Slashdot Mirror
New Federal Government Stance on Internet Taxes
Aatif writes, "
According to this story on the Washington Post, President Clinton is softening his stance against Internet taxation. Mr. Clinton said the federal government would not interfere with individual states collecting sales taxes on goods sold over the Internet even though Congress is still under a tax moratorium." From what I've heard, my state (Maryland) and all the others are thinking up ways to tax Internet sales. It's only a matter of time before they figure out how, like it or not.
i think internet taxes are a great thing, as they fund the NSA who protects us from digital information hackers. right.
that blows the idea of online car buying to hell. -st
first post! (someone had to do it, i guess it had to be 3 in the morning for me to finally get a first) anyway, i am glad to see things are going this way. even if they decide to tax internet sales, it will be state to state, and since i am in oregon i still won't have to pay! but what if i purchase it in oregon and have it shipped out of state (i.e. as a gift), how will that work?
The constitution (amendments) says the states (not the federal) have the power to tax but not the right to tax (federales have nothing). The constitution also states taxing (hence mail order is supposed to be tax free) across borders is wrong, aka unconstitutional.
In sum. To affect a change in tax the voters must be polled. To raise or enact a tax w/o voter approval is unconstitutional.
Besides the internet is international hence the world wide web sig. therefore no one owns it nor do they have the right to tax it.
And what would be the problem with that? I rather enjoy shopping online.. let everyone elce pay.. I can't believe everyone saying the like the idea of internet taxes... my god *everything* is fucking taxed! Many times over in some cases... don't we all pay enough taxes. Give people an incentive to start shopping online so other bussiness can get a chance. *please* don't tax the net!
Everyone resents taxes (me included) but if you want to have prisons, roads, health regulation (do u like asbestos?), justice, defence and some income redistribution, you also need money with which to finance these activities.
I live in NC and they already decided to invent a "use tax" that somehow you are supposed to pay taxes for purchases made online, through catalogs, etc. Oh well, fuck'em. I send at least 1/3 of all my money to Mexico anyways. I'd rather send it to family there than pay taxes on everything in this hellhole. It's stupid that there are taxes on everything, even if you already paid for it and own it. It's also pretty stupid that there are sales taxes on food. In a lot of situations here it's basically the state government robbing from poor people by forcing them to pay taxes on everything. Not everyone wants to degrade themselves to going on welfare.
:oD
I think the tax system in the U.S. needs looked into. Isn't the unfair taxation one of the reasons why the colonists got pissed at the British? Reform the tax system. Bill Gates can pay for us all.
Whats the big deal about internet taxes? The internet isn't some other world divorced from this reality, its just a bunch of computers connected together and ironically was funded by taxation during its inception. You pay tax on stuff you order down the phone so why complain when you have to do it using a computer. Ones audio, ones visual, other than that theres no difference. Stop whining and grow up.
I posted the similar comment above...I agree that it's stupid. I am putting $0 on mine. I wouldn't mind paying taxes if they weren't wasted so much. I think that the governor should live in welfare housing, eat ramen soup 2 out of 3 meals a day, and have to live like a bum. We pay a lot of taxes in NC yet: - Schools are run down and hazardous. Often they ship in trailers to take the place of classrooms since they don't have enough money to build bigger schools and repair the ones they have. - The roads are in bad shape, often being in "construction" for 10 years or more, while a skyscraper can be built in a couple months nearby. - The police are corrupt (Except Gerald Hege. :o) ) In Winston-Salem the sherriff hires his family members to get them off the street. This would not be so bad, except his son wounded himself with a gun so he would not have to work and get disability, then lied about shooting himself. - Tobacco is the messiah, money is the god. I don't think a state who makes the majority of their money from selling drugs to people, then turns around and bitches about alcohol, should be allowed to exist. Yet everyone is up in arms about the high taxes on tobacco products, but at least you can easily buy them. If I want to get a bottle of rum or tequila I have to go to a special "ABC" store to get it. There's plenty of other things, but I believe that it's a lost cause. I just need to find a better place to live, then find a job there and get the hell out of the south.
the reason you can buy stuff cheaper online is because they are selling at a loss!
Not to worry. They'll recoup their losses by showing banner ads for the other e-commerce sites.
:-|
I started nodding and agreeing with you. Then I realized I do my online shopping because I find what I want online. Rather than depending on the locals for their interpretation of what's right, I get choice on the Internet. For equal money, I'd rather shop online, and leave the Mall forever. Now, if some of these mail order firms could put a warm body at their end, instead of order takers.
The book The Sovereign Individual makes a good argument for the idea that strong encryption has the capability to take transactions outside the reach of taxation. It won't happen with retail consumer purchases any time soon, but large contracts between corporations or between corporations and individuals may go that direction. Read the book and think about it.
I don't know about e-commerce in general,
but the government should definately tax slashdot.
The city council of my town has a rediculous tax. Its called 'Use' tax. Which means, if you buy something from outside of the town, and bring it into the town here, and USE it there, you owe TAXES on that item. They even went as far as to send out little 'invoices' so you can list all the items you bought elsewhere, to pay their stupid tax. No one I know actually PAYS that. Idiot law makers taking even more of my money. I think I'll move to Alaska.
Yes, but don't you Norse countries get free Medical, free Education, and the such?
Yes
This article and the rest of the constitution has been suspended. So your argument is moot.
President Clinton never saw a tax he didn't like, so he is encouraging the the state governors to enact an internet sales tax. By using the state governors, the tax doesn't have his name attached to it, and the tax is in place before a new President is in office. This preempts the (possibly) non-tax policy of the new President and insures more pork for distribution.
i don't care about internet taxes. i only care about taxes on pouring hot grits down your pants. thank you.
Forget the right or wrong angle on the Internet Tax scheme. It's bad business. eCommerce (ouch) is driving economic growth in this country. Web site creation, hardware, graphics, education, media, journalism, construction ( and many many other areas)- all have new growth thanks to the ecommerce craze. It's about as foolish as you can get to throw a wrench into the machine driving the economy. Especially when higher empl;oyment, new business, etc. already result in tremendous tax gains for states. The idea that Taxing eCommerce purchases is somehow inevitable is a failure in itself. Only vote for candidates that stand where YOU stand on the issues YOU deem important. I guess what I'm saying is that Nothing is inevitable except death - not even taxes.
I've been driving on the roads in my state for _years_ and there haven't been any taxes on the Internet. What is the benefit of changing this now??
I think they can deduct their losses from their capital gains from somewhere else. Since corporate cap gains are a killer, it's a way the company "saves" money.
Too bad guys... Here in Texas a few jump-the-gun reps have already banned internet taxes. U guy we;ll get a nice little boost in e-commerce hq's & warehouses thanks to other state's need for greed. Perhaps because we already have high sales taxes around here (about 7%), and we have to deal with the City Of Houston tacking on an extra 1%. That is why I don't buy my computer stuff locally..
to get your delivery to them (if your selling product). Also if you travel, you get police/fire protection wereever you go..
Great idea! Now, have you budjeted the fleet of tug boats and barges you'll need? You do know, don't you, that if all merchandise isn't also shipped from the offshore site, it's taxable whereever it ships from. If, say, your business has a local presence then the tax laws apply.
I wouldn't worry much about it... he's a lame duck. Anyone know McCain and Bush's stance on Internet taxes? I hope McCain takes a good stand on the issue since I wouldn't even hit Bush in the ass with a dictionary much less elect him President. Al Gore is of course a wooden statue and has absolutely no chances of being elected. Mark my words! Republicans will sweep away the 2000 elections. Hopefully McCain will be the nominee though since he appeals to many more people than the Pat Buchanan sucking Bush.
you're right - they just don't get it, and if you want another great example, many members of congress don't even have e-mail addresses. but they think congress can make laws about the internet.
I realize this a little late, but I'd like to challenge the claim that we pay 50% in taxes. Every year, I add up how much I pay in taxes. It's easy because we don't have a sales tax where we live so it's income(state&federal)+property. I always end up at about 27% of my gross income. I know that people who arrive at the 50% figure look at their income after all deductions, but most of those deductions are there just to reduce taxes. For example, every time I do my taxes, I think to myself what a complete scam home ownership is. The taxes we pay are nothing compared to most other civilized countries.
The U.S. Gov. can tax and control nearly anything in the U.S. under the Interstate Commerce Act. It's meant more to protect business but in the case of taxing the Internet it will be hurting the e-business, and helping the brick-and-mortar business.
for every dollare spent on the Net that's one less taxable dollar going to keeping things running.
The (taxable) Internet has only been around for five years. We haven't had a World War in five years, looks like the threat has passed.
I can't believe that someone came up with this idea. The great state of Texas converted for use on the Internet. Does anyone have a URL for this yet? I am totally stoked! Put me down as pro Internet Texas!!!
The web and internet stores operate around the globe. I, in the US, frequently buy from CD Japan. Be it net taxation, or regulation of internet conteny, the CDA, or IP law, why of why do legislators constantly pretend that the internet is a wholly US owned and controlled entity? The net needs to be treated like international waters, and netizens surfing it like individual ships at sea.
ALL sales taxes should be banned! Then there will be open competition between all retailers, regardless of whether they are local businesses, catalog/mail/phone, or web based. Businesses will be competing over convenience, selection, and price again.
"took an amendment to even make income tax constitutional"
Yeah, that was truly a disaster. At the time, the people opposing the amendment were worried that the top tax rate might one day hit 10%.
In that context, it's remarkable to hear people b*tch about Reagan dropping the top tax rate to 33%.
Damn! They've already won....
"Taxes are inevitable, so..." errrm...WHAT is inevitable? Something done to us against our will? By someone more powerful than we are? Gee, isn't there another word for that when it's done on an individual basis?
People who complain about campaign reform, and corrupt, for-sale government don't stop to consider the 'why'of this. Government is for sale because they have something to sell. The more the gov't can tax and regulate the net, the bigger their "product line". And all that nouveau net money will be diverted from buying tanks, mansions and personal hovercraft to....well, the same place oil money, media money, tobbacco money all go. And all in the name of the common good...VERY nice scam.
I think it is a VBT to concede that this is the way things have to be. Or, to put it another way, "to lay back and enjoy it."
Dr.G
"But does Schroedingers' Elephant have the Bhudda-nature?" Basho
It's remarkable you think restricting speech about a trial makes the trial (baffling???) more fair.
.sheesh. Don't you realize that most virii and bacteria die in sunlight?
I presume criticizing a judge's ruling in the press is against the law as well. .
Yes, it really is a wonderful system. It's just a shame so many of you kill yourselves. Without using guns, even.
As an aside, you can argue increased globalism makes the probability world war very unlikely.
.they might be wearing boots.
Of course, one shouldn't do this around any knee-jerk progressives. .
You're assuming that everything bought online can be bought locally. This is not the case. Example: No-one in my area sells high end Tyan motherboards. If I want the board, I have to purchase them over the 'net.
Kentucky, population 4 million, has 120 counties. Somehow I don't think you're going to get the U.S. down to 10 states.
"Why should two people living a mile apart be subject to two different sets of laws just because they are on different sides of some arbitrary state boundary?" For the same reason that two people living 100 feet apart are subject to different laws just because they live in different towns? Or are we planning on abolishing all local government right down to the municipal level?
One: As far as the customer waiting for service after making an email request, it is probably possible to move this function from email to something like IRC, so that it is more like a customer phoning into a call centre for assistance.
Two: At as far as Canada goes, the income tax system penalizes people for saving money. Which is why I would like to see income tax eliminated and go to a constant (for everything, no exceptions) sales tax. People who save money would not be penalized. Mind you, the sales tax would end up being quite a bit higher than this 7% GST plus PST we have now across our country.
Some kind of rational tax system has to come out of this, internationally not just the US, or just the ECU, or .... This is probably something that has to grow out of the WTO. Either they make a policy that taxes are paid on jurisdiction of seller, or jurisdiction of buyer. But you can't have both, it is just too much of a hassle.
"The Judge can be critisized."
The judge can be criticized after the trial like he cares.
"This stops the media making the decisions."
Ummm, show me one example of the media making a binding legal decision and I'll agree with you.
"There is no restriction as to what can be said inside court."
This is bullshit. I wonder what would happen if I called the judge "your highness" after he or she got snotty. . .
"Without this people will discuss things on TV and it all gets silly."
While I agree, I don't believe it generally affects trials (+ or -).
"The court needs to be unbiased by outside influences."
This is just plain stupid. Presumably, any court staffed by people will reflect the baggage those people bring with them. In other words, it's impossible (IMO unnecessary) for a court to be unbiased.
"Trial by media is so bad as they will go for the sensational angle everytime. Surely this is obvious!!!"
While I generally agree the media goes for "the sensational angle everytime," it's also obvious that this sometimes benefits the defense and sometimes benefits the prosecution. It's also obvious that *most* of the time it makes little difference to the outcome of the trial.
Of course his "tried and untrue" quote makes sense, especially to an native English speaker. "Tried and true" is an idiom that indicates that something has been tested and found to be good. His play on the idiom indicates that he thinks that internet taxes have been employed somewhere and been proven not to work. I think if you'd actually listen to people who disagree with you, you'd find that they speak the same language you do. Or is your difficulty that you just won't see that he left out the "an" before "approach"? Sheesh, slow down that knee-jerk before you do someone an injury.
The first problem with sales/consumption/value-added taxes is that they are inherently regressive. The lower your income is, the greater the percentage of it you spend on consuming goods and services. Therefore, your effective tax rate increases as your income decreases. Even if you exempt basic necessities like food, clothing, housing, etc. it is still hard to argue that it is fair.
The second problem with replacing the income tax entirely with consumption taxes is that the rate would have to be significantly higher than an income tax rate capable of generating the same amount of revenue.
"Suppose I live in Georgia and buy a book from a reseller in Oregon. This weakens my tax base here, so taxes have to go up..." Hmmm, I suppose that means that you ought to pay a tax when you read something put online by Project Gutenberg?
What other "civilized countries" pay is irrelevant. You are forgetting gasoline tax, vehicle registration tax, vehicle insurance tax, and excise taxes on merchandise.
Then you can start with the taxes you pay which are built into the price of everything you buy: corporate income tax, inventory tax, capital gains tax, income taxes on dividends, payroll tax, medicare, social security, electric utility tax, "use tax" for your telephone and cable, fuel tax for natural gas and taxes on your water utility.
You also pay medicare and social security in addition to income and property tax from your paycheck. If you have any investments, you pay capital gains and income tax on dividends.
Later, if you have anything left to give your family, they pay over half of everything you owned IN CASH as inheritance tax.
Most people pay taxes at the Federal, State, County and Local level, as well.
Deductions are NOT there to reduce taxes. They are insignificant in the overall totals.
It is not inaccurate to think we pay 50% in taxes. I would guess if complete figures were available, we pay even more.
The best part is: the government is running a surplus, and there are elected representatives who are able to convince Americans that they shouldn't get a tax cut. Its a real shame.
But it will change soon. The voters are getting tired of hearing the same song and dance about tax cuts benefitting "the richest Americans" when they see 1/3 to 1/2 of their paycheck vanish into thin air every two weeks. I know I am.
There should be an immediate, across the board 30% tax cut. The tax code should be repealed and replaced with something that makes sense so I don't have to hire a PhD in mathematics to do my taxes every year, and there should be a Constitutional Amendment that if the government runs a surplus, it should be immediately returned to the citizens.
With any tax system, the same question has to be answered: who do you want to screw over? To generate the same amount of revenue as any given progressive rate system, a flat income tax will increase the tax rate paid by those with incomes below the break even point. So a flat tax is nothing more than a reallocation of some of the tax burden from upper/upper middle classes to the lower/lower middle classes.
