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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?"
Why not just cut out all the waste/fraud before they raise taxes again?
And we go back to mailorder, out of state purchases, called in by phone..
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.
"Moderate drinking can help prevent amputated limbs" -- Abigail Zuger, NYTimes, 12/31/02
This makes a lot of sense. Sure, I'm a libertarian who believes in a very limited government, but I also believe that taxes should be used to pay for infrastructure and civil defense. So, with the Internet becoming an increasingly important part of our national infrastructure, it only makes sense for the states to be able to tax us for the upkeep and maintainence of this valuable service.
--sdem
If the goverment takes more of our money, that doesn't help the economy recover -- it hurts it. When taxes are lower people have more money to put back into the companies that power the economy. While it is true that the government is the biggest "company" in the country, it is also one of the most inefficient and wasteful.
Perhaps the states should learn how to use their existing funds better, rather than forcing people to give them more money.
Travis
If this happens do you think it would work like English road tax (the older the car the less you pay?) My 1Ghz box should be cheap to tax by then! :)
An internet tax will do nothing more but hurt internet sales. Shipping charges and taxes??
The cost to buy something "cheaper" online would become a internet myth.
-Scott
Just call it Tax#, and everyone will just jump on board!
Neck_of_the_Woods
#/usr/local/surf/glassy/overhead
How about the goverment cut spending to pay for the tax cut? Why is a spending cut NEVER an option?
Follow the excellent example of his distiguished career: go AWOL boys!
"Flyin' in just a sweet place,
Never been known to fail..."
They should tax spam. It's not fair, but fuck em.
Someone you trust is one of us.
This will solve several problems, and make the states lots of money. Also, there is plenty of precedent for taxing spam as part of interstate commerce.
Forced registration of spammers (a spammer's license) would enable people to track them down (spam hunting) and make money from the spammers. Money strapped countries around the world could get on board with this one.
The extra bonus brownie points for having a bounty on spammers avoiding the law just sweetens the deal. And Spamming would no longer be a free ride on the back of the internet.
This is a match made in heaven.
Why not use the greed of the law makers to our advantage?
"It is a greater offense to steal men's labor, than their clothes"
Yet all of this is being muttered against the backdrop of the most conservative government we've seen in MANY MANY years... not just at the national level, but at all levels of government. Go figure..
Turn s60 photos into awesome videos with mScrapbook for all S60 3rd edition phones!
How am I represented with my tax dollar in the state of Ohio when the tax income is going to the state of, say, California? That's the whole reason interstate taxes don't exist in the first place. Ah well, it's all for the better.
The more taxes we pay, the more Iraqi we can eradicate. Thanks Mr. Bush.
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.
ah do you guys realize that most sales tax laws in all states read like this:
"Items bought withint the state shall be charged a sales tax of.."
If it snot bought in the state you cannot be charged a sales tax because states cannot charge taxes on intyerstate commerce only feds can..
Now please will someone read something before they post it.. please.. the FUD is getting deep in here and I am drowning in it...
Don't Tread on OpenSource
.. but don't make it terribly complicated. Wish I had something more insightful to say than that, but I don't. Every time I hear this topic brought up, everybody and their mother wants to make it more and more complicated just to make it more fair. Personally, I don't care what the diffrence between 5% and 7% is, and I don't care which state it goes to. Hell, make it a flat tax and let me choose which state the taxes go to. :P
Sure. Power (i.e. government office) can be won by promising to use the power of government to take money and things from some people and give it to others.
The recipients become government dependent, terrified of losing their goodies, and can be counted on to keep voting for whoever keeps them attached to the trough. (The major example of this is currently the elderly.)
Income tax rates are highly "progressive," which means that very few people pay the vast majority of income tax. Once the majority of people are in the goodie recipient category, whoever is in power is in power securely...at least until the minority decides not to put up with it any more (a la Atlas Shrugged).
"Maybe they wouldn't need to tax internet sales if Bush weren't pushing a $674 Billion Tax Cut [216.239.33.100]."
Um. This is insightful? Somebody doesn't know the difference between state and federal taxes, but that's okay because they made an anti-Bush joke?
So the question to ask is not if Internet transactions will be taxed -- but when and how.
-Thomas
Since when do state governments maintain the Internet?
The US government doesn't own the Internet, it just thinks it does. If we had to say anyone owns and maintains the Internet, it would be MCI, AT&T, et al.
Depends on what you use it for. The money I pay when I stop at a toll on the road is a tax used to pay to improve the roads. The social security tax I pay on my paycheck is used, for social security (the fact that it's dying is anohter story). So if there is an internet tax, it should be used to improve/maintain the infrastructure of the internet. Otherwise, screw it.
The GeekNights podcast is going strong. Listen!
"Internet Taxation May Be Imminent"
So... if it may be imminent, then it's not imminent, right? Heh.
A store in wichita that sells golfing stuff online aparently pulled in 6 million between thanksgiving and christmas. Im sure with that info out and our horrible budget here in Kansas, they would LOVE to get a bit of that pie.
The ultimate network admin tool needs HELP!
To quote our lovely tax form,
(note bitter sarcasm in my voice)
So you see, it was never about maximizing revenue in tough times - it is about unfair competition.
+++ UGUCAUCGUAUUUCU
With the current bipartisan agreement that a tax cut is a good idea to stimulate the economy (they just seem to argue over who's taxes should be cut), I have to wonder what the real thinking is behind all this talk of adding a new internet sales tax. Ok, maybe some states will be just enforcing laws already on the books, maybe not, but it's still a new tax payment for a great majority of folks.
What is it?! Should my federal taxes be lowered so that I can pay some new internet sales tax to the state? Why don't they just give money directly to the states and ignore the general populous instead?
It seems that either:
A) state politicians are too chickenshit to cut their budgets and piss off their over-demanding constituency
B) they're greedy for more funds and don't give a hoot about the national economy as a whole
C) a combination of the two.
Either way, I think an internet sales tax would (at least partially) cut any federal tax-cutting stimulus package off at the knees.
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
Not entirely true -- because state taxes are partly calculated on the basis of federal taxes paid, the states are in position to get hit hart by Bush's tax cut. And, because all but a handful of states are in serious budget trouble right now, a decline in their incoming taxes poses a particularly huge problem. See, for example, this recent AP story in the Sacramento Bee.
The hour of noon has passed. Let us go and get some Kentucky Fried Chicken.
Then you can sign this petition.
I don't see the big fuss from a tax perspective - the paperwork is the problem. Of course the level of government waste and high rates of tax are a disgrace but this is not really a new tax, just a shift in enforcement of an existing one.
Not wanting to give the money grabbers any ideas, but I have not been directly taxed for viewing a web page, sending an email, etc. Sure, I pay lots of indirect taxes related to connecting to the internet (just try to make sense of all those charges on you phone bill sometime), sales tax on my hardware, utility tax on my power bill, etc.
The so-called internet tax is not a new tax. Most states require the purchaser of out-of-state goods to pay a "use" tax on those items. Of course most people don't. Note, this also means that out-of-state sellers have an unfair advantage over local businesses.
The real shift of the "internet tax" is to place the burden of collecting the tax on the sellers. This is a real burden as it could dealing with 50 (or more considering local tax districts) rates, returns and such. The overhead of dealing with the government could be far more damaging than the effect of the tax itself.
Of course (as always) someone will build a business around handling the government overhead for you but that'll cost, too.
Final comment on taxes:
"If you could steal all the money you want and print all the money you want, don't you think you could stay out of debt?"
