NEIL.
NEIL: I THINK A LOT OF THEM ARE
SEND ISING MONEY WITHOUT GETTING
ON THEIR HOT HAND.
THANK YOU VERY MUCH, HILLARY
VAUGHN.
AMAZON WAS AHEAD OF THE CURVE
ESTABLISHING OPERATIONS IN 45
OUT OF 50 STATES.
IT HAS KIND OF OPERATIONS, KIND
OF OPERATIONS IN THREE
ADDITIONAL STATES HERE.
I WILL GET INTO THAT IN A BIT.
SUFFICE IT TO SAY THE THOUGHT IT
WOULD DAMAGE AMAZON MIGHT BE
PREMATURE, BECAUSE IT HAS BEEN
PREPARING FOR THIS DAY.
THE STOCK WHICH IS DOWN AS MUCH
AS 30 BUCKS.
HARD TO SAY WHERE THIS GOES.
NOT HARD TO SAY, A LOT OF
STATES, MUNICIPALITIES ARE
FIGURING HOW MUCH MONEY WILL
COME FROM THIS THEY'RE COMMITTED
TO SPENDING IT.
SO MUCH FOR THEIR FISCAL
RESOLVE.
WHAT ABOUT THE OVERALL IMPACT ON
THIS?
LOOK AT IT WITH MARKET WATCHER
JONATHAN HOENIG.
CHARLES PAYNE.
WHAT DO YOU THINK?
>> I THINK THIS IS, AGAIN, TO
YOUR POINT, AMAZON HAS BEEN
PREPARING FOR THIS.
YOU KNOW INTERNET FOR THEM, IS
NOT JUST SALES TAX.
IT IS CONVENIENCE.
NEIL: RIGHT.
>> WOULD YOU GO TO A MALL IF YOU
COULD HAVE A DRONE BRING YOU THE
ITEM YOU HOURED AN HOUR EARLIER?
THEY HAVE A WHOLE BUSINESS
DIFFERENT MODEL.
HILLARY VAUGHN WAS RIGHT WITH
RESPECT TO THE SMALLER ENTITIES.
I'LL REALLY CONCERNED ABOUT
THEM.
WHAT THIS RULING DOES BUILD A
MOAT ON AMAZONS OF THE WORLD.
THEY STOP SMALLER FOLLOWINGS
GETTING INVOLVED AND GROWING
THEIR BUSINESS.
I THINK ETSY'S PLEA TO CONGRESS
PUT SOME RULES OF THE ROAD IN
HERE ARE PROBABLY REALLY SMART.
HAVING SAID THAT THIS IS GREAT
NEWS FOR THE BRICK-AND-MORTAR
NAMES WHO ARE GETTING IT RIGHT,
GETTING RIGHT COMBINATION.
MACY'S IS AN EXAMPLE OF A
COMPANY RECENTLY PUT OUT
EARNINGS REPORT SUGGESTED THEY
WERE LEARNING HOW TO USE THEIR
BRICK-AND-MORTAR LOCATIONS ALONG
WITH THE INTERNET TO TURN BACK
THE DAMAGE THAT AMAZON HAS DONE.
FAIR, THAT STOCK GOT CRUSHED TO
THE LOWER 60s WHEN AMAZON SAID
THEY WERE GETTING INTO FURNITURE
BUSINESS.
AS YOU SAW ON THE SCREEN, IT IS
$115 STOCK.
ALL THE BUSINESSES ARE MORPH
BEING AND TURNING THEIR
BUSINESS.
ONE OF THE BUSINESSES IS KROGER.
KROGER WAS SUPPOSE TOED
ANNIHILATED WITH AMAZON AND
WHOLE FOODS AND COSTCO AND
OTHERS, WALMART.
THEY ARE LEARNING HOW TO DO IT.
THEIR STOCK IS UP VERY BIG
TODAY.
SO IT IS A BUMP IN THE ROAD TO
BE SURE BUT I DO HOPE THEY GET
THE RULES OF THE ROAD BETTER FOR
SMALL BUSINESS, MOM, POP, SMALL
ENTREPRENEURS WANT TO GET INTO
THE INDUSTRY.
NEIL: WHAT DO YOU THINK,
JONATHAN?
>> THE WINNERS HERE ARE THE
ACCOUNTANTS.
THEY WILL HAVE TO FIGURE OUT ALL
THE NEW RULES AND THE STATES.
AS CHARLES AND YOU MENTIONED,
WE'RE TALKING ABOUT BILLIONS OF
DOLLARS THE STATES WILL GET TO
HAVE IN THEIR GREEDY LITTLE PAWS
ON AND SPEND AND MISMANAGE.
AS CHARLES ALLUDED TO REAL USERS
ARE NOTTETTECY OR MARKETPLACES
BUT INDIVIDUALS THAT SELL ON
THEM.
THESE ARE MINORITY, WOMEN-OWNED
SMALL BUSINESSES OPERATED OUT OF
PEOPLE'S HOMES WHERE THEY SELL,
2, 3, $4,000 WORTH OF
MERCHANDISE IN OTHER STATES.
THEY WILL BE CHARGED WITH
COLLECTING THAT TAX.
THAT IS BURDEN ON SMALL PEOPLE
WHO ARE TRYING TO MAKE COUPLE
BUCKS ON THE SIDE.
THAT IS WHAT THE INTERNET
BENEFITED AND THAT IS WHERE THE
NEW RULING WILL HURT THE MOST.
NEIL: FORGET ABOUT TAXPAYERS IN
GENERAL.