Is that fair? Some people think that it is fair to make lower income people pay their share, but I personally don't think so. I do believe that government taxation and spending is out of control, but I'm in favor of a reduction in each marginal tax rate and keeping a progressive system. What is so unreasonable about expecting those who benefit more from the economic system to pay more?
...Jordan fades back..
SWISH
...AND THAT'S THE GAME!!!
Reminds me of the Senate impeachment trial when some Senator "objected" to something stupid, and the CHIEF JUSTICE OF THE SUPREME COURT OF THE UNITED STATES said...
"Your objection is overruled."
Now THAT's "closing the door."
I certainly hope the states use this Article, along with the 10th amendment, to keep the Federal Government out of this whole issue.
If we eliminate the income tax, how shall we pay for government? Even if we agree to eliminate enough government services and functions to cut the federal budget in half, it still requires WAY to much revenue to be collected through duties & tarriffs. Do you propose creating a new national sales or value added tax as well to make up the difference?
Besides, what is so fair about taxing international trade? From the citizen's point of view, tarriffs and duties end up being equivalent to sales taxes, only on selected goods. Also, imposing significant new duties and tarriffs would effectively cut off our nation from the rest of the world economy and throw the brakes on economic growth as a result.
Don't you remember the last time the government tried shifting some of the tax burden from income taxes to import duties? The passage of the Hawley-Smoot tarriff act at the beginning of the '30s was largely responsible for the Great Depression. Implementing similar duties/tarriffs today would have a much worse effect since our current economy is far more dependent on trade than the economy of the '20s and '30s.
Fine. Get 2/3 of both houses of Congress and 3/4 of the State Legislatures to agree with you and you can put your grocery list in the Constitution.
The Constitution is the law. It is the standard by which all other laws in this country should be measured. I would hope that all Americans would want to keep it that way. I do.
Out of state mail order sales are not taxed. Why should internet sales be? If they tax them, I'll just call the mail order line instead of using a secure online ordering method.
And we don't like their kind 'round here, do we? C'mon boys, get 'im!
Michigan does this too - their bullshit "use tax" where you are supposed to claim and pay taxes for everything you buy online or by mail order, etc. Made a big deal of it in our tax forms, too...
Just ignore it. They steal enough of my money as it is, they're not voluntarily getting any more from me!
That is true, but...
I think most people in this country would prefer to pay all of their taxes through a single, simple tax mechanism. Why not eliminate all consumption, property, and usury related taxes altogether and implement simple income taxes without all of the myriad loopholes.
What purpose is there in maintaining thousands of separate mechanisms for collecting taxes?
But what about goods that are sold within the same state? Why should online purchases be exempt, while mail order isn't? The only difference is the way in which the order is placed. Any good sold within the same state, regardless of the method of sale, are fair game for sales-taxation by that state. Mail order sales are only tax exempt when the buyer is in a different state as the seller... just like the Constitution commands it to be. If the Seller has a physical place of business in the same state as the buyer, but the sales order is being placed to one of Seller's business office located in a different state, then the state of the buyer has the right to tax the sale since the Seller does have a physical business point of presence in that same state and it's really the same thing as if you'd visited that place to make the purchase. Online sales should be no different than mail order sales in that regard.
If you consider taxation a "revenue stream" you're already too deep into the forest. Ya know, all those trees and such.
Unfortunatly, I will have to pass any cost increase along to my customers. I have a Tiedye business and I offer my products at the lowest cost I can. If I have to pay more taxes on my products my customers will sadly suffer.
Same thing happens when the government decideds to raise items like minimum wage. The cost of higher priced labor gets passed along to the customer. If you examine this you will notice the never ending cycle of too much government.
John Hines (Sculpy)
http://www.tiedye.org/
Weefcraft Custom Tiedyed Apparel
"Yo, yo! I got one, teach!!"
"And what would that be Mr. Gregory?"
"Since everyone sees that government, via our corrupt electoral process, is for sale, would it not be a viable meme to view taxation of the Internet as an expansion of the government "product line?"-a way to get at that nouveau silicon money?"
"So you would, in this meme, view laws, regulations and taxes as the 'product'? i.e.: what the government 'sells'?"
"Well, actually, the government most frequently sells mitigation, you know, releif from the effects of its' efforts."
"Hmmm...yes, though there is certainly plenty of direct-benefit legislation that positively affects the profitability of certain businesses..."
"ANY group!! People who are trained to teach left-handed dyslexic Inuits will lobby for the government to 'do the right thing' by that needy group. Only a cynic would note that the 'right thing' in this case involves hiring people trained..."
"Don't interrupt! Also note that by sheer incompetence, or deliberate, sound-good vagueness, many laws generate huge compensation for lawyers, and a lot of that money finds its' way back into the campaign chests of the authors of the bad laws...this is indirect of course...very good, Mr. Gregory. So your proposal for the Top Ten List would be-"To expand U$Govenment, Inc.s' product line"...
"What do you think of the business/gov't meme?"
"It is in no ones' interest to view government action in this way...I don't think it will fly."
"Shit."
Dr.G
"But does Schroedingers' Elephant have the Bhudda-nature?"-Basho
Various jurisdictions have been bellyaching for years about the "money" that they "lose" by not collecting sales taxes on out-of-area sales. The Internet is just an extension of the catalog sales problem, from their point of view.
....
Most states have a law that says you have to pay sales taxes on out-of-state purchases. This includes driving across the border, as well as catalog and Internet sales.
If they were serious, the states would simply subpoena the transaction records of Visa and MasterCard. Then they could simply look for out of state purchases and send a bill for sales taxes owed.
It'd be interesting to hear the screams
Import duties assessed at the Port of Entry funded our government for the first hundred years. Income taxes didn't happen until about 1910 with the passage of an amendment. Sales taxes are also relatively new.
The fun thing about the income tax is that it was pitched as a way to hit the wealthy. Just a few percent, for the 3% richest families.
The pitch still works, doesn't it? You never learn. And this is happening at a time when all govts at all levels have more revenue than they can spend.
The old style retail merchants better watch out for the law of unintended consequences. Because states get no revenue from internet sales, they aren't doing much to boost them. Wait till they become a cash cow, imerchants will get the tax breaks and other goodies the brickandmortar crowd now have all to themselves.
When someone buys something for $100 on the internet, it automatically reduces the sales tax received by the government. The $6 (or whatever) received from the internet sale replaces the $6 that would have been received from the local sale.
No, it's comparing the entire economy to the single good case that's a logical fallacy.
If someone steals the software, it does not mean that they would have bought it. If they pay for the software, it means they don't buy something else--other software, bananas, caonsumption in the future, whatever.
In the case of an internet sale, it means that they don't buy something else--somewhere, someplace.
The differences is that piracy involves a single industry getting/not getting money, while an internet sale displaces the same amount of *something* somewhere (at least to a first and probably second order approximation. I'm not about to get into full equilibrium analysis in this type of forum . . . but such an analysis would reveal that the internet sale probably slightly increases the size of the economy).
That said, no one has yet to offer a tax code that any consumer will be treated fairly with. The two biggest questions are "How do you validate whom you are taxing?" and "Who gets the taxes?".
The first is difficult from a technical viewpoint. I've yet to see any specification or protocol or method to 100% positively ID who is buying the goods. Credits cards are close to 100%, but not perfect. There's too much at risk to assume that the current methods will accurately tell me who is buying something on my website, where they live and thus how much to charge them. And what about oversees people?
The second is very political. As others have pointed out, Oregon has no sales tax. Michigan, on the other hand, has a ~6% sales tax, plus they want to collect "use tax" for out-of-state purchases. So if I bought something from an OR based company, what tax do I get charged? IMO, you should pay the sales tax to the state that you bought it from, but other states will cry foul as industry will relocate to states with no sales tax, dragging away people and money from other states.
At least to this end, the fairest solution as I see it is to have the nat'l gov't determine a nat'l sales tax on internet sales, the rate set as being the population-normalized averages of every state. This will probably be between 5 to 6%. All domestic internet sales will have this tax, collected by the national gov't. The money is returned to the states based on the population and sales tax of the state. Thus, in the above scheme, OR will get no returns from this, while I'd expect CA and NY to get rather significant chunks.
In line with that, two other things have to be done: first, all mail order and otherwise all transactions not done in person need to be taxes via this method, instead of the usual method for mail order. There is no difference from ordering from the internet as there is from ordering from Eddie Bauer over the phone or via mail. Second, all states must abolish any "use tax" clauses; they already tax purchased items twice and should not be legal assuming the above was put into place.
I know this isn't the best solution, but it is probably the most practical and easiest to implement while still being fair to the states (and cities too for those that have city sales tax as well).
"Pinky, you've left the lens cap of your mind on again." - P&TB
"I can see my house from here!" - ST:
Based on what I know, the proposal that a lot of states are considering is that devised by the National Conference of State Legislatures' Internet Taxation Task Force. You can read a copy of their "'Zero Burden' Sales Tax Proposal".
The main aspects of this plan are:
Bob Kopp
--
That argument is a logically fallacious as the arguments put forward by the "anti-pirating" lobby.
Why do you assume that everything that is bought online would be bought locally if it were not possible to buy it online?
This simply does not follow. Do you honestly think that the government is going to say, "Oh good, we have all this tax from Internet sales, let's reduce standard taxes"?
Of course they won't. They will take all you give them, and more. This is another government attempt to yet another bite out of our collective ass. The people must say no, and say it loudly.
>>I buy a book worth $50 from Amazon.com. I pay 25% VAT of both the book and the shipping at the time of delivery (appr. $50 + $6 + 25% = $70).
In Germany, if you order something to your home address, you usually dont have to pay VAT or any duties. I have ordered books for 100-200$ and hardware for 50$ from the US without paying anything. However, if you use a a business address as shipping address, you will always have to pay a lot (VAT, import duties, stuff like that), and this can be up to 50% (that I paid for 4 T-Shirts from copyleft).
You're almost right. In Germany you pay 6% VAT for food, books and other dead trees and 16% for everything else.
The optimist in me makes me take a look at the bright side of internet taxes as each state scrambles to take a cut of goods crossing their borders:
It will put Amazon out of business.
The bad side:
It will put most other internet shops out of business too. I can say goodbye to all the nice hardware I buy on a whim and no more greeting the nice fedex and UPS guys who bring me big boxes full of computer toys.
Now, IF the fed decides to make a "bandwidth tax" or a "transaction tax", which is what some are proposing now, that is a breech of our constitution"
A tax on our internet bandwidth would effectively be a tax on free speech.
Imagine getting taxed on a popular web page. Say you are a member of a local band who enjoys sharing some music. Even though you want to give away the music for free, that bandwidth is going to be taxed.
It adds up. Free speech is going to be costly. Disadvantaged people will not afford to express opinions or go to jail for tax evasion.
Goods sold within the same state via any means (with certain exceptions - YMMV by state) are subject to state taxation.
I live in WA and if Amazon _didn't_ tax my purchases, they would get in big trouble with the WA Dept. of Revenue.
This has always been the case, just as with mail order.
-- This and all my posts are in the public domain. I am a lawyer. I am not your lawyer, and this is not legal advice.
OK folks, Maybe my threshold is set too high here or maybe I have been too busy to pay attention, but did Congress and 3/4 of the states of the union ratify a constitutional amendment which obviates Article 1, Section 9?
That article clearly states that, and I quote verbatim: No Tax or duty shall be laid on Articles exported from any State.
What part of this is ambiguous, and what part does not apply in this situation?
Not only that, but just below, in article 1 section 10 (Powers prohibited of States) it clearly states that No State shall, without the Consent of the Congress, lay any Imposts or Duties on Imports or Exports..
BTW, A1S9 is subtitled 'Limits on Congress', which means that Congress may NOT deviate from this legally unless the constitution itself is amended!!!! Therefore Congress can't grant those rights (A1S10) because they are not authorized to (A1S9), again, without an amendment to the Constitution itself.
What is so hard to understand here? And why get worked up about it?? This pops up occasionally, and it really shouldn't as it's much ado about nothing until the amendment is proposed....
Your Working Boy,
The issue with internet taxation is whether states or other taxing entities can force out-of-state retailers to calculate and withhold the tax for them. Here the answer is clearly (at the moment) no, unless the business has a physical presence in the state (same as with catalog sales). Of course, without help from the retailer, the states have a hard time collecting tax. But just try to buy a car from a dealer in Oregon (with no tax) and import it into CA without paying CA sales tax. It doesn't matter how the sale takes place.
In my opinion, the answer, given the increasingly difficult enforcement of sales taxes, is not to change the law to put the enforcement burden on (often small) private businesses, but to eliminate sales tax in favor of a more straightforward, progressive taxation system such as income tax.
Please don't get me wrong, I'm opposed to taxation of Internet sales, but I'm very much in favor of the states getting some of their Constitutionally guaranteed power back.
So? This is a federal system, under which it is (supposedly) assumed that public problems and needs differ from region to region. This way, the system is flexible. The states' rights have been declining steadily for quite some time now--it's high time we got some of that back.
There's really no reason for things to be uniform other than some people don't like the world to be all messy-like. Should we get rid of time zones because they aren't globally uniform?
States are a good thing; and we have already gone way too far in implementing centralized governments. I don't know where you live, but if it's more than about 40 miles from where I live, you have completely different concerns and needs than I do. Even within a single state, there are wide-ranging differences in needs.
For example, if one part of a state has a big seaport, it is very likely that their industries are almost entirely related to shipping. Meanwhile, in another region of the same state, logging is the most important industry. In yet another part of the state, heavy-duty manufacturing is king. I can guarantee that these people don't like having laws imposed on them that make sense on the other side of the state, but hurt everyone where they live.
In addition to all this, there are cultural differences. Texas has a very different culture from Delaware. These people have widely different beliefs; a federal system allows people to keep local culture and beliefs while still entering into a beneficial governmental structure together.
Far from being an anachronism, until you can get rid of the variation in natural resources and industries from one region to another, and eliminate cultural diversity and personal beliefs (which is a frightening and dangerous proposition, IMHO), local governments are a necessity.
Well, because laws have to be precise; people have to know what's legal and where it's legal. Unfortunately, "You seem to be a Dubuque kinda guy, therefore this law doesn't apply to you" doesn't really work. Just one of the necessary evils of the system.
There's also a vast cultural difference between a lot of states in the US - think of the difference between California and Kansas for instance. The cultural gap between some US states is far wider than it is between many different countries across the world.
I really see that as necessary. It just happens and there is nothing that can be done about it. The federal system is just a way to be flexible about these differences.
Whilst the Constitution guarantees certain rights across the US there are a lot of things equally important to the welfare of a country, such as education, which are decided on per state basis which IMHO isn't right.
Here, I really have a problem: I don't believe education is a responsibility of government. Government can only do those things which are public. Education is very much a private affair.
Of course, the result of our education system is, "a horde of illiterate savages." This is because our system makes cattle out of children. We treat them as if they were parts on an assembly line: a little poorly understood mathematics slapped on here, a bit of physics (also poorly understood) there, and you have the average American dolt. Education is personal, not public. It is entirely in the care of the parents and children themselves.
$0.02 tax for using email/webmail
$0.05 tax on isp dialup
$0.01 tax on memory used by your perl script
$0.15 tax on large software d/l's (ala gnu)
$1.00 tax for trolling /.
Honestly, I think government's will start taxing isp's, which will in turn bring up isp prices. Either that, or credit card portal's on the net and banks will be forced to place a tax on any online transactions.
Screw this internet, I'm starting my own one.