~~~~~~~
"You are not remembered for doing what is expected of you." - Atul Chitnis
It won't matter where the servers are. They'll do it based on where the items are shipping from. When it comes to taxes, lawmakers know how to write laws to be effective.
Scary part is, nothing gets taxed without first being regulated to death. I think that's a law of physics....
Is how politicians always have it ass-backwards. Rather than decide that there is a specific need for revenue, and then figure out how to meet it in a fair and non-burdensome way, they are always in "taxable industry" hunting mode.
"Let's just take what we can, and figure out how to spend it all later."
"No, let's tax air! Everyone breathes it, and we can give exemptions to people with emphysema!"
The way they run things, 5 years from now when they can't meet their budget, will they find a second internet to tax to make up for it? They need to learn to do sustainable budgeting.
Let me get this strait. You're blaming the state's tax revenue loss on the Federal regime? Hugh?
Just admit it. You are so liberal that you just hate anything to come out of a Republican administration.
The federal tax cut does NOT affect state tax revenues. At least this tax cut has a chance of helping the economy. States are experiencing lower tax revenues because the nation's economy as a whole is suffering. The federal tax cut if anything should help the state economy by giving more money back to the people who can then spend it on taxable goods and services.
One of those articles referred to the case in title, being shocked that any legal precendent has been set in ND, I looked that case up...very interesting read and something that may get tossed around during dicussion of an Internet Tax.
4 .Z O.html
http://supct.law.cornell.edu/test/hermes/91-019
forget it.
CA is in trouble because it spent the past few years spending money like a drunk fratboy with a trustfund.
All this does is reinforce the positions of the current big ecommerce players -- Amazon, Wal-Mart, K-Mart, etc. -- because they can most easily afford the software upgrades and new software packages/services that will be required.
A lot of small businesses found new life on the internet, becuase they were able to extend their reach. Now they're faced with huge new expenses to either develop new software themselves, or be chained to a third party who can. Unfortunately, this will probably Microsoft, Intuit, Yahoo Store, etc., who will rake in a fortune selling new ecommerce-in-a-can systems with tax tables built in.
I have a couple of clients who were thinking about expanding into web sales in the next year, but in light of this will probably nix the idea.
US Military Budget this year is something like $780 billion US dollars. The ten year tax reduction plan Bush is babeling about is $670 billion over a ten year period.... In other words we are being given a tax break that is less then ten percent of the US military Budget, this year alone.
Now where is the government getting all that money from?
As to taxing the sale of products reguardless of what state the company and consumers are, via mail order (internet is just a means of communication) some companies (few) do it in a manner that the state the consumer is in determines what the tax is and also gets the money.
And what is taxes being spent on? Warmongering!
I don't know, I look at the bloat and waste of government, the useless bureaucrats secure in their firing-proof jobs, and I wonder if taxation for propogation is really the policy I want. I'm a political liberal in many respects, but I'm far more interested in the government being able to provide services well, not throwing more effing money at broken systems.
Why not just cut out all the waste/fraud before they raise taxes again?
You'd probably have better luck trying to turn lead into gold.
I agree, saving money by cutting spending would be the best solution, but where do you cut it from?
Waste? Define waste.
Fraud, sure we need to catch this, but again, how do we define it?
You've got a nice sounding solution there, but its not a real solution, just a catch phrase.
Necessity is the mother of invention.
Laziness is the father.
Has anyone ever bought anything from some of the larger online merchants? Most of them do, in fact, collect sales taxes. Many of them book the sales at point of delivery. I.E. if Best Buy ships you a new DVD player and you take delivery of it in NJ, the store closest to you adds the sales to it's numbers and pays the tax, then you are charged the 6% sales tax.
Even if lawmakers decided to impose additional taxes above and beyond traditional sales taxes on internet commerce, it would only drive the business back into traditional retail channels where standard sales taxes apply.
Taxes only increase government revenues when the general economy benefits. All forms of taxes are designed this way; property taxes, sales taxes, income taxes only increase as the underlying economics increase. Lawmakers trying to boost revenues during a recession are delusional about the intended results.
-ted
The S&H charge when ordering from online only stores is nothing more than a relic of when the stock came off the store floor. Now, most items never see a B&M retail outlet. B&M don't tack on a S&H charge that they obviously incur in delivering the product to the store. It's called the cost of doing business. Etailers itemize S&H b/c they can get away with it.
Do you really think that it costs Amazon more in S&H charge to deliver a book to your house than it costs Barnes & Nobles? B&N has to deliver the items from their warehouses, stock the shelves, etc. Amazon ships stuff to the warehouse. When you order, they they don't ship it right away with free shipping. Instead, they probably move items by the truckload to enable them to send things in smaller batches.
Plus, that S&H charge is often a well-provided service. It's a lot easier to get it delivered to my door than to make a special trip to buy something. Really heavy stuff (TVs) cost a lot to ship, so then it makes sense to buy it in person. But bottom line, basic S&H charges should be included in the cost of goods.
It seems to me that something like this can only serve to hurt an already weak economy. Seems like a bad idea to ask people to pay more for online goods when people are already spending very little.
Just a thought.
- Sighuh?
Here's the links...
Federal taxes down -> Less money in Federal spending -> Less Federal government grants -> States required to still provide services and do public works projects with less Federal help -> States need to raise taxes.
They could call it .tax
I am not a number! I am a man! And don't you
e-Commerce only accounts for about 1% of total retail sales -- see department of commerce: http://www.census.gov/mrts/www/current.html
Traditional catalog mail/phone order sales account for about 10% (I haven't found a definitive internet source for this -- the articles I've found are about a year old, and may include e-Commerce too).
If these are not taxed as well -- and they have a powerful existing lobby much stronger than even Amazon, let alone Ma & Pa Website -- it would be a blatant disregard of the economics, let alone the legality of taxing one kind of interstate commerce over another.
If they can tax all mail/phone sales, then there's a significant income source. Taxing just the internetters is only going to drive them out of business, while those Brick & Mortars already out there with catalogs will endure. They'll just encourage people to call after browsing.
Design for Use, not Construction!
To get the form right, you've got to cite a bunch of cases, including quotes that aren't there, and (my favorite) cite arguments from the briefs filed by the losing side as if they were part of the Supreme Court's decision.
You can disagree with the tax cut, but it has absolutely nothing to do with state budget shortfalls.
This is also the most anti-coporate corruption idea proposed by a president in recent memory. It's effectively a tax increase for corporations and a tax break for people and investors.
Someone doesn't realize how much of state funding is federal grants, or how much is spent on unfunded federal mandates (which could be funded, for example, if you didn't have the $674 Billion Tax Cut).
Guess you wern't as informed as you thought.
paintball
and when the govt. borrows, that puts them in competition with me for borrowing that money. If I want to buy a house or car, and the govt. wants to buy guns and airplanes to use in Iraq or North Korea, we're both borrowers. If there's only so much money available that means that according to supply and demand, the COST for borrowing that money goes up. In other words, we both pay a higher interest rate. This means that the govt. has to either borrow more money or raise taxes to make the payments (something like 18-20% of the federal budget goes just to pay the INTEREST on the loans the U.S. already has (AKA the deficit)). It means that my monthly mortgage payments go up (if I can still afford to buy, that is). It also means that I have a larger mortgage deduction which means that I pay less income tax which forces the federal govt. to borrow more $$ to pay for next year's guns and airplanes. See how it's interrelated? It isn't an easy problem that has an easy solution. The only way to really help the deficit is for the federal govt. to SPEND LESS MONEY.
