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Internet Taxation May Be Imminent
redfenix writes " Here, there, and everywhere, the words "Internet Tax" are being uttered with intentions of bolstering state budgets. It may be inevitable that products purchased on the net will be taxed someday. The real question is: can the fragile internet economy really help local tax economies now?"
They are completely unrelated one is a STATE tax(internet taxes) the other is a FEDERAL tax(Bush). I don't like Bush but it is unfair to blame this on him.
Except for Canadian retailers. DVD sales are a good example. Few retailers in the US can approach Canadian etail DVD outlets because of the exchange rates. Additional taxes will make this problem all that much worse.
Jay
Yes, but if a law like this passes, you will most likely end up paying sales taxes when purchacing items over the Internet from a store located in another US state. I doubt there is a way for the US to collect sales taxes when one purchases items from a company outside the country. However, they are likely to collect tarrifs, and other such fees before the item passes customs.
Mecworks BLOG
Then you can sign this petition.
Once the states "simplify" their tax codes, there is no impediment for Congress to make a new law allowing or requiring interstate sales taxation. In fact, as representatives of the
-- Heisenberg might have slept here.
It seems to me that most internet retailers are operating on such razor-thin margins that adding a sales tax would probably shove them further over the edge in to non-profitability.
No. The tax will be passed onto the customers. THe customers are the ones who are going to pay the tax, not the online retailers. Yes, this might indeed drive some vendors out of business because of the laws of supply and demand. The consumers will treat the sales tax as the part of the cost of the goods that they buy. Since the price goes up, certainly, they're gonna buy somewhat less goods online.
No. The Social Security you pay is used to by Goverment Bonds. Then the money goes into the general fund. It is not used just for social security.
You should try studying your American history once in a while. The U.S. federal government operated without a personal income tax just fine for over 130 years.
Typical AC stupidity. What was the population of the US at that time? How big was the military? What kind of infrastructure did we have? I'll tell you what: we'll create a microcosm of 1920s America for you, a few towns surrounded by a wall, and throw a massive depression, a violent World War, a Cold War, racial tensions, drug problems, and all the other ills of the past 80+ years at you, and see how you cope with them without an income tax.
It's also worth pointing out that there were other sources of income which are lower now: for instance, tarriffs were much higher back then.
You, my friend, do not understand how sales tax works (or doesn't, as the case may be). The customer is charged the sales tax, not the business. Recognizing that few customers are going to bother filing paperwork and paying taxes of a few bucks everytime they spend money, businesses were required to remit sales tax on behalf of the customer - ostensibly as a service to the customer.
This is why mail order and internet retailers don't collect sales tax on out of state orders. They aren't legally required to remit sales tax beyond the state they are in - you are. In theory, everytime you buy something, you are supposed to pay the sales tax (actually called a use tax in most places) but few, if any, do. This is the problem - everyone is buying "out of state" and avoiding taxes completely.
Frankly, I think this is a better argument to forget sales tax, but it is a revenue generator, and perhaps even more fair than an income tax.
Either way, it's because the majority of people purchasing over the internet are skipping the taxes that this has become such an issue. Businesses don't want to mess with keeping up with hundreds of tax laws, and having to deal with keeping up with it all.
The real money in a few years is going to be in the companies that develop tax software to help internet retailers deal with all this crap - because it is coming. It's too much money for cash strapped states to ignore.
Here in Canada, when I buy online services in-province - I pay provincial tax. In-country, I pay federal tax. If I order from the US, 75% of the time I pay the tax as it crosses the border (even on used items!) plus border duties, etc.
Over here, I don't think we can be taxed anymore than we are. I also wonder... with free trade, why is there border taxation/duties?
Thank you for your polite reply to my post. However, I would like to point out the problems I personally see with Libertarianism. Please keep in mind that these are not some kind of preconceived notions. Some of my views agree with those of the Libertarians, but I don't think the advertised goals of that party are consistent with its platform. To me, Libertarianism seems like a platform that favors private corporations to the extreme.
As an example of what I see wrong with Libertarian politics, let's examine the page about the education proposal. It is basically the voucher system that has been proposed many times; it also shares the problems of the voucher system. It allegedly seeks to solve the problems of poor kids being forced to attend a sub-par public school by distributing tax money to private schools on a voucher system.
The advantages seem obvious. With the current system, private schools are typically known for their educational excellence. The voucher system seems to be capable of bringing this excellence to every child. However, this is not so.
Imagine a school system based on vouchers. Suppose that you are a low-income family. You have a voucher that you may spend at local schools A, B, C, and D.
Schools A and B are very selective, choosing only the brightest kids from the best families that could afford such an education even if the vouchers were not offered. Since they are private, they can use any criteria they want to determine eligibility, including family status and income as well as academic potential. They will most likely reject your child, because they will not want to contaminate their prestige with poor kids from ghetto neighborhoods. Even if they accept him/her, they will still charge too much (on top of the voucher) to be affordable.
