Not a subsidy

Marc Fisher has a lament over the demise of locally-owned and -operated bookstores. While he freely admits to using Amazon, he also makes the usual arguments about the “intangible benefits” of local bookstores.

Marc is not wrong about going to a local bookstore for those intangibles. But those of us with limited disposable income would rather not pay 20 to 40 percent more for the same book. Oh, and, of course, plus whatever the sales tax where the bookstore stands. Here in Virginia that is 5 per cent (5.75 per cent in Washington DC). And, of course, Amazon, not having a bricks-and-mortar outlet in Virginia, doe not charge sales tax.

Marc calls this “a government subsidy of online commerce.” He’s correct in only the most technical use of the word “subsidy” as something that assists. But in its common usage, a subsidy is a transfer of money. A government subsidy would be the government giving money to Amazon, which, of course, they do not do.

No, Marc. What we have here is not Amazon getting any subsidy, but on taxpayers paying less of their money to the government. Repeat this slowly, so it sinks in: less of their money, meaning your money, and my money.

If local bookstores wished to compete, they would have to match Amazon’s pricing and more. In other words, match the Amazon price, then reduce it by the amount they are legally bound to collect as sales tax. They can’t make a profit doing this? Perhaps they should apply for a bailout…

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