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States To Try Taxation Of The Net Again
kimbermatic writes "From the Denver Post comes this article that the states are ready to try and tax the internet sales once more. The poor economy is sending the 'hounds' sniffing for more money. An interesting, and alarming read if your interested in protecting online merchants from this taxation plan." 'though it's not really online sales that are the big ones people want -- it's catalog mail order sales, which are still much bigger then online sales.
This means the only time I buy at Fry's is when I either need it *fast* (which happens) or when it's so little it's not worth ordering (which also happens). I mean, the CA taxes on anything in the $50+ range makes it worthwhile to always buy online and pay shipping.
This, on the other hand, could change all that, couldn't it? I think this will just drive more people away from online business, sink a sector of the economy and drive prices up for the consumer (which means they'll probably spend less, which is a Bad Thing, especially when you're in a recession).
But hey -- if that happens, I'll start selling motherboards on the street in SF right next to the guy selling the fake Rolexes.
Every year during my review, I just pray the words "slashdot.org" aren't mentioned.
In any case, I see taxes as one of the prices one pays for living in a civilized society, so I see no problem taxing online folk at an equitable level.
That is all.
What politicians fail to understand is that the major draw to e-tailing is the lack of taxes. Sure, shopping online a huge convenience, but people today would still choose to drive to their local retailer and actually touch and try out a product before making a purchase, and forcing taxes on e-tailing would take away any incentive for consumers to use the services of the fledging new industry.
With huge competition with prices and selection from traditional real-life retailiers such as Walmart and Best Buy, e-tailers are already having enough trouble trying to grow their new industry. Slapping taxes and removing incentives for consumers to use online services would only impair progress. We're already seeing the effects of fees on online services and its related decrease in usage (MSN, Yahoo, Hotmail), taxes would further the disincentive campaign that seems to be propagating through the online world.------
Amadaeus
The last bastion of Mathie-ism
If you order a CD from Amazon and don't pay your use tax, you're cheating your state out of more money than the artist would lose if you downloaded the CD from Napster.
Don't try to rationalize. You're all thieves. Bow your heads in shame.
(I have to make myself stop here. It's just too fun to spew out righteous indignation.)
My word, when will these overbearing government goofballs learn that having LOW taxes while surrounded by HIGH tax areas drives business AND revenues up for the low tax area?
Also, don't think that if there is no visible sales tax that you are buying anything tax free. The politicians conveniently forget all of the inventory, property, business income and other tax streams that they are already getting BEFORE they jack up/create a sales tax.
A perfect example of that was Washington, DC. They exempted "not for profit" organizations and had the highest sales tax in the area. This only resulted in the few businesses that were paying taxes to loose business to Maryland and Virginia.
Tennessee is now on their way to driving every bit of retail business near it's borders into the surrounding States with their 9.5% (or is it 10%?) sales tax. That is on top of their invintory taxes, "licensing" taxes, etc.
Solution? A small group of States make it inviting for internet business to locate their warehousing, data centers, etc. there and reap the benefits of elevated employment and higher volume of money due to a lower % of taxation.
Eve Fairbanks says I drive a hybrid!LOL
From the article: Twenty-nine states will vote on a tax proposal next month that could be pivotal in their effort to tax all online sales.
... To regulate commerce with foreign nations, and among the several states
Section 8 of the Constitution: Section 8. The Congress shall have power to lay and collect taxes, duties, imposts and excises
But then, who cares about the constitution? Certainly not the United States.
The theory of relativity doesn't work right in Arkansas.
But the US needs free trade more than anybody to soften the risk of entering foreign markets. Most of the 'free trade' agreements in place (at least with Canada and Mexico) were the brainchildren of US business men in order to make it easy to get into other markets (well, really, to make it difficult for local governments to protect domestic markets - same thing) .. I'm not sure setting up tarrifs would go over well at this point.
It'd seem pretty hypocritical of the US, and it'd probably be difficult to get away with, given the amount of trade agreements in place that purpot to provide free trade with various foreign markets.
"Old man yells at systemd"
I do so enjoy it, when people comment without reading the articles first.
It QUTIE clearly says, that in order to get on board with this plan, states have to harmonize their sales tax regimes. So that the state, and local taxes are the same.
"Politicians are interested in people. Not that this is always a virtue. Fleas are interested in dogs." P.J. O'Rourke
The governments shouldn't need to create any new laws to tax internet sales, because they should already do so.
Performing an age old activity like sending packages through the mail in exchange for money transmitted by credit card should be equally taxable regardless of whether the customer places her order via phone, email, paper mail, http, fax, or the trusty old carrier pigeon.
We've seen it again and again- government regulators/lawmakers/busybodies get tricked into thinking that activities are somehow inherently different when computers and internet are involved. This gives us special laws to prohibit computer intrusion (we've had wire fraud statutes since 1910) and special patents for "carrying out traditional business XYZ, but over http".
