David Clark’s comment not just dumb, also wrong

David Clark’s comment not just dumb, also wrong

This morning’s¬†post¬†about slapping GST on Amazon¬†covered on David “rising star” Clarkson’s dumb comment that:

¬†“It seems it would be pretty simple to speak with Amazon and other suppliers to ask them to collect GST since they collect, as I understand it, sales taxes for individual states in the US.¬†If that’s true, then it’s obviously an ideological decision from the Government not to collect it.”

Looks like the comment was not only dumb, it was wrong. Amazon is refusing to collect state sales taxes, even taking New York State to the Supreme Court. ¬†The Taxpayers’ Union has blogged:

How Mr Clark thinks that the New Zealand Government has any tax jurisdiction over companies operating in and domicile in the United States is unclear. Is he meaning that as Minister he would seek agreement from the large online retailers like Amazon to charge just New Zealanders more, and pass the money on to the government? If so, he is being optimistic.¬†Amazon for example is challenging New York State’s attempt to force it to collect its sales tax.¬†Why would Amazon (and it’s competitors) take any different view to New Zealand? ¬†

 

If Mr Clark thinks that some sort of cross-border legal obligation exists, he is wrong. Tax treaties seldom cover sales taxes.

In reality any further GST levied would be the responsibility of Customs at the border. The screening process is imprecise and carries high administration costs (both reasons for the existing threshold). For the consumer it means parcels/goods are held at the border until GST (and any applicable duty) is paid.¬† We’re not yet convinced that retailers have made the case for an iPhone cover ordered from a US website to be stopped at the border in order for a few dollars of GST to be collected.

 

David  Clark is supposed to be a rising star in the Labour Party. How a spokesperson for such an important portfolio could say something so stupid should be a big wakeup call for Labour.

What will be next, a coalition partner promising to print money? These people are not fit for government.

  • http://keepingstock.blogspot.com/ Keeping Stock

    About 40% of New Zealanders voted for Labour or the Greens at the 2011 General Election, and about 40% support GST being levied on online sales. I suspect there is a direct correlation.

    As for Dr David Clark; he came into Parliament with such high expectations, but he has been proven to be no more than a reciter of Labour Party talking points and rhetoric. If the likes of Clark and his Dunedin comrade Clare Curran are the future of the Labour Party then David Cunliffe has a major problem on his hands.

    • blokeintakapuna

      Yep… They’ll be bringing out a new logo soon too.
      Remember, they’re on a war footing… And perceptions matter.

      • Adam Michaels

        Actually I have something in mind which perhaps could be shared?

        • blokeintakapuna

          Share away…

          • Adam Michaels

            I emailed the image to W.O. directly- there may have been copyright issues and I altered the thing a bit

          • Adam Michaels

            Re New Labour Greens logo: people may have noticed the original before, perhaps when it was the logo for Instituto de Estudos Orientais.
            I changed the colour of the house to Green to relate to the Red Sun.
            What do you reckon?

    • Pete George

      Clark has been disappointing. He was lucky to get early attention by inheriting the Mondayisation bill of Grant Robertson and then having it drawn in the first ballot of this term. But he has failed to show any political or practical nous.

      And after being rapidly promoted by Robertson’s proxy leader David Shearer Clark dropped markedly when Cunliffe took over the Labour leadership.

      Clark often looks out of his depth beyond the Labour cheer squad.

    • Pete George

      An interesting Public Notice on the ODT yesterday regarding Clare Curran’s electorate:
      “The New Zealand Labour Party wishes to advise all Electorate, Branch and Affiliated members that nominations for the Dunedin South constituency remain open. The closing date has been amended and is now February 28 2014.”

      This may be normal process, or it may be an indication that rumours of attempts to replace Curran within Labour have some substance.

      • http://www.whaleoil.co.nz/ Whaleoil

        I think those rumours are fairly accurate…seems there is a move to rinse her.

        • http://keepingstock.blogspot.com/ Keeping Stock

          She has embarrassed the party far too often. I doubt that she would get a winnable list place either.

    • Adam Michaels

      I think a number of us here could name a few more labourites who came into Parliament on the back of hype and have performed miserably with Labour ending up stuck with them. National appears to have been more successful at refreshing its candidate base and bringing in new blood to contest electorates in 2014.

    • caochladh

      I would suspect that a good proportion of the 40% is made up of those whose incomes rely on the retail industry.

