Evolution Of The Online Tax Debate

rhwalker22 writes "Last November, the Streamlined Sales Tax Project drafted a plan to make it easier for states to cooperate in collecting sales taxes on products sold over the Internet. That plan is now headed to governors and state legislatures for debate. While that debate begins, the sales tax group is moving into new territory, debating how to apply sales taxes to digital services, like music and software downloads, and IP telephony. Most states participating in the sales tax project have sent representatives to Tampa, Fla., this week to take up this subject, according to a report by washingtonpost.com."

Comments

Tax and Government Revenue

[McG33k]

I'm pretty sure this is what our government is doing with our hard earned tax dollars:

cd /pub
less tequila
more beer
dd if=/dev/conciousness of=/dev/null

--g33k

What to tax

[mirko]

I think it would be more fair to tax stock-exchange based revenue instead of Internet sales.
It is IMHO not normal not to be taxed, even a little, when you makes thousands out of your shares ...
Maybe this smells like a troll but it is not : it is the base for a debate and I'd sincerely love to understand more about this issue..

Re:What to tax

[EmagGeek]

(In America) Profits from the sale of stock are already taxed by the capital gains tax. Likewise, losses on the sale of stock are deductible.

Re:What to tax

[Anonymous Coward]

Stock-based profit IS taxed - it's called a Capital Gains tax.

However, any gains by the government are mitigated by the fact that anyone LOSING money on the stock market gets a tax CREDIT.

At any rate, the standard argument would be: it's in the country's best interest to stimulate the economy in times like these. If people invest in companies, new ideas, etc., that stimulates the economy, and we should be providing an incentive for people to do that. (not a DISincentive, which is what an increased capital gains tax would be.)

From the economists' perspective, anyone making thousands off the stock market is actually HELPING the rest of us, because it means they invested in successful companies, and that by giving them what they need to be more successful, they make it possible for more jobs to exist etc.

Not saying I buy this argument entirely, but it is the standard response to your position, and you'll have to come up with some compelling reasoning to talk anyone out of it.

Re:What to tax

[jhunsake]

However, any gains by the government are mitigated by the fact that anyone LOSING money on the stock market gets a tax CREDIT.

That's simply not true. You can use capital losses to offset your own capital gains. However you never get a credit.

Two examples:

buy 100 shares of Stock A for $10 sell for $8
buy 100 shares of Stock B for $10 sell for $13
(assume all done in the same year)
you pay capital gains tax on $100

buy 100 shares of Stock A for $10 sell for $7
buy 100 shares of Stock B for $10 sell for $12
(assume all done in the same year)
you pay no capital gain tax (you get no credit)

Re:What to tax

[seanadams.com]

(In America) Profits from the sale of stock are already taxed by the capital gains tax.

That's only if you've held the stocks for 2 years or more... otherwise it's regular income, taxed at the full (roughly) 50%.

One of the things that was common during the boom is that people were drawing their profits not by selling, but by taking out cash on margin. You're taking a risk to avoid paying tax on your gains. However, if the stocks go down, you can sell without making any money, so you don't pay any tax. Just pay back the margin debt and you're back where you started. I think that might be what the parent was referring to.

Re:What to tax

[EmagGeek]

Ahhh, tax evasion at its finest... if I understand you correctly, just borrow against your appreciation and pray the stock doesn't collapse? What happens if you take out all of your cash, and then your stock pulls a Worldcom?

Re:What to tax

[seanadams.com]

You're still broke; the only difference is that you didn't pay tax on the money you "took out" while the stock was up.

All of the brokers severely tightened their margin allowances during those last few months when the market was getting out of hand. The bubble could burst, and they had to mitigate the potential damage.... then investors had to sell their stocks to get in line with the new margin rules, and thus began the dot-bomb.

Fun times... :)

Re:What to tax

[Anonymous Coward]

the issues in a nutshell...
First and foremost almost all states have laws on the books levy a use (think of sales) tax on Internet sales of goods (tangible NOT intangible goods like software). The problem is that the people that are responsible for paying the tax (the citizens of the state) are not paying the tax. Thus what you have here is an enforcement problem. However it is a whole lot more work to police every citizen of a state than it is to only police businesses. This is why the states want Internet retailers (amazon etc.) to start collecting sales tax on their sales. However since the U.S. Constitution allows only the federal government to regulate interstate commerce the states have no legal right to force out-of-state merchants to collect sales tax on goods shipped into another state. The problem that the states have is that there are no federal laws that require merchants to collect state taxes for a state were they don't have "nexus". (Nexus is a sufficient presence in the state to subject yourself to state laws. If you have a building in the state you absolutely have nexus. If you merely mail catalogs (make your web site available) you do not have sufficient nexus for the state to be able to make you collect taxes. Things in between are generally decided on a facts and circumstances basis). In order for the states to be able to force merchants out of state to collect sales taxes there would need to be federal legislation. So the states in Tampa are wasting their time by passing laws because until the federal government acts their hands are tied. However there also seems to be some momentum building in congress to pass this type of legislation. Frankly in my personal opinion is should happen regardless of the financial implication for he Internet industry. Why? Because Internet merchants consume state resources just like other merchants and so the Internet merchants and the brick and mortar merchants are on an equal footing when it comes to taxes. I know that this is likely not going to be a popular notion in this forum but I like to look at these things from an academic point of view - not what is in MY best interests but what is good and fair for society as a whole. This is a very shortened version of the issues but I think will give some insight into the issues in this area.

Re:What to tax

[Overzeetop]

If you're in a 50% personal tax bracket, I really can't feel too sorry for you, as that would put you in the top tax bracket for both federal and state. Definitely not working mans wages.

However, as I feel your pain, I would recommend an alternative tax. Instead of income, how about net revenue? No deductions, no alterations. You sell something, you pay tax on the income. You pay a percenteage to your brokerage house for executing the trade, why not to the government for ensuring that the rules governing the safe trading of stocks is conceived, written, dissemenated, and policed?

"How Much?" I hear you ask. Well, GDP for the US is roughly $40 trillion dollars. The federal government spends $2 trillion. That means roughly 5%. Of course that estimate is high. To tax all (gross) income would be a larger number, so we could probably get away with about 2-3%. That's less than some brokerages and mutual funds. Of course, this would require that corporations start pulling their weight and be subject to this as well.

Yes, this means people earning less than $25,000 a year would pay more taxes. For those getting the EIC (a negative tax bracket), it could be as much as $400-600 plus their EIC (in excess of $1000). If every entity with a federal tax number got a $250 credit (i.e. - you make minimum wage or less, you pay no taxes) we could throw 'em a bone, and allow for a small break for those with children. It also means that small businesses with low incomes would realize that break, or could use it in place of a tax deduction for up to $12,500 in equipment each year.

Re:What to tax

[EmagGeek]

Ahhh very interesting theory - one of those Catch-22/self-fulfilling prophecy type situations. I agree there was WAY too much margining going on - credit was so easy to come by, but interest rates were also rising which almost guaranteed a pop at some point.

Don't ya love it when preparing for the worst causes the worst?

Re:What to tax

[bdlarkin]

Definitely not working mans wages. Interesting comment. What do you mean by that? Only people who do low-wage jobs are "working men"? Only people who earn low amounts should be felt sorry for? I have a feeling you mean that anybody in the 50% bracket is so "lucky" that they deserve to be soaked with taxes. Of course, this would require that corporations start pulling their weight and be subject to this as well. Except corporations don't pay tax. They just raise prices, or lower wages. So their customers or employees pay the tax. Every cost that a business has is reflected in the price of their products. Taxes, labor, fuel costs, etc. So basically all your saying by the statement "corporations should pull their weight" is that we the people should pay taxes, just hidden from us, so we don't complain about it to the government See this paper for some examples. I'm all for your argument for a flat tax however. And the EIC is a fraud where people think they are paying taxes, but actually get a welfare payment. Just be careful with the class warfare rhetoric.

Re:What to tax

[bdlarkin]

Dang.. I had paragraph symbols in there, but when I previewed it showed up as two blank lines. Thought that slashdot had gotten all automagical on me and was inserting the paragraph symbols in there for me....

Sorry for the poor formatting.

VAT while across the ocean

[ostone]

When I went over to London I got told about VAT refunds. If you are a tourist in Britain you can get back most sales tax (Value added tax) if you save the recipts and it is over some base cost. The reason I heard for this is that a visiter recives no benefit for the tax and therefor has no logical reason to pay it. This seems to be the case with internet shopping... I don't live in North Dakota so why should I pay for kids to go to school there while not contributing to my state... now if the tax was being proposed from the originating state it makes a little more sense, but is still a streach. The long and short seems to be that the states are strapped for cash and trying to collect more taxes without making new taxes.

Re:VAT while across the ocean

[evilviper]

By that logic, people who do not have kids should not pay taxes for schools. People who do not drive, should not pay taxes that support the building of roads. There's a million other examples I could give.

Re:VAT while across the ocean

[vrai]

That would be the point. What's wrong with private schools and toll-roads? What's the betting that they'd be both better and cheaper than the current state provisioned systems.

