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from The Edgy Optimist:
Online sales tax: a good idea done badly
On Monday, by a comfortable 69-27 majority, the U.S. Senate passed a controversial bill that will require online retailers with annual sales of more than $1 million to collect state sales taxes. Said Republican Mike Enzi of Wyoming: "This bill is about fairness. It's about leveling the playing field between the brick-and-mortar and online companies, and it's about collecting a tax that's already due. It's not about raising taxes."
Wait, isn’t it? Leaving aside the anomaly in today’s world of a Republican sponsoring a bill that raises revenue, the proposed law is entirely about raising taxes. The question, then, is whether these are taxes that ought to be raised, and if this is the way to raise them.
The short answers: yes to the first, no to the second. This bill is precisely the wrong way to raise revenue from a growing stream of business. It applies a tax designed for physical entities to new commerce and does so in ways that will do little to help states or to reinvigorate small businesses that are hurting.
As is, much of the tax system is not fair. We are acutely aware of the labyrinthine quality of the U.S. tax code. The vagaries of state-by-state sales taxes only add to the complication. Five states don’t even have a sales tax (Alaska, Delaware, Montana, New Hampshire and Oregon), and seven states have no income tax, including no tax on dividends and interest (Alaska, Florida, Nevada, South Dakota, Texas, Wyoming and Washington). If fairness is your litmus, as it is Enzi’s, then it is rather unfair to live in New Jersey as opposed to, say, Florida, given the radically higher tax burden.
from Breakingviews:
Will Netflix star in “The Easter Island Effect”?
By Robert Cyran
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.
Will Netflix have a starring role in “The Easter Island Effect”? The Internet video service seems to be using up resources faster than it can produce them. New series like “House of Cards” lure customers, at a cost. Netflix cash flow remains negative and obligations are rising. It’s starting to evoke the centuries-old Polynesian society that eventually exhausted its means of sustenance.
from Photographers Blog:
Indians, or farmers-to-be?
Maraiwatsede, Mato Grosso, Brazil
By Paulo Whitaker
Sixty years ago Brazil’s Indians had their territory demarcated, when they lived in a rich forest from which they extracted their food. Their rivers were teeming with fish, and their jungles with wild animals.
Today, in the 21st Century, many Brazilian Indians live a completely different situation, trapped in corners of their land by settlers who are large and powerful farmers that invade native territory to plant soybeans, sugar cane, and pasture to raise cattle.
from MediaFile:
By Nook or by crook
Barnes & Noble, the venerable book merchant whose history spans three centuries, is in the midst of a strategic identity crisis: how to admit defeat on its Nook platform while turning its last-bookstore-standing status into a de facto monopoly. Barnes & Noble did not spark the e-book revolution – now accounting for 22 percent of all book sales – nor has it proven particularly good at evolving it. So now it’s back to basics, which is to say, back to books.
The precise fiscal health of the company’s Nook Division ‑ e-readers and e-books ‑ is not public knowledge. But the company's most recent results revealed that its total losses had increased from the previous year. This, as you might surmise, is not the desired trajectory for a business unit that Microsoft asserted was worth $1.7 billion a mere 10 months ago (when Microsoft invested $300 million for a 17.6 percent stake). Only three months ago, Pearson reaffirmed that estimate when it took a 5 percent stake for $89.5 million.
from Paul Smalera:
In Amazon, Wall Street worships a disruptive god
Why does Amazon please Wall Street so much? The company treats shareholders with a disregard that borders on contempt. (CEO Jeff Bezos is "willing to be misunderstood" which means he really doesn't care if investors understand the business, as we'll see.) Yet when it announced that profits last quarter fell 45% year-over-year, the stock price saw a healthy bump. Meanwhile, many tech companies, like Apple, which had a high-profit, high-margin quarter, found their stocks punished. Perhaps this is a sign that Wall Street is finally embracing the idea that, for tech companies, growth comes first, even at the expense of profit.
If that’s what’s going on then the Street has started to adopt the ethos of the Valley, specifically of one its most prominent sages: Harvard Business School professor Clay Christensen. The godfather of disruptive innovation, Christensen is often quoted chapter and verse by technology company founders and venture capitalists alike. Christensen studies how established, high-flying technology companies like Amazon and Apple conduct business, to determine if they are ripe for attack from low-margin, startup competitors. His thinking can help shed light on why the market loves Amazon, which is, after all, a barely profitable conglomerate of loosely related businesses that is growing at a bonkers rate. But basically, his theories all comes down to profit margins, and how companies spend their money.
from MediaFile:
Three tech predictions for 2013
Sometimes the most important ideas in tech are hiding in plain sight. In that spirit, here are three predictions for 2013 that are just waiting to happen. No 3D TVs, wearable computer or jet packs for me — at least not this year.
The Kindle Offer You Can't Refuse
Demand is rapidly shrinking for e-ink e-book readers. IHS iSuppli predicts that when the books close on 2012 some 15 million will have been sold — down 36 percent from 2011.
from Photographers Blog:
Dreaming of diamonds
By Jorge Silva
We are just north of the Amazon Basin, riding a boat on the Ikabaru River. The passengers are people who buy gold and diamonds. They stop at each of the illegal mines that appear as craters on the river’s edge. They carry small weighing scales that seem very accurate, magnifying loupes, burners to melt the gold and separate the mercury, and some large spoons to collect it.
They are also carrying bags full of cash.
We are very close to the porous and at times imperceptible triple border between Venezuela, Brazil and Guyana. The area is remote and hard to access. Getting here takes a day of navigating along the river, or flying in one of the small planes that land on makeshift dirt landing strips. There are no roads.
from Breakingviews:
Why do investors prefer Amazon to Apple?
By Robert Cyran
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.
Why do investors prefer Amazon to Apple? Sure, the gadget maker’s market capitalization is far larger. Yet investors are willing to pay almost nine times as much for the retailer’s estimated earnings. That looks expensive in any case. But it’s also odd, because Amazon perpetually promises more jam tomorrow, while Apple delivers it.
from MediaFile:
Apple in miniature
This week Apple faces two significant tablet challengers. The first is Microsoft, which is releasing its long-awaited Surface tablet on Friday. The second is... itself.
Yesterday, amidst the anticipation for the Surface and strong sales for the Kindle Fire, Apple announced a slew of new devices, the $329 iPad Mini the most intriguing among them.
from MediaFile:
EBay’s buyer’s remorse
How do you know if you’re in a buyer's market, or a seller's?
Offline it's pretty easy to know. There's price pressure, abundance and not too many people vying for the same house, commodity or mint condition Pee-Wee Herman doll at the yard sale. In the land of the real, markets aren't terribly efficient. Before the Internet changed everything, retailers were bound by geography and the ability (and willingness) of people to range. That's why gas costs a lot more right off the highway exit than it does less than a mile down, where strangers would rather not venture. (Now, of course, there’s an app for that.)
Online, it's easier to know where the consumer stands. In fact, online, it's always a buyer's market. There are, of course, always fixed costs that help determine an item's price – a book publisher's monopoly or the cost of jet fuel, say. But a buyer's power to compare prices from a comfy chair has made it difficult for online sellers to gouge – to insist on a higher price than the market bears – because the market is transparent, fluid and infinite in all directions. Services like Kayak create an almost perfect buyer's market for air travel, which was already one of the world's most competitive businesses. Amazon's ability to offer nearly everything at buyer's market prices has created a retailing behemoth that doesn't even need an Apple-like seller's market to thrive.