EraseMe
.. or it will just push up server collocation, and everyone will run their servers out of the Christmas Islands, or anywhere offshore to avoid sales taxes. Found any good gambling sites running out of the States lately? (hi Starnet!)
;)
Hmm, good idea for a business plan right there. IPO anyone?
EraseMe
But what about goods that are sold within the same state? Why should online purchases be exempt, while mail order isn't? The only difference is the way in which the order is placed.
--
bgphints - internet routing news, hints and ti
How are purchases made on-line different from purchases made through mail order? Aren't there already regulations for that in the US?
--
bgphints - internet routing news, hints and ti
So take the right pill and read Goldstein's book again.
Stuart Eichert
Stuart Eichert
The best way is for the government to pay the
debt and then think about cutting taxes.
Cutting taxes while we're in debt over our
heads will trigger another Reagan style deficit
to jack up the dept higher yet and force some
more tax increases down the line.
Those republicans sucking up to us with big
promises of tax cuts are opportunists assholes.
They talk about a simple tax, most likely
replaced by a tax like the TPS in the Great
white north or like European TVA to clean up our
wallets. That flat tax bullshit would end up
costing us more than our current income tax
system. Luckily the jerk promoting it is history
for now, we're left with McCain the national hero
and Bush the one who sucks up to the fundies.
If you look at who are asking for the internet
taxes, for the most part republican governors.
Sales tax doesn't affect big earners much but
we in the middle are getting screwed big time.
You may not care about how much other countries
pay compared to us but you should realize that
we got it good. Having worked for a few years
in a high tax country I know how little tax
we pay here.
6% sales tax is a joke compare to 15% or 17%
or more as in Canada and Europe.
It's Pat Robertson, no Buchanan. Buchanan is
the idiot polititian while Robertson is the
fundy idiot.
The republicans don't like McCain so he's
not going to be nominated.
As for Gore, unless Bush wakes up and tells
the fundies to go back to their cages, Al Gore
will win in a lanslide and with a nice democratic
congress and senate.
If for some mysterious reasons Bush would manage
to win, republican asses will get kicked out
of the congress to force a check and balance
to keep the president in line.
1) Because all those people online are having FUN! The people who are NOT online can't stand it and want to put a stop to it.
2) To generate funds for a manned mission to Mars.
3) To increase certainty and stability, since the only things you can depend on is death and taxes.
4) Pay off the hugh US national mountain of debt - of course investors in T-bills won't like having their taxpayer "pay or go to jail" backed high grade securities, bonds and debt obligations retired.
5) Bread and Circuses for all!
6) Military buildup for upcoming nuke war w/ China over Formosa
7) Funds for free health care
8) Expand White House summer intern program
9) Because everything is taxed.
Finally, the top reason to tax internet deals:
10) To fund the final stages of the US shift to global socialism, where there are no possessions! No work or need to compete for a living! Everything is free! The lion lays down with the lamb, and peace, harmony, sibling love and understanding comes to all, bombers turn into butterflys - This is the dawning of the Age of Aquarius...yada dada dada dada da.
try { do() || do_not(); } catch (JediException err) { yoda(err); }
I believe the point of the original poster was that tax should be paid on all sales, regardless of medium, not that it would be very good for the government to get more income through taxes.
From a programmer's point of view, I applaud this attempt at introducing a little consistency into taxation, whatever non-altruistic motives may be behind it. It seems as if each new government creates benefits to counter the lasts governments raised taxes, making the legislation a kludgy mess.
Oh, and for the "They will take all you give them" and "The people must say no": In a democratic country, you deserve your own government.
Would something like Freedom.net allow you to get around this whole internet tax thing by concealing the physical location of the point-of-sale?
Work is for people who lack the imagination to play.
I absolutely agree with your last statement. Being from the UK and now living and working the USA, I know how awkward the whole sales tax thing seemed to be. It'd makemuch more sense to have the tax incorporated into prices like it is in the UK (called VAT - Value Added Tax .. value added?? whatever..). Over there it's 17.5%, which sucks and everything in the UK is too damn expensive anyway. But at least the tax is incorporated within the actual price on the shelf, so you don't get that little 'surprise' at the checkout. I found that confusing and a bit annoying when I was first visiting the USA.
.. but hey, simplistic is sometimes just what's needed!
A flat rate for all taxable products sold would be the best and would make e-commerce providers (which is where I work) lives FAR simpler. At least the system has been seen to work for other countries. Yes, the UK is smaller but if everyone agrees on it (there's the kicker) there shouldn't be a problem.
If there was a flat rate (for net tax and sales tax in ALL states, no exceptions), couldn't the states collect it in the same way as they do now too?
I don't know if that's too simplistic a view
--
Delphis
Usually, the tax is dependent on where the product is shipped.
-- Don't Tase me, bro!
I recently bought some software from a vendor on the Internet. Everything, including delivery and payment, was done on-line. I expect this will become much more common in the future as information content, such as audio and video, is separated from transport media like CDs and DVDs. What will the tax man do when anyone can buy a copy of the latest movie by downloading it over an encrypted connection from a virtual video store in Hong Kong?
Mea navis aericumbens anguillis abundat
There are 2 pre-requesites to becoming a senateor or representative in local/state or federal governments.
1 - Be corrupt, if you have any scruples at all, you think that things should be fair for all or if you look to root out special intrests then you will not be allowed to run for an office, corruption is a requirement.
2 - Stupidity. You also must be dumber than a stump to be a government official. Let's see: we have sales tax, when someone mail-order's or phone order's the EXACT same thing happens to the order and taxes as compared to internet orders. there are LAWS already in-place to address this, yet our people that are in office are so stupid or retarted (Excuse the insult to retarts, politicians are more mentally ill then the mentally ill) that they cant see that an existing law is in place and works.
What will come of this? a bunch of morons will grin about the fact that they can steal money from more people! Hell institute a tax on taxes paid for taxes! we can quadruple taxation! why dont we tax taxes on content. if a site actually has content viewers pay a content tax, then sales tax on the content tax.
And they wonder why federal buildings get blown up. the only hope is to either ignore these idiots and their laws, or move you e-commerce site out of the country.
Do not look at laser with remaining good eye.
This is something you have to decide for yourself. When it comes to books, T-Shirts, etc, I will purchase them online. I am not concerned that the item will be defective or bad. Computer parts, on the other hand, I will only buy from local shops. I don't want to deal with the hassle of returning bad parts via mail. I am lucky in that I have a local parts store that sells computer parts in competition with the online dealers, so I end up getting a good deal because of where I live.
Even if you don't count tax, right now most online prices + shipping is about equal to the price of the same item in a store. Online stores don't spend money shipping stock to stores before it has been sold. They don't have to contribute any cash to paying some guy to vacuum a showroom floor everynight. I really don't think this is going to make too much of a difference.
Bad Mojo
Bad Mojo
"If you can't win by reason, go for volume." -- Calvin
Constitutional or not, I know that in MY state, mail order and net purchases are the same. In the past, NC had not been enforcing the mail order taxation aspect of their state taxes. Now that they feel many more people are placing online orders, they are starting to try and enforce that tax.
Personally, I feel that if you don't enforce something for a few years like this, you shouldn't be able to just prop it back up and revel in the number of people you catch violating a law. It smells of entrapment.
Bad Mojo
Bad Mojo
"If you can't win by reason, go for volume." -- Calvin
You might expect a competitor and consequently increased efficiencies; it is not an entirely unreasonably proposition. However, if you look at the empirical evidence of many other subsidized industries this is not the case.
Please remember that many of these brick-and-mortars have been in business for a long time, and as a result have developed certain efficiencies and managerial skills. Many of these Dot-Coms do not yet have this kind of talent, and, even with, competition, may never (in the short run) achieve the same efficiencies. Particularly, when "e-commerce" appears to be more of an "all or nothing" game...which is (or will be) unfriendly to later competition, even if the competitor technically posesses the potential to compete in the same ways exhibited by more traditional businesses.
Also, in regards to your "other observation", my problem is less the "lack" of taxes, then it is with the differential. If the internet is really all that great, they shouldn't need an effective subsidy (over their brick-and-mortor counterparts)? Don't artificially put one at a disadvantage.
anyhow, I dont have time to get into this right now, maybe later tonight....
In any case, a 1% tax rate is pretty inconsequential, particularly when you consider that most shopping malls (e.g., KoP) and the like are located outside cities which impose such taxes. At the very least, internet firms should just apply the tax for the area (or state) they reside in. But, I do think it might be a bit more equitable and stable, to apply it based on customer state (and state alone) location.
Also, even if it were necessary to apply each and every localities sales tax, the federal government, or some other organization, could easily compile a free database and update it on a regular basis to apply the total tax rate (e.g., based on zip code), which would serve as the official measuring bar. In other words, the internet firm could only be held responsible for updates which make it into the database. I know if I had the necessary information, I could easily compile such a database and impliment it.
Mail order firms don't comprise that large a part of our economy. Furthermore, mail order firms DO have to deal with state sales tax (they don't to my knowledge worry about city/county taxes...except for perhaps certain major cities).
Huh? What is it exactly that you are arguing here? That you should only be required to collect sales tax for residents who live in your state? Or that you shouldn't have to collect any sales tax at all? It would seem as if you are leaning towards only collecting for in-state customers, but it is far from clear.
I wasn't strictly arguing that you should collect for other states. I was advocating, that, at the very least you should treat all transactions as if they're in-state sales, and send all that money to your state--that would atleast put you on a more level playing field.
Furthermore, even if you had to collect for other states, the costs (if properly implimented) would be nominal, mere fractions of a penny per transaction. In this case, the federal government or some other federally recognized organization would be responsible for compiling a database of tax rates and issuing quarterly updates to all who need it. The Dot-Coms would only be held responsible for rates which correspond with the updates, not the "actual" rate of the locality at any given moment. I, and most other e-commerce sites, (atleast those who are half compotent) could intergrate these rates into their existing software quite easily.
The burdens put on local merchants under your scenario, far outweigh the burdens imposed in either of my scenarios (e.g., treat all sales as in-state, or apply the rate matching each customer's state) on e-commerce. In your scenario, the average dot-com is enabled to sell for much less (huge competetive advantage on certain items), while enjoying higher margins (assuming they're anywhere near as efficient), merely because some politicians (and people like yourself) happen play favorites (under the mistaken belief that the internet, in and of itself, is the best thing since sliced bread). In my latter example, when customer A, who lives in PA and has a choice between DotCom or BrickAndMortar (next door to the customer) on the same commodity item, both will have the same essentially the same tax rates and associated costs (proportionately, plus or minus a fraction of a penny). The decision will be based on who actually provides the best service and the lowest price (due to efficiencies, not tax considerations).
This 'usage' argument is silly. Under the same reasoning, should I only have to pay 1/10 what everyone else pays to use the roads, because I only drive on a small fraction of them? Society simply can't operate remotely efficiently like this.
Furthermore, the fact of the matter is that you ARE using many out of state services, whether or not you realize it. For example, to merely complete the transaction (in an immediate) sense, you rely on: that state's roads to transport your goods, the police to keep your shipments safe, and many other things. Then you have the associated and secondary costs that are necessary to conduct business. Such as courts to resolve disputes or fraud in your sales and police to arrest criminals. In addition, and perhaps most importantly, you must not forget that YOU benefit from OTHER states prosperity. In order to maintain a strong economy, that state needs a strong highway system, schools, hospitals, courts, police & fire protection, telephone companies, a prison system (to lock the criminals up), and many other things. These cost the state money, which means they need tax revenue. Given that sales tax comprise roughly 30% of most states revenues, and that internet sales could theoretically (huge emphasis) eat most these sales up, something must give.
Not taxing internet businesses is effectively a subsidy. It can breed a less than efficient market place. For example, let us suppose that dot-com, company A, in PA has no sales tax to contend with. While brick-and-mortor, company B, has a 5% sales tax. This means that company A can sell for, say, 3% less even though they're enjoying 2% more profits (and perhaps 1% less efficient).
The fact of the matter is that sales taxes comprise approximately one third of state sales revenues. When, and if, internet sales replace brick-and-mortar sales, this is going to be a major issue. The state governments are either going to need to reduce services (and/or improve efficiency) by 30%, or increase other forms of tax revenues. They might decide to tax brick-and-mortars more to make up for the lost revenue. Meanwhile, the government is effectively GIVING that Dot-Com a little less than 5% on each sale it makes.
Put simply, not taxing the internet is asking for inefficiency. While you may be correct, that Dot-Coms have to contend with shipping costs on high-dollar/low bulk items, this is rather nominal. Furthermore, Brick-and-mortars have increased overhead (e.g., retail presence, real estate, liability, etc)...all which ARE higher than shipping costs on most items sold over the internet.
If Dot-Coms are offering a better service (e.g., lower prices as a result of lower overhead, better customer service, better inventory, etc) to customers under the same tax footing, I have no problem with dot-coms gaining market share (frankly, I think most are offering inferior service for the time being). But if you, the dot-com, have shipping lag-time, increased costs, and many other problems, you are offering your customers a worse service than those brick and mortars. If your only area of differentiation is price savings for the consumer, and this is strictly (or even mostly) the result of tax exempt status (read: subsidy), then YOU don't deserve to be in business (This has little to do with "fair", it has to do the aggregate economic effects).
US law is a combination of legal precedent and Constitutional law, which tends to trip most folks up (as opposed to UK, which is legal precedent through and through). Legal precedence in the US, when cases bubble up to the Supreme Court especially, involve that Court's interpretation of the Constitution (or, much more commonly, a precedent based on same).
In summary, it doesn't matter how many people get shot. If you want to ban guns "forever", you have to amend the Constitution. Good luck, you'll need it.
-- ultra1
Score: B-
Missed topics:
This'll be moderated down, but...
Hot grits
Freshmeat!
VA
Whether they figure it or not doesn't mean we should lie back and take it. How quickly people accept such a horrible inevitability--why, because "everything else" is taxed? Because there's a perceived "loophole"? When will people wake up and question the system as a whole? The U.S. govt. heaps law upon law, tax code upon tax code--increasing numbers of the smartest people go to law school to make a living off these laws, and we can't get anyone to write decent code or teach our children!
The problem is not that e-commerce businesses operate in some "loophole", but that we've let our elected officials enact overly-complicated tax schemes and regulations that are now showing their deficiencies.
Slashdot: Liberal News for Nerds. Liberal Stuff that Matters.
Tax + Shipping = about as much as I can get it at Best Buy for most stuff. That's going to put the rip-off retail stores in the advantage again (who wants to have to wait a week to get something shipped, and have to pay about the same price as in stores)
I think the government should subsidize shipping if they are going to charge tax (I'm sure that will happen). Oh well. Why should we be suprised that they want to get their hands in another money pot?
In one way online stores are taking away state revenue, because everyone is realizing "wow, look how much cheaper I can get the same exact product for on-line". If stores would lower their prices to be more competitive with the on-line stores I think that would fix a lot of the problem.
Good question!
and i say why not? why should the net NOT be exempt? WHY do we just blindly accept that we should be taxed for things? Last time i checked i was a US citizen, and hey the government works for ME. and all i'm hearing is alot of unfounded rhetoric on the part of politicians who want to waste MORE of my money. have they given me a good reason to pay a tax? where would the money go? are they going to put ALL the money into teaching our kids to read? are they going to improve anything with this money? or are they just going to throw it into the big pot and squander it? A better question is--can they prove they are actually losing money because internet businesses are lowering the revenues of traditional brick-and-mortar businesses? NOOOOOOOOOO.... thats all bullshit! the numbers just aren't there!