Re:VAT while across the ocean

[nosferatu1001]

it's not quite an extension of that l9ogic.....you pay taxes for kids to go to school becauseyou benefit by having a higher skilled workface, that can afford to pay more tax and [in theory] perhaps lower your contributions. same with central roadss etc. now you don't pay contributions to other countries tax bills [directly!] as you WOULDN'T recieve such benefits, so the VAT back is a sensible item

Re:VAT while across the ocean

[Anonymous Coward]

I think the idea of the VAT refund in the UK is that you then pay the TAX as an import duty when you enter your own country. For small things governments don't bother, but if you import an expensive piece of equipment you will probably get stung.

Re:VAT while across the ocean

[Anonymous Coward]

Have you *seen* what's coming out of schools?!?!

Re:VAT while across the ocean

[Anonymous Coward]

You don't pay the tax in UK, because you are exporting the item. You might have to pay the tax when you get back home (though most nations allow some tax free souveniers).

This has nothing to do with any bullshit about where the money goes -- it's an international agreement to encourage trade.

The incentive for the tax-back is to encourage tourist spending, which ends up benefiting the country giving the tax back. I.e. they give you back the tax because they collect income (etc.) taxes from the merchant for purchases you otherwise might not have made.

Re:VAT while across the ocean

[prichardson]

The state budgets are trashed because they spend too fscking much on prisons. We need to retool our legal system (especially the drug laws) so that we dont fill our prisons with people who got cought with a tiny bag of weed. I'm not suggesting legalization, though that would be nice. I'm suggesting maybe first offenders get community service, a big fine and probation.

Also, toll ways are bad. They were designed to allow the roads to be built, but when the road is paid off they still charge you. They keep charging you because the beurocracy of the toll way doesn't want to lose its' jobs.

Moderators: This is my opinion and I don't care If I get modded down for it; I've hit the Karma cap.

Re:VAT while across the ocean

[Fig, formerly A.C.]

Money to pay for roads should come from a fuel tax. People who use them more should pay more. The cost of shipping goods would be rolled into the product anyway, so someone without a car would still pay their share.

As far as the school payments go, I tend to agree with that also. Why should I pay for someone else's kids? It's bad enough they get a tax break, so I'm paying some of their share anyway. My taxes are higher to cover the portion they don't pay, simply because I have no kids.

Why am I being penalized for remembering to wrap my willie?

Re:VAT while across the ocean

[Chriscypher]

I already pay tax in order to use the "toll road". The state charges me sales tax for my internet access.

Additonal taxes based on online sales are more akin to intrastate tarrifs.

Re:VAT while across the ocean

[budgenator]

Your wrong about a couple points, what they want to do is collect from you taxes you owe your own state. If you buy from a website in North Dakota and live in South Dakota, so South Dakota wants the website in ND to collect from you for the sale/use of goods for use in SD for them. Previously there was no way for SD to compell the website in ND to comply. Very likely you owe your state use taxes on the goods you bought in London, but are using in your home state. There is nothing that I'm aware of that keeps SD and ND from passing laws requiring retailers in their states from collecting and paying to the states their use taxes.

Actualy most sale/use tax laws are difficult for businesses to completely understand, add in how the courts have interperated many cases, its means a mom and pop operation on the internet, or telephone sales, or mail-order would have to hire 50 laywers in the 50 some States and territories. If they manage to clean up the mess of laws in the various states, and come up with a easy reporting system, it's likely to happen.

Re:VAT while across the ocean

[karnal]

I understand that once roads are built, that's a huge one time cost that may never happen again at one time.

However, I would think that maintenance of said road would still be expensive. Especially with large semi trucks etc. The roads can't take care of themselves.....

Re:VAT while across the ocean

[LMariachi]

"I don't have anything worth stealing, so why should my taxes pay for the police? If don't drink milk, why am I paying for dairy farmer subsidies? I never go hiking, why should my money go towards national parks?" It's called a social contract. Even the childless benefit indirectly from public education, so we've decided that everyone should contribute. You're paying for the right to utilize public schools; whether you choose to exercise that right is your business.

More to the topic at hand, the issue with interstate taxation is that monies you pay to another state do not grant you any representation, privileges, or benefits. If I, a New York resident, pay sales tax to the state of Maine when I order something from Land's End, what am I getting out of it? Conversely, if Land's End is saddled with collecting taxes for New York State, what's in it for them? All they're doing is shipping a package here, so it amounts to an unconstitutional interstate tariff.

(The way some states have been getting around that problem with things like automobile purchases is by dint of a mutual agreement, a bargain you'd have a hard time striking with any no-sales-tax state.)

Re:VAT while across the ocean

[ComaVN]

Also, toll ways are bad. They were designed to allow the roads to be built, but when the road is paid off they still charge you. They keep charging you because the beurocracy of the toll way doesn't want to lose its' jobs.

Roads need maintenance. If you have ever been to Belgium, you know that.

Re:VAT while across the ocean

[Anonymous Coward]

I think you have this backward. If a British citizen goes to the U.S. and buys something, when the come back to the UK he would have to declare that purchase and pay VAT. So, by that argument, if you live in California and buy something online from North Dakota you would still have to pay a sales tax that would go back to California.

Re:VAT while across the ocean

[Anonymous Coward]

You pay for schools because you and I both don't want any more stupid idiot running around. That's not hard to figure out.

Said more nicely, we all benifit from an available well trained work force.

Re:VAT while across the ocean

[Stonehand]

Or Pennsylvania, where our roads are always under repair due to cracking, probably well sub-standard asphalt. It's remarkable how much road maintenance, and therefore how many opportunities there are for union labor, there is in this state.

Re:VAT while across the ocean

[mOdQuArK!]

I don't care so much about roads, but for "equal opportunity" to mean _anything_, good schools need to be available for everyone - not just the people who can afford it. Without a widely-available societal mechanism to allow people to haul themselves out of the gutter, you're going to end up with a society that has a frozen class structure with massive inequity.

Re:VAT while across the ocean

[yakko nef]

"The reason I heard for this is that a visiter recives no benefit for the tax"

But you do recieve a benifit. That tax pays for the infrastructure that you used while visiting. The roads, the electricity, the water and sewage. It pays for their schools so that there would be educated people to run the businesses that you patronized. If you went to that country then you recieved a benifit since if they were not there in that state of development you probably would not have visited as a tourist.

Re:VAT while across the ocean

[macrostiff]

If you are not paying it and then you are, it's a NEW tax.

In most states, 'sales tax' is short form
for 'sales and use' tax. These taxes are
collected from larger business who purchase
from vendors outside their home state and
are collected on big ticket items that can
identified. i.e. car, boat, airplane.
There's not any infrastructure to enforce
collection from individuals on small
purchases and this is what's being addressed.

Reporting will be a burden on small businesses and
the tax will likely be hidden in the price like
your VAT (BTW, Hawaii has a GET, general excise tax, which is kind of like a
VAT/sales tax hybrid and for the most part hidden).
Like all those other hidden tqaxes, people are much
less likely to complain about 'tax' when prices
increase than they are to complain about the 'price'.
Less troublesome for big brother...

Re:VAT while across the ocean

[leviramsey]

Also, cold weather (especially frost) tends to do a number on just about any paved surface.

Re:VAT while across the ocean

[len_harms]

No states are trashed because they spend so much on EVERYTHING. They saw their tax pools go up during the last 'boom' and started spending like crazy. Well DUH people were making a bit more because of the cycle. Now they are making less. They got caught in the lets spend all this money we just got. With NO plan for what about when the economy snaps back to normal. So now they have HUGE debts they can not pay off any time soon.

So what is the natural reaction? Lets RAISE taxes. Oh yes raising them will help the economy. Those idiots down at the state house sure know how to spend MY money better than I! This will make the low of the cycle we are currently in even worse. For we are paying for the extreem high where they spent like a .com with a new foosball table.

The one tax that every state could lower to help the economy? Fuel tax. Its acounts for about a dollar for every gallon. Yes gas is really that cheap. How would that help? Companies that ship things can lower prices or hire more people. They can ship more stuff for the same amount of money. This lowers costs of shipping every item everyone buys. These things get passed on the consumers. Even if they are not they are pass on to the market in the form of dividinds. Now think about the people that drive for 2 hours to get to work every day. Their cost is lowered. They can buy more stuff (which helps create jobs), or even save it (which STILL helps).

Taxs in this country are not used to help people. They are used to rearange wealth, and regulate 'bad' habits. And they do a spectacularly lousy job at it. Also most taxs in this country are like super glue they just do NOT come off, but you can always add more!

Toll roads are just another form of tax. Once paid off they just do not go away. Because NOW the money for that road is spent, and being spent, somewhere else. Now they wouldnt be able to make their 'budget' if they took away a tax. It is the classic game of build my empire. This year it took me $1000 to do X. I will ask for $1100 next year. Hmm, still only cost me $1000, well Ill just add something that costs $100. Well NOW it does cost $1100. So the next I will ask for $1200. Rinse and repeat. That money has to come from somewhere and these sorts of things is where it comes from till it is used up. So you will need something else to make up the 'deficit'. There is no damn 'deficit' they are spending to damn much. Also the word deficit makes it sound better than they 'overspent'. There currently is a 'deficit' because they did not plan for a cycle of revenue. They planned on MAX all the time. The economy moves in cycles. Its up for a few years, its down for a few years. If you plan for max spending and growth during that whole time you will never have enough money.

