Holt Uncensored

Holt Uncensored

 

Member Area

  #174
by Pat Holt

Tuesday, August 8, 2000

 






WHEN EVEN THE ADVOCATES BETRAY
THAT SALES TAX ISSUE
  1. MOBILIZING CONSUMER SUPPORT
  2. GALVANIZING INDEPENDENT BOOKSELLERS
  3. THE PETITION
LETTERS

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WHEN EVEN THE ADVOCATES BETRAY

Well, this would be a hoot if it weren't so embarrassing for many of the well-intentioned nonprofits involved.

Perhaps you've seen that dramatic and galvanizing full-page ad in the New York Times that attempts to educate the public about the damage electronic commerce on the Internet is doing to independent retailers.

The ad looks so positive and pro-independent that the American Booksellers Association reprinted it in the ABA's weekly newsletter, Bookselling This Week, on July 31.

Decrying "E-Commerce and The Demise of Community," the ad states that Internet corporations are being "shamefully backed by federal officials" through "billions in tax subsidies," while "thousands of non-dot-com businesses, neighborhood stores" are going bankrupt.

The ad is sponsored as part of a series on the effects of "Megatechnology" by the Turning Point Project, a "coalition of more than 80 non-profit organizations that favor democratic, localized, ecologically sound alternatives to current practices and policies."

Good for them, we think at first: They show us how "giant, trendy, Internet and high tech industries" are making "sacrificial victims" of "small neighborhood and retail businesss that relate people-to-people rather than online." They also reveal alarming statistics that show how much was lost in state taxes as shopping moved online in 1999 ("New York, $26.6 million lost; Florida, 30.3 million lost; Illinois, 32.6 million lost," etc.).

Even people who don't believe sales tax should be charged on the Internet must agree that an ad like this is healthy, if not restorative, in a democracy. In the midst of everybody jumping on the Internet bandwagon, it's time somebody stood up and said outloud that at the very least we have to have a balance between Internet and community life.

After all, if growth predictions quoted in the ad about the Internet are true - that online shopping in the United States will increase from $13 billion in 1998 to $108 billion 2003 - then it's possible we're in the midst of "one of the greatest big business boondoggles in our history."

Throwing so much of our investment and shopping to the Internet may be tantamount to "replacing one culture for another," the ad states, with the result of putting "American community life, as we have known it, on the brink of extinction."

The text is passionate, the stance unyielding. And who are the members of the Turning Point Project? The 18 signers are part of a coalition of more than 80 non-profits and include Earth Island Institute, Rainforest Action Network, Center for Commercial-free Public Public Education, International Center for Technology Assessment, Planet Drum Foundation, The Ecologist Magazine, Institute for Policy Studies, The Nature Institute, Silicon Valley Toxics Coalition, and so forth.

They're great-sounding nonprofits, but here's the problem: Many of them sell their books and publications through .... Amazon.com!

Hard to believe, but true: Earth Island Institute, The Foundation for Ethics and Meaning, Institute for Policy Studies/Global Economy Project and The Loka Institute are some of the organizations that either recommend or link directly to Amazon.com.

In some cases a namby-pamby disclaimer is provided. The Institute for Policy Studies, for example, states that it "encourages the support of local, independent booksellers. If you do not have access to a local dealer, the following titles may be ordered from Amazon.com by clicking on the bookcover."

Well, not good, IPS: Other groups listed here have found independent online booksellers to recommend (the Collective Heritage Institute, for example, "partners" with Copperfield's; YES! Magazine provides a link to Powell's).

Ordinarily, I believe that publishers should be able to sell through every outlet available - chain, online, independent. But given the philosophy of the full-page ad these nonprofit groups espouse, any contact with Amazon.com seems antithetical to their stated purpose.

I don't think we're talking about hypocrisy here, either: Rather, the startling lesson may be that even the most passionate champions of independent retailers and the strongest critics of e-commerce multicorporations can't see that they're dangling on the end of an Amazon.com fishing line.

After all, isn't that what the first big branding campaign was all about on the Internet? Amazon.com has spent hundreds of millions of dollars to make itself look like the great democratizer of the Internet, the one place for the little guy to sell books without being crushed by conglomerate publishers. This is the image that seems so incidiously to have settled its way into the little niches and crannies of website purchasing.

Unfortunately lost in the shuffle is that Amazon.com is perhaps even more guilty than most e-commerce corporations of 1) fencing off the Internet for its own benefit, 2) attempting to crush the competition through unnecessary litigation, 3) building an empire across a worldwide landscape so big that OF COURSE it's contributing to the extinction of community life, and 4) dodging the sales tax issue so blatantly that Jeff Bezos thought he could get away with thumbing his nose at it at BEA.