I can understand the argument that to support budding e-commerce, you want to give them a temporary reprieve from some normal costs of business. But the expiration of such grace periods shouldn't be newsworthy, it should just be expected.
Its about time this happened.
Can anyone put forward a well-reasoned argument why the Internet should be exempt to sales tax? Every other method of interaction in the world - from face-to-face transactions to mail order to telephone sales - is governed by state statues which tax that commerce. Is the Internet exempt simply because it is 'too cool' or 'over the head of stuffy old lawmakers'?
Perhaps taxation laws are merely over the heads of overexcited teenagers.
Dr. Joseph Hairston
Superintendent, CCBC
To be a REAL retailer with inventory, rent to pay, etc. and have to compete with 12 year olds with online stores that don't have to pay sales tax. Why, exactly shouldn't online retailers be taxed like everybody else?
Democratic businessman Rollie Heath, Owens' challenger in November's gubernatorial election, is pushing for Colorado to join the tax project.
He said that not taxing online sales puts local businesses at a competitive disadvantage.
"I just have a strong bias against having our own business having to compete unfairly with somebody who can send the same product in here from out of state," Heath said.
Sure, some businesses have suffered quite a loss due to the internet, but many businesses rely upon the internet to order items for themselves. Restaurants for wine, bike shops for parts, used book stores that buy, sell, and trade on the internet. All of these types of stores and shops would be hit by this tax as well as Joe consumer. And on top of this point, would this not increase the amount of items ordered directly from countries such as Canada and Mexico?
Yeah, but "the long run" when you're talking about the negative effects of tariffs on trade is, like, five years. Tariff wars were among the main causes of the Great Depression. I'd rather not see us go down that road again, thanks. The few countries that have success with big tariffs (e.g. China) tend to be developing countries that can sell their exports so cheap that when richer countries (e.g. the US) slap retaliatory tariffs on the poor countries' exported goods, those goods are still so cheap that the people in the richer countries will buy them. In cases where the economic situations are more nearly equal (e.g., the US and Japan) tariffs end up hurting both sides, and revenue goes down pretty fast because everyone's out of work, and bums don't pay taxes.
...
The other issue, of course, is that US States can't enact foreign policy. I think that there may have been a couple of times when state governments have tried to enact tariffs on foreign goods and have been shot down, though I'm not sure. And since we're talking state revenue, not federal
The correlation between ignorance of statistics and using "correlation is not causation" as an argument is close to 1.
Why would you love to see import taxes? You do realize that means no more cheap TV's and other consumer electronics. Any tax on imports gets passed onto you, the consumer. Taxes on imports have little to do with generating revenue. They are more about encouraging people to buy American (which in turn increases tax revenue).
I was taxed by a company on eBay a couple of weeks ago and brought this subject up with a state investigator about these matters. Here's the rundown from what I understand.
A company doesn't have to charge you sales tax if they are located out of state. They CAN if they have an agreement with the state you are in if it's different from the state the company. Even if that company doesn't have a branch or whatever in your state. If the company does NOT charge you tax it's YOUR responsibility to go the the local department of whatever and tell them that you bought whatever item at whatever cost from whatever company and you will then pay the tax.
Obviously a lot of people do not follow this course. And most mail order companies don't charge tax because it's apparently a giant pain in the ass for them to keep track of it all. So they don't charge across the board.
So it looks to me that they aren't trying to tax something that's not taxed. They're trying to collect what's suppose to be.
Abiit, excessit, evasit, erupit.
Same for many agricultural products. The undisputed leader of agriculture subsidies in ADM, supermarket to the world. Europe subsidizes its agriculture industry, just like the US.
Bush just slapped tariffs on steel, tariffs on lumber from Canada, and gave cash and loan subsidies to the airlines. All the Republican administrations - Reagan, Bush I, all believed in a large central government that centralized economic power, and redistributed wealth from the middle class to the rich. So did Clinton. Free markets are like a free lunch - ain't no such thing.
When the US says other countries should open their market and lower trade barriers, they mean just that - OTHER COUNTRIES. Not the US. We play by our own set of rules.
When other countries subsidize their industries and protect their local businesses, we call that SOCIALISM. When the US subsidizes our industries and protect our local business, we call that CAPITALISM. See how it works?
There are two types of people; those who divide people into two types of people, and those who don't.
That first line in your post is hilarious. :P No tarrifs == sharing of wealth? Laugh.
.. lets see, privatization, liberalized trade .. for business for all of which, for some odd reason, seems to go to american multinationals!
.. and they wouldn't give a flying fuck how anybody sees the US, so long as they can start selling Pillsbury to Venezualans.
.. cause tarrif wars make it exeedingly difficult to gain access to foreign markets. The inevitable tarrifs that would go up in other countries as soon as the US started using them more would have the effect of making it more difficult to exploit foreign markets.