Business is booming on all fronts! State governments are taking in more and more money from us because we are (supposedly) making more money and more of us are employed and buying more stuff (don't forget, the businesses who MAKE the stuff we buy pay taxes on their income too!!!!!! and the people who work at the places where they make the stuff we buy pay taxes. I look at the numbers on my paycheck, and A LARGE CHUNK of my paycheck goes to other people (not me) including THE STATE WHERE I LIVE.
spread the word.
xoxo
"Tension is the great integrity" -- R. Buckminster Fuller
If an income tax exempts savings and charitable donations, then it has almost the same economic effect as a sales tax -- any income that you didn't save (or give away) was, by definition, spent on something.
--
"But, Mulder, the new millennium doesn't begin until January 2001."
send all spam to theotherwhitemeat@ropine.com
I don't belive the problem here is anything to do with moral "should it" "shouldn't it" be taxed discussions - likewise I don't belive that this is legislation which applies solely to web based trade. Its much more to do with the practicality of deciding where the tax liability is incurred and then applying the tax in that location - mostly this problem is down to deciding where the transaction takes place.
e.g. Company based in USA, server hosted in Bermuda, customer in Canada.
Whose tax rules do you use? Currently people seem to be tending towards using the location of the server for any service (i.e. online content) and for the location of the customer for physical purchases. (Well this is the situation in europe anyway). But this is far from clear, it wouldn't suprise me if at some point people start to incure taxes at all sites involved!
Under current systems companies account for their VAT liability - but with a serious increase in cross boarder trade those companies need to be VAT registered in multiple locations if they ship above a certain revenue to those locations.
The only real alternative is to make every individual responsible for handerling thier own VAT (sales tax) liability and applying the tax laws local to the customer - I don't belive that this is going to be practical anytime soon due to shear volume!
Hence, if anybody really wants to tax trade over the net there needs to be a clear descision about where transactions take place - and nobody wants to do that because all pure net businesses will instantly "relocate" for the tax advantages!
In effect, in the US, the Internet would be a 51st state with respect to taxation.
That is, a 51st state with no constitutional right to tax in this manner. The Feds ONLY have the right to tax interstate commerce, NOT intrastate commerce. Or would you only charge this tax to people buying from companies out of state? But then again, what constitutes an out-of-state company? Where they are, or where their www server is, or where the data flow goes?
What a nightmare!!
I'd peg the US sales tax rate on the Internet to the mean sales tax by total revenue. In other words divide the total tax revenu in all 50 states by the total sales taking place in those states.
Based on what? Where the seller is, or where the buyer is? Or a split? You're right, this is *exactly* what we need. More government, wasting more money, causing more overhead, for no benefit. Excellent!
That way, on average, you are at no disadvantage or advantage to some brick-and-mortar store in the US. Let's say it amounts to 3%. At the end of the quarter, you just provide a breakdown of gross sales by state and a check for 3%, and the tax man takes care of the rest. Would that be so horrible?
Lol. Like boiling a frog, I guess. Lets see, I've *already* paid the Feds 39% of my salary in income tax, and now you want to give them an *additional* 3%. That's on top of the 4% sales tax i pay to the county, and the 4% sales tax I pay to the state. WE HAVE A BUDGET SURPLUS, and they want MORE tax revenue? Get the hell outa here.
"Those who would give up essential liberty for temporary safety deserve neither liberty nor safety" - Benjamin Franklin,
---
This sig has been temporarily disconnected or is no longer in service
The state in which the item is bought and the state in which it is sold are the same state - the one in which the actual transaction takes place, i.e. the state that the vendor is located in. If you don't happen to live in that state, that state has no jurisdiction over you and cannot force you to pay sales tax. That's why you don't pay sales tax on goods that you order from another state. BTW, the federal government has no constitutional authority to enact a national sales tax.
A national sales tax would be patetently unconstitutional. But since when did the constitution stop the politicians from having their way?
Ever watch any of those insipid infomercials? Heck, consider just about any commercial selling music/kitchenware/exercise equipment/... you get the picture. They clearly state that residents of the state in which the business is located (and typically one or two specific other states) must include x% sales tax. Now, if you live in one of the other 46-48 states, you pay no sales tax.
/. this morning.)
Is Congress considering taxing these transactions? Not that I've heard of. (Of course, I'd better keep my mouth shut lest some minion of Congress is reading
IMO, internet sales are no different. I could live with taxation of goods involved in intrastate commerce, but interstate commerce is another matter.
Others have clearly outlined problems with taxing interstate commerce, so I'll merely sum them up. Would taxes be based on the state the company ships from or the state in which they are incorporated (what about small e-commerce sites that aren't incorportated... are there any?). Maybe BOTH states will want their own cut. 12-15% sales tax on e-commerce will put a serious damper on continued growth. Another option would be to assess tax based on the location of the customer. But then a business will have to keep up to date on the tax laws in all 50 states, not to mention foreign practices when shipping overseas (or is banning international e-commerce next on the agenda?).
In short, this has many of the same problems as passing legislature regarding the internet. There are no such things as "local standards" on the web. What the US outlaws, other countries permit, and accessing hosts outside US jurisdiction is as easy as clicking a link or typing a URL.
My message to Congress is this: Listen to your informed constituents. They certainly know more about this matter than you could ever hope to know... it's their jobs and livelihood. You are supposed to be comprised of representatives of the people. Represent us! Oh, and try to do a better job in the future...
Eric
I'm an American expat living in Sweden. We have the highest tax burden of any country in Europe (and probably the world). Internet sales are not excepted! Taxes:
Life is a tale told by an idiot, full of sound and fury, signifying nothing.
William Shakespeare
I'm an American expatriate living in Sweden. This country has the highest tax burden of any country in Europe (and probably the world). Internet sales are not excepted! Sales tax (VAT): 25% Income tax: 30% (with exponential rise over $2700 per month income ) Payroll tax: 32% (also with exponential rise over $2700) Gas Tax: 300% Liquor, cigs: 400%+ The sum total is that your average Swede pays about 87% of personal income in taxes. To make it even tougher stock options received by employees as compensation are taxed as income at the above 62% base + exponential rise depending on the amount!
Life is a tale told by an idiot, full of sound and fury, signifying nothing.
William Shakespeare
Education tuition is free. Although room and board and books are up to you.
Medical is not free except for children. Although it is very cheap. For example, I pay about $15.00 per doctors visit. Prescriptions are costly up to a cap of around $500. Hospital stays are very cheap - $10.00 a night or so. And operations are equally cheap. And, yes, if you can't afford it, you get it anyway.
Dental, on the other hand, is not free. In fact, there was a ridiculous proposal last year that homeless folks that can't afford fillings should just have their teeth pulled out! (It was defeated.)
Life is a tale told by an idiot, full of sound and fury, signifying nothing.
William Shakespeare
They are already taxing internet sales in North Carolina. You are supposed to determine the amount you owe and enter the number on your tax return. The scheme they are using is horrible. You are supposed to check all of your recipts for the year and then figure the amount of tax based on what you spent on the internet or mail order at out-of-state companies. And for those of us who don't keep all the receipts there is a chart which gives you a flat fee depending on your income. I can see a lot of people using either the flat rate or 0 just to make it easier. I really don't think anyone is going to take the time to go through all their receipts. Then there is the fact that they are assuming that if you could not have spent the money on the net then you would have spent it in state. Sorry, wrong. Most of my net purchases where because I was unwilling to pay the inflated prices around here or could not find the product I was looking for. So if I could not have spent the money on the net, then most likely the money would have went in to savings or investments.
The tax system has got to change, and until they are willing to do that, the net should be tax free. It is apparent that the governments want that money very bad, do they want it bad enough to fix the system?
"Damn the man." - Lucas, Empire Records
More info can be found on Michigans use tax page
Taxation funds the activities of government. In my country (Ireland) the main areas are Education, Health and Social Welfare. These alloacations are decided by the representatives of the people in the annual budget. Within certain bounds, the necessary tax rates are decided based on the amount of money which the legislature want to spend. I believe that the tax take should be fairly spread amongst those who are able to pay - this is easier to see when talking about income tax, but also applies to sales taxes and the like. In certain situations it may be decided to give an exemption to a certain class of business or area of society. This is usually for one of a small class of reasons: - The cost of regulation and collection would outweigh the money received (or make the collection too inefficient to be worthwhile) - A tax break acts as a form of subsidy for a socially worthwhile activity. For example, the income of artists is tax-free in Ireland, since art/culture is seen as something that society should support. - A tax break is necessary to encourage economic development, increasing employment or supporting a sluggish industry or economy. In this case, the 'trickle-down effect' ensures that society gains more than it loses in fore-gone revenue. I am unconvinced that any of these situations applies to the (now booming) on-line economy. Even if tax breaks are allowed to encourage the development of on-line commerce, these should be fazed out over a period of time. The point has already been made that on-line sales mean lower sales off-line. If the same tax-take is collected from off-line retailers (with no input by on-line sales) the percentage tax on off-line sales increases, making them even less attractive to customers. This would seem to be an unfair distoortion of the market. Incidently, if on-line sales are allowed to be tax free, I can see a situation where retailers will install terminals in their brick-and-mortar shops to make _all_ sales technically be 'on-line'.
I'd rather go down in familiar flames than be lost in that endless blue.
If the states were really concerned with leveling the playing field for their retailers, they'd cut their own sales taxes.
State treasuries are awash in money, to the extent that even politicians are embarrassed to ask for more. The "fairness" issue is simply an excuse to raise more money, while pretending to help the retailers. Phooey.
You would think that consumers going to the net for products to avoid paying sales tax would tell the government something. TOO MANY TAXES? I know everyone's probably heard this before, but we're paying FAR more in taxes today than what caused the revolutionary war. Just because we're a larger country doesn't warrant taxing everything..
Think about it, sales tax, gas tax, taxes on your phone bills, taxes on cigarattes, taxes on your income... Aren't there laws against double-taxation? Well, you would think after they tax your income, they wouldn't be able to tax you on things you purchase with that income, right?
God bless the US Government.
-brain
It's interesting this topic comes up today. I just read an editorial in Newsweek suggesting that internet sales should be taxed. For what it's worth, I have written my senator regarding the issue.
I see some very real flaws in the argument that not taxing internet sales amounts to an unfair subsidy. First, it seems based in the wrong-headed assumption that everything should be taxed. It is an extension of the absurd notion that wealth belongs to the government and the government "allows" people to gain wealth. This is just backwards. People could gain wealth just fine without government. However, governments usually gain wealth by taking it from their population.
Second, let's talk about taxing entities. Do I have to pay California sales tax if I order a NIC from a company in California? If so, why don't I just go with a different company in a less-taxed state? If the states set and collect internet sales tax, we will undoubtedly have a few states which will NOT tax goods sold over the internet. They will do this to spur growth of technology companies in their states. Smart companies will incorporate and locate in those states and internet-based business in the other states will dry up. Ever wonder why credit card companies are concentrated in a handful of states? It's because the laws in those states are favorable to them.
So, if there is no state internet sales tax, then it should be federal, right? The federal government could just collect the tax and give the money back to the states, right? Wrong. This gives an unfair advantage to brick-and-mortar businesses in states which do not impose a sales tax. Wasn't this all about fairness?
Well, maybe the federal government could just keep the money. The problem here is that the federal government is not in the sales tax business. Nobody wants it in that business -- not the states and certainly not us, the loyal subjects. It might pass if it was offset by a decrease in income tax, but Congress has this neat way of forgetting about tax cuts. We will end up with a net increase in taxes. I guarantee it.
The argument for internet sales tax keeps repeating the word "fairness" but since when has business been fair? It's not fair that companies who have yet to show a profit get to go public with huge market caps. It's not fair that the infrastructure costs for an internet business amount to a few servers, software, and bandwidth.
"Fairness" has nothing to do with it. It's about money. It's about government getting a slice of a real free market. It's about preserving for nostalgia your aunt and uncle's general store.
It's not fair that your delivery service switched to trucks when everyone else was using horses and buggies either. Business is not fair. Deal with it or get out. It's time for your aunt and uncle's general store to pony up for some server space and SSL.
And no, it's not fair that brick-and-mortar businesses have to deal with state sales tax hassles. However, the solution is to ease their burden, not put the same burden on others.
Save the whales. Feed the hungry. Free the mallocs.
...at least, if the state that you live in taxes the type of purchase that you made (typically goods as opposed to services). All states that have sales taxes in the US also have usage tax. The rules regarding usage tax may vary a little from state to state, but the general rule is that if you purchase goods and have not paid the amount of sales tax that your state would charge you at, you owe the state the difference, typically paid on your next income tax form. The usage tax exists to protect local businesses from the difference between tax rates in different states, so I see no need for the feds to interfere on this one as long as the states are good about collecting. Of course, this is a very difficult thing to do unless they happen to catch you in a random audit, but the penalty tends to be pretty hefty (in CT, it's a fine up to $1000 and/or year in prison plus the tax that you owe).
See http://www.salestaxinstitute.com/Sales%20Tax%20Rat es.htm for more info about which states tax what.
-Jennifer
There are 2 types of customers. One is looking for the best price. He isn't intrested in great service. Maybe he's frugal, Maybe he allready knows the product and dosent require much service. That is my market. I can serve his needs as well as any local bargin merchant, and at a better price. The other type of customer considers service part of the product, and is willing to pay extra for this service. He may only have a general idea of what he wants. He needs expert advice from someone who can help him one on one. This is a market the local merchant can serve better than a web site a thousand miles away. There is room for both.
Quemadmodum gladius neminem occidit, occidentis telum est
Last month I ordered some computer parts from a company located in the same state. I ordered on the web. They charged me the taxes, same as if I had ordered by phone. In state sales are allready liable for sales taxes.
Quemadmodum gladius neminem occidit, occidentis telum est
I am starting an Internet business, and I would like to know what services states I don't live in are going to offer me in return forcing me to be a tax collector for them? Nothing. How much do they plan on reimbursing me for the costs of collecting the taxes? Nothing.
I keep hearing about the so called advantage no taxes gives me, but what about the advantages a local merchant has over me? His customers can leave the store with the product today. Mine have to wait at least a day for shipping, longer if they don't want to spring for overnight air. His customers don't have to pay for shipping, mine do.
Then there's the biggest advantage of all. SERVICE. There is no way in hell I can offer the kind of service a knowledgeable salesperson, that is speaking directally to a customer, can offer. His customers can get an answer in seconds. Mine have to e-mail me and wait for a reply.
Businesses with good customer service have nothing to fear from the internet. Businesses that hire high-school dropouts that can barely run a cash register are the ones in danger. Any local merchant who can't compete with the advantages he allready has desreves to go bankrupt.
Quemadmodum gladius neminem occidit, occidentis telum est
Now I can't begin to say that I know anything about this subject, but isn't it less efficient to tax in lots of little places?
For example the overhead of imposing a net tax rather than just increaseing wage tax must be quite big.
Can somebody tell me why a flat rate tax system doesn't work?
He said: "I would like to know what services states I don't live in are going to offer me.
How is his product going to be shipped -- by air drop? I bet he uses the roads in your customer's state.
The state is providing for the welfare and education of his customers; what would happen to his customer base in that state over the long term if there were no education?
I think the sticking point is the idea that the tax man is "taxing me". What actually is being taxed is the transaction. Making the merchant collect the taxes is purely a matter of practicality. We could make the individual collect the tax, but it would be more costly since there are many more individuals. Also, the tax man would need a complete record of every purchase you made; this would not only be impractical, it would be downright creepy.
Post may contain irony: discontinue use if experiencing mood swings, nausea or elevated blood pressure.
Getting back to your point, do all governmential entities -- including towns and counties -- deserve a 'value added tax' for providing the physical corridor to the final customer. You can bet that's going to be one of the arguments!