That these otherwise sterling nonprofits could not see that, could not have scoured their own web landscapes of any trace of Amazon.com, is more than disappointing - it's heartbreaking. Maybe after independents and consumers acquaint them with the facts, they'll change their minds.

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THAT SALES TAX ISSUE:

1. MOBILIZING CONSUMER SUPPORT

Speaking of sales tax, independent booksellers in California have not only found allies in the state legislature (Carol Migden and Dion Aroner), they have been instrumental in the creation of Assembly Bill 2412, which clarifies existing law and requires so-called "click and mortar" stores with Internet affiliates to collect California sales and use tax on their Internet transactions.

A parallel campaign to educate readers about the sales tax issue is also underway. In a typical statement to customers, Andy Ross of Cody's Books explains his belief in the movement in a formal yet impassioned circular I find quite eloquent:

"Existing law is quite clear that companies with a substantial physical presence in the state must collect sales tax. Yet several large retailers, such as Gateway Computers, Barnes & Noble Books, Borders Books and Music, and Sam Goody Records, are not collecting these taxes on their Internet transactions, in spite of the fact that these companies have physical presence in hundreds of communities in California."

Meanwhile the American Electronics Association came out against AB2412, a move that booksellers must also address if the general public is going to understand what's at stake. According to Ross, "one would think that the electronics industry, which benefits so much from California's educational systems and advanced infrastructure, would want to do its share to support these services by urging sales tax collection by its own members.

"Certainly important spokespeople for the industry, including Andy Grove of Intel and Carly Fiorina of Hewlett Packard, have spoken out in favor of a 'level playing field' for sales tax collection. Unfortunately, the American Electronics Association seems more intent on preserving an unfair tax loophole for out-of-state Internet companies than on promoting the greater general interest of the people of California.

"Local businesses are fundamental to the economy of the state. Without us, the vibrant street life of cities will die. We contribute to the diversity and multiplicity, which is essential for a free market. The great market places of the world have been the centers of communal life since the time of the Greek city-states. California should not discriminate against its local businesses by supporting tax loopholes for Internet commerce.

"John Marshall stated that the power to tax involves the power to destroy. That is why sales tax policy should be non-discriminatory and based on the principle of the 'level playing field.' That is to say that the same products being sold to the same consumers into the same localities should be subject to the same tax rules.

"The unequal application of sales tax collection distorts the free market and induces consumers to make their buying decisions based on tax evasion rather than on price, availability, service and convenience.

"It is ruinous to local businesses; it will erode community values; it will attenuate the ability of the state and cities to provide services and infrastructure; and it will stifle diversity and encourage monopoly power.

"That is why the state legislature should pass and the governor should sign into law AB2412."

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2. GALVANIZING INDEPENDENT BOOKSELLERS

Meanwhile, a parallel campaign has been launched to convince the surprisingly recalcitrant governor of the wide-based support for the bill. The Northern California Independent Booksellers Association is mounting a petition drive to get at least 5000 signatures (hoping for 10,000) in the next two weeks. Here's the letter the NCIBA is sending out:

"Dear Bookseller,

"Thanks in large part to your efforts and support, our message about Internet sales tax has been delivered and well-received. We have one major stumbling block left - Governor Gray Davis.

"As our Assembly Bill 2412 has begun to receive legislative and media attention, opposition has surfaced from the American Electronics Association, a pretty formidable group. Additionally, the Governor's office has been pointedly mum on the subject of AB 2412.

"According to Assemblywoman Carole Migden's office (she's the bill's co-author), what the Governor is waiting for is a reading from the public. A strong show of support for the bill from California citizens would help mitigate other opposition and might well sway Davis to our side.

"So here's the game plan. We are asking California independent bookstores to collect signatures on the enclosed petition. The goal is at least 5,000 names by August 25, which should be easy. If every store receiving this mailing (our colleagues in Southern California will receive this packet as well) filled just one petition (both sides), we'd have close to 10,000! Customers, friends, neighbors, other merchants - any and all can sign.

"When you've filled a petition sheet or collected all the names you think you can, please return them as quickly as possible to the NCIBA office in the enclosed self-addressed envelope. We want to keep track of the numbers and report our progress to Sacramento weekly . . .

"THANK YOU ALL VERY MUCH for your help. When we began talking about legislation last fall, many told us we had no chance of even getting a bill introduced. Less than a year later, we have generated tremendous media attention and are close to passage in both Houses. But the Governor could still veto it if he thinks no one really cares. We can make sure he hears otherwise."

