Since 1998 I have dabbled a bit in affiliate marketing and have been a consultant to assist affiliates with their marketing strategies. Don't believe me? Well, just hop in the Wayback Machine and take a look at this page from December of 2000.

Sorry about the eyebleed caused by my daring sense of style but the important thing to note is the fact in this iteration of the website, I had links to eight genre themed virtual stores. Don't worry, this is not one of those "OMG I made $86,000 in a day doing affiliate marketing!!!!1!" sort of posts that is clogging the Internet. Quite the opposite - I hardly made much money on the stores and the other affiliate programs that I was involved with, but rather I had them as a method of adding content to my website. Regardless of the level of financial success, I was getting a lot of people coming to the site since I was ranking pretty high in the search engines for some valuable keywords. I learned a lot about SEO as a result, and the benefits of that education have definitely outweighed any immediate financial gain.

Follow up:

Affiliate marketing programs are almost never an effective mechanism for making stacks of cash, regardless of what the "get rich quick" people say. Oh sure, some people do make quite a bit of money doing affiliate marketing, but most simply do not. I'm not even going to get started on that right now - that's a post for a different day.

So imagine my surprise when I saw this email in my inbox this morning, from Amazon.com's affiliate program:

We regret to inform you that the North Carolina state legislature (the General Assembly) appears ready to enact an unconstitutional tax collection scheme that would leave Amazon.com little choice but to end its relationships with North Carolina-based Associates. You are receiving this e-mail because our records indicate that you are an Amazon Associate and resident of North Carolina.

Please note that this is not an immediate termination notice and you are still a valued participant in the Associates Program. All referral fees earned on qualified traffic will continue to be paid as planned.

But because the new law is drafted to go into effect once enacted – which could happen in the next two weeks – we will have to terminate the participation of all North Carolina residents in the Amazon Associates program on or before that same day. After the termination day, we will no longer pay any referral fees for customers referred to Amazon.com or Endless.com nor will we accept new applications for the Associates program from North Carolina residents.

The unfortunate consequences of this legislation on North Carolina residents like you were explained in detail to key senators and representatives in Raleigh, including the leadership of the Senate, House, and both chambers’ finance committees. Other states, including Maryland, Minnesota, and Tennessee, considered nearly identical schemes, but rejected these proposals largely because of the adverse impact on their states’ residents.

The North Carolina General Assembly’s website is (deleted, because they do not deserve a link from my site), and additional information may be obtained from the Performance Marketing Alliance at http://www.performancemarketingalliance.com/.

We thank you for being part of the Amazon Associates program, and we will apprise you of the General Assembly’s action on this matter.

Sincerely,
Amazon.com

Pardon me? Apparently the North Carolina General Assembly is up to their old tricks again, enacting laws that are unconstitutional. Oh yeah, it is really a favorite pastime of theirs. Before I go into their latest constitutional blunder let me gripe about an old favorite of mine, the North Carolina Intangibles Tax.

The Intangibles Tax was a state tax on stocks held by North Carolinians. Before all you lefties out there that will never hold a single share of stock applaud, please note that I said "held." That's right - each year you had to pay taxes to the State of North Carolina on stocks that you owned. Never mind that you had to pay taxes when you sold stock, or when you collected dividends, or if you inherited them. Never mind that you bought the stocks with money you earned, which meant you paid tax on that as well. Also, never mind that the dividends paid out to investors by the corporations was from money that the corporations... you guessed it!... paid tax. Do you see a trend here?

I paid Intangibles Tax from 1982 until 1995, when the tax was repealed. Did I get any of that money back? Hell no. In 1996, the Supreme Court of the United States rightly and fairly declared the tax to be unconstitutional. In 1997, the North Carolina State Supreme Court ruled (not surprisingly, mind you) that they did not have to refund any of this illegally and unconstitutionally collected tax. What a shock, right?

Anyway, back to the rant at hand. It looks like the North Carolina General Assembly is back at it, and limiting the freedom of their citizens to engage in the common, standard practice of affiliate marketing. Let's take a look at what happens when somebody makes money as an affiliate:

1. They make a little money
2. They buy more stuff, which in turn increases the tax revenue stream to local and state governments
3. The state then makes more money

If the citizens are prosperous, the state's prosperity will follow. It really is a no brainer. Now let's take a look if they enact laws prohibiting this sort of thing:

1. People who do make significant amounts of money will have to move their operations (or themselves) to another state
2. They will be buying stuff, not in North Carolina, but rather in the states that do not unconstitutionally limit the citizens' freedom of enterprise
3. North Carolina loses out on tax revenue, not just from the tax on income generated from affiliate marketing, but since the affiliates moved to another state they are also missing out on sales tax on the stuff they buy and property taxes as well

The net result is the state gets less taxes than if they had left the whole bloody mess alone to begin with. Duh. Even a 10 year old kid has a better grasp of economic theory than the shepherds we sheep keep voting into office.

Obviously the North Carolina General Assembly is composed of people who are the product of the North Carolina Department of Public Instruction. Hey, look at it this way: at least we are at the top... of the bottom half.