Nick's Blog

Evaluating the potential outcomes of passing the “Amazon tax” to force out-of-state retailers to collect California sales tax, the legislature will be forced to make a business design – something government entities are notoriously bad at.  They need to look at revenues and expenses, and the impact on California citizens.  We’ll save the debate about “level playing fields” and what’s fair and unfair for another day.

Revenue

It is likely that some online stores will chose to comply with the new law and dutifully collect the sales tax.  What percentage of overall CA internet sales receipts will this represent?  Hard to say.

Expense

Many large online stores will stop advertising on California-based websites, severely diminishing the earnings of those websites.  This will dramatically reduce income tax receipts for California, and will also reduce state sales tax as the owners of those websites cut back on their spending.  Some will move out of the state entirely and take their entire tax check with them.

The California government will also incur the expense of enforcement.  How will they determine what online stores shipped how much of what to California residents?  There is definitely an audit and compliance cost here.

And then there’s always the legal fees.  The 1992 Supreme Court decision Quill v. North Dakota expressly states that it is unconstitutional for an out-of-state retailer to be responsible for collecting in-state sales tax.  The legislature would be foolish to assume Amazon, Overstock, and others, will simply ignore this fact and not challenge them in the courts.  Lawyers are expensive.

Impact on Californians

Should this bill pass, every Californian who shops online will be worse off.  Even though people are supposed to report their online untaxed purchases on their tax returns, few do.  To the vast majority of the population, it will be seen as a “new tax” — which in today’s political climate might as well be career suicide for lawmakers.

Businesses here that make a living selling advertising online to out-of-state retailers could be devastated when those retailers pull out of California.

Owners of local brick-and-mortar stores will be the first to cry “victory!” But it will be a short-lived celebration.  With the exception of a few big-ticket items, I don’t believe “sales-tax-avoidance” is the #1 reason people shop online.  Convenience, better selection, and lower prices all rank higher.  Does anyone really expect the mom-and-pop bookstores to see a sudden overnight boom in business if this passes?   I imagine they still might have difficulty competing with Amazon’s economies of scale that allow them to offer still lower prices, free shipping, and the biggest selection on the planet, and stay open 24 hrs a day.  And that’s assuming Amazon would collect the tax, which they’ve already said they won’t.

So in the end, no one is better off.

I think the moral of the story, for California lawmakers, is that sometimes the best action is inaction.  By not passing this bill, you almost certainly save money for your state, and make your constituents better off.  Now it’s no longer a business decision, but a no-brainer.  (Insert cheap shot here about how that’s perfect for politicians!)

This week I was interviewed and photographed by the San Francisco Chronicle for an article on California’s proposed “Amazon tax.”  Obviously I don’t get a lot of press so I thought it was pretty cool.  Hopefully Gov. Schwarzenegger will veto this bill again if it passes.  The full article is available here.

The photographer, realizing this would be the most boring photo shoot ever, asked me to find some shoes we could use in the picture.  I came back with a couple pairs of Bryn’s shoes and one of my size 13 runners.  “We can’t use that thing,” he said, “it would take up the whole frame!”  So Bryn’s more petite Nine West flats made a cameo.

It’s a holiday everyone can enjoy!

And you can get a free short stack at IHOP.  Donations encouraged to support local children’s hospitals.

Has America been “hypnotized” and “brainwashed” by Barack Obama?  That’s what some crazies think.

NLP stands for neurolinguistic programming and attempts to influence opinions and actions through thoughts, language, and behavior.  The principal “weapons” of NLP are repetitive words and phrases, deliberate pacing, suggestive/agreeable language, and emotional speech.

In other words, what makes for a good NLP brainwashing speech are the same elements that make for a good normal speech.  Successful speakers (and salesmen) have been using these same techniques long before the science of NLP ever emerged to explore their usefulness.  There’s nothing shady about it.  Every politician on the planet probably uses some if not all of these techniques in their speeches.  And no one accuses them of brainwashing.

So come on right-wing nutjobs, get a life.  If Obama could really hypnotize people, you’d think he’d hypnotize Congress to actually do something.

According to wikipedia, Pixar modeled Frozone (from The Incredibles) after Olympic speedskater Shani Davis.  So you don’t have to feel bad about commenting on their striking resemblance.

Congratulations to Shani Davis and all the Olympic athletes.

What the Dog Saw (and other adventures) is the latest from Malcolm Gladwell, the best-selling author of The Tipping Point, Blink, and Outliers.   The book is not one cohesive story or thesis, but rather a series of 19 Gladwell essays that were previously published in The New Yorker magazine.  So if you’ve been a devout reader of The New Yorker for the past 14 years, nothing will be new to you.  But knowing that no one reads the magazine, and that anything with Gladwell’s name on it will sell, it was a no-brainer to publish this book.

What the Dog Saw covers a wide variety of topics, including ketchup and mustard, women in advertising, homelessness, Enron, birth control, choking vs. panicking, and yes, even the Dog Whisperer, Cesar Millan.  Each essay is written with the author’s trademark inquisitive style, which uncovers deeper layers of the subjects.  I think I like Gladwell’s books because they challenge the conventional wisdom and I always learn something new.