More likely it would piss off the world because multilateral free trade is how american multinationals get into foreign markets (b/c it weakens the foreign governments' ability to protect industries.) Consider all the conditions of IMF aid
The US doesn't _need_ tarrifs, which is why it doesn't have any. You don't really suppose American international trade policy has anything to do with whats nice, do you? I mean, the trading policies in place are pretty much what heads of multinationals want them to be
So no, its not foreign countries that would be pissed if tarrifs increased. It'd be heads of US corps that would freak
Just look at some of the prominant trade agreements in place. NAFTA was dreampt up by american corperate heads, and then pitched to Canada and Mexico through 'figure heads' inside those countries. The biggest opponants to increasing tarrifs would be growth-minded CEOs inside the US's border fearing a tarrif war with markets they're trying to expand in.
"Old man yells at systemd"
It's great to see that the internet has succeeded to the point that government wants to tax it. What's too bad is that many ecommerce businesses see their only advantage to be price. And if 4.5-9% in sales tax will cut into your orders that much, you are already among the living dead. Those that live by price, die by price. You can't make money selling $.99 for $1.00. For that matter, it's damn hard to make profit selling $1.00 for $1.10.
$G
-- $G
Why don't we just try taxing imports? Works well for the Chinese and every other country that has positive GDP growth this year.
Both the US and China are members of the WTO, which makes it very difficult to put new tariffs in place. While China certainly has more trade restrictions than the US, the main reason for the trade imbalance is that the China has something to offer that the US wants (cheap, simple goods like toys and Halloween decorations) but there are few american goods that are affordable to the Chinese (this has little to do with tariffs, but rather with the fact that the average Chinese has a monthly salary that is one tenth the average American's).
The suggestion that tariffs are essential for growth and prosperity is ridiculous, the US and other of the worlds richest countries all have long-standing free-trading policies. The fact that China has higher GDP growth than the US should be attributed to the enormous opportunities that have become available during the last 20 years as the country has opened up economically. It is also much easier to have a high GDP growth if your current GDP is one tenth of the most modern countries (like the US).
Tor
But we LOVE taxes. You pay taxes when you make money, when you spend money, when you don't spend money and your holdings increase in value, and when you die and haven't spent all your money yet. ;-)
About the only thing you can do with money and not be taxed is to buy food or donate money to charity.
Kinda explains why we're all fat and still have sleazy televangelists, eh?
Blessed are the pessimists, for they have made backups.
"Can anyone put forward a well-reasoned argument why the Internet should be exempt to sales tax?"
The complexity of current systems of sales tax in the US are so complex that only larger retailers would be able to justify the use of online sales. Smaller retailers would be forced out of the market. In the event of some sort of simplified "internet tax" system, there still is the problem of submitting the taxes to the various states, no small headache.
Because, many of the most interesting, innovative, and creative products offered online are from small businesses, including mom & pop internet retailers, those products would disappear from the internet in the event of internet taxation of the sort mention in the original post.
An example:
I'm very into bass fishing. Fisherman often develop a preference for certain lures that have become their favorites. New lures are introduced to the market, and become the hot bait of that year, season, etc.. It's not uncommon that the new hot lure, or an old favorite will not be available from local tackle shops. Local tackle shops have limited space, indeed even the biggest names in the mail order fishing tackle such as Bass Pro Shops, and Cabela's don't have the space to carry ever model, of lure, in every size, and color. (1k of models, 10 different colors on average, and lets say 5 sizes on average yields 50,000 different lures, and this is a conservative estimate.) Thus, I have on many occasions ordered lures direct from small manufactures, though, I prefer to do business with local tackle shops. Often these manufactures are ran out of a garage, or the shed in the back 40. As such they are quite capable of selling online to anyone in the US give the current tax structure. However, if these small manufactures were to be subjected to the complexity of having to determine, charge, and submit sales taxes to umpteen different taxing authorities in 50 different states the paperwork would overwhelm them. Even under a simplified system they would still have to submit taxes to 50 different states. Thus, in either case they would then only be able to sell wholesale, and/or retail only within their local taxation district.
Not being able to sell to the fisherman directly would deprive such companies of the ability to be profitable, and the consumer of a broader choice of merchandise.
Ergo, the consumer is harmed, and both local economies, and the national economy is diminished.
I would also point out that catalog sales have always been "tax free" as the purchaser was responsible for state, and local taxes. So this sort of tax "problem" has been around for quite a while. I've been ordering from Bass Pro Shops, Cabela's, L.L. Bean etc. since at least 1976. I clearly recall that in the early 80's there were calls for taxing catalog sales. Such calls occurred with a fair amount of frequency for 15 years, or more. With the advent of the internet such calls morphed from "tax catalog sales" to "tax internet sales." This whole thing is nothing new, not unlike the push to prevent music, and video coping. First it was cassette decks, then VCRs, and now it's mp3 etc.. Same song, somewhat different lyrics.
"Oh drat these computers, they're so naughty and so complex, I could pinch them." --Marvin the Martian