Thank you for your thoughtful response. I think that you are missing an important point here. The point isn't just the roads, its everything the local government provides to make the transaction necessary. Does Amazon benefit from the fact that its customers can read? For that matter, any form of mass e-commerce depends critically upon widespread literacy, until a purely pictorial GUI is invented.
There is also reciprocity involved here. Suppose I live in Georgia and buy a book from a reseller in Oregon. This weakens my tax base here, so taxes have to go up, further skewing commerce towards the out of state sources. Next, the owner of the Oregon bookshop buys a computer over the Internet from a vendor in Geogria, and Oregon's tax base suffers.
My position is not that more taxes are inherently good, but that more broadly based tax is inherently fairer, tax revenue being equal. Different modes of business have different advantages. Traditional businesses have the advantage of face to face contact and the ability to walk away with the product immediately without shipping costs. Net businesses can shave facility costs and amortize those costs over a larger geographic user base. These advantages and disadvantages are inherent to the mode of doing business. From a classical economic theory point of view, the mix of providers in each sphere is likely to be optimized with respect to the total resources required. A tax advantage for one mode of business is an artificial advantage, not a natural one; it skews the naturally optimal division between traditional and e-business.
Post may contain irony: discontinue use if experiencing mood swings, nausea or elevated blood pressure.
This is getting ridiculous. I already pay taxes on the internet. We pay taxes on telecomunications of every kind. We pay taxes on our harsware. The Ecommerce sites pay taxes on their income. We pay taxes on our shipping fees.
Now they want to add another tax to Ecommerce. This is ridiculous.
It may seem unreasonable that taxation is so all pervasive -- but unless taxation is all pervasive, some people will have to pay taxes and others will not, for the very same thing. I do not see how this can be considered fair.
You may reasonably feel the overall level of taxation is too high. In that case I suggest you vote for somebody who wants to reduce government spending, rather than somebody who believes the tax burden should be shifted from one set of transactions to another, except to bring them into parity.
As far as Article 1 section 9, this has been ruled to apply only to exportation to outside the US. I suggest you look in article 10 provisions against "direct" taxes. However these are highly unlikely to prohibit an e-commerce tax, which may be considered to be an "excise" rather than a "direct tax".
Post may contain irony: discontinue use if experiencing mood swings, nausea or elevated blood pressure.
Yes, I realize that some little bit of government will always be necessary, but that little bit that performs the legitimate functions of a government is pretty cheap
Cheap != Free. Last time I checked, defense, law enforcement, building prisons were not only not free, but they were rather expensive items.
It is inefficient; ask any economist.
You need to talk to more economists before you make this argumentum ad verecundiam (appeal to authority). You may be surprised to find that there is quite a diversity of opinions on most topics, and the view you cite is decidedly a minority one. I am not an economist myself, but this is my understanding of the issue.
Markets work on the assumption exclusivity. In other words, when I buy a TV, I'm buying it for my benefit, not yours. It is usually agreed that their are "public" goods -- things which need to be paid for whose benefits are entirely or partially non-excludable. An example is national defense. These goods are the necessary province of government to obtain (although not necessarily produce -- a government might decide to pay mercenaries for national defense, for example). Defense is a pure public good, in that there is no exclusive benefit. By definition, there can be no market for the product national defense.
There are two problems with public goods. First, there is no way (or at least it is very difficult) for a market to find an optimal distribution of resources between private and public goods. It is entirely a matter for rational discorse, for which we rely, unfortunately, upon our political system.
Another problem is that there are many important goods that have both exludable and non-excludable benefits. Education is one; clearly it benefits the individual, and it also greatly benefits society to have a large pool of literate workers and consumers rather than a horde of illterate savages. In the US, education through the High School level is largely treated as a public good.
In other countries, health care is treated as a public good, although clearly there is a large private benefit involved.
Post may contain irony: discontinue use if experiencing mood swings, nausea or elevated blood pressure.
Their really isn't a fair way to implement a sales tax over the internet due to so many local option taxes. If it was just one rule for each state, it would still be a bit confusing. Although, it would be manageable. Taxes will come. There just has to be a good fair way to determine what it should be. Maybe a flat internet sales tax of 5% across the board. This is still unfair to states without sales tax. I think the option of one tax per state is the way to go. Let the municipalities fight it out with the state as to how to disperse the money.
In the illustration given of a tax exempt firm in PA, one can reasonably expect a second 'dot com', Company 'C' to appear, running at maximum efficiency and selling the same product at a 1% discount to company 'A'. Of course, Company 'B' is still SOL, but it is unwise to expect taxation (or the lack thereof) to mask production inefficiencies, _unless_ some other externality exists to support the inefficiency. For instance, Company 'A' has exclusive sales contract for said product, or PA has high startup costs for new company 'C', etc. Don't expect tax inconsistencies to hide unreasonable profits or production inefficiency for long!
One other observation: it wasn't that long ago that we thought of taxes as the added distortion in a market. It's interesting to see the _lack_ of taxes considered as another kind of market distortion - a subsidy. How the world has changed in 50 years!
Everyone will start to cheer when you put on your sailin' shoes.
Books, newspapers, non-luxury food stuffs in the UK are zero rated (0% tax). This applies to stuff being imported to the UK too (but see below for an exception). What is good about US retailers that are known for books is that books have 0% import tax also, so ordering DVDs from such a place means that customs assumes they are books and they get thought without import tax or VAT.
Another difference in the EU is that VAT is changed from the point of sale, rather than the point of delivery. A lot of "high-tech" companies have web sales outlets in Ireland (because the can get Government and EU grants to set up there). This leads to the farcical situation where it costs more to order eg. a G400 card from matrox (with 21% VAT in Ireland), rather than from a local wholesaler (with 17.5% VAT).
And as for the blinkered Europhile sometime earlier asking whether a) High taxes but a good social welfare policy or b) low taxes but people sleeping in the street (they were in favour of a), needless to say). The UK gets the best of both worlds - high taxes and homelessness. I work in London, but every european city I have visited there are people "sleeping rough" (as it is euphemistically called). So great in principle, but the reality is somewhat different.
Well, VAT style taxes do at least ensure that visitors/tourists who use the publically funded roads/rail/etc. do end up paying for the services they use.
The main problems with income/corporate taxes as they are set out now in most countries, allow better of people/companies with smart-arse accountants/tax advisors to avoid paying as much tax as possible.
I do agree with making taxes simple, with no exemptions, which means less chance of avoiding/evading them. GST (VAT) in NZ is the same rate (12.5%) on EVERYTHING. Until recently, there were only two tax levels too (~21% and 33%), but now the Labour govt. has made a new level (39%) which again opens up opportunities for avoidance (evasion is illegal!).
Forgot the first time, but taxing profits is a bad idea - companies just rearrange their books to show no or negative profit.
Lets see a person in State A buys something from state B via a catolouge ==> no sales tax. The same person in State A buys something from state B via the internet ==> sales tax. This doesn't make sence.
Why is it that when something like "taxing the internet" or "equal access for the internet" comes up I always hear the blather on "what about the poorer folks"?
Take a look around you, people - there exist TONS of computers FREE FOR THE TAKING by those "poorer folks". Businesses are constantly upgrading their machines, and the old machines more often than not either languish in a storeroom, or get thrown in the trash. A few companies sell them as surplus to other companies that either strip them for parts or sell them whole at rock-bottom prices (I once got a P100 with 16MB and 500 MB hard drive - for $15.00 from one such place!).
Ordinary folks often have computers lying around collecting dust, and try to sell them at yard sales. Many times you can get a decent 486 or low end pentium at a yard sale for under $50.00. Parts can be scavenged to build a machine for almost nothing.
The point I am trying to make is that to get a computer, one capable of going online (I am not talking about a machine that can run the latest and greatest software, but still one that is more than useful for MOST ORDINARY TASKS), for little money. Certainly for equal/less money than a month of cable, cigarettes, beeper/cell phone service, or whatever other non-essentials someone who is poor spends their money on. The same goes for internet service (free and cheap dialup exist for those who look or ask, and normal dialups exist for not much more). But, herein lies the REAL problem of getting these people internet access:
Computers themselves are a non-essential item, just like the other things poor people buy (like the above mentioned cable, cigarettes and beeper/cell phone service). However, for some reason, these people are more concerned over having cable for their TV, than getting a computer and the internet, and educating themselves. Even if all they had was a computer, and no internet - they could still call all the free BBS's and perhaps educate themselves (learning programming and other computer skills) that might get them out of the mire they are in.
The thing that should be focused on is getting those people who haven't got a lot of money to see that computers don't cost a lot of money - if you are willing to settle for last year's (or 5 years ago) tech (many seem to settle for "last year's tech" on their cars, why not a computer?). There exists so many resources that are cheap or free for getting a computer, learning about computers, and getting online. These people are willing to save and spend $50 to $100 a month on non-essentials - why aren't they willing to do the same for a computer?
Does any of this make sense? Am I not seeing something? Is it a cultural issue? Am I blind to something because I haven't been poor or in the situation? Is it because of fear of theft (you have a computer, and someone breaks in and steals it to buy crack)? People, please enlighten me...
Reason is the Path to God - Anon
Interesting points but I think the Internet is different.
Its just as easy for me to buy the Matrix movie from some South East Asian country as it is from Southern California. Shipping will be a bit higher but what I save in taxes will be worth it. So if the US does start taxing Internet sales why should I buy from a US based Web company vs. going offshore?
The surprise isn't how often we make bad choices; the surprise is how seldom they defeat us.
Comment removed based on user account deletion
I can't see why the majority of Net sales should or even CAN be regarded as anything other than Mail Order or Telephone Service sales - obviously dividing this into cases where a good is delivered by post or electronically (online sales of something tangible) as opposed to cases were prices are charged for entertainment or other non-tangible services. Most countries already have policies in place to deal with these cases - why not just apply them???
--
-=DaveHowe=-
Of course, that was changed with an amendment and we have the current system. I think it was done to pay for American involvement in the Great War (WWI), but I'd have to double check my history books to be sure.
All the creatures will die, And all the things will be broken. That's the law of samurai. (Jubai, 1605)
The key to making this model is that the police will then only enforce the law when it is politically expedient or profitable. The trouble with that is it can lead to a police state, in which the police can harrass the general population on a whim and then back it up with the huge numbers of ridiculous laws we've got.
I used to live in New Jersey, and people from NYC would come there to shop, because the taxes were lower. Well, someone in New York government came up with the bright idea of sending cops into New Jersey mall parking lots and searching for New York plates. Later they would send threatening letters to the people who were shopping in the New Jersey stores saying, "You still owe New York sales tax and you'd better pay it!"
This, of course caused friction between NJ and NY, and was eventually dropped (I think, I haven't been back in a while, it was back when Florio was governor of NJ.) Of course, the original reason that interstate commerce was supposed to be exempt from taxation was to help keep the country united so you wouldn't have a bunch of little wars between individual states, and its worked pretty well for years (well, except for a few little altercations in the past.)
It is idiotic for the Federal government to allow individual states to tax the Internet this way, because the Internet is a national and International resource. The Federal government is supposed to be responsible for things which fall into the catagory of national. Personally, I don't think there is any pressing need to tax Internet commerce, but with all the hype about the Internet goldrush it is definitely going to happen. The rational way to handle it is on the national level, not the state level.
Of course, I'd rather we didn't get these wonderful new taxes, but then I'd rather Harry Browne would be the next president rather than George Bush or Al Gore.
All the creatures will die, And all the things will be broken. That's the law of samurai. (Jubai, 1605)
Or of course there is the simpler option.
1) Some company writes a product that will do the tax submission and handling.
In the travel world they are called "agents" and the online version isn't rocket science. In the same way as all online commerce people pay people like Datacash for credit card validation they will pay a tax-handler.
An Eye for an Eye will make the whole world blind - Gandhi
The hub-bub about E-Taxes and who pays what where is something that has been done and dusted (pretty much) in the shipping industry for over 100 years. The companies register themselves in the cheapest place to pay taxes, they register the boats in the cheapest ports with the lowest safety requirements. And then the country you are shipping TO takes its tax cut on delivery. Thus its the point of delivery where the tax occurs, no matter where you buy from.
This isn't new someone has just whacked an "E" infront of it and bumped up the lawyers fees.
An Eye for an Eye will make the whole world blind - Gandhi
"Funnier" still is that it also applies to purchases at garage sales and other situations where the in-state seller doesn't collect sales tax.
It's pretty ugly, IMHO, and given that nobody I know is following the law (heck, I wasn't even aware it applied to private individuals until a week or two ago, and I've met with disbelief when I've told others about it), it should be repealed. But that's another issue entirely...
Bamboo Database for Writers
No Laughing Allowed!
Also in the current Washington Post, columnist Robert J. Samuelson argues the case for sales taxes on items sold over the net.
He says that the present tax exemption is like a government subsidy for e-commerce businesses, and tends to promote waste, since inefficient e-businesses may still have a lower end price for the consumer. Hence there is an unfair penalty for brick-and-mortar businesses that may be more efficient but have to pay taxes.
Always keep a sapphire in your mind
Cryptonomicon was so prophetic a book. We NEED a data haven and cryptographically secure electronic money to keep from being bled dry by taxation. This is getting ridiculous. I already pay taxes on the internet. We pay taxes on telecomunications of every kind. We pay taxes on our harsware. The Ecommerce sites pay taxes on their income. We pay taxes on our shipping fees.
Now they want to add another tax to Ecommerce. This is ridiculous.
Why should ordering from the internet be any different than any other mail order transaction? Because we use the phone lines (usually) to access the site? Oops, most of us already use the phone to order from the Sears of Penny's catalog. Mail order, for as long as I recall has never had an additional tax unless the company you are ordering from is based in the state of your residence? So why single out the all the Ecommerce startups? Taxing internet sales is just going to give preference to the big, established mail order companies like Sears and Penny's. The governemt would just be taxing a new class of commerce out of existence.
Or perhaps they plan to slam huge taxes on mail order too, and extract a king's ransom from Sears and Penny's? Wouldn't suprise me too much. But I thought that some mail order company had already taken this to the supreme court, which found such taxes unconstitutional.
Article 1 Section 9:
"No Tax or Duty shall be laid on Articles exported from any State. No Preference shall be given by any Regulation of Commerce or Revenue to the Ports of one State over those of another; nor shall Vessels bound to, or from, one Sate, be obligated to enter, clear, or pay Duties in another."
Another poster mentioned this section of the constitution that deals with this. I'm SURE I've read SOMEWHERE that mail order companies had already taken the government to court on this, and won. So should the internet be handled different than mail order?
I'm not suprised at all, however. It's typical of the government to want to bleed a new industry dry in taxation whenever one emerges. Well, typical of the "tax 'em till they bleed" democrat party anyway.
Are not a couple of the republican candidates for president campaigning on the platform of aboloshing taxes on the internet forever? Sounds like a good reason to vote republican to me. Sure as hell, if the democrats keep a stranglehold on Washington for much longer, all the doomsday theories of net taxation will be coming true.
The republicans are not perfect, of course. But thay are at least a little less inclined to confiscate my income and redistribute it to parasites who have done nothing to earn it. If only they could get over their "holier than thou" attitude.
I guess it comes down to which is worse:
Republican: We're better than you. So you should be like us.
Democrat: Everyone else is better than you. So we're going to take most of what is yours and give it to them.
I'm still keeping my fingers crossed for an offshore data and Ecommerce haven with cryptographically secure electronic banking. Hmmm, perhaps I'll start one myself.... send the SEC a copy of Cryptonomicon for my business plan when I file to go public....
But since that's not likely to happen SOON, I'll be voting republican this november.
john
Imagine all the people...
