Showing posts with label Lying About Costs. Show all posts
Showing posts with label Lying About Costs. Show all posts

Tuesday, September 17, 2013

Amazon: Supporting Ben Franklin's legacy by making one of two certainties more certain

To paraphrase England's greatest prime minister, commercial partners, like nations, have no permanent allies, only permanent interests.

It used to be the case that Amazon was a fairly reliable partner in helping consumers find the lowest cost purveyors of particular products. Of course, it was only limited to those in their network of people selling through them, but this tended to be pretty liquid. For most products I searched for, there would be a sufficient range of sellers that you'd get decent price competition. This is made easier by the fact that once you're comparing literally the same product, it's basically a commodity market - there's some sorting on reliability of shipping and returns policy, but that's about it.

Amazon always privileged themselves slightly by defaulting to selling the item themselves if they stocked it. But it was simple to click on the tab for 'new' and find a range of sellers sorted by the total cost of the item plus shipping, which was what you paid. Problem solved - buy from the cheapest guy, the end.

In other words, as long as you clicked on the tab, Amazon would make it easy to tell if they were the cheapest provider of the goods or not, and the sorting process made it clear how you could purchase the lowest cost item, even if wasn't from them. Amazon were willing to take the hit to some direct sales (though they got some back in fees from the marketplace seller) for the repeat business that came from running a good price comparison service. 

But starting about a year ago, the interests of consumers and Amazon started to diverge. The reason is that for residents of various states (now up to 12) Amazon has to collect sales tax on their purchases. The citizen was always obliged to pay the tax, at least nominally, but in the past Amazon wasn't involved in collecting it. Collection was meant to occur because citizens would voluntarily report the sale tax on their internet purchases to the state (Ha ha! Stop it, you're killing me!). In practice, this made the Greek Tax office look like a model of perfect enforcement.

The loophole, which doesn't get greatly discussed, is that while Amazon is now forced to collect sales tax for its own providers, and for providers in the same state as the purchaser, it isn't compelled to (and in practice, doesn't) collect sales tax for third party sellers outside the state of the purchaser.

So what would a permanent ally do? 

Simple - he'd now sort purchases on total purchase price of Price + Shipping + Tax. That's the end cost to the consumer, let them find the lowest cost item.

But this was apparently a bridge too far for Amazon. This would put their own offerings at a structural disadvantage, and a decent one at that. In California, for instance, the minimum sales tax at the moment is 7.5%. This article claims that Amazon's after-tax profit margin, for comparison, is 1%. Can you see why playing at a 7.5% disadvantage is a game they're incredibly reluctant to play? 

And so we witnessed the internet commerce equivalent of the Suez Canal Crisis between erstwhile allies. Amazon felt that listing the total price would hurt them so much that they were willing to significantly degrade the usefulness of the price comparison function of their website. So they continue to only list cost in terms of Price + Shipping.

It gives me the absolute $#!7s that I can't sort on total cost any more. The only way to find out is to click through various sellers, add them to the cart, see if tax is added on, remove the item if it is, go back, find another seller, and then compare the tax with the difference in price. 

For small items, I won't always bother. But I will always resent the fact that Amazon is deliberately making my life harder for their own purposes. 

To give them credit, Amazon fought damn hard for a long time to prevent the states from forcing them to pay, but in the end, they saw the writing on the wall. Tax was going to get collected eventually, because the bankrupt states saw them as a cash cow waiting to be milked. Maybe I should cut them some slack.

Or maybe not. There are, after all, no permanent allies in commercial transactions. They happily screwed us when it suited them, so I have no compunction in reducing my business to them in response.

I don't know if it's possible, but if someone figures out how to scrape amazon prices for the lowest total cost, I'll direct all my purchases through them.

The only thing that would be even better would be to be able to scale the weight placed on taxes by a fixed amount. I'd probably set it at about 1.1 for small purchases. In other words, I'd rather pay slightly more money just for the pleasure of depriving the State of California of additional revenue.

That's not going to happen, of course, because Amazon makes it hard to just scrape all their data. So in reality, we consumers just have to bend over and take it.

Marketers love to tell you that the customer is always right, but it's not true.

It sucks to spend so long thinking that your purchasing dollars made you Dwight Eisenhower, only to find out that you were actually Anthony Eden all along and didn't know it.

Thursday, May 31, 2012

Heritage Listing is Theft in Disguise

A recurring theme of this blog is that government policies should be honest about what they cost, and who's paying. Few things irritate me more than politicians implementing policies that they pretend to be cost-free, when in actual fact the costs are just being shifted to someone else, or disguised as part of a price increase, or similar such dubious methods.

Another one to file in this category is heritage-listed properties. Some homes have real historical value - period pieces that exemplify a style of architecture, or homes of important historical figures.

