

Best-Selling Author Cancels California Affiliates - bond
http://entrepreneurbootcamp.blogspot.com/2011/07/best-selling-author-cancels-california.html

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jdvolz
As someone who is living in Las Vegas NV (no state income tax) I am struggling
with where I should move. I just checked and the CA state income tax is 10%
for my earning bracket. That's a 10% premium (>$10k per year) when compared to
Texas, Nevada and Washington. It's also 1% greater than Oregon. It's 5%
greater than CO or NM. Add to that the high cost of living in the valley
(particularly housing) and it's difficult to justify moving to California vs.
getting a remote job working for a company in California at the same salary.

I see the economic value of working the valley and that the salaries are
higher, but they would have to be 30% higher than what I'm earning in Nevada
just to offset the increase in costs. Imagine if I actually wanted a raise.

If you tell me that not only is the CA legislature requiring these funds from
me, but also requiring corporations with operations in the state to collect
sales tax (putting them at a competitive disadvantage to companies that don't
have operations there) I'm going to start to wonder about what other anti-
business measures might get passed. Anti-business measures are going to cause
businesses to move if they can. Less businesses means less chance for jobs
which is obviously a negative for someone looking to move to economic
opportunity.

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pkteison
For that remote job, just be careful to check the law first. Some states tax
telecommuters. I do not believe California is one of them, but I also do not
believe that will last forever since lord knows they need revenue.

All CA has to do is redefine "source" and poof, free money.
<http://www.ftb.ca.gov/aboutFTB/manuals/audit/rstm/3000.pdf> section 3420 "The
critical factor in determining the source of income from personal services is
not the residence of the taxpayer, the place where the contract for services
is entered into, or the place of payment. It is the place where the services
are actually performed" - change that definition, and there goes your sweet
telecommuting tax break.

[http://www.nytimes.com/2008/02/20/business/businessspecial2/...](http://www.nytimes.com/2008/02/20/business/businessspecial2/20tax.html)
is an interesting article about the New York telecommuting tax.

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ams6110
_lord knows they need revenue_

Or they need to cut spending.

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maineldc
Sounds like someone who is looking to generate PR by coasting on other news
and slamming California. As someone who has started a company in CA, I don't
find the business climate "repressive".

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GoldenMonkey
As an outsider dealing with CA taxes... due to a previous CA employee, I find
CA intrusive and expensive to deal with. More paperwork and fees, and hassles
than anything in my own business tax state of Colorado. And, like I've said in
other posts, I'm still dealing with CA... 2 years after I let my CA employee
go. Don't believe me? Try calling up the Franchise Tax Board... 2 hours of
waiting, if you can get thru their automated phone system that is. Yes, there
are much better business friendly states... CA is at the bottom of the barrel.

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raheemm
Im curious - why does California's 'anti-business' culture not interfere with
silicon valley startup activity?

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wpietri
As a Silicon Valley entrepreneur, none of what this guy says rings true for
me.

I'm here because I think California's climate for business is great. What I
need is smart, well-educated, creative workers. I need reliable
infrastructure. I need great universities. I need a broad-minded culture, so
creative oddballs feel comfortable, and talent from overseas feels like they
could make a life here.

