Thursday, June 30, 2011

Amazon to shut down California affiliates over new sales tax law

By Jacqui Cheng

If things continue down their current path, Amazon’s affiliate program will eventually go extinct in the US. Late Wednesday, California joined the growing list of states attempting to collect sales tax from online retailers like Amazon in an effort to help close the state’s vast budget deficit. Amazon, in typical fashion, has aggressively pushed back, warning its California-based affiliates that they’ll have their revenue streams cut off as of September 30 if the law ends up being enacted.

California’s new law, signed by Governor Jerry Brown on Wednesday, requires online retailers to collect sales tax even if they have no physical presence in the state. How does that work when federal law states they have to have a brick-and-mortar store to qualify? Like the many other states before it, California counts Amazon affiliates who reside in California as a “physical presence.” So, if Joe Blow runs a personal blog with affiliate links to Amazon products (you know, to make a few bucks on the side), he is effectively “selling” Amazon products and making money from them via his home in California.

Because of this “physical presence” technicality, the state wants Amazon to begin collecting sales tax from California residents, and subsequently pay it back to the state.

Amazon’s reaction has been predictable: the company sent a letter to its affiliates in the Golden State earlier in the day on Wednesday warning that the affiliate program may soon be cancelled there due to the impending state law. “We oppose this bill because it is unconstitutional and counterproductive. It is supported by big-box retailers, most of which are based outside California, that seek to harm the affiliate advertising programs of their competitors,” Amazon wrote. “Similar legislation in other states has led to job and income losses, and little, if any, new tax revenue. We deeply regret that we must take this action.”

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2 Top Lawyers Lost to Obama in Libya War Policy Debate

WASHINGTON — President Obama rejected the views of top lawyers at the Pentagon and the Justice Department when he decided that he had the legal authority to continue American military participation in the air war in Libya without Congressional authorization, according to officials familiar with internal administration deliberations.

Jeh C. Johnson, the Pentagon general counsel, and Caroline D. Krass, the acting head of the Justice Department’s Office of Legal Counsel, had told the White House that they believed that the United States military’s activities in the NATO-led air war amounted to “hostilities.” Under the War Powers Resolution, that would have required Mr. Obama to terminate or scale back the mission after May 20.

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Rubio’s Ridiculous Rendition Resembles Rancorous Representation Ruining Republic

The continuing saga of the decline of Marco Rubio is dully noted. We at Libertarian Viewpoint spoke out against Rubio in the last election cycle in favor of Alex Snitker. Warning the general public, we said that a vote for Rubio would be another nail in the coffin of Liberty. Many laughed at us and claimed he was the Tea Parties choice and he had the “R” by his name to become a winner in the election.

They were of course correct. He did have that “R” in front of his name and he did win the election. Not because he was good but because many people were too scared to vote their conscience. While he did win, we were not wrong with what he told people. He is a neo-conservative through and through and is proving himself to more and more McCain like every day. So much so, he co-authored the piece in the Wall Street Journal with McCain’s pal Joe Lieberman.

In the piece they call for funding of the military to continue the war conflict in Libya. Together they claim that the conflict between the White House and the Congress are not necessary and that we should do everything in our power to get rid of Gadhafi. The article shows their contempt for the Constitution and the law of this country. Such ravages border the definition of treason and might want to be considered reason for impeachment.

What an appalling story it was to read. From Lieberman I might have expected it but for Rubio to show his hand like that so quickly in his term really scares me. It should scare the rest of you as well. The call for bigger government and further involvement in escalating wars by someone who won the election espousing constitutional idealism is eye-opening to say the least.

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Tuesday, June 28, 2011

Time Magazine Promotes Tyranny

This Year’s cover for Time Magazine has a picture of the constitution not a famous American as is traditional for the July 4th Issue. Time Magazine’s managing editor Richard Stengel, Asks a question about our Constitution: “Does it still matter?” He concludes that the constitution is irrelevant saying, “If the Constitution was intended to limit the federal government, it certainly doesn’t say so.”

Either purposefully or of ignorance, Stengel completely misrepresents the plain language of the Constitution. “The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.” Those words make it quite clear that the federal government is limited to only the powers specifically granted to it by the people as clearly stated in the Constitution.

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The Deficit Is Worse Than We Think


Washington is struggling to make a deal that will couple an increase in the debt ceiling with a long-term reduction in spending. There is no reason for the players to make their task seem even more Herculean than it already is. But we should be prepared for upward revisions in official deficit projections in the years ahead—even if a deal is struck. There are at least three major reasons for concern.

First, a normalization of interest rates would upend any budgetary deal if and when one should occur. At present, the average cost of Treasury borrowing is 2.5%. The average over the last two decades was 5.7%. Should we ramp up to the higher number, annual interest expenses would be roughly $420 billion higher in 2014 and $700 billion higher in 2020.

The 10-year rise in interest expense would be $4.9 trillion higher under “normalized” rates than under the current cost of borrowing. Compare that to the $2 trillion estimate of what the current talks about long-term deficit reduction may produce, and it becomes obvious that the gains from the current deficit-reduction efforts could be wiped out by normalization in the bond market.

The second reason for concern is that official growth forecasts are much higher than what the academic consensus believes we should expect after a financial crisis. That consensus holds that economies tend to return to trend growth of about 2.5%, without ever recapturing what was lost in the downturn.

But the president’s budget of February 2011 projects economic growth of 4% in 2012, 4.5% in 2013, and 4.2% in 2014. That budget also estimates that the 10-year budget cost of missing the growth estimate by just one point for one year is $750 billion. So, if we just grow at trend those three years, we will miss the president’s forecast by a cumulative 5.2 percentage points and—using the numbers provided in his budget—incur additional debt of $4 trillion. That is the equivalent of all of the 10-year savings in Congressman Paul Ryan’s budget, passed by the House in April, or in the Bowles-Simpson budget plan.

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