It baffles me that any American can ask whether or not another form of taxation matters. Have you done your taxes yet this year? I have, and I can tell you, taxes matter: most of us work exclusively for Uncle Sam from January to what, March or April? And that's just FEDERAL INCOME TAX! Add Social Security, Medicare, State Income Tax, Gasoline Tax, Cigarette Tax, Inheritance Tax, on and on and on....
We've gone from a country that had NO income tax at the end of the nineteenth century to a country that wants to tax the pennies in our eyes at the end of the twentieth.
Understand this: let Uncle Sam dig a finger into your pocket, and eventually he'll get his whole hand in there. Social Security is the ultimate example: We're FORCED to participate in an antiquated system designed and implemented long before most of us were born. Furthermore, although Social Security withholding has generated many, many millions more than the system pays out, the PERCENTAGE OF DEDUCTION HAS INCREASED AT LEAST THREE TIMES IN THE PAST 50 YEARS! In other words, the citizenry is paying a much greater percentage of their wages into Social Security today than they were fifty years ago, despite the fact that the withholdings generate vast sums of money, much more than is needed to support those currently collecting benefits.
Why? Because, for 50 years, POLITICIANS HAVE BEEN SPENDING THE SOCIAL SECURITY REVENUE ON OTHER THINGS, programs and projects completely unrelated to our retirement. In place of the cash various Congresses and Presidents have left "IOUs".
Now, one of the greatest debates currently making the rounds in Washington: How to "Save" Social Security? What happened to all of the money Politiicans have siphoned off over the years? POOF!, gone... And the IOU's? Worthless, of course.
Amazingly, NO politician other than Steve Forbes, I believe, has suggested a complete conversion to a privatized form of Social Security. Uncle Sam just can't conceive of that, especilly under the scrutiny of powerfull lobbies like the AARP. The only things Politicians have managed to change: increasing withholding percentages or, as of today, eliminating the earnings cap, legislation the AARP fully supports.
How many Americans know that the Supreme Court has ruled that NO CITIZEN has a right to Social Security money, despite the length of time and/or the amount of money they've contributed.
Who in the hell gave Uncle Sam the right to decide what's best for my retirement? Can they do a better job of it than I? Why is it any business of the Government's? Most importantly, what portion of the Constitution gives any Branch of Government the authority to meddle in these matters?
I use the example of Social Security to illustrate a point: Uncle Sam begins by taking a little bit of money, but soon comes back for more and more. What's worse, he's not even a good steward of our money. He swears that he's taking it for this purpose but, pretty soon, it's paying for everything but.
We should be fighting proposals favoring any Internet related taxation just as energeticaly as we fight for free-speech issues. We know how best to spend our money: Let's not give Uncle Sam the opportunity to waste more of are hard-earned greenbacks.
(By the way, for further information on Social Security I suggest a vist to Cato.Org)
I just got a big shipment of DVDs delivered today; From USA (region 1) to here in the Netherlands.
DHL slapped the import duty and VAT on the items!
That blew the price up by another USD$98!!!
They don't seem to catch everything, but once upon a time, they would let such items pass through unscathed.
Bargain basement US prices are beginning to lose their appeal.
Yousef
-- "To ask a question is to show ignorance; Not to ask a question means you'll remain ignorant."
I think the current scheme for internet taxation in the US is unconstitutional, but I also think it is necessary. So perhaps time to amend the constitution. Or better yet, get rid of most state governments. In today's world with airlines and fast communication, we can govern more square miles much more efficiently than in 1787. Get rid of about 40 state governments, tax intrastate commerce, and you'll be able to do more with less.
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You were a moderator with 5 points. You should have read the moderator guidelines before you did any moderating
The recent change NC made was to move the collection of the "use tax" on out of state purchases to the state income tax form. Previously there was a seperate form available for reporting this tax and everyone just ignored it. Now that it is part of the state tax form you are expected to figure the "use tax" on your out of state purchases via mail order or internet and include it on that form. If you do not have exact numbers from receipts, etc., the state provides a table to estimate your use tax based on your gross income, which I consider extremely bogus.
A rticle I, Section 9
"No Tax or Duty shall be laid on Articles exported from any State. No Preference shall be given by any Regulation of Commerce or Revenue to the Ports of one State over those of another; nor shall Vessels bound to, or from, one Sate, be obligated to enter, clear, or pay Duties in another."
Cheers
One of the great advantages of the net is that
a small local vendor (your neighborhood bookstore)
has an opportunity to impress global web buyers
just as well as Amazon. As long as Amazon's
tens and hundred's of web programmers continues to do stupid things and the small local vendor hires a smartie--we web buyers consider them equals--each with a unique service to offer.
But no single smartie representing small businesses and small business websites can handle the statistical nightmare of modifying very website he or she is responsible for to handle 50+ different sales taxes, exceptions, forms generations. It's not so different than trying to handle 50+ income tax forms yearly. Human or superman programmers--no programmers can cope with that.
But Amazon's army of 10 to 100 programmer can.
Are we trying to turn the Net into something only the rich companies can afford to operate in?
We will be if we pass this law.
The founders of the Web made a point of keeping the Web infrastructure and software simple. With CGI, HTTP, XML. And the universal use of simple SQL (for the catalog), HTML forms (for the sales pitch), Perl/Tcl (for manipulating business logic) and JPEG (product pictures) made it easy for the little guys to get on the net. Let's try to keep in mind the spirit of the Net and consistently push for simplicity and equality.
I think State-imposed sales tax on the net makes about is about as sensible as laws that brought us Segregation and restricting people to Indian Reserves. It's flawed logic and everyone gets hurt.
What I don't understand is if the federal government just set up a federal standard sales tax, we wouldn't have to fuck with all these states coming up with their own taxes and then whining when out-of-state sales don't have tax. This would solve not only what the government sees as a "problem" in the no-Internet-sales-tax issue, as well as any other interstate orders, such as mail ordering, etc. Sure, we may not like it because we'd have to pay Internet sales tax, but looking at it from the government's standpoint, I'm surprised they haven't talked about this more.
the reason you can buy stuff cheaper online is because they are selling at a loss!
:)
Actually, you don't understand the typical reason behind why it's so much cheaper on the internet. Etailers in general don't keep hardly the same amount of stock of an item that a Wal-Mart, for example, does. As a result, they don't have to pay as much for warehouse space (if they even keep a warehouse; often they order it when you do), and they also don't have to keep up a physical sales location and all the costs involved in that (upkeep, rent, etc). Granted, there are also some inherent costs in online sales that aren't involved in a real-life, physical store, such as website maintenance and costs, but these costs tend to be much less than the inherent costs of maintaining a real store.
That's why "stuff is cheaper on line". If etailers were selling at a loss, they wouldn't be selling.
(forgot to add this for those who really can't put two and two together)
Thus, these lower costs of production or maintaining capital mean that the etailers can sell their products for less of a profit (but _still_ a profit) and still make a good chunk of cash because of where they save money in other areas.
It's been pointed out before that the military doesn't really pay $4000 for the hammer. It's just that several thousand or million of those add up to the cost of what they really spend the money on but don't feel like explaining to Congress or anyone else what that was or why they need it.
Believe me, regardless of whether or not the feds give themselves the power to enact a national sales tax, the states won't give up their taxes. You'll just end up with another layer of taxes taking even more of your money out of your pocket for you.
The US Constitution prohibits taxes, levies and duties on items imported/exported between states. Duties, levies and taxes between states was one of the primary problems with the Articles of Confederation (that the US Constitution replaced) which formed the first Federal US Government. The States started all sorts of nasty trade wars.
Not that anyone pays much attention to the US Constitution any more but...
...
No Tax or Duty shall be laid on Articles exported from any State.
...
Article I, Section 10
...
No State shall, without the Consent of the Congress lay any Imposts or Duties on Imports or Exports, except what may be absolutely necessary for executing it's inspection Laws: and the net Produce of all Duties and Imposts laid by any State on Imports or Exports, shall be for the Use of the Treasury of the United States; and all such Laws shall be subject to the Revision and Control of the Congress.
...
-Jordan Henderson
How is his product going to be shipped -- by air drop? I bet he uses the roads in your customer's state.
The state is providing for the welfare and education of his customers; what would happen to his customer base in that state over the long term if there were no education?
Suppose he ships it by UPS. UPS already pays taxes which they include in their shipping cost. The transaction occurs over phone/data lines, which the customer and merchant already pay taxes on, and so do the network providers in between. This of course is also passed to the consumer as part of the user's Internet access. As far as the state providing for the welfare and education of customers I believe that the merchant probably is paying taxes towards these things in the form of property tax, or as a portion of the rent (allowing the merchant's landlord to pay taxes on such things.) In the end, this filters back to the consumer as well. Not to mention that the consumer is paying taxes on the money they earn before they even get to use it.
I don't see it so much as a question of "Do we need to tax Internet purchases" as "Do we need to add yet another tax to our transactions?"
Of course I could be under the wrong in my assumptions. Perhaps they only intend to take as much taxes as they absolutely need.
numb
which is the concept of location, applied to a company.
What I don't understand is how Walmart.com can be a separate company from Walmart, although it has no problem piggybacking on the physical presence, and advertising of the Walmart registered name, it doesn't have nexus in this state, so it escapes having to collect sales taxes.
I don't object to small companies, who clearly don't have nexus in another state, to not have to collect sales tax for another state.
I do object to a nationwide corporation who clearly has the ability to collect taxes in those states, due to physical presence, to be able to avoid collecting sales taxes by simply using some accounting tricks to setup a wholly owned subsidiary in another state.
The other side is the states, who have to come to the party with a simplfied sales tax code. The idea of enforcing a very local sales tax is losing meaning in the global economy.
Can anyone name one online merchant that does not charge sales tax to in-state purchases? I can't.
As far as I'm concerned, there should be no difference in taxing between online purchases and mail order. Whether you fill out an online form or talk to a sales person on the phone, you're still ordering remotely. What's to stop someone from searching for goods via the website, and then picking up the phone and giving the sales rep a list of part numbers?
Frankly, I think this whole thing would go away if vendors charged the sales tax for the state from which the item was SOLD, not the state in which the item is BOUGHT.
Or even better, get rid of the concept of a state sales tax and make it a federal sales tax instead (like the European countries do). The states would get money by raising property or income taxes instead, because that makes a lot more sense (if you live in the state, you pay money to the state). And since the tax rate is the same for everyone, vendors could automatically add the tax to each item sold, so instead of seeing "$35.99 + tax", you'd just see "$37.79" (assuming 5% tax rate). It would make it a lot easier for consumers to determine the true cost of an item, and it wouldn't matter where you lived or where you shopped.
And the men who hold high places must be the ones who start
To mold a new reality... closer to the heart
Its easy to take the short sighted view that whatever is good for Internet commerce is good for America (or Europe, or the world). It means cheaper purchasing online which is what a lot of folks really want. Heck I like it too.
I'm just not sure I want to live in the town where all the stores went out of business, the sales tax revenue dried up, and the state had to increase income or property taxes to fund the schools and maintain the infrastructure. I dislike taxes as much as the next guy but it reminds me of the story of the well meaning town that brought pigs in to eat all the garbage in the streets only to find that the resulting "pig waste" was worst than the original problem.
Unfortunately the constitution was rather ambiguous on several points and so many issues are open to debate.
I'm trying to teach myself to set people on fire with my mind... Is it hot in here?
Remember back in the day when they were trying to decide bout BBS, about where the crime really took place if someone sent material from a place in which the material was acepted by community standards to a place where it wasn't? Well, way back then the courts decided they would mimic mail order policy. The sale takes place where the seller is, more importantly, where the SERVER is. Now, if they simply keep this law the same and implement Internet taxes, everyone will merely move their servers to another country and be immune to state and federal taxes on the sales. Hundreds of thousands of jobs will also be lost unless there is a programmer and sysadmin exodus to wherever the new servers are going to be placed.
So, they will probably try to change the law so that if you buy something over the net, it is taxed based on which state you buy it from. This removes inventive to move the servers compeltely. However, logically, mail order laws would have to be changed as well. Also, the laws about transmitting indecent material will change. Now if you live in New York and someone from Bumfuck, Idaho goes to your site and its offensive by their community standards, you've just committed a crime. Across state lines.
This could get very, very messy. I'm so not-worried about paying taxes on the stuff, I'm worried as hell about all of the fallout and all the things that this will make illegal by consequence.
Esperandi
i'm in maryland too, and i've heard the same. but currently, you don't have to pay sales tax on goods that are shipped cross-border (ie if i buy a computer from new york, i don't pay sales tax on it, but if i buy one in maryland, i do)... i imagine that they're going to try to change this, but make sure to let your elected representatives know that they are there FOR YOU and that you DEMAND that they vote against such taxes. surely enough people will oppose these taxes - no one likes paying more than they have to.
--
DeCSS source code!
--
you must amputate to email me
i read all replies to my comments
Taxation should serve a purpose:
to provide infrastructure
to provide services
I see no discussion of the purpose of these taxes.
That's a quote from William Hague, the current Tory leader, from his speech to the Conservative Party Conference when he was a young lad.
Maggies eyes glistened as she listened to his words with a wistful smile on her face.
threadeds blog
They might even need some geeks to build a Beowulf to do the local processing!
threadeds blog
I think it's idiotic that we spend all this money collecting taxes in a hundred different ways. All the time and energy spent collecting sales taxes could be better spent on something else.
Instead of clamoring for net purchaes to be taxed *as well*, we/businesses should be using this as the right time to ask why we're collecting sales taxes at all when we have perfectly good income and corporate tax systems. Don't give me any bunk about 'fairness', I can't imagine any *supposed* functional distribution of tax against people that can't be transferred rather transparently within the income tax rules.
So what is the historical history of sales taxes? Did they preceed income taxes? (which didn't come into existence until how late this century?) Were they originally introduced on selected items for good reasons, and then over 100 years simply spread to all items by Governments who at the time had no other revenue stream?
Unfortunately, most people are too small minded and afraid of "more taxation" to grasp even this simple concept. sigh.
I am a man of const int sorrows
I live in Minnesota, there's no place around here that has prices anywhere near as good as I can get online. Even by the UofM prices are still 10% over what I can find online. Shipping and Handling does raise the cost of the product you're buying, but if there were taxes you'd pay the higher cost and S&H too.
Schools are already funded by property taxes. That's why you hear all those stories about how hard up 'inner city' schools are. Theres still plenty of products that people buy in stores. I know grocieries and clothing aren't taxed, here in Minnesota anyway, but there will always be a local service that you can't just go online for.
Personal income taxes in the US fund over 40% of the government's budget, while corporate taxes contribute only about 10%.
If the states want more tax money, they should increase the tax rate for corporate profits. Don't ask me to subsidize billion-dollar businesses!
To get the whole picture check out US Budget Receipts by Source
Hence, if anybody really wants to tax trade over the net there needs to be a clear descision about where transactions take place - and nobody wants to do that because all pure net businesses will instantly "relocate" for the tax advantages!
I agree that this is an issue that will take a very long time to decide as it involves so many different countries and laws. In the mean time you're in a very uncertain position when it comes to internet transactions, which is probably why e-commerce is so slow in taking off over here in Europe.
IIRC however the major credit cards here in the UK will insure purchases over the net irrespective of where it was purchased, so this is probably the safest way to go.
As for relocations, if taxes are going to be levied in some countries then we'll certainly end up with about a dozen countries without these taxes which will end up hosting practically all of the websites on the net. This is similar to the way that almost all of the online gambling sites are run from a few countries - the Cayman Islands and Antigua IIRC.
