Jeff Bezos, Amazon CEO

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Editorial: Referendums running amok!

Published: Sunday, Jul. 24, 2011 - 12:00 am | Page 6E
Last Modified: Sunday, Jul. 24, 2011 - 10:19 am

Far from being the "people's remedy" launched by Gov. Hiram Johnson and the Progressives, the California initiative and referendum process – in place now for a century – sometimes gets hijacked by individual corporations seeking to advance their own economic agendas.

Last year, it was Pacific Gas & Electric and Mercury Insurance trying to entice voters into supporting efforts to shield them from competition and expand their markets. Fortunately, voters defeated them.

Now it is Amazon.com, the online retailer, seeking to overturn a law signed by Gov. Jerry Brown that would extend to online-only retailers the same sales taxes that traditional retailers collect.

Amazon has submitted a petition and now must collect 505,000 signatures by Sept. 27 to get on the June 2012 ballot. At the point that it collects enough signatures, Amazon and other online retailers would not have to collect sales taxes in the months before the June 2012 vote. The law is automatically suspended until the vote occurs.

This use of California's electoral process is a clever way to avoid taxes.

Referendums to overturn existing laws are rare in California. Since 1912, voters have overturned laws only 28 times. Eighteen times voters have declined to sign petitions and, thus, referendums didn't make it to the ballot. That's an option that voters should exercise again: Don't sign petitions to put the Amazon measure on the ballot.

Amazon's aggressive stance against playing by the same tax rules as other retailers has hurt Amazon's reputation. As Marty Manley, co-founder of the Alibris global exchange for rare books, has written, "The cost of collecting sales taxes is trivial relative to the cost of being branded the nation's number one tax evader."

As The Bee has editorialized in the past, ultimately Congress will have to create a level playing field, giving states the ability to create a fair, broad-based sales tax that taxes similar goods similarly in the marketplace. Amazon says it supports such a national solution. Sens. Richard Durbin, D-Ill., and Mike Enzi, R-Wyo., are championing a bill to assure that all businesses collect the sales tax in the state where the consumer resides.

In the meantime, Californians should stand by their law that treats online sellers the same as others. Voters can send a message by declining to sign petitions to put the Amazon tax advantage referendum on the ballot.

© Copyright The Sacramento Bee. All rights reserved.


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