"If you let me write $50 billion a year of hot checks, I'll give you the illusion of prosperity too!" - Lloyd Bentsen in a 1984 vice presidential debate against Dan Quayle
"And besides, I'm already paying taxes on a lot of my internet commerce."
;))
Whaaaaaaaaaaaa???
I figure $$$$$exyGal must live in a state that has a lot of internet retailers, maybe California or New York. Or else she actually fills in how much she's supposed to pay in use tax each year on the state tax form! (Much like I do
The net is going to be taxed, plain and simple, no matter how much we all belly ache over it. It won't be a bad thing either. Although I'm by no means a fan of being taxed, they are necessary. Internet commerce is still commerce, and commerce is taxed.
I do take exception to the terms fragile economy when used to describe the Internet. Sure, some of the infrastructure jobs and that sector may be hurting, but online spending is up. And going up. These transactions, if taxed would do a great deal to help states if a system is implemented.
-- jimmycarter
Somebody doesn't know the difference between state and federal taxes, but that's okay because they made an anti-Bush joke
Do you know how to read?
The theory of relativity doesn't work right in Arkansas.
Yeah, I'll fax you the fiscal 2002 state budget.
No, they don't divide the entire budget by the number of K12 students. The figures are provided by the office of the State Controller every year. Education spending has gone up 80% in the last five years. $230,000 per classroom after paying for the teacher. Where's the money? It sure ain't going to repairing the crumbling schools or providing books.
The schools are wasting immense amounts of money while providing almost nothing they are supposed to, and churning out class after class of graduates who can't read or add. Sorry, but its a fact.
No more new taxes. Fix it with the budget they've got or give it up. Everyone else has to make do.
LadyStar - Your Magical and Mysterious Adventure Awaits
Want to better the education system? Quit throwing money at it and teach the kids to read. Sorry, it doesn't cost a quarter million dollars to teach 30 kids to read.
LadyStar - Your Magical and Mysterious Adventure Awaits
is the same thing. but heck, i already pay taxes on my purchases in MA. i think the basis is determining whether theocmpany has a substantial presence in the state.
The war with islam is a war on the beast
The war on terror is a war for peace
You only pay sales tax to businesses in your own state. I suggest you start ordering from different companies...
It may be inevitable that products purchased on the net will be taxed someday.
Products purchased on the Internet are taxed right now. Businesses must pay varying amounts to various governments in order to operate. You, in turn, pay for this when you purchase a product. In essence, the taxes levied on businesses end up being paid by you. Should you ever begin to appreciate the complexity and magnitude of these taxes, including the various means to increase/decrease or even get out of them, a paltry 5% (or whatever) sales tax isn't all that big of a deal. The governments' largest monetary gain (and your loss) is not sales tax -- it is the traditional means of taxing a business. This law won't change it. It may, however, help to keep you from figuring out just how much of your money is really being taxed.
"God is a comedian playing to an audience too afraid to laugh." -Voltaire
"Do you know how to read? [sacbee.com]"
You're debating with me using somebody else's opinion as fact? Heh. Hint: Factual documents don't use the term "difficult to forecast".
I'd go into more detail, but that's not even close to what I was talking about. Perhaps if you spent more time understanding than arguing?
If there was a surplus, why should you be any happier about it? A surplus means the federal government is taking more of your money than it needs. Of course, that's the case in virtually any circumstance, but a surplus puts a flood light on it.
15%? Sounds like British VAT. There are some in the Bush cabinet that want want to impose a similar tax in the U.S. replacing the Income Tax system.Of course,the states get income data from the IRS, so odds are, we'd somehow end up with a >40% sale tax...
You're debating with me using somebody else's opinion as fact?
Yeah, you're right. The governor of Missouri has NO IDEA what he's talking about:
Gov. Bob Holden said that the repeal of the federal dividend tax could cost the state $95 million during the next fiscal year.
"When federal taxes are cut, the states suffer," said Holden, who is struggling to make up a projected $1 billion budget shortfall. "The problem is that the federal government can run a deficit, but Missouri government must have a balanced budget. We are left with the choice of cutting programs that help citizens."
The theory of relativity doesn't work right in Arkansas.
DivX at 11.
"Yeah, you're right. The governor of Missouri has NO IDEA what he's talking about:"
Okay, let's point out a few interesting things about this fruitless debate:
1.) Brought to you by the gubner of Missouri. Incidentally, the dude's talking strictly about Missouri, not the rest of the country. Gee, MO's in the shits. What about the rest of the country?
2.) We are left with the choice of cutting programs that help citizens."
So what's the solution here? Give them the bill they need? Okay. How does that help them balance their budget? It doesn't. It buys them a year. Their budget problems are their problems. I don't mean to be insensitive to the issues here, but the problem is they need more people making more money paying more taxes. His shortfalls will always be a problem until that happens.
So yes, the Gov. of MO has no idea what he's talking about.
Considering that they had to slash their discounts just to stay afloat. I searched two cds and found that I could save 32% on one and 0% on the other. And has the company even hit the black for a full fiscal year yet?
Sure, we can say "fuck 'em" but usually crushing a fledgeling industry (especially after the backlash of the Dot-bomb and now this Recession) isn't in our best interests.
And I especially like how they say this will solve the States' budget woes. Heh, Michigan alone has a $500 million dollar deficit. Do they really think that much internet merchandise is heading out of state to make up for that (roughly $10 billion in sales would be needed if a 5% internet sales tax was enforced)? Hell, even a fraction of that would still require a ridiculous amount of sales anyway.
And even then, who the hell is going to enforce it? What about ebay? Are they going to raid Paypal.com and demand that they turn over their records so the member states can bill people accordingly? How much bureacracy is that going to cost? I think they might be playing around with 1998 numbers here. Pfff. Try again.
What is music when you despise all sound?
I think it's a big mistake at this point to specifically tax internet sales. I purchase goods off the internet because they're cheaper than in retail stores. The prices are usually just barely cheaper after shipping. However, they are cheap enough to more than offset the delay in receiving the product.
Since I'm currently in New York State (which has outrageous taxes, at least compared to Idaho), I am often taxed for internet purchaes. For example, ordering from CDNow (which I did before they were 'swallowed' *cough cough* by Amazon.com it was about the same price ordering from them (after shipping and taxes) as buying the same $18-$20 CD from a retailer. It simply wasn't cost effective. I only continued because I don't have a car to drive to stores :(. If they start taxing internet sales, it won't be worth waiting a week to get a product that I'll end up paying full retail for. It will destroy online stores. I for one won't buy from them, because it won't be cost-effective for me.
<soapbox>
IMHO, states should think about eliminating unnecessary government programs instead of looking for more revenue. That's the best in the long run. It ensures a fiscially responsible government that isn't bloated. It also allows private companies (who can do the jobs for cheaper) to save money and provide better services.
</soapbox>
neurostarIt's called income tax and everyone pays it, including your ISP, and it does pay for infrasturcture and civil defense. Many states also have income taxes.
Friends don't help friends install M$ junk.
Nobody under the age of 18 should have to pay sales tax either. Even if a minor lives in Ohio and buys something in Ohio, its still going to a government for which he has no representation in.
The masses are the crack whores of religion.
Then those who currently may not even pay any income taxes at all[the poor], suddenly can't eat anymore because you made the payments on their car which they need to get to work 30% higher. Gee, what a great idea!
