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  1. #1
    Advocate mellie's Avatar
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    Article In Buffalo News
    There's an article in today's Buffalo News on the impact of the NY Affiliate Tax. I was interviewed on Wed regarding the impact on NY affiliates. It's an interesting article because it is actually about a textbook store in upstate NY that was affected by the law. It seems that distributors dropped listing their book listings because they thought they would have to collect tax (further irony is textbooks aren't taxable in NY) . The business is now relocating to San Diego.
    Anyway, interesting read - http://www.buffalonews.com/145/story/502441.html
    Melanie
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  2. #2
    Full Member Greywolf's Avatar
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    part a story of the unintended consequences of a change in the New York State tax law.
    Interesting that the article calls the business relocating "unintended consequences", but surely not unanticipated consequences.

    This is similar to the theory of the Laffer Curve. Increasing marginal tax rates don't necessarily lead to increased revenue, and new taxes on businesses will cause some to relocate. Our Fed Corporate tax rate are the second highest in the world, which is why Corp HQs move to the Caribbean.

  3. #3
    Affiliate Manager
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    The Laffer Curve is a tricky thing, since while it demonstrates that taxation can go too far it also demonstrates a point of peak returns, and even that may be higher than some prefer to pay (personally I would prefer zero <g>).

    On balance is the other side of the equation, the question of whether tax cuts actually produce enough growth to pay for themselves -- FactCheck suggests they do not:
    http://www.factcheck.org/askfactchec...in_higher.html

    From the article:

    "N. Gregory Mankiw, former chair of the current President Bush’s Council of Economic Advisers, calculated that the growth spurred by capital gains tax cuts pays for about half of lost revenue over a number of years and that payroll tax cuts generate enough growth to pay for about 17 percent of what is lost."

    That said, they also note that corporate taxes may be an exception in the special case of multinational corporations, but I'm not sure how many of the companies we do business with as affiliates would fit that definition. Since 9/11, the rules for moving assets overseas have become much more complex and cumbersome to comply with.

    And of course, all that only applies only if they pay taxes at all:

    --------

    Study says most corporations pay no U.S. income taxes
    Aug 12, 2008

    WASHINGTON (Reuters) - Most U.S. and foreign corporations doing business in the United States avoid paying any federal income taxes, despite trillions of dollars worth of sales, a government study released on Tuesday said.

    The Government Accountability Office said 72 percent of all foreign corporations and about 57 percent of U.S. companies doing business in the United States paid no federal income taxes for at least one year between 1998 and 2005.

    More than half of foreign companies and about 42 percent of U.S. companies paid no U.S. income taxes for two or more years in that period, the report said.
    ...
    http://www.reuters.com/article/newsO...080812?sp=true
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  4. #4
    Full Member Greywolf's Avatar
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    Good points. I'd be in favor of eliminating corporate taxes all together. It's the individual that ultimately ends up paying them.

    Study says most corporations pay no U.S. income taxes
    I saw this study too, but it doesn't really get into the details of why. It could be because they didn't have any profits for the year, or it could be because of federal or local tax subsidies. Just saying they didn't pay taxes leaves the reader believing that they are somehow "evading" taxes, which most likely isn't the case.

  5. #5
    Super Dawg Member Phil Kaufman aka AffiliateHound's Avatar
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    Quote Originally Posted by Greywolf
    Just saying they didn't pay taxes leaves the reader believing that they are somehow "evading" taxes, which most likely isn't the case.
    Most likely it IS the case - through special interest loopholes their lobbyists rammed through - and bribed through - Congress (and state legislatures).
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  6. #6
    Full Member Greywolf's Avatar
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    special interest loopholes their lobbyists rammed through
    sometimes, but also local communities or states will offer tax breaks to bring businesses into their communities. Nearly every auto plant is built where it is because of subsidies from the states.

  7. #7
    Analytics Dude Kevin's Avatar
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    Way to go, Mel. I wasn't able to hook up for comment, unfortunately. But it's likely I would've just echoed everything you had told him.

    Proud of you!
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  8. #8
    Affiliate Network Rep Kim Salvino's Avatar
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    Mel,

    You rock. Thank you for doing your best to keep this issue in the forefront of merchants.
    Kim Salvino, Client Services Director, Performance Horizon Group
    Reach me at kim.salvino(at)performancehorizon.com or on (443) 617-4036

  9. #9
    Troll Killer and best Snooper!
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    Good job, Mellie! I hope this article triggers an avalanche of similar articles in newspapers all over NY state.

  10. #10
    ABW Ambassador purplebear's Avatar
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    ditto what the others said, too.

  11. #11
    Advocate mellie's Avatar
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    Thanks all, but I didn't make it happen. The reporter actually reached out to our lawyer who relayed a message to Kevin and I. I'm hoping that a little pr on the issue keeps it in the minds of merchants and lawmakers, hopefully swaying all to positive action.

    Sorry you guys couldn't connect Kevin, I know your schedule was full that day and he was pressed for time too. Maybe if he does a follow up.

    I am still shocked that distributors actually dropped Valore Book's listings thinking they would have to charge tax. Very sad that misinformation and lack of knowledge had such powerful ramifications.
    Melanie
    President - Affiliate Advocacy 2008 ShareaSale Performance Industry Advocate Award, 2009 Affiliate Summit Pinnacle Award - Affiliate Advocate
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