Actions Have Consequences


I really enjoy chess.  Well, actually, I wish I really enjoyed chess.  In reality, I’m a horrible chess player; and I know why.

I think the reason I’m such a poor player is that I’m a “selfish” or “arrogant” player.  That is, I assume my opponent will play as I would.  Therefore, when I create my strategy and begin to implement it, I fail to take into account that as the board changes, my opponent is going to react and change his behavior.

I’ve never overcome this failing of mine.  So I lose.

And because I lose, I rarely play.

I can take heart that others face the same challenges.  However, that comfort can also cause great concern.

See, my failings in this aspect of my character seems limited to chess.  I don’t struggle in this same manner in my corporate life.  I’m very aware of actions and consequences.  I’m careful to work incentives and make sure they are aligned as well as possible.

Just chess.

But it seems that other folks struggle in their professional life.  Politicians mostly.  Now I understand that the position these folks find themselves may not be the most comfortable.  I suspect that many of these people lack management experience.  They lack the ability to meet individual goals within the context of meeting organizational goal.

They know how to win an election.  And in an election, life resembles a zero sum game.  The more advantage I have, the less advantage my opponent has.

So, when politicians are faced with troubles, and the stress of being responsible to fix them combined with the need to be re-elected, they fumble.  They fumble and take the easy way out.

Consider California for example:

Beginning Friday, a new state law will require large out-of-state retailers to collect sales taxes on purchases that their California customers make on the Internet — a prospect eased only slightly by a 1-percentage-point drop in the tax that also takes effect at the same time.

Getting the taxes, which consumers typically don’t pay to the state if online merchants don’t charge them, is “a common-sense idea,” said Gov. Jerry Brown, who signed the legislation into law Wednesday.

The new tax collection requirement — part of budget-related legislation — is expected to raise an estimated $317 million a year in new state and local government revenue.

Now, you can argue that collecting tax for sales online makes sense.  I don’t see it that way, but hey–I’m a pretty anti-tax kinda guy.  But the good govna’ is making the same mistake I make when playing chess.  He sees a pile of online sales, implements a tax and expects the money to just roll in.

Problem is, actions have consequences:

Amazon.com Inc. plans to cut ties with 10,000 California marketing affiliates to avoid collecting a new state tax, according to a report released late Wednesday. The Los Angeles Times said that the tax would force Amazon to collect California state sales tax on purchases made through the affiliates, as part of Gov. Jerry Brown’s plan to close a budget gap in 2011-2012. The affiliates use Amazon to sell their products and are paid either a percentage of the sales or get a commission from Amazon after each sale. Other states have required online retailers to collect sales taxes if they have online affiliates in the state, and Amazon has responded by dropping affiliates in those states. “This legislation is counterproductive and will not cause our retail business to collect sales tax for the state,” said Paul Misener, Amazon’s global-policy vice president, in a statement according to the Wall Street Journal.

By implementing a tax on businesses, those businesses, will, in aggregate, react.  And just like the saw states:

When you tax a thing, you’ll get less of that thing.

So Amazon reacts to what it sees as “damage” and routes around it.  The result?

In addition to getting the same amount of tax revenue from Amazon’s affiliates, now 10,000 affiliates are out of the Amazon business.

Did’ja get that?

The State of California is going to get the SAME amount of tax revenue from Amazon.

Zero.

But 10,000 people suffer.

This is why people and businesses are fleeing California as fast as they can.

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4 comments
  1. Alan Scott said:

    On the chess thing I also play . I play against the computer . If my ego needs help I just put the settings on my opponents lower and then I win . If I want to get better I increase the level of the puter and get my ass kicked . I don’t play enough any more to try to get better . My opening moves are always my problem . I play better as the pieces get less, but by then I’m losing .

    I agree on the California tax collections . I have said it before, that state will have to go much lower financially before the people get mad enough to throw out the Bolsheviks . Before a Walker, a Christie , or a Daniels could get elected .

    • pino said:

      I have said it before, that state will have to go much lower financially before the people get mad enough to throw out the Bolsheviks .

      The problem is; there are two kinds of liberal in California.

      One has so llittle money that they don’t care what the tax rate is.
      The other has so MUCH money [that they really didn’t “earn”] that they don’t care what the tax rate is.

      Regular schmos and businessmen are leaving.

  2. I got my notice from Amazon yesteRday. I will post a copy later this week when I return from NYC and have better computer access. More CA ridiculousness.

  3. Alan Scott said:

    I just read somewhere, Southern California wants to break away and become the 51 state . It is of course not going to happen , but it is a sign of the frustration of some Californians with the lunacy of Sacramento . Apparently the State is stealing more and more local revenue to balance it’s impossible budget . The locals feel they have no power to stop their mad State overlords

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