Howard's Views

THE STATE OF CALIFORNIA CHEATS US TOO!

The Retailers in California have long felt that they are being unfairly treated by the State, in-as-much as they become official tax collectors, as well as unpaid tax collectors for California.  There are different points of view about whom should be responsible for what, but there is a cost to being a collector of taxes, there is a financial burden that the state expects the business owner to bear.

That cost relates to the accounting, and as the cost of accounting today approaches the hourly rate that  attorneys charge, there should be some consideration given, some small percentage of those collections allowed to each and every business for performing this valuable service to the state.  The state, however, also says, "Well, you are expected to do this because we grant you the privilege of doing business here."  

That I cannot agree with; as a resident, that should be one of my entitlements, to earn a living in the way I wish, as an employee or an employer.  The state may charge business owners a license to do business, but it shouldn't expect them to perform valuable services for the state and losing money while doing it.  That's involuntary servitude, but you're paying for the privilege of being the slave. 

We are not professional tax collectors, but we are forced to become official tax collectors, yet are obligated to assume both the legal responsibilities as well as the direct costs of accounting and banking that are incurred, and that, somehow, does not seem right.

COLLECTING SALES TAXES & CREDIT CARDS

But, there's a far different issue in collecting taxes for the State and being forced to take money out of your own pocket to make up the difference between what you actually collect and what the state claims you owe them.

As an example, let's use a figure where it immediately becomes obvious of what the difference is for a retailer.  Mr. and Mrs. Garcia go into the ABC Furniture store and purchase a bedroom set for $2,000.  The sales tax is 8 1/4% or $165.00 for a total of $2.165.

Mr. Garcia pulls out an American Express* card and charges the full amount, so that he can gain the points or miles or whatever that he covets.  At 4% MDR*, it costs the ABC Furniture store $86.60 in bank charges for accepting that piece of plastic.

ANOTHER TAX BITE BY THE STATE

However, the sales tax on the bedroom set was $165.00 and ABC Furniture is charged 4% MDR on that Sales Tax as well.  ABC's cost to collect the tax for the state is $6.60.  However, the state expects to receive the full $165.00, not $158.40 that was actually credited to ABC's bank account for the transaction, by the bank processing the credit and collection cards for them.

For more than thirty years the Retailers have been subsidizing the state in this manner, and it's patently unfair.  The state knows full well that the Merchant's Agreements with the banks absolutely demand that they accept each and every credit or charge card offered, and that today many stores write up 80 to 90% of their sales on plastic tickets because of the Air Miles (bribery) program. Still they ignore the plight of Retailers whose bank accounts are being pilfered daily both by the Credit Card Cartel and the state.  The State Legislatures should correct this injustice where it occurs. 

In Florida the state allows a small percentage credit to retailers for the accounting costs, but most likely ignores the MDR charges.

*American Express - or American Excess, because their charges are usually double that of Visa or Mastercard for the Retailers.

WHO'S LEGALLY RESPONSIBLE TO REIMBURSE THE RETAILERS?

Certainly, nationwide, the Retailers had been cheated out of tens of millions of dollars, being forced to subsidize the state in the collection of sales taxes, but the situation was altered and worsened with the introduction of Citibank's Price Guarantee Plan, designed to increase the amount of sales made on plastic.  Then, with the follow-up of Air Miles, the amount of sales on plastic rocketed upwards, overtaking cash and checks in payment for goods and services.  As sales on plastic went from approximately 15% for the average business nationally, and rose to 80% to 90%, so did their losses to the state when filing the sales tax collections.  Scores of millions would rise dramatically to hundreds of millions, because it has been ongoing since 1992.

This is exactly what Carl Pascarella, CEO of Visa, set out to do some years ago, to "replace cash and checks with plastic" and he has very well succeeded as a member of the Credit Card Cartel and their unique form of bribery. 

Visa should be a large target in a legal action to seek to recover those lost millions, since they specifically targeted the Retailers' bank accounts in their drive to dominate the financial markets through bribes in order to supplant paper money with plastic. 

The dominance of plastic also dramatically increases the risk of fraud against both for retailers and consumers, contrary to all the claims made in their advertising by these financial institutions; they are deliberate lies.