Wednesday, June 24, 2009

Fighting Back by Opting Out (Or Going Galt, If the Term Appeals to You)

It looks like Amazon.com is battling encroaching tax hikes the only way companies can these days, by withdrawing their business. The WSJ reports that Amazon threatened California legislators that they would end marketing affiliations with anyone in California if a proposed online sales tax is implemented. They made similar threats in North Carolina and Hawaii. They argue that the law is unconstitutional, and I think they're trying to preempt a court battle, which they aren't likely to win. Apparently, they and Overstock.com are fighting a similar sales tax in New York in court. Since the courts are basically useless these days, the only option is to cease business in any economically viable manner. Hopefully, the threat will make some in Sacramento stand up and take notice of the value that their tax victims provide to the state.

In other news, as anyone with a modicum of reasoning power should have been able to predict, financial firms are having trouble attracting top executive talent. While many hot-blooded capitalists would jump at the chance to revitalize troubled institutions, the prospect of being a government bureaucrat has a tendency to temper enthusiasm. I like this description:

At Citigroup, Jerry Grundhofer, the former chief executive of regional bank U.S. Bancorp who recently joined the New York company's board as part of a government-driven shake-up, is viewed as a strong potential successor to Vikram Pandit.

But Mr. Grundhofer, 64 years old, has expressed concern about the relatively low pay that likely would come with the job, along with the difficulty of leading a company that is so entangled with the U.S. government, according to people familiar with his thinking. The government soon will own as much as 34% of Citigroup.

Yeah, I don't blame you, Jerry. Who would want that job? No one worthwhile, as would be expected.

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