State prisons? Hell I bet its a drop in the bucket compaired to what they spend on social reform in your state.

I have figured it out. Even though I am in the 27% tax bracket. I spend 48% of every dollar I make in some sort of tax.

Whenever you hear any politician talking. Just add the words 'I want to spend your money on' to the front of whatever they are saying. For that is EXACTLY what they are talking about. The word 'no' is not in their vocabulary. It needs to be.

Re:VAT while across the ocean

[Anonymous Coward]

It's the same in Canada. You can get your sales tax you pay as a tourist in Canada refunded. You just need to fill out a form and mail it in.

Dice Finance

[Anonymous Coward]

Well with their homes in hock and health insurance premiums soaring, Americans are filing for bankruptcy protection in record numbers.

Personal bankruptcy filings in the third quarter jumped to 391,873, up 12% from a year ago. That puts filings on track to surpass last year's record high of 1.45 million. The surge continues a trend that started in the mid-'90s. But the nature of the debt woes has changed.

"The amount of borrowing has been rising faster than incomes," says Stuart Feldstein, president of SMR Research. In addition to credit card debt and steep medical bills, many consumers now are bingeing on mortgage debt and home equity loans, putting their homes at risk.

They are buying homes with smaller down payments, financing 90% or more of the loan amount. And old rules limiting the amount a home buyer could borrow have largely gone by the wayside.

"Lenders are flush with cash," says Keith Gumbinger, at mortgage tracker HSH Associates. "The debt-to-income ratios used to be cast in iron, but now they're just guidelines."

Low interest rates also have spurred homeowners to consolidate credit card debt and other bills onto home equity loans and lines of credit. That often provides only a temporary reprieve.

"They have so darn much debt that even at low rates, it's hard to pay," Feldstein says.

Mortgage delinquencies are on the rise, and the number of homes going into foreclosure is at the highest rate in 30 years, according to the Mortgage Bankers Association of America.

Compounding the problem: Stock investments have lost ground. Savings rates are barely keeping pace with inflation. Many workers have been downsized out of jobs and into lower-paying ones.

Medical debt also weighs on consumers, playing a role in about half of all filings. Last year, the number of Americans with no health insurance increased by 1.4 million, to 41.2 million, according to the Census Bureau.

Faced with rising bankruptcies, creditors have pressed Congress to tighten the law. They say many debtors load up on credit card debt and use bankruptcy to escape bills. That legislation has yet to be enacted. "Another national record in personal bankruptcy filings at the end of this year could help fuel renewed calls for changes," says Samuel Gerdano at the American Bankruptcy Institute.

so a bit of online tax is the least of your troubles, there is a queue of people outside USA who want paying back cos you spent it

what about overseas tax?

[010011101_(thats me)]

how is the tax gonna work for ppl in other countries? (there are other places than the USA you know)

Re:what about overseas tax?

[dubbayu_d_40]

They would have been purchasing something worth the S&H in the first place. If they come for a visit and make a purchase, they pay tax don't they?

Re:what about overseas tax?

[glesga_kiss]

how is the tax gonna work for ppl in other countries?

Simple. We stop ordering things from the USA. and go elsewhere.

It's your econemy, do what you want! ;-) I suggest you try to explain to your leaders how e-commerce works. It's of no relevance to me where I order things from.

Why tax?

[dytin]

Why even tax the internet? After about 5 years of e-commerce being popular, we have seen the market take off. It started off with some bumps, but after the bubble burst, and all of the stupid dot-com companies died out, we were left with many legitimate e-commerce sites that were pulling in a large profit. Rather than law-makers seeing this as a sign that maybe low taxes are good, they see this as an opportunity to tax further. If law-makers truly believe that internet commerce is hindering their states because it is so cheap, then they should lower taxes in their state rather than trying to levy taxes on the internet.

It's kind of like two kids. One is very gifted and one is just regular intelligence. If you want to help the regular kid, you should spend extra time with him and help him. You should not try to force the gifted kid to act dumb.

Re:Why tax?

[Anonymous Coward]

the govt would never miss an oppertunity to tax something

Re:Why tax?

[Hittite Creosote]

You're missing the point - governments tax so they can spend it on things. Whether it is to educate kids or buy new shiny bombs, or give it back to their friends, governments just love getting their hands on money. They'd tax the internet because they think they can.

Re:Why tax?

[cayenne8]

The tax system has become just a method for weath re-distribution. And the gov. can't stand to see a source of money out there that they can't use to perpetuate this flawed system......

Re:I once watched....

[Anonymous Coward]

That's nice. Maybe you could post something _RELEVANT_?

Re:I once watched....

[martingunnarsson]

The no. 1 place to see movies is in a movie theatre. I can download loads of movies if I want to, but I rather see them in the movie theatre or buy them DVD.
I can however understand people who download movies that aren't available where they live, like not-so-famous anime-movies and such.

Ridiculous! What about the US Consititution!?

[Anonymous Coward]

Ridiculous! What about the US Consititution!?

When state Governors are sworn in they USUALLY take an oathe to uphold the US Constitution and to defend it.

They are not if they keep trying to fight it with ridiculous crap like this. Some states have no sales tax for example like the wonderful state of Washington.

As everyone knows it is unconstitutional to tax interstate commerce or subject levies and tariffs.

The only exception to taxing telephone purchases or internet prurchases between two states is when the company collecting the sales tax HAS PHYSICAL BUSINESS PRESENCE in both states.

I hope people see this at 4:49am EST and put his thread to rest.

The whole idea is UNCONSTITUTIONAL. And ammednig the constitution is a dangerous action, once it starts the constitution is open for modification until closed and ANYTHING can happen during the debate.

This stuff makes me sick. California and New York should be ashamed for their socialist spending practices.

Re:Ridiculous! What about the US Consititution!?

[visualight]

Washington has a sales tax. Over 8% I think.

Re:Ridiculous! What about the US Consititution!?

[kahei]

Hmm, good point.

After all, if it were possible to create unconstitutional legislation, we'd have suspects being indefinitely detained without trial, copyrights that last forever... why, it doesn't bear thinking about!

Re:Ridiculous! What about the US Consititution!?

[jhunsake]

When state Governors are sworn in they USUALLY take an oathe to uphold the US Constitution and to defend it.

Hmm, do they? I believe they swear to uphold the State Constitution.

Re:Ridiculous! What about the US Consititution!?

[Idarubicin]

When state Governors are sworn in they USUALLY take an oathe to uphold the US Constitution and to defend it.

*snip*

The whole idea is UNCONSTITUTIONAL. And ammednig the constitution is a dangerous action, once it starts the constitution is open for modification until closed and ANYTHING can happen during the debate.

Right, because it would be inappropriate for a Governor to urge constitutional change if he or she felt it in the best interests of his or her people. If we let that sort of thing happen, Congress could do something really dumb, like abolish slavery, or protect people from self-incrimination, or worse.

Operating within the Constitution includes making suggestions that it be changed--not through violent revolution, but through the mechanisms that were built into the document for that very purpose.

Whether or not the taxation considered is unconstitutional (IANAL), and if it is, whether or not the hassle of an amendment should be pursued (IMHO not), are side issues. Politicians should be free to urge changes that are (on their face) unconstitutional, if they are prepared to follow through with an amendment. If a question falls into a gray area, that is a matter for the courts--that's why the judiciary exists.

Re:Ridiculous! What about the US Consititution!?

[Trollsfire]

Some states have no sales tax for example like the wonderful state of Washington.

I think you may be confusing Washington with it southern neighbor. Oregon has no state sales tax.

Or you may have mis-remembered which tax Washington does not have; Washington has no state income tax.

Re:Ridiculous! What about the US Consititution!?

[Cokelee]

Interstate Sales tax is legal, you have to file it on your tax return in April. Geez, what are you mouthing off about? Get out your tax return this year and read it. Maybe you've never recorded interstate purchases, but they are required and you are breaking the law by not supplying them.
Even though I don't think anyone records them, it's there.

So much for online sales

[visualight]

Why buy online and pay tax AND shipping?

Re:So much for online sales

[Anonymous Coward]

Exactly. A lot of people simply will NOT buy the products if they cannot get it cheaper. For some, this is hard to understand, but for every percentage markup, there is a near equal percentage of buyer's lost. Usually, this results in a short cycle where even the margin then is increased to make up for the lost customer base, further reducing the number of buyers. Induced inflation?

This is going to slaughter many small retailers of online sites. Jobs go bye bye because, while the margin per sale is there, their sales are going to be reduced; what's margin if you have lower sales. These folks, some small businesses paying in excess of 20% tax for less than $20,000 a year, will simply go on welfare. Brilliant.

Most people are not going to go to the stores. Hell, I wouldn't. I can get DVDs for $10 cheaper online via amazon and buy.com than my local national branch stores like Circuit City and Best Buy. I will NOT be buying a $25 DVD + tax + gas/travel that I used to pay $17 for, shipped. I can do without. Sorry.

This in turn will probably increase pirating and effectively clobber distributors.

What a bunch of idiots.

Why is it that when people lose their jobs or get struck in harder financial times, we tighten our budgets. Meanwhile, the fuqin state looks to increase revenue via taxes. Why don't they tighten their goddamn budgets? Hell, why haven't their budgets gone down? The financing for infrastructure projects is at an all time low given interest rates, even income levels for such infrastructure workers have stabilized, and yet they keep spending more.