-- 'The' Lord and Master Bitman On High, Master Of All
"When federal taxes are cut, the states suffer," said Holden, who is struggling to make up a projected $1 billion budget shortfall. "The problem is that the federal government can run a deficit, but Missouri government must have a balanced budget. We are left with the choice of cutting programs that help citizens."
You know, I hear lots of criticisms of Bush's plan, but I'm not hearing a lot of people with alternative and potentially better plans.
Anybody can whine. They can point out problems with internet taxation, for example. But they can't say "Here's a better idea, chew no this."
Funny thing is that both of you don't seem to understand the idea that the money isn't disappearing, it's just being redistributed. America will cope. Just chill.
Besides, it's painfully obvious that the main reason everybody's critical of it is that they're being critical of the President. All I can say to that is: Grow up.
"Derp de derp."
Sales tax is based on where the sale takes place, use tax is the one that's based on where you live.
So, one could argue that the sales tax belongs to the jurisdiction where the store is, since the transaction and billing happens with their datacenter.
Frankly anyone who know anything realizes that an "Internet tax" would be hell for governments to implement and regulate.
People already have to pay taxes for things bought on the Internet, and do pay them if they are imported from another country. Customs looks at the sticker on the package, calculates the duty and tax, charges a fee for handling, and presto - Internet Tax.
This is not new stuff to anyone who sells on eBay for example.
Saskboy's blog is good. 9 out of 10 dentists agree.
Please explain that logic. It would appear that every time I vote Libertarian, Republicans lose races, and they have to stress their tiny little brains and think about maybe making their platform appeal to some of us that don't like big government.
Actually, every proposal I've seen exempts the first $30k-$35k from sales tax each year.
I have a few situations which US lawmakers may need to look at.
1.If I (a foreign national) visit the US and buy goods subject to sales tax, when I leave the country I am able to claim this sales tax back. How does this apply in this situation when I do not physically arrive in the US and I do not physically leave?
2. I (hypothetically) own an e-commerce business based in Australia. If I sell goods to a customer in say, California, will I be required to charge them a Californian sales tax? If so, how will the state of California ensure that I pay the tax to them. They have no recourse through the californian courts as I have no material resources in California and any judgement against me would be ineffectual. They have no legal recourse under Australian law as Californian legislation is overidden by Australian federal or state(NSW for the sake of argument) law.
3. I reside in Australia. I use my credit card to buy a book online at Amazon.com. I ask for the book to be sent to the UK. As Amazon has UK offices they elect to send stock from there rather than ship the book across from the US. Who gets to levy the taxes here? The purchaser is in Australia, the vendor is in the US (I forget which state) while the goods are in the UK.
It seems to me that this is a mad grab to try and get money which the states feel they are losing out on. My personal feeling is that the entire thing is unworkable and that the effort will not be worth the end result.
You call me a pedant? I prefer the term "correct"
Why shouldn't we be charged sales tax on internet purchases?
For a better question, why *should* we have tax on internet purchases? For in-state purchases only, I can see it as (somewhat) justified. Otherwise, this gets into a large mess with that whole "No taxation without representation" thing. Tell me, how does my tax money going to another state enhance my representation in my own state's government?
Of course, I agree with you that we should not have any state-level sales tax in the first place. A number of states get by just fine without it, and those with the highest sales taxes tend to get the most tourists (such as NY). Explain to me how heavily taxing tourism has ANYTHING to do with representation in government? Yeah, I harp on that point a bit, but we fought our very first WAR over it. If we've recanted our stance on taxation, perhaps we should just beg the British to take us back? Their economy seems a hell of a lot better than our own, at the moment...
Finally, this will kill on-line purchasing, but not have any of the desired effects, for one simple reason - I most certainly would *NOT* pay taxes on an on-line purchase when I can simply pick up the phone and order the same thing, from the same company, as "mail order", without the taxes.
First off, some are saying they will force retailers to pay the tax to their state, others say they want to force the retailer to pay the tax to the buyers state. Bwaaa hahahha!
Second, the federal exemption for internet sales tax doesn't run out until 2004. I admit, they can speed that one up if they pull for it.
Third, and last, is that this crosses state lines. Do you think states are going to sit down and divide the pie fairly?
HAHAHAHAHAHAHAHAHAHAH! *gasp* *gulp*
HAHAHAHAHAHAHAHAHAHAHAHAHA *gasp* *choke*
HAHAHAHAHAHAHAHAHAHAHAHAHAH!!!! *gasp* *choke* *chortle* *THUD!*
Quick, some one show Michael Powell how to use e-bay!
*Boat tax, 6th paragraph
Necessity is the plea for every infringement of human freedom. It is the argument of tyrants; it is the creed of slaves.
States had been pushing for internet sales tax for some time now...but now everybody's got a bee in their bonnet to see it occur. States feel that they are losing big bucks now because people are ordering online (though their calculations are only thinking about the internet sales going to their state, not necessarily the opportunity cost of jobs and stuff that may be created in their state because of internet commerce.)
Thing is, states have screwed themselves with progressive income taxes. Sales taxes do go up and down with consumption (obviously) but not as severely as income taxes. California for instance has this really progressive system where the top 10% of income earners are paying for some 75% of California government. So, the economy takes a tumble, income generally does go down...but the top 10% of income earnerrs have *huge* decreases in income, so suddenly California has a $25 billion shortfall. They can't increase the progressivity of the tax structure--you're not gonna get much more out of people who's income's dropping severely, so all ya can do is widen the tax base...meaning increase income taxes for median earners, or sales tax, or find new tax sources. I believe states are starting to understand how easy it is to screw the pooch raw with progressive income taxes (note that the states that have blown their budgets the most are those with income taxes, CA, OR, OH, IL, NY, whereas non-income tax states like TN, FL, NH, TX, are not looking at such bad looking budgets. Those states have much more reliable income streams from property taxes and/or sales taxes.)
You still buy CD's?
LOL!
Yeah. I like the artwork. And I also like to support bands I really like.
Unless it's a band I really like, I first download some songs to see if they're good. And if they're good, I'll buy the album, just to support the band. And if it's not good enough to buy, the songs aren't worth the space they take up on my HDD. So they get deleted.
neurostar...and yet teenagers are charged taxes before they can vote. So I don't think 'taxation without representation' is much of an arguement anymore.
Quidquid latine dictum sit, altum sonatur.
Actually, the Libertarian platform agrees more with the Republican platform than the Democratic platform. For instance, Libertarians want to eliminate welfare and social security. While Republican want to decrease these programs, Democrats want to increase them. Also Democrats like big govt. running everything while both Republicans and Libertarians feel less govt. is better. The main place where Republicans and Libertarians clash is that lLibertarians don't support religious right type issues that Republicans do. Of course there is also the patriot act, but Libertarians do believe in the responsibility of govt. to police and defend against foreign ememies.
Vote for Pedro
I live in a state that has use taxes. I've paid them on my tax form in the correct spot, but every year they claim some sort of error and add that money back to my refund. ???? The bureaucrats seem to have no clue!
Maybe they are afraid what they're doing is illegal? I know this state has a fedral IRS processing center, but the IRS has everyone in this state ship their forms somewhere else. My only guess is the taliban-like government in this state was caught doing some crooked things.
I just hope I can scrape enough money together to get out of here someday...
did NOT collect at least $77,500 in sales taxes
The company you work for is suppose to pay a use tax for those online purchases. How is the state going to know if you bought those computers? Since a computer is a deductable item, if your company attempts to "write off" the said computer systems on their federal and state income tax than they will also be required to pay the use tax.
