the middle class. The last time the tax code was reformed was under Reagan in 1986, when loopholes were closed and the number of tax brackets was reduced, the board wrote:

Yet in the years since, Congress has steadily drilled loopholes back into the code while lowering the tax burden for wealthy people who make money through investments rather than labor. That was the source of Buffett's complaint.

The response from Republicans, who are working tirelessly to block all attempts to level the playing field by raising taxes on the wealthy? Playground jeers. "For tax-raising advocates like Warren Buffett, I am sure Treasury would take a voluntary payment for deficit reduction," Sen. John Cornyn (R-Texas) said in a tweet.


Practically no one would pay voluntary taxes, not only because people resent paying more than their fair share but because, unlike charities, government spends money on many things that individual donors would prefer it didn't. Of course, Buffett's conservative critics know this; like most bullies confronted with a powerful argument, they'd rather mock it than try to refute it.

Readers on the discussion board wouldn't pay voluntary taxes either, but many agree that it's time to reconsider the tax code.

The rich are the ones influencing Congress against the rest of us

Anyone who criticizes Buffet for being honest about the way the mega-rich are abusing our country better be super rich themselves or they're a complete idiot.  I cannot understand middle class Americans who side with Millionaires on budget issues.  They're never going to let you join the club.  Give up the fantasy and realize the rich must keep you poor or they will be less rich...and they'll sacrifice the entire country to avoid that.  They're the ones influencing congress to set the rules against you.  WAKE UP!

--the Middle1

If you hate government spending, limit the benefits you take to what you put in

if you hate government spending so much, why don't you limit - until you die - the benefits you take from the government to only the amount you put in. You'd never take that deal the same way no one wants to voluntarily pay extra in taxes. Michele Bachmann cries and moans about too much spending and earmarks, but then writes numerous letters asking for the very same money. Same concept.


We need to reform the tax code

The tax code in this country is tens and tens of thousands of pages long. It has been conservatively estimated that the tax code contains gives aways for hundreds of billions of dollars and in fact the pork in the tax code may well reach north of 1.3 trillion dollars. Finally, if we taxed the earnings of everyone in this country that earned more than 250,000 dollars year at 100 percent, would we be able to balance our budget and begin to reduce the long term debt? The answer to this question is no. We need tax reform in this country. Instead we get distracted by issues such as the rich paying more to divert attention from the real problem. The need to reform the tax code, the need to create a system of taxation that is fair and raises the revenues needed to run the country, and to stop politicians from using the tax code of this country to reward supporters - favored special interests. Sadly, there are no adults in the room who will act in the interest of average hard working Americans. 


Everyone should pay the government, but the government doesn't know how to spend?

The author says people don't give voluntarily to the government because "government spends money on many things that individual donors would prefer it didn't." So on one hand, Mr. Buffett says we the taxpayers should pay more taxes because government knows best, and on the other hand, the author says he shouldn't have to voluntarily pay more because government doesn't know best. So which is it? Sounds like someone wants to pay lip service to equality, all the while keeping his  money safely in his own pocket.


We need shared sacrifice

The Republican refutation to Mr. Buffett's call for the wealthy to contribute more encapsulates their philosophy, which is against the common good.  Their idea: if YOU want to give more then YOU do it.  Buffett's idea:  WE all need to do it.

In differentiating his belief from the Republican approach, Mr. Buffett would hardly be living up to his own dictum by doing it himself and not encouraging others of his wealthy ilk to do it, too.  For only by shared sacrifice can the wealthy contribute as a group toward solving a problem started and exacerbated by the 6 years of George Bush and his Republican Congress.


If the super-rich are being taxed the same as the poor, that's not right

[…] Warren Buffet reported that he paid 17%. He was able to pay this because he qualifies for certain deductions that either allows him to ignore certain types of income or to take large/HUGE deductions on certain types of income.  He simply referenced that based on the tax code/law that there is a flaw in the system whereby his employees paid an average of 28% tax and he paid 17%.

I am a Republican, NOT a fan of taxes. I prefer a gov't be as small as possible while still capable of doing "the job." Taxes are necessary for gov't services, anytime you take money out of the private sector you reduce spending and investment which are the true gas for our economy.  But, I believe in equity. It is wrong for a person making [way] more to pay a tax rate that is [way] less.

IF the super-rich are being taxed at the same rate basically as a "pauper," that is not right or just.

I'm not a "Tea Party" person. I'm NOT a fan of anyone in govt who draws a line and simply won’t listen to discussion with an open mind. That is how a child behaves. So, Tea Party person – How do you justify not adjusting the tax law so the super-rich pay a fair percentage. You can't say eliminate taxes or Govt is not necessary. That will simply put you in the "dumb" class. 


