An Amazon Tax! Really? Imagine if Maggie had taxed Argos?

An Amazon Tax! Really? Imagine if Maggie had taxed Argos?

by Jonathan Stanley
article from Wednesday 15, August, 2018

I UNDERSTAND 1979 was a rather tough year. The high street was full of bin bags the unions wouldn't collect. Cheap crinoline skirts, flared jeans and only Mrs Slocum's pussy to console us.

Except there was a glimmer of hope. Crippled industrial towns like St Helens could access almost any commercial good at competitive prices. No storage of stock on shelves, no large displays. Instead, a thousand or more companies at our fingertips where one ordered from a magazine and then picked up the product in a dull cardboard box.

This was Argos. It still is. It did not kill the high street, it allowed it to survive. Imagine if Maggie had taxed it to save a few obsolete shops?

How is Amazon so evil that it needs the left (sorry, the wets) to attack it and say we need an Amazon tax? Or a tax on Ocado or, ironically Tesco online, Debenhams online or M&S online?

What problem are we trying to solve beyond not having enough cash to both be nice to earners and dependents? 

Amazon does not pay business rates because it has been given sweetened deals by, er, governments, and does not need the direct access to the public to sell its wares from the high street. It’s a new business model and it works.

Likewise I no longer need to keep 20p in my pocket to call home from a payphone now I have my smartphone. It was only in the late 90s that such freedom became affordable. 

Then the email decimated the personal mail business. It is the corporate mail business that requires paper billing that keeps it alive. What I find really sickening is that had the unions behaved well, had Royal Mail management been innovative, if Maggie had part privatised Royal Mail, then Royal Mail could have been Amazon.

Amazon remains largely a very fancy mail order business. Royal Mail still has a pension deficit it must fill. Why has it never been able to leverage its position? 

Why could a state-run Royal Mail maximise returns? The truth is because it was run by people like Phil Hammond, Ruth Davidson, Gordon Brown and a myriad of other politicians who know not quite enough about a thing to make it work profitably.

We could safely ignore that corporation tax is not devolved except such calls to clamp down on non-existent tax avoidance simply fuels the idea of devolving corporation tax. Amazon invests essentially all its profits. It enjoys the joys of the single market. This is why is hardly pays any corporation tax. 

It does of course pay VAT on everything it retails. That is a tax and a cost to consumers. EVERY tax levied on production falls on the consumer (I have clearly been watching Peppa Pig with my daughter too much). 

We could levy a tax on anything delivered by mail, to prop up high street rents and keep the iniquitous business rate regime going. It would just make us all poorer. A strategy that seeks to make more expensive businesses more competitive without reducing their cost base is anethema to innovation and investment.

Why does this need spelling out in 2018?

This proposal, to quote a dear friend of mine, is "the opposite of cornflakes."

Cornflakes are cheap to make, easy to sell and make money. They are easily cloned and yet branded cornflakes continue to sell because the brand is strong and associated with certain things cornflakey and good.

The Amazon tax is expensive to implement, easy to sell and makes money. It is easily cloned by the left and their brand is much stronger when it comes to things taxy and angry.

So we risk a policy that is more easily marketed by the left, that isn't associated with our brand and simply endorses the left's philosophy. Out-lefting the left never works for the right. There is no point even trying. 

It is the reliance on picking winners and rewarding failure that explains why Royal Mail never became Amazon and the free market that allows Argos to thrive despite high business rates that have killed off so many competitors.

As I've whined before, we need to be honest about what our ology is. Taxing things isn't it, nor is finding problems for solutions we cynically believe we can fool the public with.

ThinkScotland exists thanks to readers' support - please donate in any currency and often

Follow us on Facebook and Twitter & like and share this article
To comment on this article please go to our facebook page