Amazon.com Usurps Process of Direct Democracy to Perpetuate Corporate Subsidy

By Orson Aguilar and Michelle Romero
First Published by the San Francisco Chronicle, July 28, 2011

Editor’s Note: Amazon Corporation is the latest corporation to usurp direct democracy to serve its ends. In its quest to continue its tax evasion scheme, Amazon will be fighting against Walmart Corporation, perhaps the most frequent abuser of the process. For those interested in learning more about corporations and the ballot process, this battle will provoke us to update this recently-dormant page, which offers many background resources. For more on why exempting internet corporations from the tax-collection responsibilities storefront businesses must follow, we suggest this Business Week article from our allies at the American Independent Business Alliance.

Amazon.com, the giant Internet retailer, has decided to put an initiative on California’s ballot to try to evade having to pay the same sales taxes that other retailers pay. As the system stands, Amazon’s chance of getting its self-interested proposal on the ballot is essentially 100 percent.

Something is very wrong with this picture.

Amazon, the Internet giant that began as a bookseller and branched out into other retail, has local merchants up against a wall in part because until now it has been able to avoid collecting sales tax on purchases. That gives it an 8 percent or more price advantage over local stores. So the Legislature, faced with an ongoing budget catastrophe that has forced cuts to schools, universities, parks, care for the elderly and other vital government functions, sensibly acted to close this loophole. Now Amazon plans to buy its way onto the ballot to repeal this reasonable action.

This is just the latest example of how our ballot initiative system – designed by reformers a century ago to reduce corporate influence on state government by giving ordinary citizens the ability to make laws – has been turned upside down.

In the past year or so, we have seen oil companies try to strangle our clean energy law, insurance companies seek to evade state rate regulations, a major utility company try to block local governments from establishing public power systems, and a variety of corporate interests push to make it harder to raise taxes or fees on big companies. That said, Californians rightly value their ability to go to the ballot with their own ideas for new laws. The process can have great benefits, but it’s time to figure out how to put citizens, not special interests, back in charge of “citizen democracy.”

Right now, the system is hopelessly skewed toward moneyed interests. Because of the vast number of signatures required and the short time in which they must be gathered, most initiatives qualify largely or entirely through the use of paid signature gatherers. If you have a couple of million bucks to pay petitioners, you can get a proposal onto California’s ballot. It’s as simple as that.

This isn’t what Gov. Hiram Johnson and his fellow reformers intended when they created the initiative system. That’s why the Greenlining Institute and other organizations have begun to return the system to the ideal of citizen democracy.

Our polling and research suggest several potential reforms. Voters consistently want more reliable information on who supports and opposes initiatives. There is also interest in a formal process for reviewing and revising proposed initiatives, through either an independent citizens’ commission or perhaps the state Supreme Court. And we need to find ways to make the system accessible to true grassroots initiatives, perhaps by lowering the signature count required.

We don’t have all the answers yet, but we’re convinced the system can be fixed.

Orson Aguilar is executive director and Michelle Romero is redistricting fellow of the Greenlining Institute.

© 2011 SF Chronicle