Okay, fair point about the moratorium. But I still think that allowing all the different states to make their own regulations involving net transactions (and I'm not just talking about taxes here) will lead to a lot of confusion - what counts for a customer in New York buying off of a company in Maryland whose servers are based offshore somewhere?
And yes, I'm sure that the internet will be taxed in the long run - the moratorium is just to build up their tax base. But again you have to take into account the fluidity of the net - companies can relocate much more easily than their bricks and mortar counterparts.
But many traditional retailers say they suffer an unfair disadvantage by having to add a sales tax to their goods in the 46 states that impose such a levy. Many governors and local officials fear a deep loss in revenue if online sales siphon business away from traditional merchants.
Further complicating the issue is the existence of more than 6,000 sales tax jurisdictions nationwide, with widely varying rules.
So basically what will happen is that different states will end up with yet another set of taxation rules that apply to internet sales. Seeing as how internet sales will generally occur across state lines this will result in vast amounts of confusion as different states attempt to try to apply different laws, and people and businesses will lose out from trying to comply with this patchwork of regulations.
Clinton is obviously in favour of such a tax, and is trying to get enough states to enact it so that it becomes more and more difficult for the advisory commision or his successor to keep the moratorium in force.
Not if you download software, books, music, or videos.
Where does the state contribute then?
-cwk.
Well.. that response was all over the board, calm then wild, then calm....
Anyway, why NOT??? My answer would be, because there would not be a net, if it hadn't been for taxes. Who do you think funded the original DOD/Arpanet? Who (up until recently) paid for maintaining DNS? Who paid to help build the infrastructure for the copper to be put into the ground for data communications around the US?
If all you care about it ME, ME, ME well then go ahead be selfish and build your own road, don't go to a high school or University, grow your own food (government subsidised), and secede for the US and get your own plot of land to be owned exclusively by you forever (of course that doesn't mean you can't be conquered). The US has the LOWEST taxes in the civilized world, try going over to France, Switzerland, Germany, etc. ever heard of 75% tax bracket? I don't like taxes (hell I loathe them) but the amount of good that it does for humanity and for me are worth that small (tiny) amount to pay for my luxury items.
Spelling and grammar check off because I don't care
As I see it there are four options:
- Tax is collected where the selling company is located/registred
- Tax is collected where the buyer is located/registred
- Internet as a tax free zone
- Anarchy
The first is the most company friendly solution. One set of rules to implement on your website. (of cource the buyer must learn to check what "Tax not included" means...)The second is a small web company's nightmare. Every freaking site owner is suddenly responsible for every freaking tax system in the world... Governments will like it though, since people don't move away from taxes to the same degree as companies.
Tax free internet? Don't think so. Why should a net ordered item be tax free when the same item (maybe from the same company) bought "irl" is not?
Anarchy is where we are heading now. Every government wants a cut. Fortunately they are not clueful enough to do something really clueless, like bit tax. or whatever...
In the EU, every (web) company must implement the tax rules for member countries to which they sell for more than a certain amount. If they sell less, it is the customers responsibility to pay sales tax according to local rules.
This version of alternative 2 or altenative 1 is probably where we will end up eventually.
All opinions are my own - until criticized
But the main reason I buy so much online is because it _is_ cheaper. If it becomes the same price as in bricks'n'mortar shops, I'll buy a lot less online. CD's, DVD's, PC stuff, Books - all a lot less from web sellers than real shops.
---- Den ene knappen er powerknapp, den andre er Bender voice knapp "Bite My Shiny Metal Ass"
Since we are talking about the NET and taxes, will Canadians be forced to give money to the parish fire department in rural Louisiana (an acknowledged municipal taxing authority) just because some cajun wants fresh moose for his gumbo?
What is to stop the flight of the big Ecommerce sites over the border into Mexico to evade tax payments to those 6000+ collectors in the US.
Let's face it , US corps. have long traditions for running sites in Northern Mexico and bribing the local governor to be lax in his official duties(it cheaper than taxes and more direct).
Going further with this, say Amazon(patent monkeys) get together with UPS and FedEx and sets up a major international airport/warehousing in Northern Mexico. Then Jeff offers this service to other major Ecommerce shippers Then only US Customs is involved and most of these goods (Jeff's at least) would go through tax-free.
NOTE: UPS already does bulk shipments from Tokyo of web goods bought from nihongo sites. The customs agent inspecting these is actually in Tokyo working with local authorities.
Getting back on track to the NAFTA thing, Texas has no agreement with Canada to pay their VAT, so I doubt Canada would be willing to pay our sales Taxes on Egoods.
Reality is just a clever Hack, and the Planck constant is the refresh rate.
I'm Canadian. I try to buy from Canadian online retailers as much as possible. (The whole support your own country thing). As soon as I find a good price for something online, I add 15% tax. Its a fact of life for me. The only time I don't is when I buy from wholesaler (which doesn't always have the lowest price), where I would only pay GST. (Government Sales Tax). The way it seems to work here, is the company selling the goods has to charge tax, reglardless of how they sold it. Me, as a consumer, just has to deal with it.
Place witty comment here.
If you care to analyze your wonderful tax laws
in Europe, you will realize that the Highest
State Sales Tax in the U.S. is less than half
of the "V.A.T." that you get charged for every single product or service in Europe.
V.A.T. already applies to internet sales in Europe, does'nt it? Unless of course, products are getting shipped from overseas.
Real men don't need signitures!!!
States have been trying to get taxes on mail order products for years, and some have passed laws that do tax out of state purchases. I would expect that some states will pass similar laws for internet sales, and some will stay in the clear.
A bigger problem will come when the federal government places tax on internet sales, bandwidth or usage, or whatever. This is primarily because there is no such all encompassing tax at this point. Whenever you purchase something, the only tax that goes to the federal government is the wonderful corporate tax that those who sold it to you pay each year. There is no "transaction" tax on any transactions whatsoever that the federal government collects. This is because it is unconstitutional to do so.
Now, IF the fed decides to make a "bandwidth tax" or a "transaction tax", which is what some are proposing now, that is a breech of our constitution. There is only one way to stop that, which is write your senators and congressman and tell them what you think about this, reminding them of what will happen to their job if they vote for any internet tax whatsoever.
I hope you all write at least one letter. Otherwise, you should'nt complain when bandwidth or transactions or whatever gets taxed. After all, you never officially complained, did you?
Real men don't need signitures!!!
He has a point. What is worse, is with global e-commerce, the issue is not states anymore, but rather COUNTRIES! This makes the whole issue more complicated.
2bits.com, Inc: Drupal, WordPress, and LAMP performance tuning.
Yep, you're right; that is precisely the rationale.
However, a point to consider is why is it necessary to make up the shortfall? Assuming taxes go to pay common services like police, fire, etc., wouldn't the deviation of money from brick and mortar establishments cause those establishments to close? If they close, doesn't that reduce the need for common services, resulting in lower tax requirements (this assumes ecommerce entities are capable of doing business more "compactly")?
The little guy just ain't getting it, is he?
The reason that stuff is cheaper on line isn't just because its not taxed, or because the retailers (or 'etailers' as the press now like to call them) save on rent, the reason you can buy stuff cheaper online is because they are selling at a loss!
ThadThad
Why not get rid of sales tax, period. I can understand why states want to tax: it's unfair for the Internet to be a tax-free zone and leave local business in a tax(high-price) ghetto. 'Course sales tax is pretty regressive anyway, Alan Keyes notwithstanding, so maybe it should be done away with anyway. Replace revenue with slight jump in income tax(oh but progressive taxes are socialistic and classist, right?)
-Every time I see you flourishing with a metaphor I experience the same anxiety I feel watching a child with a razor-
It's farly reasonable to assume that there wont be any major internet taxes imposed as any state will realise the danger of pushing business into other states and loosing out......
One would expect this to be true but then again if states like Texas can ban online car sales by car manufacturers solely to preserve the position of middlemen (car dealerships), who knows?
i think taxes suck because:
they make me have less money
hot grits cost money
less money=less hot grits, and less hot grits make harvey something something
go crazy?
DON'T MIND IF I DOOO!!!!
but seriously folks, did you think that since all commerce is moving towards the internet, that the governments and beaurocracies of the planet are just going to say, "darn! no more tax money. oh well, lets just stop all government services."?
i didn't think so. we've got a good argument for why there shouldn't be taxes, but they're the government. it doesn't matter what we say. mainstream media will just make it look like 50/50 and make everyone feel stupid for not wanting it.
or something
LLAMA GRITS
"..Constructive critizism is always welcome however."
Yes, I realize that some little bit of government will always be necessary, but that little bit that performs the legitimate functions of a government is pretty cheap. A government should enforce our property rights, and nothing more. That includes most of criminal law, and specifically excludes "income redistribution", AKA theft.
Even the socialists among you should be able to see flaws in the sales tax idea: it's regressive, and socialists are supposed to be against that sort of tax. It is inefficient; ask any economist. It causes underproduction and loss of welfare (in the economic sense of the word). Eliminating sales taxes would force the governments to collect the taxes more directly from the people. Yes, that's good. Then folks will see more clearly how deeply the government is gouging them.
I think that the tax-free status of the net is a great chance for all of us who don't like big government at any level to push for the elimination of sales taxes in general, so that the brick-and-mortar guys can keep up, and so we can keep government in check just a little better.
See what I've been reading.
Hey, if you think that internet taxation is as stupid as I do, check out this web site:
http://www.NoMoreNetTax.com
It's got a nifty little (international I might add) petition you can sign to show that you don't like this taxation stuff.
--
Words are meaningless. Action counts.
As more commerce moves to the internet, the government will have to make up the shortfall. It can do this two ways.
The first way is going to be unpopular with the majority of the population who don't really care about the net. Seeing as the money has to come from somewhere, the government has to chase ecommerce, in case it erodes other income streams to the point where they can't make up the shortfall.
There is no such thing as a free lunch - the idealogy of freedom of the internet clearly has no place once you're making a buck.
Drag n' Drop DVD Recommendations
The government is just looking for a way to make us turn our heads while they come up with a "fair & just" way to dig into our pockets, don't be fooled by Bill (I did not do that.....) Clinton.
,Collect the whole set !
2 years ago, I bought a new TV from a store in New Jersey (I live in New York)and had it delivered to my house. Guess what, no tax !. If I carried the same TV out and put it in a truck myself and took it home myself the price would be $130 more.
I don't know how it is in the rest of the country, but when something is being delivered across state lines tax is not charged. IMO 90% of internet sales are sent across borders so why should the laws be different than going to a store ?.
For one thing it will cost the government MORE to try and keep track of internet transactions so they will have to hire MORE people to deal with the extra work, so why bother ? It will cost more for them and the shoppers who thought that the internet was going to be cheaper (effectively closing some of the smaller I-net shops)....
I personally am tired of the government nickel & dimeing me to death ! (anyone buy a pack of smokes in NY today ?, the tax went up again !)
P.S. It all really sounded good in my head ! Oh well
- Save The Whales
Success is not the result of spontaneous combustion, you must set yourself on fire.
That article clearly states that, and I quote verbatim: No Tax or duty shall be laid on Articles exported from any State. What part of this is ambiguous, and what part does not apply in this situation? Not only that, but just below, in article 1 section 10 (Powers prohibited of States) it clearly states that No State shall, without the Consent of the Congress, lay any Imposts or Duties on Imports or Exports.. They're not taxing the import or export. They're taxing the sale; just as they would if a resident of that state bought it locally. The tax-proponents are claiming that the fact that it leaves the state after the sale has no effect on the taxation of the sale. Your line of thought that no special rules should be implemented against out-of-state buyers only reinforces the pro-taxation argument. Currently, out-of-state buyers have a loophole where they can [technically illegally] not pay state tax, something in-state state buyers can't do. They are proposing to close this inequality somehow.
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I think that the BEST solution (again, US wise) would be a national sales (consumption) tax instead of an income tax.
International sales? Why should I pay taxes to a foreign government? When I travel overseas, I can get my VAT tax dollars back before I leave the country.
If you ignore the stance of Nozick 'All taxes are theft' and other utopian libertarians you need to look at a fair tax method. 'Fair taxation' is an oxymoron -- taxes are simply unavoidable burdens paid to government. It was US Supreme Court, not 'utopian' libertarians, that ruled that there is no patriotic duty to pay more taxes than absolutely required. There's nothing 'fair' in taxes. The adequate question to ask is not why Internet sales are not taxed, but why regular sales are. Taxing Internet sales is using approach that is tried & untrue. PS. I don't see how making the claim about the nature of taxation (this way or another) can be 'utopian' or 'distopian' for that matter. That's sloppy thinking.
Bad. Eliminate that instead of taxing the Internet.
Ones audio, ones visual, other than that theres no difference. Stop whining and grow up.
Money from taxation is acquired through extortion. It's not yours to take, and not yours to give, regardless how good intentions anybody might have or how good and how so oh the all important goals are to be (supposedly) realized for that money. Stop stealing and grow up.
The only way to have a true internet tax is to tax the shipping, the same way the only consuption tax for oil is on gasoline. Here in California there is $0.40 added for state tax for each gallon. The same idea will be used for internet sales.
They will tax the shipping.
-- Andy
* "Uncle this droid is malfunctioning" -- Luke Skywalker
You're assuming that government is a rational parasite; I don't know if I can agree with that.
As for distorting preferences--government's been in that business for a long time, vide tax subsidies for ethanol, wind power, etc. If you're concerned about that, though, why not work to get sales tax relief for brick and mortar stores?
That's a little too socialistic for my tastes. Here's an even better idea: Repeal the income taxes (federal and state), and replace everything with a sales tax.
This would, of course, involve repealing the 16th amendment (otherwise, the government could slap us silly with federal sales taxes AND income taxes).
The big problem I see with income taxes is that the burden is on those who produce, not on those who consume. In other words, those who produce the most (or have high paying jobs, or are shrewd investors) currently shoulder most of the tax burden. The net effect of a transition to the sales tax would probably be the same in terms of generated revenue, given that those who make more often spend more. But it might also have a postitive effect on the "buy-now-pay-later" mentality of the credit card age, in which people max out several credit cards and end up paying 18% interest until they die (or declare bankruptcy).
If an income tax exempts savings and charitable donations, then it has almost the same economic effect as a sales tax -- any income that you didn't save (or give away) was, by definition, spent on something.
This is a very good argument for sales taxes. I believe sales taxes would encourage people to save more, invest more, and give more to charity. Why? It'll shift the focus from material acquisitions (i.e. what I want) to more realistic views (i.e. what I need). And I don't know about you, but my money gets taxed regardless of whether it goes into savings or checking. Thank goodness for the 401(k) and charitable contributions!
JimD
I do not think that the ablility for states to charge sales tax on internet purchases would make that much of a difference on internet commerce. Most of the stores I buy from on the internet charge sales tax already, either because they have physical retail stores in my state, or for other reasons unbeknownst to me. Even with these taxes, the purchases I make at these stores are a really good deal to me.
As a college student without a car, it is difficult for me to get into cities that have some of the basic things I need, like art supplies. Although Utrecht an art supply store, has a physical store in Cleveland, about 50 minutes drive (virtually everything takes at least an hour to get to) , I make most of my purchases from their internet store. It is cheaper than the physical store, and they do not charge shipping. So for all this, to have to pay state sales tax is not so bad.
The only question I feel the need to ask is which state will be able to collect the sales tax, the one where the seller is, or the one where the buyer is?
It's farly reasonable to assume that there wont be any major internet taxes imposed as any state will realise the danger of pushing business into other states and loosing out......
I wonder if anyone could clarify this (i'm from the UK): If you live and run a business in one state where there is an e:tax but have your e:business services operated in another state where there is no e:tax, do you pay the tax in your native state?