I must say, as one who thought independents were fighting an uphill battle (and they are), I've become a flat-out admirer at the speed and determination with which they've ushered AB 2412 into the state legislature and are already mounting an end run to stop Governor Davis' predicted veto before he talks himself into it. Let's hope this is one of 50 success stories in bringing sales tax back to that now-famous level playing field

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3. THE PETITION

"Dear California Legislature and Governor Davis,

"We the undersigned are increasingly concerned about the outflow of sales tax dollars from our communities, a loss that is the result of the growth of internet commerce. We are particularly distressed that several major businesses with stores in the state sell their products on their web sites without collecting sales tax, in violation of the law.

"Assembly Bill 2412 (Migden & Aroner) addresses our concerns, making it clear that businesses ignoring existing state tax code law cannot continue to do so. Companies such as Barnes & Noble, Borders Books, Sam Goody and Gateway computers are competing unfairly against local retailers by evading the collection of sales tax on internet purchases made in the state.

"They are also cheating communities out of always-needed revenue. According to the Board of Equalization, the loss in 1999 was estimated conservatively at $15 million. Local retailers, on the other hand, collect sales tax, hire locally, contribute to the local economy and support PTAs, Little Leagues and scores of other community programs.

"Please show your support for local businesses and our communities by assuring that AB 2412 becomes law."

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LETTERS

Dear Holt Uncensored:

You can tell [Vintage editor-in-chief] Marty Asher for me that we still have a mom and pop appliance store, Derby Electric, and a mom and pop bookstore, Earth Light books, in Walla Walla.

Perhaps this decadent slide into oblivion that our culture is experiencing may be the disappearance of mom and pop themselves. I can after all, buy an egg, some sperm, hire a womb, and "breed" a virtual poet in the test tube of my spare time. Who needs mom and pop in this techno wasteland.

And one more thing for Mr. Asher and the claim to be publishing lots of good books. How would any individual know? Suppose you read fast, two full length books a week. Thats over 100 a year. And there are 40,000 books published in English. And any individual is going to tell me what's being published and how good it is? Anybody making such claims hasn't really read the material.

But that's where education comes in. College is where you learn how to talk intelligently about books you've never read.

The end can't come too soon.

Charles Potts
tsunami@innw.net
www.tsunami-inc.net
Walla Walla, Washington


Holt Uncensored:

Archie Satterfield wrote: "My next book, and my first novel, will go to a professional editor who works with some best-selling authors who hire her as something of a pre-editor for the simple reason that editors in New York do not do their jobs. When she and I are content, more or less, with the manuscript, I will work from a template to be certain the interior of the book is easy to read and does not have the silly errors you pointed out."

I thought I'd ditto Mr. Satterfield's remarks as they apply to the computer trade book business. It's extraordinary, but most computer books are only copyedited not edited at a high level. They are tech edited, but once the author gets a contract, there's typically little developmental work done. Some books may be rescued at the copyediting stage, but you can't repair a broken book when it's that far along, especially in a business in which new editions of titles come out every nine months or so.

My colleagues in Seattle and I always "package" our own books even for other publishers. We hire editors or self-edit in the case of co-authors, and do a fundamental amount of advance work with our publisher before we write. I believe Peachpit Press is relatively unique in both what they require from computer book authors and the freedom they offer to package, but it's an absolute necessity in our minds.

Glenn Fleishman,
http://glennf.com


Holt Uncensored:

You had a fair amount to say about Amazon.com. As the owner of a small publishing company and a woman, I have found Amazon.com a little unsettling.

They ordered 4 books from us in May and I have yet to receive any payment. It is a complete puzzle to me how they can demand that they receive the titles they ordered with statements like "we are expecting to receive your shipment at our distribution center within 2 weeks" and ignore the payment of invoices with 90 days.

My company mailed their book request on time - May 25, 2000 - one week after the order was confirmed. I still have heard nothing from them in regard to payment. Of course, we will not do business with them anymore. I'll stick to the small independent bookstores. At least they communicate with the publisher.

An Independent Publisher


Holt Uncensored:

Comparing appliances to books (and dirt roads!) is an interesting proposition. If I've got the time and the proper vehicle, I'll take the dirt road to Sears, where I know I can get a good price and a good guarantee on my appliances. Unfortunately, I don't live near a Sears, nor do I have access to catalog delivery here in Mexico. So I head for the local mom and pop stores over the cobblestone roads and look for the best deal and the best service.

We have several independent bookstores in this town of 100,000, and they manage not to step on each others' toes, thus maintaining their niches: one for English, one for Spanish, a couple for text books, one for magazines in either language, etc. Everybody's making a living; nobody's getting rich.

Writing is an interesting art in that the successful writer depends upon many, many copies of her or his work gaining access to the public. Painters and musicians have their own battles to fight. My own publication, a bi-weekly journal of travel, culture and current events, is a screaming artistic success and an dismal financial failure. I depend upon the subsidy of angels, as do many civic cultural programs.

