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EU Web Tax Proposed
SomeGirl writes "Well, it's finally happening. The EU is proposing a Web tax." Its only a matter of time I s'pose... but quick! By a bunch of stuff while its still tax free! I recommend Moby's 'Play' and the Tenchi in Tokyo DVDs, but stay away from those VW Bugs that they're selling online (Ooo! Look! A Special Color!)
Sales tax is unnecessarily messy: you tax consumers directly, pennies at a time, for everything they purchase. Very inefficient: for starters it's inconvenient to me to go into a convenience store, grab a bag of Doritos marked $0.99, and have to pay more than a dollar. It's hard to figure out exactly how much your groceries are going to cost, and it varies between states, and sometimes between cities. Also, if the customer can prove out-of-state residency (by showing a driver's license), they're usually exempt from sales taxes. More importantly, though, there's a fair ammount of overhead involved in actually collecting sales tax - both on the part of the retailer and the government.
Income tax is much easier, because your employer only has to deal with it for each employee, instead of each customer, and you only have to pay it once a year, rather than every time you go to the store. $0.99 Doritos cost $0.99 instead of $1.06. Everything costs what it says it costs. If you're from out of state, there's nothing to worry about; there's no sales tax anyway. This also means that there's no problem with interstate commerce on the Web.
In areas that attract a lot of tourists, the state generally collects a lot of sales taxes, and this helps the government. Great! Collect the same money from local businesses in the form of income taxes instead. If people are spending money, the businesses must be making money; tax that instead! Much easier.
Anyway, what I was really trying to get at was, doing away with sales tax completely solves the problem of Internet taxes. You don't need to worry about taxing online transactions if you instead tax the people and businesses in your own state or country regardless of what purchases are being made.
I apologize for the poor wording and lack of coherency of my rant, and I'd appreciate any feedback.
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This sounds similar to the mail order tax tried here in the U.S where states may require out of state businesses to collect sales tax, but where there is little means of enforcement.
And as this crosses national lines, not just state/province lines, how can the EU hope to enforce this. Will they block sites which offer items for sale? Restrict deliveries?
It seems like an idea that's bad on paper and could only get worse in its implementation.
Of course I use Microsoft. Setting up a stable unix network is no challenge
They want to tax services sold over the Web from outside EU. For products (ie DVD and books) there's allready a tax paid at the customs.
New Hampshire, Oregon, Montana, Alaska, Delaware (N.O.M.A.D.)
:(). Supposedly you make it up if you own a home though. They also tax businesses more, so prices may be slightly higher.
And, FWIW, Delaware is getting along just fine, thank you. They are snagging huge amounts of sales away from the states around them, because people will drive over the border to pick up those big-ticket items w/o sales tax. They also sell lots of liquor to PA residents who are sick of the lousy state liquor store sytem back home (socialism, anyone?)
As someone above mentioned, the income tax in Delaware is VERY high (about twice the Pennsylvania rate, from personal experience
Added benefit of Delware: they make it damn hard to become a lawyer there. Keeps the population down!
Jon
All opinions expressed herein are my own, and not those of my employers, who are appalled.
"When Switzerland will be finally forced to join the rest of Europe, all mail-order companies will move there"
Switzerland won't join the EU before at least another 10-15 years. We just voted a big YES (76%) in favor of bilateral agreements between our venerable country and the EU. Now (well, when the agreements are totally implemented), it's *almost* like being in the EU without having to give up our strong currency in favor of the Euro, which isn't worth jackshit. Hundreds of companies chose Switzerland for their European HQ's (less tax, central location, etc.). Sci/Tech companies already take many pages in the phone book here.
I dunno about mail-order companies, but my newest "neighbour" is Handspring, maker of the Visor PDA. There's also HP, Compaq, IBM, etc... Not talking about all the international organisations.
The French usually don't like Switzerland (jealous?), and tend to treat us like the black sheeps of Europe for being "that little rich country". So far, we have a stronger currency, the lowest unemployment rate (1.9% only) and *very* attractive wages (at least twice higher than in France) and some of the lowest VAT rate (7.5%). And pot is to be legalized at the end of the year, too! Beer is cheap as well...
Really, I don't see why we should join the EU... To get our tax levels doubled, have our currency basically cancelled and inherit an average 15% unemployment rate? No thanks...
And, IIRC, as of next year EU citizens will be able to live and work freely in Switzerland.
Come and have fun in Geneva, man!
Max
-- It's always darker before it goes pitch black.
EU consumers already pay VAT and/or import duties on incoming goods from outside the EU (often along with a charge for collecting the taxes which seems particularly nasty.
This stuff is changing *where* the tax is paid - so on tangibles would have the advantage for EU people that they wouldn't be additionally hit for for the tax collecting charge. However it would mean that software delivered over the internet (look, no customs), would also be taxed.
Can it be implemented, can it hell.
Let's face it. Governments get most of their money through sales taxes. It's no wonder why the only state in the Union (Delaware) is in such poor shape - there's no sales tax on any items in the state.
With the Internet economy increasing at an exponential rate, many people are going to turn away from the conventional means of shopping. Grocery stores will be phazed out by online Grocery stores, as will the common Electronics Store, the common Book and Movie Store, and the common Clothing Store. All of their online counterparts are now available in abundance on the Internet, and most shoppers that peruse their wares are exemt from paying any taxes, through a signifigant loophole - they are not making the purchase in the state the product itself is located. As such, they pay no taxes, and the Government loses money from the sale.
