But, revenue-hungry Massachusetts politicians aren't satisfied with the fixings they see on the table, and they're already demanding seconds from already-beleaguered taxpayers.
Let's talk turkey.
Last week, Governor Deval Patrick announced that the state is in serious negotiations with Amazon to have the mega-retailer voluntarily collect sales tax from Massachusetts customers who purchase goods online. The rationale is that Amazon has a sufficient physical presence in Massachusetts (due to some recent corporate acquisitions) to make it only fair that it collect sales tax here in the same manner as any brick-and-mortar business would, even though goods are sold online.
We think that's bogus, and we can only assume that Amazon is negotiating because it must figure it would lose a court case to the same effect and that negotiating a deal with the state is better than having an adverse judgment against it. (It's also possible they are thinking of relocating any ties out of Massachusetts to avoid paying the tax down the line.)
We also think there are curious things about the timing of this announcement that aren't getting a lot of attention.
First, it's interesting to note that the Governor made his announcement just days before Thanksgiving, as most Massachusetts residents were more focused on stuffing and gravy than taxes. Nothing like holiday cover to minimize the blow of a major announcement.
Second, it makes sense that the announcement was made strategically before so-called "Black Friday" and "Cyber Monday," but it's ironic that it was made in the same week as so-called "Small Business Saturday". The administration rationalizes that Massachusetts small businesses are at a competitive disadvantage because of the sales tax they are forced to charge. That's probably true. But, note the response -- instead of LOWERING the sales tax for everyone to level the playing field, the administration is INCREASING the sales tax on online retailers. The end result -- businesses all over are on a level playing field, but Massachusetts consumers end up paying more.
Third, note that just before the Patrick announcement, state Treasurer Steve Grossman came out of left field (literally) and announced his desire for the federal government to pass an initiative for all online sales to be taxed nationwide. We can only assume that Grossman, who is rumored to have his own gubernatorial aspirations, caught wind of the Governor's upcoming announcement and wanted to preempt it. And, note the style of Grossman's announcement -- he wants to charge more taxes, but he wants someone else (the federal government) to make the decision -- and therefore suffer the political consequences). (Of course, Grossman will gladly keep the revenue for the state Treasury, thank you very much.)
Overall, we think this is an unfortunate situation all around. It's sending a message to Massachusetts taxpayers that they can expect to dig even deeper than before to pay for state government in 2013. And, it's sending a message to businesses that it pays NOT to invest in Massachusetts and to grow jobs here. Those are two messages that the Bay State can't afford, literally.
So long as Democrats continue to believe that the answer to supporting small businesses in Massachusetts is to charge big businesses and consumers more in taxes, it's going to continue to be difficult to grow businesses and jobs here.