Why does it seem a state, which should be such a large buyer and provider of services, bucks the economies of scale? More folks, more people, same service, usually lower or equal cost per person in the business world turns into rising costs instead at the state level. wtf are they smoking?

Question: National import taxes?

[0x0d0a]

Is there an import tax on things being shipped by a single-package shipping company? Like, if I buy something mail-order from Japan, is there a tax the US imposes on the postal service to bring the box across the border?

Because if not, it seems that all this does is put US e-retailers at a disadvantage to sell to the best market (US consumers) in the world in an increasingly competitive time.

I mean, why not sell to the US from Toronto, and to Canada from New York?

Re:Question: National import taxes?

[kahei]

I mean, why not sell to the US from Toronto, and to Canada from New York?

Because of the import tax? The one you should technically have been paying already, but which isn't normally levied on small packages -- yet? I imagine they'll start enforcing it if and when they implement a domestic sales tax.

Incidentally, here in lovely socialist England I am likely to pay 20% tax plus another 15% or so in tax-like handling charges on every single thing I mail order from the US -- which is a lot, since you can't buy clothes here unless you're a dwarf who loves terrible clothes. Luckily, the money is spent on a worthwhile cause, i.e. huge subsidies to companies that spend it on executive pay, share dividends, and disastrous foreign speculation. The locals love this state of affairs because hey, that's socialism!

(Prepares to lose all his karma to righteously indignant English people who think giving away your economy is morally virtuous and that the world is grateful to them, but heroically does not click the 'anonymous' button!)

Re:Question: National import taxes?

[Jonathan]

As an American living in Canada I also have to deal with customs fees when I buy things from outside Canada. What annoys me is that my Canadian co-workers all say "why not buy locally?" as if I was doing it to screw the Canadian economy and not because the books, CDs,and computer equipment I order just can't be had locally. Incidentally, I don't believe the US has such fees -- I'm a fan of German music and never had any problem shipping CDs from Germany to the US when I lived there.

Re:Question: National import taxes?

[glesga_kiss]

I am likely to pay 20% tax plus another 15% or so in tax-like handling charges on every single thing I mail order from the US

That's pretty unlucky. I've been importing DVDs etc for years, and I've only be taxed once or twice. Some things to know:

• You are only taxed when the goods sum total is over a certain threshold
• Big carriers like FedEx always charge tax because they have an agreement with customs on this. It enables them to get their packages through customs quicker

Keep your packages small, and take by-land delivery, and you will mostly be tax free.

you can't buy clothes here unless you're a dwarf who loves terrible clothes

Your placing US clothing above European? Wow. Never seen that done before. What on Earth do you like wearing? ;-)

Re:Question: National import taxes?

[milobloom-ab]

I mean, why not sell to the US from Toronto, and to Canada from New York?

In large part, it's not worth ordering from the US when you live in Canada because of the low value of the Canadian dollar against the US dollar. But, on the outside chance that I find something that's reasonably priced even with the currency exchange rate, one of the following will usually deter me from buying:

• Many online retailers in the US either won't ship to Canada or charge some ridiculously high shipping fee. (ie. usually double or more what they charge to ship within the US)
• Because of brokerage fees (all couriers now charge them - used to be only UPS, but now FedEx screws you over too), import duties (not charged on all goods, but still charged on some) and then 7% Gouge 'N Screw Tax (GST) on top of all that.

The only way around some of this is to have the seller ship via USPS ground, which most won't do. At least that way you don't get dinged for brokerage fees, just applicable duty and GST at the post office when you pick it up. There have been many times where I'd love to buy something from a web site in the US, but either can't get it shipped here or it would be prohibitively expensive.

Just to give you an idea, I ordered a couple of VCDs (cd-i's actually.. remember those? :)) a while back. I paid $20 US each, plus $5 US each in shipping. Total of $50 US charged to my Visa. Items were shipped to me via UPS, and when the package shows up, the UPS dude demands $32 CDN in brokerage fees and GST. So, adding up and using a rate of exchange of 1.5, I paid $107 CDN for two VCDs. Had I known that I'd be paying that much, not fscking likely that I'd have ordered them in the first place!

And now they want to add state tax on top of this? Pffffft...

Re:Question: National import taxes?

[MikeVx]

Hmmm...

I have never been hit with any kind of import tax, and I regularly get stuff from outside the US. What really surprised me was UPS sending me an import bill of $0.00 for a $1200 DVD player (at the time, there was exactly ONE place on the planet to get modded players, as far as I was able to tell). Researching this, I discovered references in customs documents to a $2000 exemption on imports for personal use.

I don't know if this is still the case, but I continue to get small items every month and haven't been taxed yet.

Let states compete on low cost of doing business!

[aquarian]

To keep governments honest in delivering value to their constituents, states should be forced to compete in offering low cost of doing business. If taxes climb too high, then the goverment isn't doing it's job well, businesses leave, the economy suffers, and the people vote the government out of office. This is the best mechanism we have for keeping governments accountable to the people -- just as companies have to offer value to their customers, and to their shareholders.

Taxing across state borders is unjust and just plain stupid. We have enough barriers to trade around the world. Let's not start *within* our own country.

Re: need to pay more TAX

[Anonymous Coward]

i Agree, at some point we need to pay more TAX because of this financial wizard problem when we start to pay it back is anyones guess, but im worried about the kids now,turning them into wage slaves (working for big corp) to pay our previous excessive dues doesnt seem to be fair somehow

brit chink read too many books

[Anonymous Coward]

this guy is a retard

anyone who really thinks that 25% of CO2 is a measurable number is either a complete fucking retard, or a democrat. adding on to this list of shit is saying some old fucker in london is going to solve all problems couldn't be more wrong. nothing good has ever come out of london, it's food, it's chicks, it's research (less VNC).

AC

PS YES i'm american
YES i'm proud
YES we will bomb you
YES i'll recive a federal anal inspection for
independant thought

Re:brit chink read too many books

[Anonymous Coward]

YES i'm american
YES i'm proud

Proud ? How can an anonymous coward be proud ?

YES we will bomb you

Ah ok, it's a testosterone thing :)

YES i'll recive a federal anal inspection for independant thought

Does this also make you proud ?
Or did you just mispelled pudding-head ?

Taxation w/o representation

[natron 2.0]

I am currently living in South Korea, serving a remote tour for the US Air Force. I do not pay taxes on base. When I purchase stuff online and it has to be sent to my APO address I get taxed with the outrageously high California tax, just because my APO address begins there and is then shipped over here. I am not a resident of the state of California, so there for I am not represented by the government there, which leads to the reason this country was founded on "Taxation without representation". Why should I support a state that I have nothing to do with? I have never even visited California, and probably never will until they change thier smoking laws. Of course this is just my uneducated opinion, but I am sure the bureaucrats see it differently and only care about the money coming in.

Re:Taxation w/o representation

[budgenator]

When I purchase stuff online and it has to be sent to my APO address I get taxed with the outrageously high California tax, just because my APO address begins there and is then shipped over here.
I'm sure that this is wrong, not you but it's a missintreperatation of CA's law. California's and New York's laws cover their states not soldiers and sailors stationed physicaly in foriegn countries, just because the APO or NPO, Army Post Office or Navy Post Offices zip code is in CA or NY doesn't mean that those states have jurisdiction over people serviced by those zip codes. For those /.'s not aware of this, the army/navy operates a postal system for the soldiers and sailors benifit. These systems have zip code typicaly in CA or NY as hand-off points to the military systems. Several benifits to the Service Member is that the mail does not have to go through a foriegn country's sometimes less reliable mail system and as their units are physicaly move, their mail automaticaly follows. Furthermore civilians often establish a vendor agreement with the AAFES or NEX, Army/Air Force Exchange System or Navy Exchange and sell goods and services that are exempt from state sales and use taxes, because they are taking place on federal property, which is foriegn to the surrounding state. Just because a website in California isn't astute enough to recognise that they are making remote sales doesn't mean they are correct. you are probably due refunds, or at least an income tax deductions for taxes paid to a foriegn government. Technicaly many Indian reservations are foriegn to their surrounding states and sales should be exempt unless the goods or services cross the boarder back into state jurisdiction.

Of course IANAL or CPA so check with your own pro's about this.

Re:Taxation w/o representation

[rleibman]

Taxation w/o representation indeed! Have you thought of all the non-citizen LEGAL residents that pay their taxes year after year and have absolutely NO say in how they're spent?

Re:I once watched....

[jhunsake]

No, the no. 1 place to see movies is at home in front of your widescreen HDTV with THX certified stereo system (I don't have this). Why would you want to deal with: annoying kids, sticky floors, tall person in front of you, overreactors, lack of pizza :), burnt or dirty film, not-so-comfortable chairs (at least not like a couch), need I go on?

Re:I once watched....

[meringuoid]

The movie was Star Wars Episode I. The experience was so displeasing that I went to see Episode I in a movie theater and I do not plan to watch a pirated movie again. Mainly because the quality of the 80% of the pirated material sucks and also because I have better things to waste money/bandwith on.

Run that one by me again, will you?