While Republican want to decrease these social programs, Democrats want to increase them.
No, most Democrats want to keep them at about the same size, but reform them so that they work better.
Also Democrats like big govt. running everything while both Republicans and Libertarians feel less govt. is better.
Yeah, sure. Right. Like the DoD budget: every Democrat I know just LOVES that part of big government. And they all want Ashcroft running things.
Ultimately the difference between Democrats and Republicans is this: 1. Democrats cater to the poor and pander to the middle class, Republicans cater to the poor and pay lip service to the middle class. Democrats are tax and spend, and Republicans are borrow and spend and don't pay back. Killing Social Security means "don't repay the money we borrowed from all those folks who've been paying Social Security taxes for the past 40+ years and haven't had an opportunity to collect yet." And you think that's an "entitlement?"
Fiscally reponsible indeed.
The proposal put forth obviously cover all interstate transactions not just internet commerce - I thought this was obvious.
The reason states want this is because they're being influenced by B&M stores. B&M stores apparently think they're missing out on a lot of customers JUST because there is no sales tax on the internet.
Sorry guys, that isn't why I'm not shopping as much at B&Ms... Chances are, the cheapest you'll find the product you're looking for is on the internet. If B&Ms had prices like I find on the internet, I'd buy there.
Shipping and handling doesn't really make up for the sales tax... S&H on a $50 game could be anywhere from free to $2 (overnight) and sales tax would be ~$3.50 depending on your state.
The only reason to shop at B&M stores for the most part is the convenience. Try the product, hold the product, go home with it THAT VERY day. No need to wait around for product shipments.
Shopping at B&M and on internet sites have advantages and disadvantages that pretty much cancel out. Don't destroy internet shopping with a sales tax!
the byproduct of years of oppression by the white man
Nice idea, but how do you regulate it? So my spam now says 'in accordance with US SpamTax(tm) Law' instead of 'click here to unsubscribe'. Do I forward all my spam to some agency who then track the spammers down?
The technical solution needs to be developed to support this... and that's going to be tricky. I don't know much about alternatives to SMTP but I do know it's very pervasive... until you can solve the problem of accurately tracking spam mail, taxing it will be impossible.
If you can't see this, click here to enable sigs.
The Legislature likely will consider a bill in the coming session that would require Oklahoma's Internet companies to change the way they charge taxes on sales made in the state.
Like another bill considered a year ago, this one would require Internet sellers to compute the sales tax based on their locations rather than the buyers'.
This is from the second article for the state of OK. What a great way to slit your own thoat. This will effectively discourage any high tech, non-polluting, job creating, revenue generating business from your state.
My wife has a modest internet hot sauce store. She generates over 100k in revenue and hires an employee. The employee pays state and local taxes. We pay an inventory tax, a use tax on equipment used to run the business, property tax, state income tax, commercial vehicle tax, etc. If Idaho implemented such a tax we would close up shop or move to Montana or Nevada and the state of Idaho would lose.
You might want to check out who the authors/sponsors of the Patriot Act were. (Hint: Not all Republicans) Myself, I am a libertarian. I couldn't vote for someone to waste more money or enact more laws like the DMCA or CBDTA, in good conscience. Oh, check out the authors/sponsors of those bills too.
Derek Greene
Slashdot content is accessed throughout the world, so by your logic, you have a presence in every country and you should follow all their current laws. Even if they contradict or are unreasonable.
BTW, the dictator from Yosmucklastan wants his money. You forgot to pay your dues. Under Yosmucklastan law all good "comrades" are required to "donate" 50% of their income to the "cause." ;-)
You're right about teens being taxed, which is why i feel that no one under 18 should have to pay income tax.
US Military Budget this year is something like $780 billion US dollars.
m l
/. Actual facts don't matter.
2002 US military budget is less than 1/2 of that. $342.3 billion.
http://www.cdi.org/issues/budget/fy'02/index.ht
Let's not get silly with our bitching, OK?
Insightful, my ass. But hey...this is
'Linked' or not my point still stands. Seeing as how the state gets the money back one way or another anyway, I don't see why we're having this convo. The dude was being an idiot.
The government doesn't have the right to license you to spam me. It cannot rightly issue you a license to trespass upon my mail server and steal its resources for your advertisements ... any more than it can issue you a license to burgle my house, joyride in my car, or pick my pocket.
Theft is made illegal because it is wrong -- it's not wrong just because it's illegal. Likewise, spamming is wrong even in jurisdictions where it is not clearly illegal in statute. Government, in its position as an balancer and protector of rights, does not thereby have the authority to collude with some wrongdoers and agree not to enforce claims against them. We call that "corruption" when a police force won't investigate crimes by someone who is paying them off -- and that is what "spam licensing" would be, too.
Require something like:
All unsolicited commercial email must be on an direct and specific opt-in basis only
Or something similar. You can fine tune it.
"It is a greater offense to steal men's labor, than their clothes"
Firstly, the administrative costs of Internet Sales Taxes would eat up any profits involved, unless it were (a) strictly Federal or (b) so staggerinly high that it would wipe-out the online sales market.
Secondly, sales tax is a horrible way to raise money anyway. Of the three forms of taxation (income, property, sales aka "outgo"), it is the most regressive (meaning impacts the middle class more than the upper class and the lower class more than the middle class). A sales tax discourages purchasing. Sales tax HURTS the economy more than any other form of taxation.
If the states wanted to raise taxes to get more money, they should be looking at the income tax, specifically at the upper-end. Income tax may reduce spending (since people have less to spend), but unlike sales tax it does not also discourage spending as well. If taxation is the only answer, then at least tax the right thing! Sales tax only hurts the economy more.
"But my income tax is too high already!" Only because the current federal income tax system (state income tax is typically around 2-3% compared to the up to 33% federal) is effectively regressive. If we didn't give upper-class income brackets all sorts of effective loopholes to reduce their income (eg, Congress just declared the capital gains tax to be zero, eliminating BILLIONS of dollars of federal income, and returning money to the people in the country who are in the least need of additional cash), because, and this is the important part, different income levels tend to get their income from different sources, and those sources are taxed differently.
You want to raise more money through taxes? Fine. All income from any source whatsoever is treated the same. Wage, stock options, capital gains, everything. Then impose a staggered, progressive income tax on it, without any loopholes or exemptions or "business deductables". Then drop the percentage rate from where it is now by, say, 25%.
Then eliminate all sales tax, Internet or otherwise.
Not only will 90% of the population have MORE money to spend (stimulating the economy), it will reduce the cost of operations for the IRS and for state tax agencies (reducing the budget), and still give the government (at various levels) more money to play with to fund social programs or invasions of other countries (whichever they're in the mood for this week).
Internet Sales Tax? No. Let's not have an Internet sales tax. Let's not have a sales tax at all. There are far less damaging ways for governments to raise money, and they involve smaller (and cheaper) armies of accountants to do it.
--GrouchoMarx
Card-carrying member of the EFF, FSF, and ACLU. Are you?
With mail order, the seller enforces the sales tax if it has a business location within the state. Otherwise its technically up to the buyer to report the sales tax to the state.
There is no such thing as tax free catalog sales or internet sales. Its just that no one ever reports the taxes their supposed to unless its a big ticked item that they need to register anyway (car, etc.).
