eBay and Taxes


Hundreds of eBay Inc. merchandisers say they have closed their online storefronts, and some took their listings elsewhere, in the wake of a controversial [6%] fee increase eBay began charging earlier in the week.
This is of interest because the same phenomena occurs when government raises taxes. Substitute ‘government’ for eBay and ‘businesses’ for ‘online storefronts’ and it becomes more apparent how economic disaster occurs. What types of businesses are most hurt when government raises taxes?
A list of more than 700 eBay stores that have closed so far can be found on a Web site created by Melinda Burnett, an eBay seller living in Atlanta. The majority of eBay stores closing appear to be the smaller ones, just as eBay had hoped.
“A lot seem to be small, mom-and-pop type places.” said David Yaskulka, the president of Harris Michael Inc. of Valley Stream, N.Y., and chairman of a committee of the Professional EBay Sellers Alliance, the main association of eBay sellers. “These are the less successful ones that see that eBay as no longer profitable because of the rate hikes.”

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