You SAW Episode 1 for free. Having found this a displeasing experience (didn't we all) you then went and PAID to see it AGAIN? What kind of masochist are you?

Re:How about taxing campaign funds?

[Anonymous Coward]

Let everyone pay their FAIR SHARE.

DONT WORRY! be happy ;p

[Anonymous Coward]

by the time this is passed as a law, we wont use "the internet"...

we will all be running wifi boxes to connect everyone to everyone else for free(minus power bill, get them solar/wind generators up!), running whatever servers we want, and blacklisting spammers with ease.

we will also be reading the news on flexible plastic, while using our 3d glasses to play duke nukem forever!

downloads?

[heretic108]

Well, tax the shareware downloads, as well as other stuff sold, as in, money actually paid.
Kinda defensible - why should the internet be used as a sales tax shelter, particularly when people pay sales tax for fax, snail-mail and phone orders.

But don't let them get any ideas about taxing downloads in cases where there is no money paid. Fucked if I want to go to bed after typing 'apt-get dist-upgrade' and wake up to find $25 added to my tax bill.

Re:downloads?

[Overzeetop]

Huh? Thay don't pay for fax/phone/mail orders from companies without a nexus in the recipient's state.

If I order via internet/fax/phone/mail from Smarthome (in CA, no Nexus in VA - where I live) I don't pay tax. If I order anything via any means from Crutchfield, I pay tax (Nexus in VA).

Internet companies currently have the same interstate-commerce protections as mail-order houses. But the states, after binging on taxes generated by the stock market bubble of the nineties, need sustainable dollars to run their services. As internet commerce gets larger, a N% tax starts looking like real money - real money that State Legislatures are afraid to ask their populations for directly.

Re:downloads?

[geekoid]

"If I order via internet/fax/phone/mail from Smarthome (in CA, no Nexus in VA - where I live) I don't pay tax. "

you don't pat tax to CA, but you are suppose to report that sale to your state franchise board, and pay the appropriete tax.

What the?

[Nursie]

Where's all this come from?
No-one's talking about taxing pirate movies on the net, it wouldn't work!
Now tax on legitimate movie downloads could happen, despite probably being a bad idea, but I'm sure the quality of legitimate downloads is much better.......

Is the parent poster an employee of the MPAA just using any story they feel like to post pro-hollywood propaganda?

I once watched a pirated copy of a movie. The movie was Star Wars Episode I. I thought it was pretty good quality and never went to watch it on the big screen. That's 'cos the movie sucked though ;-)

what really irritates me...

[night_flyer]

...about this whole thing is the government, especially most of the States, dont spend the money they get wisely in the first place, so we are going to give them MORE money?

For the last 10 years in Oklahoma the population grew at about 6%, government spending grew at about 70%, now there is a budget shortfall and the want to raise taxes!

Re:what really irritates me...

[ratamacue]

It is the logical nature of government to expand. The people who are most interested in gaining power are those who wish to control others -- not those who wish to mind their own business and live in peace. This is precisely why the US government is so overly complex and expensive today: Power and profit for those in control expands proportionately to the size of government (measured not just in tax dollars but liberty). You have probably heard of "political pork", i.e. government designed precisely to benefit those in power by expanding their "responsibilities". In the end, ALL government is "pork" to some degree, because it is impossible that government benefit everybody at the same time (except perhaps for government which protects against force, for example the local police responding to theft). By the reality of human nature, every person represents a unique thinking individual -- and thus a unique opinion on government.

You have to view government as the business it really is, driven by profit and market share like any other business. Those in power are not there to benefit you -- they are there precisely to benefit themselves.

Incidentally, this is the most important flaw in the concept of "government by the people". How can government be both "by those who wish to control others" AND "by those who wish to control themselves" at the same time? It is logically impossible.

Re:what really irritates me...

[jmulvey]

You have to view government as the business it really is, driven by profit and market share like any other business. Those in power are not there to benefit you -- they are there precisely to benefit themselves.

To a limited extent, you're right. But the counteracting force to this is civics and morality. Unfortunately, civics is non-existant in our schools today. And as for morality, well, I won't even start on the barriers to teaching kids even basic respect.

Re:what really irritates me...

[madro]

The people who are most interested in gaining power are those who wish to control others

FALSE. In the US, people run as Democrats to try to *prevent* Republicans from controlling others (Ideologically, Republicans want to do this by reducing the size of government through tax cuts even at the risk of damaging social programs that form the safety net of a moral, democratic society are undermined)

People run as Republicans to *prevent* Democrats from controlling others (Ideologically, Democrats want to do this by regulating industries, opposing tort reform, and creating new social programs to benefit even the poorest citizen, even at the risk of stifling economic growth that can eventually raise the living standards of all.)

At one point, Rand's objectivism had its appeal to me, but at some point you have to realize that real life is about respecting the philosophical arguments behind individualism and collectivism and then finding the right balance and working to achieve it.

Re:what really irritates me...

[jmulvey]

In the US, people run as Democrats to try to *prevent* Republicans from controlling others (Ideologically, Republicans want to do this by reducing the size of government through tax cuts even at the risk of damaging social programs that form the safety net of a moral, democratic society are undermined)

FALSE. In the US, people run as Democrats to try to raise taxes, and claim that taxes must be raised because the rich don't pay enough to provide services for the poor. Unfortunately, the rich do pay enough taxes to provide services for the poor, but the government simply does not provide them efficiently.

People run as Republicans to *prevent* Democrats from controlling others (Ideologically, Democrats want to do this by regulating industries, opposing tort reform, and creating new social programs to benefit even the poorest citizen, even at the risk of stifling economic growth that can eventually raise the living standards of all.)

FALSE. People run as Republicans to try to reduce public services, and claim that services must be reduced because the poor overuse public services. Unfortunately, the poor do not overuse public services, the government simply does not provide them efficiently.

In this manner, both parties can create class warfare that effectively gridlocks efforts to do what really needs to be done: Reform Government and get rid of waste, corruption and pork!

Re:what really irritates me...

[westneat]

The people of Oklahoma are as responsible as the government since they elected them. If you have an issue with the way your government is run, why don't you get involved in some way instead of whining about how the government sucks? He is the Oklahoma legislature. If you have issue with the people of Oklahoma, you can move somewhere else. This is the beauty of a free and democratic country.

Re:what really irritates me...

[3Bees]

ratamacue observed:

It is the logical nature of government to expand. The people who are most interested in gaining power are those who wish to control others -- not those who wish to mind their own business and live in peace.

Not to contest your other points, but I don't think it matters what kind of person seeks office. Power corrupts.

Not Quite

[Duds]

This only applies if you're from outside the EU.

Equally it should apply in this case if you're outside the US

In the UK

[Duds]

We've always paid the same 17.5% sales tax on online sales as we've paid anywhere else.

Didn't stop it taking off.

Re:In the UK

[AGMW]

We've always paid the same 17.5% sales tax on online sales as we've paid anywhere else.

Didn't stop it taking off.

I think you miss the point. We all live (in a yellow submarine?) in the UK, so paying tax in the UK sort of makes sense. In the US, they object to paying (local) taxes in states other than those in which they live. Indeed, it is (sort of) against the Constitution (no taxation without representation).

As posted above, if visitors to the UK buy stuff, they can claim back the VAT as they are not resident in the UK. A similar thing happens in the US, where you can buy stuff in the next-door state and decline the pay the local sales tax because you're not a resident.

Now, what (I think) some states (may!) have is a Use Tax, so if you Use something in your state, you should pay tax on it. Unfortunately, the Out-of-State internet company you purchase stuff from ain't gonna collect taxes for some other state, so you have to own up and pay the taxes.

Strangely enough, many (probably most!) don't own up, and hence the states thinking they are owed some (otherwise invisible) tax revenue.

Now, my take on this, FWIW, is that you do have Representation because you can vote with your feet and NOT buy stuff from states where you deem the (local) tax is too high, so I'd say the easiest way is to simply let the companies charge the local Sales Tax on all purchases. If you don't like it, shop where there's smaller (or no) sales tax.

Re:I once watched....

[MikeFM]

That's a silly thing to say. That is like saying because you went to one theature and it had sticky seats and a projector that jittered that you'd never go to another theature. If you don't pick a good place to download from you won't get good results. Any wank can camcord a movie but good copies are scanned from the film. Of course if you don't mind the wait you can get good copies ripped from dvd too.

Myself, if it's a good movie, I go see it half a dozen times at the theature and either buy or download a good pirate copy to pacify me while waiting for the DVD. Once the DVD is out depending on how much I liked the movie and the extras involved I either rent or buy a copy of the movie and just rip it myself.

Moral of the story: If movie studios don't want me to make pirate copies then should release the DVD as soon as the movie is in the theature (most people don't go to the theature just to see the movie) and release a collectors edition later that includes cool stuff I'd like to have (a nice box, dvd extras, a poster, etc). I will still rip the movie but the movie studio will have more of my $$$ in their pocket too.

poof!

[Anonymous Coward]

Once this goes into effect, you'll see the everyone stop buying online. Already most of us here at my office building don't buy from an Texas vendor for just this reason (and any place like Borders.com which charges sales tax because of a B&M presense in our state).