I believe that it would be best for the economy if all e-Commerce sites were taxed. Now, I am not in favor of taxing internet access itself -- that needs to be as cheap as possible to allow the most people access. However a 10% Internet Sales tax would quickly help governments recoup losses to date from previous online sales, then in a few years, lower it down to a more managable 5-6%.
You won't you twat, if you bothered to read the article before spouting off you would realise that this is a tax on goods shipped from outside the EU into the EU ordered over the web. It's just like the import duty that you as a US citizen pay on French wine or Italian salami.
So read before opening your mouth.
Nick
-- "It's a sad day for American capitalism when a man can't fly a midget on a kite over Central Park" - Jim Moran
Yeah, and it's not just the EU. Check out this from the Grok at Industry Standard:
"But it was Andy Grove who made the most unexpected news, though few outlets emphasized it. In testimony before the Joint Economic Committee, the Intel chairman lent his support to taxes on Net-purchased goods and to stronger privacy legislation. The Wall Street Journal led with Grove in its piece about the hearings, and the Washington Post noted his remarks at the end of its piece. "
Taxes are on their way. Buy now while the web is still unregulated.
Put the blame on meme
What do you know- the first thing I see after returning from the article submission screen is the exact article I submitted, posted with exactly the spin I feared it would get posted with.
The CNNfn article is misleading- they shouldn't have called it a "web tax," which to most of us means "tax on using the web." What the EU actually proposed was a value-added tax on goods and services, sold over the Internet by non-EU businesses, to customers inside the EU in order to level the playing field for EU-based companies that already have to charge a value-added tax. It is not, in the usual meaning of the word, a "web tax." Now you know.
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-jacob
-jacob
I personally don't see a real problem in paying sales taxes (as long as they are relatively fair). I do see where the money *should* go.
On the web, it's harder to see the infrastructure. The server (equivalent of the mall) is owned by the Ebiz or is paid for by the Ebiz. The phonelines (equivalent of the roads) is owned by a telecomm company and is paid for by the Ebiz.
Then you may be asking yourself:
1. What is his point?
2. Fair Taxes?
3. What was that I just drank?
5. Did he just skip 4?
6. Where would this tax money supposedly go?
7. Is that how you spell equivalent?
So the answers:
I don't know.
Just Imagine it.
You don't want to know.
Yes.
To the implementation of laws and such.
I'm not a dictionary, Go Away.
Now I know other people are ranting and flaming about the police are already paid and they should enforce laws on the web with the money they already have. But that would just make other taxes go above the "fair" line.
The reason I personally don't think this should be done is the cost of implementation. It will cost more to force people to pay the taxes then you will actually recieve. How do you stop a sale going through from a company in Germany that has a server in Canada (hypothetically)? Do you track the traffic on the Canadian server? I don't think they will like that.
I lost my train of thought, so I hope someone gets my point and then tells everyone else what it is.
Devil Ducky
Devil Ducky
MY peers would get out of jury duty.
If you actually read the article instead of just the headline, it turns out that this is much less sinister than it sounds. The proposal is actually that goods manufactured outside the EU that are ordered over the web should be charged VAT, which is perfectly reasonable. Otherwise, non-EU manufacturers selling over the web would have a substantial advantage over all EU manufacturers and non-EU people selling through every other channel. This is not some special tax that applies only to web users; it's applying a tax that everyone else already has to pay to web users, who weren't paying it already. IOW it's just leveling the playing field.
There's no point in questioning authority if you aren't going to listen to the answers.
The EU has already ruled that a purchasing services such as web hosting inside the EU should be subject to sales tax since the service technically takes place within the EU. Surely this produces the possibility of a single service being subject to the sales tax of multiple countries (especially if other countries follow suit). The fact that the Us have already raised objection, in reality means it is likely this will never become law, the suggestion that the EU can force US (and other nations) companies to register as collectors of EU VAT is preposterous at best, idiotic at worst. The proposal would require the companies to register at any EU country and pay tax at that country rate. As the news item states, different countries within the EU have different rates of sales tax, isn't it obvious that if this happened all the companies would register in the state with the lowest level of tax? If I was a gambling man I would be willing to bet $50 that this was proposed by someone representing a low sales tax state, any takers? On a side note, proposals like this further heighten my concern that the WU is attempting to shoot itself in the foot with regard to the E-Commerce revolution. How can we (inside the EU) possibly expect to compete with US businesses online if the regulators fail to understand the intricacies of what makes the internet great? Companies within the EU are already crippled by having to charge sales tax on e-commerce transactions, if the governments really want to address the balance they should lift sales tax on e-commerce entirely (at least as long E-transactions in the US are not subject from any kind of sales tax)
Yet again people see the word 'tax' and immediately jump to to the conclusion that everything for them (especially Americans) will suddenly cost more. In Canada our taxs are 45%, what do you guys have to complain about? Anyway, in conjuction with the first comment the EU is simply enforcing an already existing VAT tax standard. This is similar to the GST (Goods and Services Tax) we have here in Canada running at about 7%. The EU is trying to ensure that the proper taxes are being paid for. With online commerce the EU is simply protecting itself. My only big problem is the actual tax rate itself. The taxes on buying something online should not be greater than the taxes on buying it at a physical location. Perhaps even less due to the lessened value-added effects that are involed in electronic media. That is, we don't pay the value-added amounts as much, because there is less being using in their creation. Like, the value-added'ness' of CDs, or paper/covers on books and all those 'hidden' costs.
..Eschew Obfuscation..