So for example if Borders was going to merger their internet and brick & mortar operations into a single business entity (maybe they are, this is just an example), then they'd have to charge sales tax on every trans action. That's why many internet operations are seperate business entities from their main company.
What this proposal is all about is the fact that many legislators think that because the internet is all technology driven (duh!) that its easy to whip up a whiz bang tax feature and *blamo* instant tax collection for the state that used to go unregulated.
---
"Don't anthropomorphize computers. They hate that."
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?
The real question is 'is compulsory taxation moral'? I, and many others, argue that it isn't.
That's not quite how I see them. Democratic leadership: pay lip service to the poor, cater to their friends. Republican leadership: pay lip service to the poor & middle class, cater to their friends. (I distinguish between the leadership & the overall parties of sheep.)
"Friends", in either case, is a small subset of overall society.
I do think the Republicans have a little more economic focus: they're still pushing "trickle-down" economics (making the rich MUCH richer so that the rest of society can live off their crumbs), although they don't call it that any more because the name has (rightfully) bad connotations.
Unfortunately, the Democrats haven't really whole-heartedly adopted the ideological opposite economic platform of "trickle-up" economics (where you give the people at the bottom a chance to dig their way out of their hell lives, and leave the rich to their own devices), since the Republicans have successfully (and in many cases, rightfully) pointed to the social program attempts at such actions as massive wastes of money & encouragements of sloth in the general populace.
Oh yeah, and since most poor people don't really vote (especially if they've been labeled felons by many laws which are doing a great job of disenfranchising & alienating huge chunks of the population which need the most help), the Democratic leadership doesn't really have an incentive to help those people out, since it won't help them get into/stay in power.
That's where 90% of the online economy is anyhow.
Build stuff. Stuff that walks, stuff that rolls, whatever.
If this becomes law, how would the government determine what was actually purchased online?
Wouldn't businesses simply find some kind of loophole like reporting all their sales as mail orders?
That brings me to my next point... that the internet is not a physical place. In this case it is just another communication method, like a phone, or the US Postal Service. If there is a tax placed on items purchased online, there will have to be a tax on everything else.
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
In Sweden (EU), the tax is 25%, for me 8.5% is almost like nothing :-)
However I can buy from other EU countries that have a lower tax. In EU sales tax is payed at the rate for the country where the company is located.
So in some sense we are having those taxes in EU already. And the Internet sales is much bigger in US, the tax is probably one big piece of the explanation for that I'll guess.
It seems to me that what is really standing in the way of all of this is a simple agreement over who really "has" the right to tax. Take a for instance; I hop on the computer in Austin Texas. Look up a CD on Amazon (based in Seattle). I then have the CD Shipped to my friend in Brighton England.
Who has "the right" to tax that? You could make a legitimate argument that every city, county, state and country involved in that transaction can claim a peice of the pie. In that case either I or Amazon would be responsible for tracking all of those different agencies and laws and ensuring that everyone gets their share. The case gets even more complex if you start factoring in the fact that both servers and stock are colocated. For all I know the "Amazon.com" that I contacted may be served from somewhere in the midwest, and the CD may have been shipped from some Amazon warehouse in France.
Obviously that would stifle any and all internet commerce. One alternative is a moratorium on all taxation. I disagree with this because it gives Amazon and other online outlets an unfair advantage over their "bricks and mortar" competitors. It also exempts them from paying for the infrastructure that sales taxes are (or should be) spent on, infrastructure that they depend upon.
The problem with the middle ground where some people can tax but not others is that you have to make a convincing argument (or carry a big stick) to explain it. In the past I know that the U.S. Federal government has used its power to regulate interstate commerce as a means to control or "simplify" interstate taxes. I suppose that could be one with internet purhases in the U.S. but when it comes to international purchases thewre's only groups like the World Trade Organization (*Shudder*) or local elements such as NAFTA.
It would hurt an already depressed market.
Geezus, voodoo economic never really dies, does it?
First off, state (and federal, for that matter) fiscal crises at the moment aren't being caused because of escalating spending (with the significant exception of prisons). Rather, it's because the economy is tanking, so revenues are declining. Also, the corporate welfare that legislators have been passing out over the past few decades are finally catching up with them. (You know, the ones where they give employers tax breaks just in time for them to layoff large numbers of people -- does a great job stimulating the economy, I can assure you.)
Secondly, if you want to put more money into the economy, reducing taxes across the board is a bad way to do it, because you'll mostly wind up putting money in the pockets of the wealthy, who have a low marginal propensity to consume (so the money doesn't wind up going into the economy).
Rather, we should pursue tax policy specifically designed to put money in the hands of working class people, who are much more likely to spend it. The Economic Policy Institute has a great counter-economic stimulus plan which calls for, among other things, a one-time bonus of 3.5% on the first $15,000 of earned wages. Another major stimulus to the economy would be a national single-payer health plan, which would massively cut overhead and red tape in health care, saving billions of dollars for everyone concerned.
Or, to return to the point, we could abolish sales taxes, which not only discourage consumption but are also regressive, with the burden falling unfairly on poor and working-class people. Failing that, however, not applying sales taxes to transactions occuring over the internet creates an unfair business advantage which threatens the vitality of locally-based retail business, which has serious economic and social consequences.
Red All Over: Rambling Missives from an Aspiring Revolutionary
"US Military Budget this year is something like $780 billion US dollars."
1 2. html
BEEEP! I'm sorry, crack monkey, you don't win the microwave!
I know actually spending 90 seconds to bother searching for the information on the Internet is much more labor intensive than your tried and true "smoke some rock and pull the numbers out of my ass" method, but if you had bothered to do any research, you would see that the President's budget for FY2003 tops out at $379 billion."
From:
http://www.whitehouse.gov/omb/budget/fy2003/bud
"To address these needs the President's Budget proposes $369 billion in 2003 for DoD and an additional $10 billion, if needed, to fight the war on terrorism."
With this correction and my handy research tips in hand, I'll let you get back to trying to pull those invisible ants off your face. And remember: Drug abuse and Slashdot just don't mix!
Lawrence Person (lawrencepersonh@gmailh.com (remove all "h"s to mail)
http://www.lawrenceperson.com/
The problem is that the poorer elements of society get shafted by 1) Parents that neglect them and fail to instill basic values in them, like the fact that a good education is critical and that intellectual pursuits are worthwhile and that financial success, stability, and independence is an achievable and worthwhile goal. 2) An educational system that is so defective it keeps the best and brightest down and focuses all of its efforts on the mediocre to idiot-calibre people.
I'm not knocking programs like special education, which are nice and everything, but the spending on gifted education should be AT LEAST that of special ed. Let's be honest - who are the people who are going to be moving the economy forward in the future? Shouldn't our schools invest in them?
In the end, most of the problem comes down to societal factors like the aforementioned parents with their fucked up values. At the least, though, our schools need to afford everybody an opportunity to achieve their potential so they might go on to better their social and financial status in life.
I was lucky. I got out in 10th grade and went to a private school. And my own children, when I have them, will never see the inside of a public school if I have anything to say about it. And luckily, I can afford that because I had a supportive family that valued my education, eventually went to a great school (okay, that's not gonna make the hordes of idiots in the world suddenly become really bright, but at least it could push up the curve somewhat and improve all of our standards of living, happiness, and certainly make our Democracy into a far more functional system - most of the fucking morons in this country don't deserve a vote as things stand now).
1. wouldn't it be the same thing as mail order, so why isn't there a tax on that? Or is this some form of EXTRA tax that goes beyond that of mail order? Sounds like very unfair business practises.
