Amazon is hardly ever out of the tax headlines these days. Following on from management’s mauling by a British Parliamentary Committee late last year and the developing Transfer Pricing dispute with the IRS, last week all eyes were on Amazon’s reaction to the Senate’s passing of the heat-seeking, this one has your name on it A-M-A-Z-O-N, Marketplace Fairness Act. Although it is still far from certain that the legislation will get through the Cock Fight of the Republican-controlled House, the great e-tailer has been preparing itself for the day after Armageddon when Sales Tax (the US’s primitive alternative to VAT) will be charged on all e-commerce in the US irrespective of whether the seller has a “Nexus” in a particular State or, for that matter, any of the 50 States and the District of Columbia.
As a child I was not one of the “Buy me” set so I suppose it is logical that, as an adult, I am not part of the “Must have” set. When it comes to electronic accessories, apart from the obligatory laptop and smart phone, the only consumer device I possess is an Amazon Kindle. For the uninitiated, a Kindle is a book that lacks pages, a spine and a half-price sticker grafted onto the front cover with irremovable super-glue.
The E-book, I am told, is the absolute future of reading. With a Kindle you can, for as little as the price of a hard copy from Barnes and Noble or Waterstones in a 3-for-2 deal, have the digital imprint of the book of your choice (if the publisher has a contract with Amazon) delivered instantly all the way to your bed or toilet seat. And it is not just the immediate availability. The Kindle is so much more convenient than a book.
For a start, you can populate a Kindle with hundreds of titles so that, if you are traveling, you can read at least a hundred books on the plane, or in foreign business meetings or while your family is admiring the beautiful places you have come on vacation to see (we will get to beach-reading later).
Then there is the weight – the Amazon site told me that my Kindle would be as light as an average book. While I am aware that, having been around for over 3 years, my device should be looking for a partner to join it marching out of the Ark and there must now be lighter versions, the weight claim just reminded me of all those economy fuel consumption tables car manufacturers stick on their advertisements (’50 mpg’ based on traveling through the Texas desert on cruise control at 45 miles per hour). My machine weighs in at about the same as a hardback copy of the Complete Works of Shakespeare with a piece of lead piping as a bookmark. And that is before I take into account the financially crippling leather cover with courtesy light (I suppose in case there is a power cut).
And what about that feel of where you are in a story? No longer, as you close your book, do you need to look at where the bookmark is located and think “Oh good! I am about two-thirds of the way through”. Now, with digital accuracy, you know that you only have 31% to go – although, on my antique piece of electrickery at least, I do not have any bloody idea what page I am on. And why have to flick back through the book searching for your favourite bit, if all you have to do is remember one key word like “decapitated” and the search function will take you there without delay?
But the best of all is the screen. Busy people have to snatch reading time. And that often means bedtime. I cannot count the number of times in my not-any-longer-so-short life when I have woken up in the morning to find my latest paperback lying on the floor next to me or spread across the pillow, a few pages unceremoniously creased, ready to be ironed out under a stack of telephone directories. If you have ever fallen asleep reading a Kindle, you may know that, while pages of a book can be approximately returned to their original form, it does not help to put a creased screen under a pile of telephone directories.
What about water? Electronic devices have a greater fear of water than the Ministry of Magic had of Voldemort. Have you ever tried luxuriating in a hot bath with a glass of wine in one hand and a paperback book in the other? Well, I have not, but I am told it is a delightful experience. While taking an E-book into the bath may not have quite the same effect on you as dropping in a mains-connected 3 Kilowatt heater to warm up the water, it will have the same effect on the Kindle. On the same lines, although I am not much of a beach-bum myself, it strikes me that the sand-soaked shore of the Mediterranean is not an ideal locale for a community of electronic devices.
Lest we forget, the Kindle may be the future of civilization as we know it, but Amazon has a pretty nifty business in distributing those hardcopy books we dinosaurs so love. In fact, it has the biggest business. And thanks to the Marketplace Fairness Act, it is going to get even bigger. And there is does not appear much good about that.
Currently, companies like Amazon that ship goods to your door have an advantage over regular retailers in that , when they sell into a state where they do not have a warehouse or other permanent presence, they avoid local sales tax. This has led Amazon to choose where to warehouse its goods and provide a less-than-immediate delivery service in many States. The upshot has been that traditional distributors have been able to exploit a market advantage in such States by either offering the standard walk-in shop service or same day delivery for mail orders through any one of their multiple outlets in the State. Now that it looks like Amazon and its ilk are likely to be required to charge Sales Tax irrespective of presence, they are evidently planning a massive expansion of their warehouse facilities across the country to enable same day delivery. The end result will be that margins will be squeezed and many of the remaining book retailers will be run out of business or acquired. To me, this would be one of the biggest tragedies in the field of literature since the birth of Jeffrey Archer.
When I look back on how I acquired the modest level of knowledge I have, school does not feature very prominently (although it was brilliant fun). I would spend literally days as a child, youth and not-so-youth hanging around my local library (where I was a one-time junior librarian) and major bookshops, picking books off the shelves and flicking (carefully) through them. As late as 2 weeks ago, I strolled aimlessly into a local bookshop and left with two great volumes that I had only vaguely heard of (I did remember to pay at the counter). While google and the rest largely compensates in the modern world for that random-walk of knowledge acquisition, the consumerization of the book market by Amazon and its friends has clearly negative connotations.
That is not to say that Amazon has not brought clear advantages too. Returning from Woody Allen’s delightful “Midnight in Paris” some time ago, I was able to lie in bed that very night reading Hemingway’s “A Moveable Feast” (on which the movie draws heavily) on my Kindle. Living, as I do, in the Middle East where supply of English language books is patchy to say the least , I would probably have had to wait months for a copy if not for Amazon.
The House of Representatives would do well to tread carefully with this reform. At the same time the European Commission is currently dealing with a, not unconnected, VAT outrage perpetrated by the French government (who else?) and Luxembourg authorities (who are they?) offering cut-price VAT for e-sales within the European Union, benefiting most markedly none other than…. Amazon.