*Spelling errors in the above comments were corrected.


That's Mr. Mobil to you

What to make of Iowa

President Obama's shrinking approval rating

The solution to the economy? Not what we've been doing

Campaign 2012: Rick Perry picks a fight with Ben Bernanke

--Samantha Schaefer

Photo: Berkshire Hathaway Chairman Warren Buffett. Credit: Arne Dedert / EPA

More on Mayor Villaraigosa and the state tax code

Los Angeles Mayor Antonio Villaraigosa tells the Sacramento Press Club that the state should consider rolling back Prop 13 and ending corporate taxes 
Los Angeles Mayor Antonio Villaraigosa grabbed headlines this week with his call for repealing part of Proposition 13. But his speech was really about a comprehensive overhaul of the state tax code, not just exposing commercial property again to the risk of rapidly escalating assessments. (And does anybody  think property values are going to skyrocket again in our lifetime? Really?)

In Villaraigosa's broader vision, there was much for corporate California to like. Consider this passage from the mayor's speech:

[W]e know that employment tax credits are the most effective way to stimulate private sector job growth in a down economy.  Let's put tax credits for business on the table.

Even further, let's recognize that our corporate tax has become a Swiss cheese of loopholes and exemptions.  Let's put eliminating the corporation tax on the table.

Read that one again: Villaraigosa says the state should consider eliminating corporate franchise and income taxes.

Here's why the idea makes sense. Much of the revenue generated by corporations isn't taxed at the corporate level because it's spent on employees or invested in equipment. But while those expenses are written off at the corporate level, they still get taxed through individual income and sales taxes.

A company's profits, meanwhile, may be subject to taxes twice -- for example, at the corporate level if they're paid to shareholders as dividends, and again at the individual level as dividend income. Corporations may also be taxed twice on the revenue used to pay taxes.

Eliminating corporate taxes would wipe out the double taxation, and it would make California a more attractive place for businesses to locate or expand in. That means more jobs and a more vibrant economy. Granted, the regulatory climate here would remain less inviting than in some other no-income-tax states, such as Texas. But wiping out the corporate tax, whose rates are among the highest in the nation, would certainly help.

Now here's why the idea doesn't make sense. Corporations have at least as much interest as individuals do in many of the services the state provides. Services such as public education, law enforcement and environmental protection are funded in part by sales and property taxes, but also in part by income taxes. Every beneficiary of those services ought to contribute to their costs.

This argument shouldn't stop lawmakers from thinking boldly about corporate tax reform. The goal should be to spur growth, albeit in a way that doesn't bankrupt the state. Given the panoply of other taxes that corporations and their employees pay, it's worth it for Sacramento to consider ending corporate franchise and income taxes as part of an overhaul of the code.


Villaraigosa: Riding Prop. 13 resentment to Sacramento? [Poll]

-- Jon Healey

Credit:  Steve Yeater / Associated Press

It's Amazon vs. California in high-stakes sales-tax fight


This is a corrected version of the original post; see the note below.

So, Californians, how do you feel about the prospect of Amazon using you as human tax shields?

Amazon has given a new meaning to chutzpah, evidence the article by my colleagues Andrea Chang and Marc Lifsher.  

Amazon's petition-carriers are trolling for signatures outside the very kinds of brick-and-mortar businesses that its online tax-free sales are undercutting. They're doing it to put a proposed measure on the California ballot that would protect Amazon from a law requiring the company to collect taxes for its online sales.

Let's be clear: This is not a new tax. You already have to pay it. The new law is about who does the collecting. Right now, you are obligated to pay it yourself, via your state income tax.

Here's how it works now. Imagine you went to buy shoes at the mall, or tires at your car dealer, and the store didn't charge you taxes -– you'd still be on the hook to pay them on your income taxes.

That's how it operates with online sales -- on the honor system. That makes you, not Amazon, liable if you don't pay. And that's evidently how Amazon likes it, because it gives the company the appearance of having a bargain over the store down the street that may be charging the same price but has to add on sales tax.

Every time you file your California taxes, you're supposed to state how much money you spent in out-of-state online sales, and pay California that tax.  Because many Californians don't know this, or don't pay the taxes if they do know it, the state doesn't get an estimated third of a billion dollars a year in sales tax on online purchases. (Taxes on intrastate online sales -– say, if you live in L.A. and buy something from a store in San Francisco -- are, on paper at least, charged up front by the seller.]

The law signed by Gov. Jerry Brown declares that online sellers such as Amazon -– not you -– must shoulder the same burden that every brick-and-mortar business in California already has, and Amazon would have to charge you the tax up front, like other businesses.

California is not the only state doing this. Texas has already passed such a law. So has New York. So has North Carolina. All these states say it's the seller's -– Amazon's -– responsibility to collect the tax, just like every other business. Texas figures that it's getting stiffed out of more than a quarter of a billion dollars a year in taxes on online sales.