Please note E:TAX is copyright 2000 Reality-Bytes all rights reserved: patent pending: 666-999 international pointless patents office.
Ripping an new rectum in the fabric of spacetime.
There is no real difference between the Republicrat and the Democan parties. They are two sides of the same coin. The "big issues" that supposedly separate the parties are so minor as to be trivial. At the end of the day they all pretty much vote the same.
With the notable exception of Jessie Ventura, third party and independent canidates don't stand a snowballs chance in Hades of getting elected to high office (President, Congress, Govenor) in this country.
As cynical as the above may sound you still should vote in every election, for every issue and post on the ballot. Because voting early and often is the only way short of revolution we are going to change the political system.
Happy Fun Ball is for external use only.
But it probably worked more like that in Denmark before, but a couple of years ago they discovered that people were buying lots of American products via the Internet, and so they started to check parcels much more carefully. :-(
A few examples from Denmark:
It's really a mess, and I hope that the Commission will soon succeed in simplifying those rules.
I don't see why the net should be exempt from tax. Just because the medium in which sales are made has changed shouldn't change everything else. Not taxing net sales, will only mean longer, higher taxation on non-net sold goods
I think this is a good thing, believe it or not. To not have any taxes on internet-sold goods is somewhat problematic in a few ways. First, it's blatantly unfair to those who dont' have access to technology--in a sense it makes lower class people who can't get on the web pay an extra tax compared to those of us who do have web access. In addition, not taxing internet sales in a way distorts consumers' priorities: consumers respond to incentives, and a tax-free way of buying something certainly is an incentive. The distortion of preferences is more dangerous in the long run. When people make their decision to buy solely upon whether or not they will pay a tax, other things fall by the wayside. I realize that it is up to the consumer what particular aspects of a purchase (s)he views as most important--and therefore choosing solely upon there not being a tax is his/her prerogative--but gov't sponsored (and by not taxing, they are in effect sponsoring) changes in peoples' preferences in the long run can be a bad thing.
Firstly Utopian Libertariansm is a political philosophy based around the utopia of a perfect market structure whereby market forces regulate properly and there are no market failures.
No market failure = no need for tax = utopian ideal.
You state that there can not be such a thing as fair taxation. I would counter that by saying that taxation is needed due to a myriad of market failures and that a fair system is an equal system where no one area of the same market (ie purchaces, Income, Labour, etc) is treated differently. Ie one good is treated with the same taxation system whether it is sold in a shop or over the internet. Of course the circumstance of the sale can be written into the taxing legislature, again the examples of import and export tax.
So the US Supreame court says that we should only pay what is required. Well, heres news for you buddy, this meand paying taxes until the amount needed for the government to overcome the market failures (which alas the US of A is not succeeding in at the moment, therefore you need to pay more tax.)
+ I find it f*cking patronising that you think that the supreme court is the be all and end all. And the fact that you use an example of a body saying we must pay the correct level of taxes to illustrate an example of the Nozick quote just shows your ignorance and lack on analytical skills. Read what I said again. Utopian Libertarianism says that no taxes should be paid under any circumstances.
Although Ironically this is exactly the same as Marx's view of the utopian state of communist society in the Communist Mannifesto... Go figure.
As for the quote
I'm assuming that english isn't your first language, but even then this makes absolutely no sense. NickWorking for the (other) man
Also, I have never seen tried and true used, tried and tested maybe, but then again I unfortunatley don't live in the US....
As for listening, I read and could only see a half formed badly argued thought process along the lines of 'taxes can't be fair because... Um, well I don't know why, they just can't'
If anything it was a reaction to the wilful misinterpretation of what I had said, the lack of argument to back up the statements and the jumbled nature of the grammar. Although this is /. so I really should have expected it :-)
Trust me, that was not knee jerk, I thought for at elast 2 minuted before typing ;-)
Working for the (other) man
If you ignore the stance of Nozick 'All taxes are theft' and other utopian libertarians you need to look at a fair tax method
Personally I'm in favour of internet taxes if they are equivilent (and based upon) non internet taxes.
A good example is the use of import and export taxes on goods bought from abroad.
Use of internet specific VAT isn't really an answer as internet goods in the marketplace should not be differentiated against as this skews the balance of purchaces away from a stable equilibrium.
Charging for bandwith can be brought into this system, but only if it is paid fo directly and only under a structure that taxes purchace of similar services such as VAT on phone costs, etc.
Creating specific internet taxes is anti competitive and anti market forces.
If they're not careful they'll get a slap from the invisible hand
Working for the (other) man
I'm always curious about government's saying "We've got something new here - quick, let's tax it!" Back several hundred years, England (and some other countries, IIRC) had a Window Tax (very tempting to do a Bill Gates joke here, but that's not the point of this post :-)
Anyway, why do we need tax? Answer - to keep the government and other state-funded stuff going. What's the most efficient way to do things? Answer - in bulk. So why do we have zillions of piddling taxes adding up to 40% earnings for middle-income folk in the UK (or 50% for the US, according to another poster)?
The only logical way I can see is to tax income for people and tax profit for companies, AND NOTHING ELSE. Can anyone think of a good reason for VAT, apart from just sneaking extra tax off ppl? Didn't think so...
And then we'd actually see LOWER taxes, cos a fair percentage of the fat-arsed crats employed chucking paper at each other would be surplus to requirements.
Grab.
As with all big decisions that have put into the hands of the states to decide on their own E-taxation to will become another SNAFU. Mainly because there will come questions of jurisdiciton when taxing a sale over the internet. Which state gets to collect the tax. This question was solved some years ago with mail order business when it was decided that the state of the customer's residence would be the one to collect the tax.
What if a wily state, like Virginia, decides to tax from Point of Presence on the Internet. Now Virginia being the home of AOL, all AOL users would theorically have a point of presence onto the "Internet Proper". Could then Virginia be able to tax all AOL customers doing E-commerce?
That will end up being something for the courts to decide, and we have all already seen the courts ability to handle internet legal problems.
Why don't they just do it like each states sales tax. People who live in NH don't pay sales tax, so why should we have to pay a tax on the stuff we buy, from our own homes, just because it's over the Internet. Let each state levy its own Internet taxes.
There are four boxes used in defense of liberty: soap, ballot, jury, ammo. Use in that order.
I went to my favorite Internet professionals club meeting last night and the essential message was: the I-tax moratorium renewal legislation will be signed and the next 5 years will be taxes free. Want a more in-depth analysis? Go to the same Uni I go to and check out the kick *ss attorneys which came and gave a bad-ass speech.
--
He lives in a world where those who do not run the client software of the omnipresent meme are unacceptable.
It is not selective enforcement. It is Practical enforcement. The man-power to enforce the tax you are legally required to pay to your state, when you make out of state purchases, Has not been cost effective to enforce. Now that the amount of goods purchased out of state is at a point where the state is taking a noticable loss(because very few people actually bother to pay the tax). And like it or not, it takes money to run the goverment. Now when you consider the our representitives do what we want them to(Yeah I know, thay don't always do what you think is right, but considering my recent efforts to get people in the technical field concerned with politics was met with apathy at best, you get what you deserve)Now we need roads, we need people to work on them, we need services, we need support, we need people to represent us to other leaders, we need a military, these thing cost HUGH money. Now we neeed to watch what they do, demand accountability, and get involved. Representatives will listen to there constituants(?) if the present them self's professionally. I have seen this happen, but everybody keeps standing on the side lines pointing going "that is bad, I'd do something, but I need to watch the matrix again".
you want it better? spend 2 hours a week to write letters, maybe even , god forbid, try to get others to rally, in meat space.
The Kruger Dunning explains most post on
Maybe I am missing something here, but the point of internet sales taxes is not whether or not the e-commerce companies themselves are taxed, but whether they should collect sales taxes in states where they have no presence.
e-commernce companies pay income taxes and all other taxes just like brick and mortar companies do. an internet sales tax ban doesn't put any money in the pocket of the e-business, except insofar as the lack of sales tax might entice a purchase. shipping charges often offset lack of sales taxes, by the way. lack of sales taxes are not a subsidy in any way whatsoever! remember, sales taxes are paid by the ultimate purchaser, the company just acts like a miniature tax collector on behalf of the state.
the states are pushing to extend sales taxes because to them the internet is "illegible" (see a great book, james c. scott's _Seeing like a State_, for a greater exposition on state's typical reaction to things they cannot understand) and they wish to make it undestandable, so they can control and tax it -- in the broadest meaning of the word "tax". sales tax is only the beginning.
Governments have a problem with taxation on the Internet. That much is obvious.
The problem is not of the Internet, but of government.
Government has built apparatus which effectively snoops on every financial transaction we make, to ensure they get their cut. The citizens have no choice but to pay whatever government demands, otherwise coercive measures are exacted.
The internet changes the rules. Transactions can be encrypted, and happen across national boundaries in hyperspace. Governmments can't tax what they can't see. We have already seen the UK government the rapacious 'Regulation of Investigatory Powers Act', an immoral piece of legislation targetted directly at users of encryption. It is cited as a crime fighting measure, but I am sure they will get around to using this legislation to track 'tax evasion'.
As I said, the problem is with government. The concept of democracy is a myth, when an elected party is in power unchallenged for four or five years, and runs the nation through a set of civil service administrators and other government employees, each with their own agenda. Current taxation is little more than institutionalised protection racketeering by the state. We have to pay what they demand for the services we need, or else.
The Internet may force government to change. Instead of protection rackets, they may end up having to talk with people, to treat some people like valued customers. They may ultimately need to negotiate a fair price with some people for the services that those people want, on the pain of those people choosing to live elsewhere. Where this leaves those people who aren't 'some people', who are not in a position to negotiate, the poor, the old, the unemployed and the 'technically challenged' is a big social problem for the 21st Century.
Stephen Hawking has written another book. It's about time as well.
Too bad guys...
Here in Texas a few jump-the-gun reps have already banned internet taxes. U guy we;ll get a nice little boost in e-commerce hq's & warehouses thanks to other state's need for greed.
Feminism is the wild notion that women are human beings.
Actually, foreign (from outside the EU) imports are subject to VAT, as well as import tax.
You see it in lots of arenas:
There are dozens more examples, but the point is this: the pace of innovation is leaving policymakers in the dust, and they are going to keep making uninformed decisions that may plague us for years . Our only recourse is an intensive campaign to educate them in the new realities, while respecting how difficult this period of transition will be.
A. Keiper
The Center for the Study of Technology and Society
I can't think of a single MAJOR difference between buying something online and ordering it over the phone. So it's a little easier, and a little more flexible. It doesn't have some moral superiority that people have tried to give to it; what seems to have happened is that people have mixed up the vision for the internet 10 years ago with the vision that corporate America has coopted. I buy a lot online, but I wouldn't lose any sleep if we saw a reduction in the e-commerce that has turned every web page into a billboard.
I know that sooner or later the local governments will find a way, but it won't be easy... taxing the purchaser would be an excercize in futility, and taxing the seller would just cause companys to relocate to other areas. anyone have any ideas on a fair way? If it's bound to happen, it might as well happen in a good way.
If on the other hand the states are going to charge out of state Business sales taxes. How will they monitor that. Will people selling out of state be required to have peddlers licenses for each state. I can't see that happening.
I buy almost all my computer stuff from a company in California ( I'm in ohio), and they charge like a 2% tax. I buy the stuff because its so cheap though. I got a Pent400 Intel everything (mobo, processor) barebones system , with a brandnew viewsonic 17" Monitor and put all the parts in it from my newly upgraded pent120 and paid less then 700$ for the whole deal. The only sucky thing is that it only has a 8x cdrom. BTW does anyone know where I can get a decent 10k-rpm hard drive around 8gigs for around 150$? I've seen one from IBM, but it was only 7200 rpm.
Hey, here's an idea: how about the govenment reducing spending!?
We are playing right into the politicians' hands when we get into "it's not fair" in-fighting. We don't need ANY more taxes--govenments need to reduce spending.
And I'm tired of the brick-and-stick whining. If getting an e-business is so damn profitable then go to it! Nobody's stopping you.
It's OUR money!
~Common sense isn't common - Tony Brown
Well, this isn't that big of a deal in terms of money. Seven percent (averaged) on top of our O'Reilly books is what we already pay at our local B&N or Borders. It would be an aggravation in terms of bookkeeping and certainly a major blow to keeping the internet free and out of the hands of the government. But it would be easy to fight. How easy? Simple. Just stop buying things over the internet. Go back to purchasing locally. True, you'd be paying sales taxes to your state that way, but you already are now, and you would be then, too. That isn't the point. The point is the INTERNET sales tax, right? So, we stop buying from Amazon.com, LLBean.com, ToysRus.com and all those other retailers. Cuts into their profits. We let them know WHY we aren't buying from them. THEY get mad and take it out on their congressmen and senators at the state and federal level in the form of denied campaign funding and votes. You'll see an immediate backpedaling, because, my friends, in America in the late 20th and early 21st centuries, I've noticed that business gets what it wants. We could call this the Internet Tea Party. P.S. I didn't check the other posts to see if this has been proposed elsewhere. Probably has.
> He said: "I would like to know what services states I don't live in are going to offer me."
How is his product going to be shipped -- by air drop? I bet he uses the roads in your customer's state.
My comments below are limited to the U.S.A., though I'd like to hear what other countries are doing.
I agree you have a point. It's a complex issue that likely will be handled by local politicians and beurocrats -- the people who are pressured to tax by the demands of paying for government services we do use. The higher the profile, the less likely you'll hear the politicians talk about new taxes.
Getting back to your point, do all governmential entities -- including towns and counties -- deserve a 'value added tax' for providing the physical corridor to the final customer. You can bet that's going to be one of the arguments!
The things that can't be shipped -- services -- will also be a sticking point.
We can't avoid it. There will be additional taxes to cover the actual and imaginary loss that these local governmental groups see -- and they will get thier take. The only question is when.
To avoid seeming like they are responsible for the taxes, it will not be enacted on a federal level anytime soon. Taxes will probably at the seller's site and probably at a special higher rate...under the reasoning that since the state/locality is loosing to other states they have to make it up.
A firewall can not protect you from yourself. Turn off what you do not need. Do not use the firewall to do your work.
Supposedly Internet sales are dwarfed by catalog sales. If this is true, why all the fuss at the moment? Is this true?
Having said that, does anyone know how the taxes are handled on catalog purchased world-wide? All I seem to see are notes on the purchase forms that say things like "if you live in X, add 6% sales tax".
A firewall can not protect you from yourself. Turn off what you do not need. Do not use the firewall to do your work.
normal(adj)- people who don't sit on slashdot all day wondering why everyone else isn't building robots [DECS]
And for you fellow North Carolinians: Barbara Howe for governor! www.votehowe.org (Besides, you gotta love someone who uses a penguin as her mascot. :^)
It may stifle E-Commerce. Having higher prices may cause E-Commerce to become unjustly ignored. You are no longer getting something for cheaper (Especially with shipping charges) So less people may use it
It may also cause a less distributed E-Commerce powerbase. The reason? All the companies that see E-Commerce as a major leap will be wanting to move to areas like Texas where there will be no taxes. The result? Certain states will lose out on the job possibilities and revenue generated by having such companies resident.
ChAoS
WARNING: May contain traces of nut
Insted of cheap taxes we have (at least in northern europe, Finland, Sweden..) The best social wellfare in the whole world. So is it better with high taxes and a good social wellfare or low taxes and people living in the streets. Personly I think the firs one is better.
If you think that we are communists you should think again. If we would be communists why the hell did our people fight against the soviet-union in the second world war? (we were NOT natzis!!)