Re:Let states compete on low cost of doing busines

[Albanach]

Surely you'd be in favour then? If a State has low costs for doing business, you as a shopper anywhere in the US can decide to conduct your business with firms in that State. They then have a competitive advantage, firms in other states complain and their business taxes are held low or are reduced to maintain their commercial opportunity.

If, however, the tax is to be collected by the State local to the purchaser, you have the opportunity to vote your representatives out of office if you don't like their taxation policies. If your fellow electorate disagree with you and keep them in office, you have the right to move to a different state.

Taxation Without Representation

[egommer]

Taxation on the intenet is a farse. The public at large barely has any protection or representation on the internet. All the interests currently serve coporations not the general public. Identity theft, Fraud, Scams, and Spam, run rampant with no checks, Security is still a problem, yet we are now to be taxed. The 'Fat Cats' as salivating over this like it's the last live stock animal in the village during a cold winter.

Now we are to be taxed for the priviledge of getting hi-jacked without recourse. I see the digital tea party. Where the masses dump their cable modems into the Bostom Harbor in mass protest. Sheesh! (yeah that'll happen)

I can't wait untill air and water is taxed. That's comming soon.

Re:Taxation Without Representation

[Fig, formerly A.C.]

Water is taxed already. When you buy it in a store, you pay sales tax.

If you use city water, you get socked for a plethora of taxes on your water bill.

Re:Taxation Without Representation

[Anonymous Coward]

Water is taxed, depending on locality and service. It's usually hidden though. For example:

My favorite is the tax on meter pipe size. See, usually there is this minimum quarterly water use fee. If you have a late residential installation, it's usually 3/4", your quarterly minimum fee is usually under $30.

Have a 1" pipe supplying water, as many older houses that were orginally hooked up to municipal/city/boro water lines? $90 a quarter.

Not based on use. Quarterly minimum payment for the connection. Don't use the water? $90 anyways. All pipe sizes have an associated "given" gallon usage, e.g. 10,000 gallons a quarter or something, depending on pipe size. But it's not based on use. Put another way, they want more revenue, they raise the quarterly minimum fee.

So, even if you used less water, you could end up paying more. Some argue that it's a minimum due to pressure buildup to supply larger pipes, but remember, these pipes were usually already there, e.g. their infrastructure has not been touched for 3 decades (copper, no problems with 'em, etc.). Combine that with the usually increase in stringent building codes and water use laws, and you have usually 3 gallon toilets or even 1.6L ones where 5 gallon ones were; people are typically using less water and yet the cost keeps rising.

My favorite is when they funnel the water profits to another department, then when the water infrastructure needs updating, the water department goes into deficit and is used as the excuse to raise the minimums for improvements to infrastructure.

Re:Taxation Without Representation

[OneIsNotPrime]

Why does everyone keep voting for these bastards? Since when is the government a seperate entity - it's composed of us, American citizens, me and you. If you don't want them to keep stealing from us, stop voting them in office. Don't blame me, I vote libertarian. _______________

Re:I once watched....

[Anonymous Coward]

Your back was even hairier than yours?

Your back intrigues me. Please subscribe me to your newsletter.

Re:I once watched....

[martingunnarsson]

You get much bigger and better picture and better sound. I'm very rarely disturbed by the other people in a movie theater.

Rebirth of digital cash..

[MikeFM]

I think they'll just encourage people to use digital cash. The lack of taxes has allowed credit cards and even checks to become the common method of payment online. If the government begins taxing these sales it'll encourage people to use digital cash. If there are people willing to use digital cash there will be people that will supply it. Sure most will suck and the rest will battle but eventually one or a couple will become the new defacto standards.

Why would a company provide the framework of digital cash without charging any fees? Simple! You get people to pay you in real money and you give them digital money. You don't have to offer to convert digital money back into real money if you have enough customers that it is practical to buy and sell everything in digital money. Other people would step in to convert currencies if there was enough demand. Therefore you suddenly have a money funnel filling your own bank accounts. Invest that money in land, gold, precious gems, or whatever is pretty stable and you have a fortune and your fortune makes your digital money more valuable thus creating a nice cycle. Just issue yourself whatever paychecks you want and live like kings.

Think of the EBay/PayPal marriage. If they moved their operation out of the US and issued their own currency that was easy and cheap for everyone on EBay to use and made it available to other sites to use as easy as they already use PayPal.. well you see where that goes. It's not that far fetched.

Re:Rebirth of digital cash..

[mark_lybarger]

extremely interesting idea indeed!

first, the governement is taxing too many different things all over the place. most likely so the population doesn't realize the exact amount they're actually paying. don't charge the poor income tax, charge them sales tax. middle income families, they get double wacked. upper income, well, they get a slight hit in the income tax, but they're able to save a lot and can find ways around some taxes. pick one thing uncle sam and tax it all across the board!. i've got 3 different governments wanting sales tax on my income, plus some old-age governement-created-quasi-retirement system that needs to be completely eliminated or at the very least optional.

now, back on the topic of the poster. a company will definately see taxing internet purchases as an opportunity to act as an offshore clearing house for internet sales. the sale will actually occur offshore and no taxes will be incured. or some such. however it's implemented, there's a technical problem that people will be paying internet taxes (the state gov't are in too big a pinch these days and are all looking for revenue from places mostly from overspending during the .bomb era). there will be a technical solution that will be implemented probably first by some h4ck0r, then by a reputable company.

during the late 90's most people didn't mind paying their taxes. but now that the gov't can do what most normal people do and live within their means, they're raping people for more and more when people have less and less to give. my governor (OH-Bob Taft) just proposed raising taxes again on cigaretts and alcohol to cover part of their lack of income. i'm sure the legislature will approve what he wants.

Re:Rebirth of digital cash..

[Idarubicin]

Why would a company provide the framework of digital cash without charging any fees? Simple! You get people to pay you in real money and you give them digital money. You don't have to offer to convert digital money back into real money if you have enough customers that it is practical to buy and sell everything in digital money. Other people would step in to convert currencies if there was enough demand. Therefore you suddenly have a money funnel filling your own bank accounts. Invest that money in land, gold, precious gems, or whatever is pretty stable and you have a fortune and your fortune makes your digital money more valuable thus creating a nice cycle. Just issue yourself whatever paychecks you want and live like kings.

Wow! This was tried in many nations--including the United States--in the nineteenth century. Some countries still use a similar system, wherein banks are allowed to issue currency. Very tight regulation is required, or else you end up with problems--similar to those in the United States--where organizations issue currency without assets to back it up, make it difficult to redeem their "cash" for real dollars, or just the money and run, leaving customers with worthless paper.

In the United States between 1837 and 1863 roughly five thousand different types of bills were issued by more than a thousand different banks. Counterfeiting, fraud, and just plain bad customer service ran rampant. Of course, none of a bank's holdings were insured by the federal government as they are today (FDIC in the U.S., CDIC in Canada; similar bodies in other developed countries.)

You're asking us to cavalierly give thousands or millions of dollars to essentially anonymous individuals on the internet and endow them with the powers of what amounts to a central bank, while letting unfettered free market forces work things out? Go ahead--Ask Slashdot: Is everyone happy with the PayPal customer service department?* Don't think so.

If it walks like a bank and quacks like a bank, it damn well ought to be regulated and insured like a bank. Until then, credit cards will reign.

*Trick question: it's already been addressed on /. The answer is 'no'.

Re:Rebirth of digital cash..

[bucklesl]

...the population doesn't realize the exact amount they're actually paying.

An accountant I know says that most people don't realize it, but they pay about 60% of their income in taxes. Think about all the other taxes, besides the obvious, that you pay for (this varies by locality, of course):

• gas tax at somewhere at $0.30 - $0.40 per gallon,
• sales tax
• food tax
• cigarette and liquor tax

Anyone think of more?

Re:Rebirth of digital cash..

[C0LDFusion]

When companies pay their half of the social security tax, it is either reflected on the employee's check as a lack of a raise, or on a customer's bill as a price increase.

Re:Rebirth of digital cash..

[theCoder]

Food tax? Where do you live? Everywhere I've been, groceries (unprepared food) are exempt from standard sales tax. Some things that are considered either luxery or prepared foods (things like soda or microwave dinners, I think) are still taxes at the standard sales tax rate.

But you're right, there are a lot of taxes. And another poster mentioned the taxes you don't directly see because your employer pays them for you. So whatever is taken out of your paycheck in taxes, double that is your real income tax burden.

It's amazing that the government is not only able to spend that much money, but is actually able to spend _more_ than what it takes in. Of course, it does do a lot of good things with that money, but it's still amazing. Especially since I still clip coupons to save 25 cents on food (and by that, I mean I'm cheap -- I know there are people who need to just to get by)

Re:Rebirth of digital cash..

[Anonymous Coward]

And of course, the much of the costs of goods and services you pay for with that other 40% is labor, and they have to roll that 60% tax charge into their labor. Assume half the cost of stuff in general is labor.

Total taxes is 0.60 + (0.5 * 0.40 * 0.60), or 72%.

Re:Rebirth of digital cash..

[Anonymous Coward]

Everytime I see this percent knocked about I want to spew.