2. If your revenue for the state is low, try incresing the numbers you multiply with the tax percentages. That is often much more effective than raising the tax percentage (and making people do what they can do avoid it), which more than likely will have the opposite effect. In this case internet sales will go down, and the economy is far from stimulated.
3. Politicians must be idiots. How come we demand that a person who operates on us is supposed to havea this extensive surgeon education, but a politican who controls our economy (and hence much of our lives) don't have to know shit about the subject?
4. I don't live in the states, but it is the exact same way here, and the minute the law is passed the mindless drones here will want the tax. So, this is just a glimpse into the future for us here.
The really stupid thing about this mess is that state governments, rather than being cautious, saw this as an opportunity to implement all kinds of new spending liabilities. Should we even be surprised that they're all sitting around scratching their heads trying to figure out why they can't pay the bills? Did they really think that this massive increase in tax revenue would continue? Come on.....
Then why not have a Federal Sales Tax?
Operation Imminent Taxation.
Hehe. Yanks.
A lot of people are arguing how Internet sales taxes are fair, since taxes are already levied on purchases in 46 states. But you need to remember that Internet sales are not entirely taxless.
1) The company that sells the goods has to pay taxes on their annual profits.
2) The person buying the goods had to pay tax on their income.
Those taxes more than cover the buying chain. Why should everyone be doubled taxed for things? They were already taxed on their income, so why tax them AGAIN on purchases?
I can two viable solutions. 1) Raise income tax and ditch sales tax. 2) Ditch income tax and have a federal flat rate sales tax.
I'd prefer the 2nd option myself.
mogorific carpentry experiments
I don't know, but when I order something from another country (say X), I pay the tax according to the laws of X and the money goes to the goverment of X. That is how it had always been. In some cases you might have to pay an import tax.
(This is not true for the EU zone, but in switzerland I once ordered some books and software from amazon and I had to pay an import tax for the software.)
But of course, perhaps an extra internet tax is meant??? Since the US laws are a bit convoluted with all those 'nexus' shit, I guess the simplest model is to have the location of the business determine the tax.
Consider for example that you send someone in Cairo, Egypt to buy a carpet for you. The man will pay the tax according to Egyptian taxation laws, which will go to the Egyptian goverment. Then, upon entering the country the goods will be inspected and perhaps an extra levy shall be imposed for importation. As this article is about the US states, which cannot tax on imports from other states, the answer is extremely simple. Just pay the tax of the state that the business is based in, to the state the business is based in.
But this is just common sense, and common sense does not apply to panicking politicians, which are at best boingering idiots when sober, which only happens when they are hungover.
"Boingering"(TM) is a new word! Add it to your dictionary for only $13.00 (+VAT)
I miss my rubber keyboard.(Homepage)
That's funny; if you look at the anti-libertarian rants on, say, freerepublic.com, aside from the crazed Drug Warriors, you'll see people claiming that every time someone votes Libertarian, he or she is voting Democrat. If you're both right, I must be getting two votes--what a deal!
Said ranters manage to argue both that Libertarians are laughably few in number and that we're a deadly danger because we deny victory to their preferred candidate. It's not clear how these can both be true.
That sounds more like property tax than sales tax, could you go into more detail than no detail at all?
-- 'The' Lord and Master Bitman On High, Master Of All
Thats what really drives prices high there because sales taxes are automatically added to prices. Most of the these sales taxes are the national sales taxes called the VAT (value added tax). American tourists can apply for a refund for big items they take home, but have to pay the normal stuff.
To build a nation of people making $50k per year, serving thier distant rich overseas masters. Thanks Zorro!
I'm not sure how you think of a sales tax as regressive, then take money away from anyone who does well through income tax. Doesn't that sound a little regressive as well? How about a flat tax without loopholes? You had a pretty good start when you said "treat all income is the same". Then when you make more, you pay more... but it doesn't matter how much you make and you still have an incentve to do better income-wise. Under your plan I'd be better off on the street with a bottle than making $100k a year (taxed at 90% to return the "People's Money"), at least then I'd have a bottle.
Right now I "frivolously" spend quite a bit of money to help various charities (in addition to my time of course). If my tax rate goes up much, there goes the charity money as I still have other fixed payments (like housing I already have) to pay. The moment you raise taxes on the middle class and above like that you are AT LEAST going to have a very nasty transition period where a whole lot of money dries up and does nothing to help anyone.
"There is more worth loving than we have strength to love." - Brian Jay Stanley
Think about it, you already pay taxes when you walk into your local store, right? So all the Feds need to do is say "Hey, you have to collect, report, and pay the taxes on online purchases as well." Make it clear that the location of where the electronic purchase server is located is the jurisdiction that get's the taxes.
Like I said, this isn't a big deal if you think abou tit normally. But the Feds are nowhere near normal (or competent) so they'll muck it up somehow.
I worked for a company that had physical stores in 7 or 8 states. We would get audited by at least one state per year. The audits were harsh. They went something like this:
"You have shipped 80% taxable goods to a sample of 5 stores, 20% nontaxable, yet your sales breakdown is 78% taxable, 22% nontaxable".
"We think that this means that your clerks ring up taxable goods as nontaxable for the extra 2% of the time".
"Based on that error, you owe us the extra 2% extrapolated across all sales in your stores in this state over the past 6 years (the last time we audited you)."
"Please send us a check for $200,000 within 30 days".
It was brutal.
Now take that and extrapolate it across 50 states, and thousands of municipalities. Sure, they'd only hit the larger taxpayers, but eventually they'd hit the smaller and smaller merchants.
After all, we're talking about states and cities that go after baseball players' salaries, taxing them on 1/50th of their salary if they play in their state/city.
That's coming too.. just a matter of time before they tax the air we breathe.
Someday the public will rise up and say no.. but that's a long way off it seems..
The revolution was partially due to over taxation.. now we do it to ourselves even
worse. how ironic...
---- Booth was a patriot ----
DO you happen to have anything relevant (like at the state level where this is being done).
The economy was already on its way down when Bush came in, the fact is that the economy is more affected by what heppened yesterday than what happens today..
At least in Wisconsin I'm required to declare how much I ordered from other places. If the retailer didn't take sales tax out, I'm required to declare the value and pay taxes on it. Sure, most people don't bother (it's difficult for the state to determine that someone lied), but in theory you already pay it.
If the "Internet Tax" simply strives to enforce existing sales taxes, that seems fair to me. If it represents a new tax above normal sales tax, that's not reasonable.
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The truth is those who think that the government is responsable for feeding the hungry, clothing the needy, ... are just plain lazy. They want to give there 30% and not think about any other human beings its pathetic. If people gave 20% to charities what we give the government in taxes we could do a far better job
Some states exempt some items such as food and clothing even that isn't done very well in Michigan prepared food is taxed but groceries are exempt. It makes sense to me that a bugrer at the resturant is taxed but the ground beef at the grocery isn't; but I can't figure out why a bag of potato chips at the grocery store isn't, but the same bag of chips at the gas station is.
For this to work they are going to have to co-ordinate definitions to classify goods so that taxability can be defined, and as the above example shows it could very well be a double edged sword for the states involved.
Sales tax is a bit more honest because its added to the price for the customer to see. I wonder which state gets the tax when sombody orders with a billing info a Michigan address for his credit card, and ships to his second home in Florida? Or Even more common I buy a gift online, from Michigan and have it shipped to my son in Hawaii.