    • gander

      KS, if I had participated in that survey I’d likely have supported levying GST on all online purchases PROVIDED that there would be a means of collecting it without interfering with buying online and receiving my purchases reliably and promptly.
      I’ve never voted Labour or party vote Green (in answer to your comment on correlation); I’m well to the right, economically at least. But I don’t think we ought to be, in effect, subsidising overseas retailers.
      Take away the GST issue and we take away one excuse for the inefficiencies of distribution and retailing, or whatever it is that causes some of our retail prices to be so outrageous.

  • Rodger T

    Blatantly obvious neither Labour nor the Greens have the ability to run a Lemonade stall at a school gala, let alone the countries economy.
    If these `tards get their hands on the treasury benches we are down the gurgler both Venezuela or Zimbabwe would look attractive places for migration.

  • Macca

    Typical bloody Liebour or any left for that matter! Utterly bereft of any workable policy they revert to type which is either trying to give something away or invent/create a new tax – God give us all strength to endure the coming lolly scramble!

    • Don W

      Labour and the greens are utterly bereft of intelligence or common sense.

  • Jake McLellan

    Amazon are in favour of a simple tax solution. In the US they would like a federal value added tax or at least a simple unified way of collecting it. This will lead to a new better system in the USA then globally. This will happen, it’s a matter of when not if. I’d rather be working on a solution rather than conservatively not bothering to do anything at all.

    • Adam Michaels

      This follows on from what I was saying in an earlier post: we keep proactive re new, practical means of maintaining our required tax take- as the world changes, so do we. If a suitable system evolves in front of us,(e.g. in the US, as you mention), then we too, are ready to adopt and adapt it to our needs without delay.

  • Michael

    It’s a policy that is like the GST off fresh fruit and veges – sounds good as a soundbite, but once you start going into details it doesn’t stack up.

  • GregM

    Here we go again. Rather than come up with some workable and costed policies that will improve our lives, once again they are trying to work out how to take more tax off us. Why don’t they just go away and leave us alone.

  • Cowgirl

    This is what my husband has been saying – why would we pay GST on something that NZers neither provide the goods nor service on?

    • Lux

      Exactly, it is insane ..

    • Don W

      Gov’t’s are constantly looking for avenues in which it can extract money as I don ‘t believe the gov’t is as flush with money as they would have you believe

  • Tas

    Let’s not forget about digital goods. The government needs to set up a giant internet filter that prevents you downloading songs from iTunes unless you pay the govt something like 20c in GST.

  • MrAuz1989

    Perhaps Silent T intends having the directors of Amazon around for dinner…….

    • Adam Michaels

      Luckily for them, he is a vegetarian

  • Jax

    Imagine the chaos sites like DealExtreme would cause.. thousands of things, some costing as little as a buck, and they will happily ship those to NZ – shipping FREE – I have just ordered a little bluetooth dongle, cost was 1.98USD incl shipping. I would like to see the mechanism they will use to collect that 30c off me cost effectively. If they tried to bring this in, I say we protest by ordering thousands of tiny items all at once :)

    • caochladh

      It’s not going to happen any time soon despite what Labour, Retail Associations, the Greens and the Herald say. It is just too hard, labour intensive and complicated to either force a tax compliance regime at the point of sale, or levy a tax when goods valued at less than $400 arrive at the border

  • SteveWrathall

    That’s what you get when you put Eddie Hitler in parliament

    http://www.youtube.com/watch?v=TMR5zhnQMvs

  • Sir Cullen’s Sidekick

    David Clark is Helen Clark in drag…

  • Positan

    Most Labour politicians are unaware of that fundament of politics – that every would-be politico should actually know the ins and outs of what they want to make noises about.

  • timemagazine

    The left has no idea how economics in the real world work. They have one single goal in life TAXES, so that they can go on bribing low information voters to get into power. But maybe DC had bad night sleep, that would be better for everybody.

  • Mdj

    Amazon do have the ability to collect tax upfront. They can even work it out for you when you reach checkout (for eligible countries). See https://www.amazon.com/gp/help/customer/display.html/ref=hp_left_v4_sib?ie=UTF8&nodeId=201117970

    With a company the size of Amazon and their computational nous, it wouldn’t have been difficult to work out the duty rates, and revenue limits for each country they ship to to determine this calculation.

    Of course they don’t WANT to gather taxes for states, countries or anyone else, but they seem to have the tools to do it regardless.

    Also, with industry standard 2D barcodes (or even RFID) they could print a calculation amount on the label of the items shipped and NZ Customs could just run under a high speed scanning system and collect the relevant details (name, address, value, customs due etc) and automatically fire a text / email / letter to the recipient while diverting the goods to a holding facility until paid as an example (or better still not holding the goods up, but sending ‘infringement notices’ like you get when you go through a speed camera).

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