First, my wife and I make 100k per year. We pay about 15,000 federal, 4,000 state, 7,500 fica and 2,500 real estate taxes for a total of 29,000 that's 29% so far.
No way I spend another 31,000 on other taxes. Example gas tax, 3,000 dollars for gas @ 1.50/gallon = 2000 gallons x .60 = 1,200 tax.
Long ways from 31,000 still to go.
If I bought some big ticket item like a car or boat I might spend another 2,000 to 3,000 in a one time sales tax, still a long ways from 31,000!

Re:Rebirth of digital cash..

[Happy go Lucky]

Anyone think of more?

Employer contribution to Social Insecurity: 7.some-odd% which they're paying Uncle Sucker instead of you. (Like it'll be around in 30 years when I reach retirement age! HA!)

Vehicle tax, separate from the sales tax you paid when you bought it and separate from the registration fee. In Colorado, it's 2.10% of the original taxable value on a new car. And the emissions tests in the Denver metro area, which can ONLY be performed at a state-owned facility on 1987 and newer, and cost twenty-five bucks.

Firearms, ammunition, and boats carry a Federal excise of 10% or thereabouts. I'm not sure, but I think fishing tackle falls under a similar excise.

Property tax-easy to miss if you're a renter. The poor bastards in Denver pay them to support schools (DPS being the best argument for school choice I've ever seen), the Donkeys' new stadium (because John Elway thought it was a neat idea for someone else to pick up the tab, greedy asshole), the Regional Transportation District (which should be self-supporting with the fares they charge) et cetera.

Thankfully, in my area we just pay property taxes to prop up an utterly-worthless public school system. Were it not for the Jesuits, this area would have third-world-quality education all around. (And I'm Lutheran. I'm not supposed to say that!)

Don't forget the taxes in your phone and utility bills. My Qworst bill for December had enough tax included to pay for my unlisted, Caller ID, and most of my long-distance calls.

Re:Rebirth of digital cash..

[MikeFM]

You didn't read my whole suggestion. I did suggest that a smart company would poor all such income into assets that would remain halfway stable such as gold.

Do you actually think the US has their currency fully backed by gold or anything more than paper and a pipe dream? Besides that what is backing up the value of gold other than it's shiny and humans have the intellegence of raccoons (they'll die to hold onto something shiny)? The real value of a currency is in maintaining flow between users of that currency so products and services keep coming. Digital cash has some major benefits in that it flows easier than outdated paper money. The stock market is more similar to digital money than is a national currency.

Also your assuming that because 5% of the population actually thinks that banks and the US government know how to manage money that the rest of the people of the world wouldn't use digital cash. Checks, gift certificates, credit cards, etc are all forms of currency. The only difference between those and full digital cash is that those things aren't easily transferable between individuals (they have a merchant-customer relation).

And yes a good many digital cash companies would probably be swindles and/or bomb but like any merchant those who do the best job at convincing customers in the long term will survive. In this age corporations are often more stable than many nations.

Don't think people would use it? Look at how many people send money (a lot of money) to total strangers on EBay without any proof that they'll get anything back. Look at how many customers do use PayPal and similar services. People will use it if it is easy and free. People don't care about stable, secure, insured, etc. Look how many people use Windows.

I've transfered thousands of dollars back and forth using PayPal since their inception and have had no major problems and they answered my questions far better than most of the banks I've had. Most of the complaints I've seen has been because of PayPal's growing pains or stupid shit like "I used my name for my password and someone stole my money.". They are easier to use, more reliable, and deliver higher interest payments than any of the banks I've used. I've used banks all over this country and for the most part they've all been pains in the ass and all managed to rip me off or lose my money at some point. Something PayPal has yet to do. My ony real complaint with PayPal is that I have to keep another bank account in order to cash my paychecks and transfer the funds to PayPal. Simply because my current employer's accountant didn't feel comfortable sending paychecks with PayPal.

Re:Rebirth of digital cash..

[MikeFM]

The funny thing to me is that people often seem to think we need the government to take this money and spend it for us. Why can't we spend it for ourselves? Are we toddlers or adults? Just some thoughts..

We have to pay gas taxes (among other things) to pay for roads. If people are using the roads why can't they be toll roads? If people aren't using the roads then hell why build a road? For that matter why can't unemployed people who's unemployment runs out build and maintain the roads for some money? It'd cut down on welfare and give people some pride. I for one find it really frustrating to go begging when I'm perfectly willing and able to work. Make it an option at least.

Welfare is a joke as is unemployment. Maybe if we didn't have to pay so many damn taxes it'd actually be possible to live off our paychecks and put some money in savings for a rainy day. Who else has used these services at some point? For me they made it a real pain in the ass to get back money that'd came from me in the first place.

Public schools are very mixed and money doesn't seem to be the issue. I've seen poor schools that did very well and rich schools that spent all the money on crap. I do think public schools are something worth taxing for but the current system just doesn't work.

Police/fire/medical protection? The police are largely a joke. My experience has been that they cause as many problems as they fix. Firefighters I've actually found to do a somewhat good job in most communities I've lived in including those with volunteer fire departments. They deserve some support but again I'm not sure if taxes are the best way. I'd rather see volunteer firefighters and community donations to provide firetrucks etc. If people don't care enough to donate than tough shit if their homes burn down. We really don't have free medical help in this country or at least no where that I've lived. If an ambulance comes to your house your billed for it. Go to the doctor and they charge you out the ass for every little thing. It seems to me that medical protection for everyone is a basic item that should be provided by the taxes we pay but we sure don't get it. Not sure how you could provide fully volunteer trained medical care. Going to med school is kind of expensive (refer back to how public education sucks).

Military protection.. how much is enough.. how much is to much? I always want to compalin that we spend to much money on the military but on the other hand we don't have Mexico invading us all the time so maybe the costs are justified? I'd like them to spend more on paychecks and benefits for soldiers and less on fancy bomber planes. If NASA can send probes into space on a newer tighter budget shouldn't the military be able to attack Iraq for a more reasonable cost? I can slap together a nice robot that can attack things for $500. Sure the enemy can fuck with them but you can send a lot of them at the bad guys for the cost of one bomber. Besides they're the military so I'd hope they can build better toys for the same $500.

#1 evil... ding ding ding.. legistlators paychecks. Why should these monkeys make more than a cop, firefighter, schoolteacher, soldier, or other working stiffs? I'm not against paying them for their time but really should they make so much more the average guy? Are these guys really so smart that their expertise is worth this much? I can't imagine they do much heavy labor so you can't really say it's all hazard pay. I think we should pay these guys minimum wage for their time. It'd A.) make them think more about the poor stiffs working for minwage and B.) make them get stuff done in as little time as needed so they could spend more time on real jobs and C.) make a career of politics and not causing waves to seem a lot less cool.

Property taxes, food taxes, utility taxes, etc really piss me off. They make it so that it is nearly impossible to mind your own business, provide for yourself, and not have to either be on welfare or be a slave wage. Unless your wealthy you can't just buy a bit of dirt and build your own house, grow your own food, etc. No in this country that is illegal (try it, if you have kids many states will take them from you for living like that). Sucks eh?

Not just overseas!

[Surak]

I live near Detroit. I'm about 15 minutes from the Canadian border and I can tell you that Canada has a similar law -- you buy stuff in Canada and if you save your receipts for items over some base cost, you can send them to the Canadian government and they'll cut you a refund check for the GST taxes (Goods and Services Tax).

Re:Not just overseas!

[printman]

Yes, you get GST back which is a federal tax, but not PST which is a provincial tax.

IIRC (and I'm no expert), VAT is a federal (country-wide) tax as well...

Re:Not just overseas!

[Surak]

Yes, you get GST back which is a federal tax, but not PST which is a provincial tax.

I dunno about the PST...someone told me that you can get it back, but I think they're confused by the fact that you can write off 100% of all you pay in PST in Canada on your U.S. federal income tax (which I don't think you can do with the GST, because you're expected to get that back from Canada).

Cry me a river...

[wiredog]

People who live in Washington DC pay federal income taxes, social security taxes, medicare taxes, and every other federal tax, and have no representation in Congress.

Re:Cry me a river...

[Anonymous Coward]

HOOAH! That is the smartest response to a stupid post I have ever seen on /.

Natural monopoly anyone?

[Goonie]

Aside from outrageous monopoly rents by the toll-road owners, you mean?

Why not just have private armies, as well? Let's go properly fuedal instead of the half-assed version current nutty libertarians want...

Re:Natural monopoly anyone?

[C0LDFusion]

Why not just have private armies, as well? Let's go properly fuedal instead of the half-assed version current nutty libertarians want...

Heh, that'd be a modded up "Insightful" post if you hadn't mixed up libertarians with something else.
Libertarians believe government exists for only a couple of reasons.
1. Protect its citizens. (that means police) 2. Protect its borders. (that means military and border patrol)
3. Ensure freedom of the people to acquire, collect, and sell property or money. (that means laws that keep large corporations from anal raping you with loopholes)

Libertarians do not believe:
1. That everyone should go naked and roam free on the land.
2. That everything should be privately owned. (There is a place for government, it's just not supposed to be in 80% of my pocketbook through payroll, sales, and about 50,000 other obscure taxes that have been excised towards punishing me)
3. That government should run everything.

I love it when the nutty socialists get uppity about cutting wasteful government spending.

This is not a troll, damn it!