School C is for the middle class. It is fairly large, and many children go there; it is comparable to a today's mid-to-upper-level public school. However, it has to charge a fee of $2000/year per student to deliver a decent educational experience. Remember, it does not get as much funding as a typical public school. Your poor family cannot afford this extra expense. Thus, your only option is school D.
School D is a mid-size school, composed mostly of poor students from ghettoish urban neighborhoods. It is privately run. It does not have enough teachers, and the ones that it does have are inexperienced, underpaid, and overworked. Many students who go to this school have problems. Unlike today's public schools, school D does not have significant funding. Furthermore, it is being run for profit, and 30% of the voucher money goes right into the pocket of a rich local businessman. Since there is no Dept. of Education, virtually nobody enforces minimum standards, develops the cirriculum, or oversees this school. Many of its graduates are unable to read and write, and none go on to college. However, you have to send your child to this school, because none of the others will take him/her.
This would be a typical scenario of a voucher-based school system. As you can see, it causes much more problems than it solves. However, Libertarians propose similar systems for healthcare, law enforcement, the justice system, and all kinds of other things.
As you can see, this system would heavily favor the rich and the upper classes and significantly hurt the lower classes. Negligible benefits may be provided to the middle class. Such a divisive system would propel any country that adopted it back into the middle ages, when the system of class division permeated every pore of society.
Although you would be paying slightly fewer taxes to the government, you would spend much more on the things the government normally gives back to you. No, the "corrupt politicians" don't magically suck up all the money they get. Probably around 95% of it is given back to you through direct and indirect benefits.
Also, I would suggest reading a book about the Great Depression. Before and during the depression, welfare was provided by private charities, exactly as you propose. It did not work very well; poverty was rampant and welfare money were scarce. The Depression was solved only through government intervention and direct government investment in the population through taxes.
In short, my beef with Libertarianism is that it aims to give everyone the same responsibilities. Do you think that a person with $50 million/yr income should pay as much/little for healthcare as a person with $10,000/yr income? Congratulations, you're a Libertarian.
Anyway, I do not want this rant to be insulting or degrading to you or your beliefs; I'm just trying to politely explain my disagreement. Please reply, as I'm genuinely interested in your take on this. Keep in mind that I'm not interested in starting flamewars, so don't assume I'm just trolling.
The official number for the Department of Defense for 2003 is $380 billion dollars. (As with all that follows, this number is based on the president's proposed budget for the year. Congress wouldn't dare cut it significantly, though they often add some pork.)
Now that's ridiculous enough. It's a good deal more than we spent during the Cold War, more than any other country on the face of the earth, and several times that of all of our potential enemies combined. Meanwhile, we're slashing funding for social services.
Then there's another $17 billion for nuclear weapons, that politicians have thoughtfully placed under the Department of Energy budget, for a total of $396 billion. (Both of those figures, incidentally, are also from the CDI's website, only for FY 2003).
My suspicion is that the original poster probably got his numbers from the War Resisters League, which puts out a great little flyer called Where Your Income Tax Money Really Goes. Their purpose is not so much to discuss year-to-year policy decisions as to emphasize the degree of the tax burden that is the fault of military spending.
They come up with a total figure of $776 billion for 2003. $437 billion is current military spending, which is the DoD budget, plus DoE nuke programs, plus portions of the budgets for other federal programs which are used in large part for military purposes (CIA, Coast Guard, NASA, FEMA, etc.). Then there's $339 billion in military spending: $57 billion in veterans' benefits and $282 billion in interest on the national debt (80% estimated created by military spending). Neither of those are discretionary from the point of view of the annual budget process, but they are definitely indicative of how runaway military spending increases our tax burden.
None of this, however, is particularly relevant for the original context of this discussion, because sales taxes are state and local, not federal. My personal opinion is that we can solve the whole problem by doing away with most sales taxes, which are regressive, and funding government primarily through a steeply progressive income tax (both personal and corporate).
Red All Over: Rambling Missives from an Aspiring Revolutionary
Real example from about 15 years ago:
One of the major aerospace companies wanted to build a big new plant in Palmdale CA (one of the most economically-depressed areas in all of California), where they already own a major swath of bare ground. City of Palmdale said, "Sure thing! Just cough up this $14,000 application fee, and we'll discuss it."
Aerospace company said "Fuck you very much" and dropped the whole idea; instead, they renovated an existing plant they owned in Atlanta.
Palmdale lost out on an estimated 25,000 long-term jobs that the area desperately needed, not to mention all the fresh tax revenue that would have been paid not only by those workers, but also by the increased business infrastructure required to support them (grocery stores, etc.), plus all the immediate construction jobs that would have come from building the new facility. All because the city got greedy for a little income up front, instead of waiting for a LOT of income over the long haul.
~REZ~ #43301. Who'd fake being me anyway?
In the real world, a company (like a store) charges its customers sales tax, which it pays to the state automatically. Then they also pay taxes on the income.
So it's not double taxation at all, since different monies are being taxed. In the case of the sales tax, the tax is imposed on the purchaser, and in the income case, on the profiteer.
Makes sense that the internet should not be immune to this line of thinking.
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