Personally, I'm happy to pay taxes to support education, infrastructure, and a
fair bit of regulation, because it directly benefits me and my business. As
far as I'm concerned, This guy's whole anti-tax-means-patriotism stuff is just
another way of saying "I Got Mine, Fuck You". And since affiliate marketing
funds an awful lot of web spam, I am not going to shed too many tears about
the end of his affiliate program.

~~~
yummyfajitas
Strangely, the author's example of a more business friendly state (Texas)
seems to beat California on a number of your government-related metrics.

Texas schools are better than California schools for all racial categories at
grade 4 and 8 (the grades in which comprehensive data is collected).

[http://nationsreportcard.gov/science_2009/g4_state.asp?subta...](http://nationsreportcard.gov/science_2009/g4_state.asp?subtab_id=Tab_4&tab_id=tab1#tabsContainer)

[http://nationsreportcard.gov/science_2009/g8_state.asp?tab_i...](http://nationsreportcard.gov/science_2009/g8_state.asp?tab_id=tab1&subtab_id=Tab_4#tabsContainer)

According to the only ranking I could find, Texas has better infrastructure as
well:

<http://www.cnbc.com/id/41666598>

So maybe this guy's attitude isn't so much "I got mine, fuck you" as it is "if
Texas can do more with less, California should as well."

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wpietri
As an engineer, I'm naturally fond of doing more with less. And California
obviously has substantial problems. But the "tax cuts = patriotism = awesome"
meme has nothing to do with efficiency. Indeed, I think it's a big cause of
inefficiency. California's biggest structural problem is the insane mess
created by Proposition 13, the result of a previous wave of anti-tax fervor.

There's also no discernment about what to cut, or how. Every hacker knows that
optimization always requires a firm grasp of the details, and that a well-
optimized system requires long-term thinking and investment.

If this guy were proposing particular fixes, I'd be totally in favor of that.
But his only proposed fix is "please allow me to continue taking advantage of
a quirky sales tax loophole". While, of course, running his business via a
medium created by government-funded research. So no, I'm pretty sure he's in
the IGMFY camp.

~~~
yummyfajitas
California spends 70% more (per capita) than Texas and achieves poorer
results.

<http://www.taxfoundation.org/research/show/287.html>

I can't see how California's inability to raise taxes further is the problem.

The author is proposing a fix: move to Texas and avoid creating a nexus in
California.

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digikata
It doesn't tell a complete picture to compare the absolute per capita costs
without adjusting for buying power. For instance, looking up the cost of
living between e.g. Houston and LA shows that cost of living is 60% higher in
LA. Without some statewide adjustment added into the mix - I don't how one
might conclude one state gov't is more efficient than another.

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gopi
Its amazing how california with all its advantages (climate, tech industry,
hollywood etc) can be in such a financial mess...Think how great the state
would if its atleast 10% as business friendly as Texas

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hysterix
You do know that california gives more to the federal government than it
receives, to keep shit states such as alabama and the like propped up? You do
know that if california did not have to pay out to the federal government
there would be no financial issues of any kind?

Of course you didn't.

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swaits
Not "California", California residents. You are referring to US income tax,
which is the same everywhere. Yes, it bleeds money out of our state. But I
don't understand HTF you make the leap that this is the cause of all of our
fiscal problems.

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saalweachter
Places like New York City and San Francisco will always have a strong startup
culture regardless of how oppressive the tax culture is. Why? People want to
live there. Not all people, of course, but there's a huge number of people who
would still live in New York City even if the tax rate of the highest income
bracket were twice what it is now. It's New Effin' York.

Incidentally, I'm kind of curious how the California/Amazon thing will play
out, given that Amazon is currently collecting sales tax in New York. When New
York passed their affiliate nexus tax law in 2008, Amazon went the route of
collecting the taxes and suing New York to have the law repealed; they are
still collecting sales tax in New York 3 years later. I'm guessing their
experience in New York has lead them to try the more extreme route in
California, of starving the state of more revenue in an attempt to force them
to change the law. If California holds firm the way New York has, will Amazon
give in?

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tsotha
Amazon won't give in in California because it has no reason to. California can
only demand Amazon collect state sales tax if Amazon has a physical presence
in California. Once there are no affiliates there isn't anything the state can
do.

I suspect the reason they're collecting taxes in New York is they _have_ a
physical presence there and they don't want to give it up.

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Vivtek
Insane entitlements?

I just don't get people.

~~~
wpietri
I think this particular facet of human nature was well explained by Upton
Sinclair: "It is difficult to get a man to understand something when his job
depends on not understanding it."