Amazon has been fighting this like mad. The Dallas Morning News reports that the company has offered to create 5,000 jobs in Texas if the state lets it off the sales-tax-collection hook for the next 4 1/2 years. South Carolina, the newspaper says, has already accepted a similar deal.

In California, Amazon is doing battle with the stick, not the carrot. It cites a 1992 Supreme Court ruling in its claim that California's law is not constitutional. It's the same argument Amazon used when New York declared that it has to collect state taxes upfront.

Amazon says it's not up to the states to pass such laws. Some members of Congress are taking Amazon at its word and proposing a federal law to accomplish the same thing nationwide.

Small businesses -– the same ones politicians praise as the backbone of commerce, and the nation's job creators -- have been unhappy about Amazon's opt-out advantage for a long time. They see potential customers coming into their stores, checking out the merchandise, asking lots of questions of the sales staff -– and then buying the item online to save the tax money.

Saving money is great, but in this case, it could wind up being counterproductive because you pay one way or another. The blowback can kill jobs and profits at thousands of brick-and-mortar stores here in California, from the hardware store your brother-in-law runs to the dress shop that employs your neighbor.

Merchants in the Salinas Valley city of Salinas recently rallied to support the California law to make online retailers charge taxes just as they do.

In response to the law, Amazon has cut its ties with its California marketing partners, and in just a few weeks has put a reported $3 million into a campaign to collect signatures on petitions to put a measure throwing out the law to a vote.

The Times article says Sarah Hrejsa, who manages a women's clothing boutique in Larchmont Village, shooed a signature gatherer out of her store. She has to collect sales tax, she said, and "I don't understand why [Amazon] can get away with not."

Here's part of how Amazon declares on its website that it's your job, not the company's, to pay taxes on your purchase:

"For states imposing sales or use taxes, your purchase is subject to use tax unless it is specifically exempt from taxation. Your purchase is not exempt merely because it is made over the Internet or by other remote means. Many states require purchasers to file a sales/use tax return at the end of the year reporting all of the taxable purchases that were not taxed and to pay tax on those purchases. Details of how to file these returns may be found at the websites of your respective taxing authorities."’

For California voters, this is shaping up as a battle of the titans -– Amazon versus brick-and-mortar retailers in California, led by Wal-Mart, which itself been accused of driving small businesses out of existence.

The tens of millions of dollars that will be spent on ads and consultants if this measure ever gets to the ballot are still nothing compared with the hundreds of millions in sales taxes at stake.

Frankly, I think Amazon owes California. The name "California" is tied to Amazon-like qualities; the word "Califia" [sometimes spelled "Calafia"] comes from an actual 16th-century novel that was found in the library of the fictional Don Quixote. The book speaks of an island paradise called California, and a queen ruling a realm of women who are veritable Amazons.

[For the Record, added 6:15 p.m. August 8: The original post misspelled Marc Lifsher's first name as Mark. It also stated that Salinas is located in the Central Valley; it is, in fact, located in the Salinas Valley. The current version corrects both errors.]


Amazon and its crafty initiative

Amazon to California: Drop dead!

Ted Rall cartoon: Busting Amazon's chops 

Amazon vs. California: Whose side are you on?

-- Patt Morrison

Credit: Rick Wilking / Reuters

Amazon to California: Drop dead!

Amazonian Ever wonder what happened to all those anti-income-tax goofballs? You know, the ones who refuse to pay federal income taxes because they say they're unconstitutional?

Did they all get together and form an Internet-only retailer? And name it Amazon.com?

Amazon has done pretty well too. Of course, your business might too if you could offer customers a 7.25% discount -- because you refuse to collect California sales taxes.

Now, Amazon says it isn't collecting sales taxes because it doesn't have to; that it has the Constitution on its side. (Oh, and if you want to buy a copy of the Constitution to check that out, it has that too; in fact, you can get "The Constitution, The Declaration of Independence, and the Articles of Confederation" [Paperback] for just $4.95.)

Mind you, Amazon isn't hurting for cash; it's first-quarter revenue this year was almost $10 billion. But when California passed a law seeking to force it to collect sales taxes, what did it do?

It took its ball and went home, severing ties with thousands of affiliates in California. And it vowed to put the issue before California voters, pushing for a referendum as early as February to overturn the law.

 Plus, it brought out the ultimate hammer these days: jobs.  

"This is a referendum on jobs and investment in California," said Paul Misener, Amazon's vice president of global public policy in Washington, D.C. "We support this referendum against the recent sales tax legislation because, with unemployment at well over 11%, Californians deserve a voice and a choice about jobs, investment and the state's economic future."

