(An Open Letter to Ed Schultz)

I had the opportunity to catch part of your Monday show as I was doing some errands, and you were talking about health care and the need for, at the minimum, a public option plan to provide people with a legitimate alternative to our ludicrously expensive and corrupt private healthcare system.   This is all to the good, and I could tell you my own horror stories about dealing with insurance, waiting months, even years to see a doctor for painful illness, and so forth, but that’s a topic for another time.  Today I want to discuss something that came up when you sought to explain how to pay for expanding healthcare for Americans.

Namely, your big idea on Monday was an ‘internet transaction tax’.  You explained the need for this tax by angrily attacking web retailers like Amazon.com as, in essence, sales tax cheats, and their customers as opportunists stealing business from the little guy, the local retailers trying to compete.  It got quite heated, and a friend of mine listening at work also took note.  We both found it exceedingly strange that the ‘Nation’s Number One Progressive Voice’ was advocating a regressive form of taxation, as all sales taxes are (they of course hit the poor more than the wealthy, who spend less of their overall income).

(It isn’t just wealthy people who buy things online, if you’ve somehow gotten that impression.   A lot of poor college kids rely, for example, on Amazon.com to save them money on the outrageous costs of textbooks so that they have enough money to eat through the end of the semester.   But I digress.)

As to the issue of net taxation, a simple set of facts might help.  In 2008, according to the US Census Bureau,  US internet retail sales totaled a measly 133.6 billion dollars, 3.3 percent of retail sales overall.  If you were to tax that at the basically standard 6% sales tax, you would only add 8.016 billion dollars to the federal till every year, which, and let’s be honest here, wouldn’t pay for much of anything healthcare-wise.

Source: US Census Bureau

So your regressive tax on net commerce wouldn’t come within an order of magnitude of raising the money needed for even the modest expansion of benefits the Democrats in Congress currently envision.   We could argue that we don’t actually need to raise much money to expand healthcare at all, of course; private systems charge up to 30% of every healthcare dollar for overhead, whereas Medicare spends about 3%.   The United States spends far more of its per capita GDP on healthcare than any other industrialized nation, and gets far less for the money.  It is painfully obvious to anyone who looks at the issue that, rather than *costing* us money as a nation, a public option or single payer system would save us trillions; we would just be paying taxes instead of premiums.  Pure semantics.

That’s still another topic for another day though.  What I wanted to get at here was your obvious disdain for people like myself who spend a lot of money online.

The simple fact is that there is no such thing as local competition for Amazon.com.  Comparing Amazon to a local bookstore is like comparing the horse and buggy to the Toyota Prius.

I grew up in a small rural community, which had a total of one bookstore for the entire population.  This store consisted of a few hundred titles, about a third of which were textbook orders for the equally small local college, and another third for small children.  The bulk of the rest were New York Times bestsellers.   This store perfectly fits your model of a local retailer, a little guy competing against the big chains.  It was also a near total monopoly.

Not to mention, a terrible bookstore.   There was nothing there to interest me, and it took weeks to make a special order.  I stopped going there and had to rely on the public library, until I got my driver’s license and could take the car an hour away to a real bookseller in the city.  If it hadn’t been for the public library I would never have developed a lifelong love of reading.

(Interestingly enough, the local college eventually got their own full service bookstore for texts, and without the subsidy provided by their students, the Mom and Pop store went under.  As anyone who had shopped there in earnest might well have predicted.. and years before Amazon.com, I might add)

I don’t shop at Amazon for the six percent sales tax reduction, and I don’t know anyone who does.  I shop at Amazon because they have the best customer service I have ever seen at any store, whether locally owned or not, anywhere.  Ever.  I shop at Amazon because they have, far and away, the widest selection of books, movies, dvds, electronics, and almost anything else you can name, and yes, they are cheaper than your local establishments, or even large chains like Wal-Mart, Best Buy, or Borders.   As my interests got wider I found that there simply wasn’t a store that carried all the music I wanted to hear, the books I wanted to read, or the movies I wanted to buy, at least, not in the ‘real world’.   But, generally speaking, Amazon does.  (Amazon also allows small retailers to sell on its site through their third party, Marketplace program.  In just the last six months I’ve purchased over two hundred dollars  of merchandise from various brick and mortar stores this way, including a comic store in Massachusetts and a bookstore in New Jersey, who obviously would never have seen a dime from this Madison resident otherwise)

I fail to see how it is more socially responsible to get in my car, drive twenty minutes to a store, putter around inside looking for something to buy that probably isn’t even there for a half hour, give up in frustration and then spend another twenty minutes in traffic on the way home.  Who benefits from that, besides Big Oil?

It isn’t just Amazon, and it isn’t just the average local bookstore that is going the way of the dodo, thanks to customer focused internet retailers, either.   For comic books, I use a website called Heavy Ink, which is a small time, startup operation that focuses on, again, excellent customer service and low costs.  You can always talk to a real person if you have an issue, and they are friendly and knowledgeable about what they do.  Most towns don’t even have a decent comic book store anymore, so Heavy Ink is a lifesaver if you still want to read comics and don’t live in one of the fortunate few places that have a place to buy them.

Meanwhile, Netflix is absolutely devastating video rental stores, both large and small, by again, just being better at what they do: renting movies.  I worked in a video store as a part time job in college; I know just how lousy they tend to be.  The vast majority of their movies are shallow pablum, usually dozens of copies of the last ten big movies, and almost nothing else.  Their discs are also in terrible shape, and the prices are outrageous.  Why subject yourself to that?  Even when I worked at the store and got free rentals, I honestly never used them.  I preferred Netflix to my own employer, and why not?  They were better.  On the flip side, Netflix killed a local independent video store/performance venue that I used to frequent for live shows, who specifically laid the blame for their precipitious decline at Netflix’s feet.   It made me sad, but of course everyone saw it coming.   Getting mad at Netflix wouldn’t help anyone.

Finally, I’d like to mention another internet business, Topatoco.  This is your quintessential small, progressive enterprise.   They sell books, art and t-shirts designed by independent artists, with a focus on fair labor conditions.  Most of their shirts, for example, are available printed on American Apparel materials, and almost all are printed here in the United States.   Customer service is a priority here as well.   Am I to believe I’d be a better person if I went to the mall and bought a t shirt made in a Malaysian sweatshop, just because I’d pay some Wisconsin sales tax along the way?

This isn’t to bash buying local.  I have a share in a CSA farm here in Wisconsin; I got a load of plants from Kopke’s Greenhouse just this weekend (you have an ad running for them on the local Prog radio station).   What I’m getting at here is that Progressives should be fundamentally about *Progress*, about improving things and making life better.   Sometimes that means an old way of life will be supplanted by something new, telegraphs by telephones, telephones by email, the horse and buggy by the car.

And sometimes that means no more work for the buggy whip maker.

Regards,

John J Sears