As a consumer, when I have access to choices, I choose different types of markets for different items: a farmers market for produce, a chain outlet for appliances and groceries in general, and a nice independent bookstore for personalized service. I look for the one with lots of used fiction, and for new books on the subjects that interest me. If I want one of those expensive coffee table books, I check out the chains first, but usually I can find it at an independent for the same price, if it's hot off the press.

Thanks to a wide open market, I've got a choice of where to spend my limited funds. Just as writers and publishers have choices, too. I'm sorry about the dying independents, the dying city centers, etc. I'm glad about the survivors. And all of the cyberwealth we hear so much about is as foreign to me as Mars. Happy, few-frills living within a four- or five-digit annual income has apparently gone by the wayside with everything else that we mourn in this column.

Sareda Milosz


Holt Uncensored;

A possible column topic for you to look into: plagiarism in Amazon.com reviews. I run the event series for our store, and frequently when I write my introductions I will check Amazon.com and Barnesandnoble.com to see if their author pages have reviews I have not encountered. Just this week Brookline Booksmith we hosted events for BarbaraNeely and Alice Hoffman, and as I checked the Amazon.com pages, I noticed that their reviewers had appropriated jacket copy and passed it off as their own work.

Jane Adams' review of Barbara Neely's latest novel BLANCHE PASSES GO begins: "Blanche White, Barbara Neely's smart, queen-sized, middle-aged African American sleuth..." The jacket cover of BLANCHE CLEANS UP offers this blurb from The Cleveland Plain Dealer: "You have never met a mystery protagonist like Blanche White. Middle-aged, queen-sized, and feisty, she redefines the black sleuth."

Alix Wilbur's review of Alice Hoffman's THE RIVER KING begins: "There are two things any reader can count on when coming to Alice Hoffman: iridescent prose..." The Boston Globe is quoted on the inside cover of THE RIVER KING--"The Boston Globe has praised her 'iridescent prose'..."

It's possible that Amazon.com "reviewers" are simply taking the summer off, and the lazy way out, but I doubt it. It's upsetting to me, as an occasional book reviewer, to think about my turns of phrase and vocabulary being hijacked by Amazon.com employees to make their book knowledge seem more impressive. Maybe Amazon should quit the book business if they can't keep up with the reading.

Jim Behrle, Events Director
Brookline Booksmith
Brookline, MA 02446
events@brooklinebooksmith.com
http://www.brooklinebooksmith.com


Holt Uncensored:

I'm finally catching up with last month's columns, and just now read Cam Thornley's question about Fair Trade. Fair Trade was the name given to state laws permitting resale price maintenance, contracts issued by manufacturers which required retailers to not sell an item below a manufacturer's list price. If a retailer sold below the set minimum price, a manufacturer could refuse to sell goods to the retailer, or could even bring legal action against the offender. Price maintenance has been applied to many goods, but the book trade in Europe (in the 19th century) was probably the first industry to try it out. In the U.S., the campaign for price maintenance was instrumental in the formation of the American Booksellers Association in 1900. The main culprits in price- cutting on books in these years were the department stores, especially Macy's. There were a series of lawsuits stemming from Macy's refusal to follow price maintenance which continued for the first half of the twentieth century. During the teens and twenties, most court decisions declared price maintenance illegal.

During the Depression, pharmacists (unlike booksellers and publishers) were especially aggressive in lobbying for price maintenance laws. They finally got them in the form of state Fair Trade laws -- the first was enacted in California in 1931. There were a couple pieces of federal legislation in the '30s and '50s which let these state laws stand. But by the 1950s, publishers who had previously supported fair trade changed their minds about its benefits, and stopped issuing price maintenance contracts. By then, discount variety stores like Korvette's had joined department stores in using books as loss leaders. The lack of action against price-cutters was a major point of contention between booksellers and publishers. Some things never change, right?

State courts started to turn against fair trade in the '50s, and the federal government finally repealed price maintenance in 1975. By then, there were few states with fair trade left, and the American book trade had mostly forgotten about it. But price maintenance on books is still a live and important issue elsewhere. The UK's version of price maintenance, the Net Book Agreement, did fall in 1995. But many other nations still have price maintenance, and the European Union recently ruled that individual member countries could retain their price maintenance laws (though cross- border agreements are illegal and Internet selling may be exempt).

I've probably gone on more than necessary here, but you know academics find it hard to be succinct. Anyway, price maintenance on books is a continuing area of research of mine, and I'd love to hear from other "Old Guys" like Dick Lupoff who remember Fair Trade.

Laura Miller
Department of Sociology
University of Western Ontario

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Holt Uncensored provides this forum for the free and uncensored exchange of thoughts and ideas from writers of all callings. The opinions expressed here are not necessarily those of Pat Holt or the Northern California Independent Booksellers Association.