And if you believe that, I have a bridge I'll sell you (although you'll have to pay the sales tax).

But hey, while we're all voting, why don't we also ask Californians if they think they should have to obey the speed limit? Can't we just ignore those pesky stop signs? And income taxes: Do we have to pay those too? 

Vote! Vote! Vote!

At least we'll be creating jobs, and lots of them -- for poll workers.

Folks, you may not like all the laws we have. You may not agree with all of them. You can certainly try to get the Legislature to change them.  

But you're supposed to obey them. 

That's you, me -- and giant Internet retailers. (Don't think so?  Then order your "Constitutional Law: The Quick Guide" [Kindle Edition] from Amazon. It's free if you have a Kindle. Don't have a Kindle?  Amazon has those too: $139 and free shipping.)

Let's get real. Amazon can talk all it wants about the Constitution and jobs and the like, but here's the bottom line, I think: Amazon doesn't want to collect sales taxes because it would hurt its business.

And the people who support Amazon?  They want a good deal, regardless of how they get it.

And everything else is just smoke and mirrors.


Are you an online tax cheat?

Amazon sales tax battle centers on jobs

California tells online retailers to start collecting sales taxes from customers

Apple denied injunction to stop Amazon's use of 'appstore' name; trial date set

-- Paul Whitefield 

Photo: Katherine Braun sorts packages at an Amazon.com fulfillment center in Goodyear, Ariz. Credit: Ross D. Franklin / Associated Press

Debt ceiling: Forget a new roof, let's build a whole new economic house

Mrpresident This is more like it.

Remember when President Obama was just candidate Obama, and he was about "Hope" and "Change"?  His presidency was going to be all big-picture stuff.

With the exception of healthcare reform, though, it hasn't been. 

But as The Times reported Friday, that may be about to change

White House and congressional negotiators have dived into a three-day marathon of talks to determine whether Democrats and Republicans can strike a grand bargain on taxes and benefit programs to avert a default on the federal debt and curb the nation's huge deficit….

At issue are hundreds of billions of dollars a year in taxes and government spending. If the largest deal under discussion is agreed to, it could reshape the government's fiscal picture for years to come, with large political implications for both parties.

OK, so it's big. How big?  Here are a few details:

Among the proposals being discussed are a change in the way cost-of-living increases are calculated for Social Security; an increase in the payments that upper-income seniors make for Medicare; an overhaul of the corporate tax system; elimination of a variety of tax breaks that primarily benefit upper-income taxpayers; and significant cuts in the military budget, farm programs and other domestic spending.

Not surprisingly, that's too big for some:

Any one of those possibilities would face formidable political opposition, but White House aides and some congressional staff believe the ideas might fare better as a package than any would individually. Already, however, as word of some of the options spread around Washington, Obama was coming under fire from congressional Democrats and interest groups who feared he was likely to agree to too many cuts and from Republicans insisting they could not support any new tax revenues.

Except that this is just what the country wants; it's just what the country needs; it's why Obama was elected. 

OK, sure, the devil's in the details, and yes, lots of people won't like lots of the proposals. 

But Americans are big-picture people.  We like the grand gesture: the Louisiana Purchase, the California Gold Rush, FDR's New Deal,  JFK's mission to the moon,  LBJ's Great Society, Reagan's “tear down this wall.”

Americans from both parties, and of no party, are sick and tired of partisan gridlock and baby steps. 

So go ahead, Mr. President: Let's overhaul Social Security and Medicare. Let's fix the tax system. Let's quit spending insane billions on defense. Let's stop farm subsidies that enrich people for growing the wrong crops, or no crops at all.

We need jobs. We need to close the gap between rich and poor. We need to make sure that people who get sick can get medical care. We need immigration reform. We need the government to quit spending like a drunken sailor.

Most of all, we need a president who will lead -– and we need people in Congress who will lead with him.

So c'mon, Mr. President, and Mr. Speaker, and all you special-interest types and you "tea party" types and you liberal types: Put up or shut up. 

Let's be this century's Greatest Generation.


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Boehner: Lack of a debt deal could place economy 'in jeopardy'

 -- Paul Whitefield

Photo: President Obama delivers a statement on the monthly jobs report Friday in the Rose Garden of the White House. Credit: Pablo Martinez Monsivais / Associated Press



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The Opinion L.A. blog is the work of Los Angeles Times Editorial Board membersNicholas Goldberg, Robert Greene, Carla Hall, Jon Healey, Sandra Hernandez, Karin Klein, Michael McGough, Jim Newton and Dan Turner. Columnists Patt Morrison and Doyle McManus also write for the blog, as do Letters editor Paul Thornton, copy chief Paul Whitefield and senior web producer Alexandra Le Tellier.

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