I'M NOT HERE TO DEBATE THAT OR
WHETHER OTHERS HAD A FREE RIDE
PRIOR TO THIS DECISION, BUT YOU
KNOW, CHARLES, I THINK IT'S A
LOT EASIER FOR STATE GOVERNMENTS
AND OUR STATE IN NEW JERSEY, A
LOT EASIER TO SPEND MONEY THAN
EVEN TALK ABOUT REINING IT IN.
YOU GET REVENUES, MANNA FROM
HEAVEN SO TO SPEAK WHERE YOU
DON'T HAVE TO EXERT ANY DISPLAIN
BECAUSE YOU HAVE GOT MONEY
COMING IN.
FOR TAX PAYERS IN THOSE STATES,
RESIDENTS IN THOSE STATES, WHAT
ELSE IS NEW?
>> YOU'RE RIGHT.
JONATHAN IS RIGHT.
ETSY RAISED PRICES ON
INDIVIDUALS THAT USE THAT
PLATFORM THAT WILL BE A
DOUBLE-WHAMMY FOR THEM.
ACCORDING TO ONE ESTIMATE THESE
STATES COULD HAVE COLLECTED
ALMOST $14 BILLION LAST YEAR.
SO IT'S A HUGE HONEY POT.
THEY WILL SQUANDER IT.
THEY WILL RUIN IT.
ADD ON TO THAT, BY THE WAY, TAX
PROPOSALS WE'RE SEEING, NEIL,
TAXES ON UBER-S, TAXES ON
AIRBNB.
THESE GUYS, RONALD REAGAN,
ANYTHING THAT MOVES OR DOESN'T
MOVE, THEY ARE TAXING IT TO
DEATH.
IT IS A FRIGHTENING PROSPECT IN
RESPECT BECAUSE ALL IT DOES KEEP
BIGGER PLAYERS BIG AND PUSHES
AWAY COMPETITION.
IT KEEPS SMALLER INDIVIDUAL
CONSUMERS REALLY IN TROUBLE.
I THINK JONATHAN IS 100% RIGHT.
NEIL: I WONDER THEN IF WE'RE
LOOKING AT BIG ONLINE PLAYERS,
IF WE STEP BACK FROM THIS, GUYS,
JONATHAN, IF YOU CAN WEIGH ON
THIS, WHETHER IT WOULD AFFECT
SHOPPERS PERIOD?
IF YOU'RE ON A SITE, ANY ONE OF
THESE SITES, ALL OF SUDDEN YOU
DISCOVER THERE IS ADDITIONAL TAX
OR SALES TAX TO REPRESENT YOUR
STATE AND FINAL PAGE WHEN YOU
GET TO YOU KNOW YOUR PURCHASE
PRICE, OTHER TAXES RELATED TO
THAT, YOU SEE THE SALES TAX
ADDED FOR YOUR STATE, WHETHER
THAT WOULD MAKE YOU THINK TWICE
ABOUT THAT PURCHASE?
I THINK MOST PEOPLE, IF THEY'RE
THAT FAR ALONG, THEY SAY, WHAT
THE HECK?
>> YEAH.
NEIL, THEY WON'T GRIN AND BEAR
IT BUT THEY WILL BEAR IT.
IT HAS TREMENDOUS IMPACT ON THE
ECONOMY WRIT AT LARGE.
IT IS OFTEN TALKED ABOUT WHAT IS
NOT EVEN WHEN IT COMES TO TAXES
AND REGULATION.
THAT IS THE REAL DETRIMENT AND
LOSS.
WE'RE TALKING ABOUT SMALL
BUSINESS PEOPLE.
PEOPLE BUY 10% OF THEIR GOODS
ONLINE.
WHEN THIS LAW WAS PASSED IN
1992, THAT MEASURE WAS ZERO.
WHO WILL BE HURT?
ULTIMATELY CONSUMERS WHO PAY
TAXES AND SMALL BUSINESS PEOPLE,
THAT WORK OUT OF THEIR HOME,
SELL ON ETSY, SELL ON eBAY.
THEY ARE ONES COLLECTING THE
TAX, HURTS THEM, HURT WHO IS
PAYING IT.
WHO DOES IT HELP?
PENSIONEERS.
THE STATE PENSIONEERS WILL
COLLECT MONEY AND SEND IT OUT
THE DOOR.
THEIR MISMANAGEMENT WILL BE PAID
FOR.
NEIL: CHARLES, I LOOK AT
WORRISOME SIGN MAYBE CONSUMER
SPENDING WOULD BE AFFECTED OR
SLOWED WHEN IT HIT ITS SWEET
SPOT.
YOU SAY WHAT?
>> I DON'T THINK IT WILL AFFECT
CONSUMER SPENDING PER SE.
MORE ON THE ENTREPRENEURIAL I'M
CONCERNED ABOUT.
I THINK JONATHAN IS RIGHT AND
YOU'RE RIGHT.
BY THE TIME YOU GET TO THE FINAL
PAGE, YOU GET TO THE SALES TAX
AND EVERYBODY KNOWS THEY'RE
CHARGING SALES TAX, YOU PROBABLY
HIT THE BUTTON BECAUSE OF
CONVENIENCE PARTICULARLY BECAUSE
OF AMAZON, WELL-OIL MACHINES GET
THE PRODUCT TO YOU IN VERY
CONVENIENT MANNER.
THE ENTREPRENEURIAL SIDE, SETS
UP A MOAT AROUND BIG BUSINESSES
ALREADY ESTABLISHED.
I LIKE TO SEE COMPETITION.
COMPETITION GOT US HERE IN THE
FIRST PLACE.
BY THE WAY TO JONATHAN'S POINT
ALSO, THIS IS RULING AGAINST
MAIL-ORDER CATALOGS ORIGINALLY.
WE WERE SEEING INTERNET FLOURISH
WITHOUT THESE ISSUES.
OF COURSE NOW, THEY WILL STILL