So society decides that it wants to preserve those buildings. Fair enough. But how do they do it?

Simple! They slap an order restricting the owner's ability to make modifications to the home.

The home hasn't gotten any more historical. It hasn't gotten any more quaint.

It has, however, gotten a lot more difficult to replace the electrical wiring, or replace the paving in the back, or re-tile the roof, or whatever the hell they've put restrictions on.

Before you had unrestricted property rights over your house.

Now, you're a part-owner of the house, with some government bureaucrat having a part ownership stake that gives them veto-power over your renovation decisions.

So clearly they've taken something of value and paid you nothing for it. How do these thieves justify this to themselves?

Take the New South Wales Office on Environment and Heritage.

What's their justification?
There is growing evidence to support the view that heritage listing has a positive impact on property values, ...
Bulls***, you crooks! Do you know how I know this is a bald-faced lie?

Because no property owner in history has ever lobbied to have their private residence heritage listed. 
... and real estate advertisements are starting to reflect this.
It's the job of real estate agents to put lipstick on whatever turd property they're given. Hence euphemisms like 'charming' (='ugly'), 'vibrant area'  (='boring' or 'terrifying'), 'renovator's delight' (='falling to pieces'). Ensuring that they don't have to deal with disappointed prospective buyers is part of the job, so they screen out the folks (like me) who wouldn't buy a heritage-listed property in a fit.

These vultures actually have the temerity to steal part of the value of your property, and expect you to thank them for it. Talk about shamelessness.

But what are the other benefits they tout?
Heritage listing provides certainty for owners, neighbours and intending purchasers. This is important when people are looking for a particular environment within which to live and work. It explains why certain suburbs, towns, villages and rural properties are sought after.
It provides certainty that you can't add an extra bedroom, that's for sure.
Protection of an item also requires the local council to consider the effect of any proposed development in the area surrounding heritage items or conservation areas. This is positive as it ensures an appropriate context for heritage items.
Your neighbours might soon be in the same hell that you're in!
It confirms a heritage status that is a source of pride for many people. This status can be very useful for commercial operators in their advertising.
It's useful if they've got too many potential buyers coming through, and don't have enough time to show them all around. Drive them away!
The assessment process leading to listing often unearths new information on the history and style of the item.
For values of 'often' equal to 'based on how frequently local government officials go above and beyond the call of duty' (i.e. 'rarely' to 'never')
Through flexibility clauses in local environmental plans, owners of heritage items can request councils to agree to land use changes, site coverage and car parking bonuses unavailable to other owners.
You can beg for some small changes to the nearby area. See how well your requests go down. You sure as hell can't request a land use change for a new apartment on your property.
Listing gives owners access to the free heritage advisory services provided by many councils. Currently 103 councils in the state have such services.
You'll get a free listing on a website, and if you're really lucky, strangers knocking on your door on the weekend expecting your house to be a free museum.
Listing provides potential savings through special heritage valuations and concessions. If the property is listed in a Local or Regional Environmental Plan (individually or in a conservation area) you can request a “heritage restricted valuation” for land tax and local rate purposes from the Valuer-General. If your property is on the State Heritage Register under the Heritage Act, you automatically receive a heritage valuation for both local rates and land tax purposes. Heritage restricted valuations are designed to ensure that valuations of property are made on an existing development basis rather than on any presumption of future development.
When your property price goes down, you'll pay slightly less in property taxes! Score!
Listing enables access to heritage grants and loans through both the NSW Heritage Office and local councils. Listing is generally a requirement for NSW Heritage Office funding.
Listing on the State Heritage Register also enables owners to enter into heritage agreements, which can attract land tax, stamp duty and local rate concessions.
If you decide to actually turn your house into a (completely unattractive) museum, the government might kick in a hundred bucks.
Listing on the State Heritage Register makes the property eligible for consideration under the Commonwealth's Annual Cultural Heritage Grants Program, which is open to both private owners and community groups.
And they give out how much to each person? How often? Are random private property owners included? Want to bet on that?
Heritage listing enhances applications to other bodies where the building or site might be eligible for funding.
In case you want to spend the rest of your life filling in government forms.

This is such egregious theft that I can't believe they get away with it.

You know the Holmes method for heritage listing properties?

Have the government (or even better, a private group) buy them at fair market prices, and preserve them themselves.

That way nothing is stolen. You can also bet your @** that the local council is going to think a lot harder over whether that ghastly 1960s cottage really is such an amazing period piece, or actually an eyesore that nobody wants to pay a cent for.

Until that happens, should I find myself in possession of any vaguely historical property, I'm going to renovate the hell out of it immediately just to make sure that government busybodies don't find it a 'vibrant' example of period architecture. Or just bulldoze it to be on the safe side, and put in a bunch of condos.

Up yours, New South Wales Department of Heritage.