Enron’s executives were accused of “cooking the books” and lying to employees and shareholders, but that wasn’t necessarily the case.  In fact, the information investigators used to bring Enron down was publicly available.  They just took a deep dive into the company’s own financial reports and SEC filings.  Enron was hiding the truth in plain sight; their financials were just so incredibly complex it took some serious time and dedication to sort through them.

One of the other interesting parts was the section on homelessness.  Some cities (Denver is cited as an example) have taken on a new strategy when it comes to dealing with the homeless.  Because a small percentage of homeless people were costing the system a hugely disproportionate amount of money in terms of public health and policing, they found it would actually save taxpayer money to put these people up in an apartment, and provide them with dedicated job placement and substance abuse counseling.  Perhaps it would cost $30,000 a year, vs. the inevitable $100,000 ER visit for the alcoholic black out who gets hit by a truck.

Of course such a plan is not without controversy.  Liberals don’t like it because it’s not egalitarian; the worst offenders get the most benefit.  Conservatives don’t like it because it “rewards” irresponsible behavior and does nothing to serve the sober, hard-working lower class struggling to make ends meet.  It’s a policy only an economist can love.

So go check out What the Dog Saw. You’ll learn something new and gain some new perspectives an array of random subjects.

When you buy a new Volvo, you have the option of taking delivery at the Volvo factory in Gothenburg, Sweden.  There’s no extra cost, and Volvo will even give you 2 round-trip plane tickets to make the journey.  Then, they’ll give you a free night’s hotel stay, let you drive your new car all over Europe, and then ship it home for you for free.

If you’re in the market for a new Volvo, you might as well take advantage of this awesome perk!  It seems like a pretty sweet deal.

I’ve been spoiled by Bryn’s excellent cooking for almost three years now.  Before that, I was more interested in the most efficient ways to get the necessary calories into my body.

One of the best (read: worst) products I found was Totino’s Party Pizza.  These little frozen pizzas would go on sale for $1 , and they provided 760 calories.  You could cook them in the microwave and not even have to turn on the oven.  Definitely a very efficient and cost-effective 5-minute greasy gut bomb of a meal.

A McDonald’s double cheeseburger from the dollar menu only has 440 calories.  Does any other “real” food deliver more calories per dollar than Totino’s pizza?  I don’t know if such a miracle product exists.

During Friday’s Winter Olympics Opening Ceremony, they would show each country’s population and then the number of athletes from that country.  It was interesting to see which countries are the best at producing Winter Olympians.

Among the most efficient was Liechtenstein, with 7 athletes from a population of 35,000.  (1 in 5000).

For the sake of comparison:

• Canada – 104 athletes out of 33.4 million. (1 in 321,000)
• USA – 250 out of 308 million (1 in 1,232,000)
• India – 3 out of 1.177 billion (1 in 392,000,000)

Liechtenstein is a tiny nation, just 62 square miles, wedged in between Switzerland and Austria.  Our small town has 70,000 people, and I’m sad to report that Livermore does not have 14 Winter Olympians.

So what has Liechtenstein feeling so Olympic?  Something in the water up in those Alps?  I think there a number of factors that allow Liechtenstein to produce more Olympic athletes per-capita than any other country.

• Per-capita GDP is over $100,000, making Liechtenstein the richest country in the world on a per-capita basis.  Skiing equipment and bobsleds are expensive, and they can afford to buy them.
• The geography of tiny Liechtenstein is covered with snowy mountainous, perfect for winter sports training.  There’s not much else to do.  In fact, they’ve never won a medal at the Summer Olympics.
• Citizens pay low tax rates, so they have more disposable income to spend on winter sports recreation.
• Liechtenstein has no military, so no able-bodied young men and women are joining the army instead of going skiing.

Liechtenstein has won 9 Winter Olympic medals in its history.   If we Americans were as good as the Liechtenstein-ians, we’d have won 79,000 medals, instead of the 216 we’ve got.  Basically they’re 365 times more efficient than us.  Gotta respect that.

Liechtenstein sounds like a nice place, I hope to have an opportunity to visit sometime.

We’ve all seen cars with custom license plate frames.  They’re little bits of metal and plastic to subtly offer other drivers a glimpse into our personalities.  A custom license plate holder is a form of self-expression, and I’m all about it.

Your license plate holder might say:

• Where you bought your car.  I like these people.  They have more important things to do than spend money on a new license plate holder and spend time changing it out.
• Where you went to school.  I fall into this category.  There’s not a lot of Huskies down here so I’ve got to represent.  The alumni association wishes I drove a nicer car.
• What you’d rather be doing.  I’d rather be skiing/playing tennis/driving a Titleist. Clever.

But the other day I saw one of these “I’d rather” license plate holders that actually made me feel really bad for the driver:

“I’d rather be sleeping.”

At first I thought it was kind of funny, mostly because it gave me something to read while I was stuck at a red light.  But the more I thought about, the more I realized how depressing it was.

Of all the things in the world this woman would rather have been doing (that could fit on a license plate frame), sleeping was her first choice.  This is what she has chosen to advertise to her fellow drivers, that her optimal state of being is one of unconsciousness.  I mean I enjoy sleeping as much as the next guy and definitely like a good night’s rest, but if that’s the activity you look forward to the most – enough to put it on your car – I’d venture to guess you’re not a happy person.