This will get even more interesting when Cities start complaining, some cities charge sales tax too.
Apocalypse Cancelled, Sorry, No Ticket Refunds
I can't believe people still believe that there is some sort of "law" that says that Internet purchases are free of sales tax.
Sales tax is still collected by web sites for purchases shipped to places where they have a physical business location. For instance, if you live in Washington State or North Dakota, your purchases on Amazon subject to sales tax. This is true for every other website that has physical offices in states which levy a sales tax.
Technically, if your state has a sales tax, you are obligated to pay the sales tax on all purchases regardless of where they originate. If you purchase something from a retailer that has a business presence in your state, they remit the tax for you. If the seller doesn't have a business presence in your state, then YOU are obligated to send it in yourself. Of course, 99.9% of people don't do this; technically we all are in violation of the law.
The reason for this is that states have no juridiction to compel out-of-state retailers to collect the tax for them. That doesn't mean that the tax doesn't have to be paid - just that they can't make the company their "tax collector".
In my home state, there is actually a form that comes with your state tax booklet that you are supposed to fill you to pay sale tax on out-of-state purchases. Also, if you purchase a car out-of-state and try to register it in my state, you need to provide proof that you paid the appropriate sale tax, otherwise they won't let you register your vehicle (they do give you a credit based upon the sales tax paid to another state, so you don't end up paying sales tax twice).
Personally, I don't see any problem with the current system. As things are, Internet sales are treated like any other catalog and mail-order sales: if the business is in your state, they collect the tax, and if not, you have to pay it yourself (wink, wink)...
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www.moneybythenumbers.com
I think you have a misunderstanding of supply side economics. It's not a matter of wealth creation, it's a matter of motivation. It derives from a few simple calculations regarding revenue. You'r revenue = (tax rate) * (tax base), but as your tax rate rises, peoples motivation for creating wealth decreases. This is trivially true. Think about it. If I tell you that I am going to tax you 100% (assuming we still live in a free society) are you going to bother to go to work tomorrow? A similar arguement might also apply for a 99% tax rate. Now granted, everyone is going to have to eat, and is thus going to have to do a little bit of work, but (especially) in a progressive tax system, as you earn more, you get to keep less. That means we are giving you an incentive to not create as much wealth. As I said before, it's trivially true that extremely high taxes will reduce wealth creation (by reducing motivation), so the only question is, "how much is too much". I believe this is where the term Voodoo economics is most applicable, primarily because the nature of this relationship is so complex that you essentially have to try things based on your magical voodoo sense of what will help, and see if it works, and even if it does, it could be for completely unrelated reasons. One other thing to note is that as you lower taxes, you reduce people's motivation to spend huge sums of money to hire tax lawyers to help them avoid paying taxes. I was reading an article last year about the current economic prosperity in Ireland due to tax cuts from about 60% to about 10%. The most interesting thing in the article, however, was a contention that worldwide, large corporations and individuals pay roughly 10-15% in actual taxes regardless of the tax rate. They do this by either hireing lawyers to find loopholes, or by moving out of the countries where they can't find such loopholes. In essence, I guess I have 3 points.
1) Supply Side economics doesn't say that lowering the tax rate will always generate more revenue, it simply says that raising taxes won't always generate more revenue, and that there is some optimim tax rate which may even change from time to time depending on a huge number of factors.
2) Like you say there are only a few ways to create wealth, but taxes are about distributing wealth , not creating wealth. They are also used to motivate economies. Finding better ways of distributing wealth and motivating wealth creation can leave you with lower taxes, and higher tax revenue. We can argue about what the best way to do that is, but saying that either raising or lowering taxes will always result in more revenue is naive.
3) Worldwide, wealthy individuals seem to pay around 10-15% no matter what your tax code looks like, and having a complex tax code only serves the wealthy, while hiding the truely regressive nature of many tax structures. Often times, tax cuts which appear to favor the rich, simply reduce motivation for the rich to find loopholes.
I've got much more I could say on the subject, but if you've read this far, I'm sure you will respond, or dismiss me as a crackpot, and I can make more points in a later post.
Your argument that someone is motivated to clear doesn't really hold water, except possibly for the lowest wage earners. It leaves out the idea that people have a choice with what to do with thier time and money. Take someone who is working 40 hours per week just to put a roof over thier head and food on the table. If you raise taxes from 15 to 30%, they may be motivated to work 50 hours per week just to hold on to what they already have. If you shoot it up to 60%, rather than working 80 hours per week, they might just say screw it, and get a smaller house, or even say I might as well live on welfare. Lets say I work 40 hours per week and make 50,000 per year. If my goal is to make 800,000 per year, all I have to do is work 640 hours/week. I'm not very likely to attempt this:) When you talk about the rich, however, they have many more choices. They generally make thier money not by laboring for it, but instead by risking what they already have. Don't get me wrong, many of them had to labor for it initially. I'm currently laboring my ass off so I can have enough that I can make money by risking it rather than making money by laboring for it. If I can risk my million dollars for a chance of making a million, and a chance of losing half a million.I might make that bet. If the government is going to take half of my profits, I'd be less likely to make that bet, and instead I might just sit on my money. Or I might move to a country where they take less of my money. At any rate, my job (when I have finally made enough money to be able to invest in this fashion) is to provide resources to people who are trying to create wealth in the fashion which you suggested earlier. The fact that I have built my own wealth by choosing how to distrubute resources inherently qualifies me for this role. If the government makes it less profitable for me to distribute my resources to create wealth, I'll be less likely to distribute my resources. It's as simple as that. Now people who inheret wealth have no particular qualifications as to how to distribute it effectively, and that's why I think the inheretance tax is one of the fairest taxes around, but that is a completely different conversation. The original point I was trying to make is that lowering taxes clearly can stimulate an economy, and supply side economics clearly can work under certain conditions. It's just that no one knows exactly what those conditions are, and I suspect that that those conditions change depending on the current psychology of both consumers and investors, but as I alluded to before, I tend to believe that all economics is "Voodoo" economics. That's not to say that economics is useless. It's just that it's extremely debatable and hard to develop rules for, and as soon as you have some rules that seem to work, the whole system changes.
If you raise taxes from 15 to 30%, they may be motivated to work 50 hours per week just to hold on to what they already have. If you shoot it up to 60%, rather than working 80 hours per week, they might just say screw it, and get a smaller house, or even say I might as well live on welfare
Problem is, this motivation thing you're talking about is "supply-side" economics, or more accurately "trickle-down" economics. It's not "trickle up" economics. The reality is that those who pay the most taxes are not motivated to make less money by higher taxes, they are motivated to hide more money by higher taxes.
If the government makes it less profitable for me to distribute my resources to create wealth, I'll be less likely to distribute my resources.
This works when it comes to the government shifting the tax burden from one area to another: say by lowering capital gains taxes and raising property taxes, one would encourage more investment in non-real property. But it doesn't really have as much relevance to how much people are "motivated" to earn, as you put it at first.
I might make that bet. If the government is going to take half of my profits, I'd be less likely to make that bet, and instead I might just sit on my money.
But most investments don't work like that. And let's remember, that the kind of "making money" you're talking about here is merely redistribution, with as far as the government is concerned is irrelevant to the overall size of the economy. The government wants to see the money circulate as much as possible, and in some ways it is better for it not to circulate through the accounts of the big rollers (who are likely to sit on a lot of it: how much money is Bill Gates sitting on right now?) if it can circulate through 8 or 9 other people's accounts instead.