[Anonymous Coward]

Vudufixit is right; the political piggies spend every dollar they steal from the citizens, and if they are allowed to steal more they'll just spend more. It's time to forbid the government from imposing taxes and MAKE THE BASTARDS BEG FOR MONEY.

Look on the bright side

[Anonymous Coward]

Well, you can always look on the bright side:

> > PLEASE SING ALONG !!!!
> > to the tune of If You're Happy And You Know It Bomb Iraq
> >
> >
> > If you cannot find Osama, bomb Iraq.
> > If the markets are a drama, bomb Iraq.
> > If the terrorists are frisky,
> > Pakistan is looking shifty,
> > North Korea is too risky,
> > Bomb Iraq.
> >
> > If we have no allies with us, bomb Iraq.
> > If we think that someone's dissed us, bomb Iraq.
> > So to hell with the inspections,
> > Let's look tough for the elections,
> > Close your mind and take directions,
> > Bomb Iraq.
> >
> >
> > It's pre-emptive non-aggression, bomb Iraq.
> > To prevent this mass destruction, bomb Iraq.
> > They've got weapons we can't see,
> > And that's all the proof we need,
> > If they're not there, they must be there,
> > Bomb Iraq.
> >
> > If you never were elected, bomb Iraq.
> > If your mood is quite dejected, bomb Iraq.
> > If you think Saddam's gone mad,
> > With the weapons that he had,
> > And he tried to kill your dad,
> > Bomb Iraq.
> >
> > If corporate fraud is growin', bomb Iraq.
> > If your ties to it are showin', bomb Iraq.
> > If your politics are sleazy,
> > And hiding that ain't easy,
> > And your manhood's getting queasy,
> > Bomb Iraq.
> >
> > Fall in line and follow orders, bomb Iraq.
> > For our might knows not our borders, bomb Iraq.
> > Disagree? We'll call it treason,
> > Let's make war not love this season,
> > Even if we have no reason,
> > Bomb Iraq.

Taxing items sold online within Canada?

[TobyWong]

I just bought a video card online the other day from a store in the same province I am in. They charged me tax for it and to be honest I didn't even notice.... it's been ages since I bought something online from canada so I can't remember if this is normal. Is the "no tax for online sales" in effect in canada right now too or just the US?

Re:I once watched....

[hagardtroll]

I do have a wide screen HDTV and THX Surround.

Here are my observations...

1. DVDs are not available in HDTV yet. You have to settle for Widescreen anamorphic. That being said, there's never a nore beautiful picture than the one from my Progressive Scan DVD player.

2. If nature calls, you can press the pause button and not have to miss anything.

3. If someone mumbles a line and you didn't catch it, my remote has a back up 6 seconds button. I don't miss any dialogue.

4. The deleted scenes included on the DVD often tell a part of the story that you couldn't get from just watching the movie.

5. You can eat whatever you want, Popcorn, Pizza, Baked Alaska during the movie without having to wait in line or pay movie theater prices.

6. For me it is a 45 minute drive to the nearest theater. A nothing special theatre (No special sound system or stadium searing.) that charges $8.00 to see a movie.

7. I live in a small town and within walking distance from my house is a rental place that provides plenty of widescreen DVDs. Its not a chain and the owner is a videophile and likes to stock a wide selection of movies, and special editions. He also gets hard to find and indpendant movies on request.

8. I control the temperature and lighting to what I want. Ambient noise in nonexistant.

9. You do miss the audience reactions, (A room full of theatergoers laughing and gasping, etc.) But you also miss the bratty kids that can't stay still and run up and down the aisle.

10. You have to wait a couple of months until the movie is out of the theatre before you can view it.

Disclaimers: Your mileage may vary. Theater can be spelled more than one way, so I took liberties.

Why fight "Internet" sale tax ?

[nbougues]

In Europe, we call the "sale tax" a "value added tax" (VAT). So you might not agree with the concept of tax on "added value". But that's all it is.

Whether the product is sold through the net, though mail order or directly in a shop doesn't change it's price or the way it's taxed.

That's why prices are usually displayed "with VAT included" (about 20%), because except when exporting, everyone pays the VAT.

So, according to me, the way it works in the US is basically flawed. I don't understand why you'd pay tax when you buy something locally, but wouldn't if you order it from a remote place.

Maybe it was meant to subsidize mail order companies, or even the carriers. I don't know.

So I can understand that nobody wants to pay more than they do now. That's a good reason in itself. Most the other ones are basically trying to justify an illogical situation.

Re:Why fight "Internet" sale tax ?

[weave]

VAT is paid by everyone along the supply chain. Manufacturer buys raw materials, supplier pays VAT. Then when they resell the goods, they deduct the VAT that they paid for the raw materials, and pay VAT on the goods sold to the distributor. The distributor then deducts the VAT paid, adds their markup, and sells it to the retail place, the retail place pays the VAT for the retail price after deducting what they paid for the goods. At least that's what I know about it. So VAT is normally built into the selling price.

Sales tax, on the other hand, just happens when the end-consumer purchases the product. So the product on the shelf for 99 cents ends up costing like $1.07 when you checkout.

Sales taxes vary by state too. Like, Pennsylvania doesn't tax clothing, but some other places do. Delaware charges NO sales tax. Arizona charges a sales tax, but some cities tack on a percent or two so you have differing sales taxes just by driving around in one metro area like Phoenix.

It's a complicated mess, so the real problem is, how does a net business know what tax to charge each user. It's not just a simple case of doing a table lookup of 50 elements and multiplying the sale value by it. There are thousands of different rates, and just as many rules about certain products which are exempt. Then you have the hassle of knowing what locality to remit the revenue to. Whereas a physical store just has one sales tax rate to worry about and one place to submit their receipts.

The answer being floated about is to have online tax clearing houses for the states so when you make an e-commerce purchase, the site connects to the tax site, gets the amount to charge, then submits that value to the tax site. That site (a private company) would keep a portion, and remit the rest each month to all appropriate localities.

A complicated mess, and some companies have noticed the huge potential to score a percent or two off of every net sale, and are eager to provide the service. The states and localities will accept a lower rate after fees because it's better than nothing.

Meanwhile, ailing dot-com online companies will suffer even more. You already have to pay shipping (usually). If you tack on sales tax and the hassle of waiting for the goods to arrive, most people will just as soon run down the street to buy the stuff where it will end up cheaper.

And that is why bricks-and-mortar stores are all for this idea...

Re:Why fight "Internet" sale tax ?

[glesga_kiss]

VAT is paid by everyone along the supply chain. Manufacturer buys raw materials, supplier pays VAT.

If you are talking about the UK (the only place I know of that calls it VAT), you are wrong. Only the final sale of the goods has VAT added. That's why if you get a supply catalogue aimed at business, or go to a cash and carry like Macro, you don't see VAT on the prices automatically.

Sales taxes vary by state too.

That explains the problem in the States for this kind of thing. The UK has a VAT rate of 17.5%, which is the same across all of the countries that make up the UK. Makes the taxing of internet goods pretty simple.

It also makes me import a lot. My hope is that the global free market will finally stop things like this, and put an end to Rip Off Britain

Re:Why fight "Internet" sale tax ?

[weave]

If you are talking about the UK (the only place I know of that calls it VAT), you are wrong

Sigh, thanks for the correction. I believe I heard that described in a seminar I went on how to tax internet sales about two or three years ago (and basis for my parent post about the clearing house). It was explained that way with respect to how the U.S. could do a federal goods tax. Leave it to the U.S. to take a simple tax idea and complicate the hell out of it. (ps, this was just some flunkies talking out their bums, I hope. I haven't ever read any serious consideration for a national VAT here...)

Re:Why fight "Internet" sale tax ?

[budgenator]

I don't understand why you'd pay tax when you buy something locally, but wouldn't if you order it from a remote place.

Simply because the state I'm selling remotly to can't force me to collect the tax from the customer, so I don't. The customer is still liable for paying the tax to his home state it just that I'm not collecting it from the customer, telling his home state he made the purchase and didn't pay the tax and neither is he.

Re:Why fight "Internet" sale tax ?

[Eunuchswear]

VAT is paid by everyone along the supply chain. Manufacturer buys raw materials, supplier pays VAT.

If you are talking about the UK (the only place I know of that calls it VAT), you are wrong. Only the final sale of the goods has VAT added. That's why if you get a supply catalogue aimed at business, or go to a cash and carry like Macro, you don't see VAT on the prices automatically.

No, the first poster was right. Everyone pays VAT, but since businesses get to reclaim it when they charge their customers they want to see the price without VAT in catalogues and so on.

Sales taxes vary by state too.

That explains the problem in the States for this kind of thing. The UK has a VAT rate of 17.5%, which is the same across all of the countries that make up the UK. Makes the taxing of internet goods pretty simple.

But Europe doesn't have a unified VAT rate. If a non-business customer buys goods in another country then they pay the sellers VAT rate (businesses pay their local VAT rate, at the port of entry).

VAT seems complicated, but it works, even with different rates.

It makes much more sense to compare the US to the EU than to any single EU country. (I always wanted to laugh when I saw reports of Maggie in the states lecturing on the evils of a Federal Union or a single currency. Why, the idea of a single currency without a single tax rate, it could never work! :-)).

Re:Why fight "Internet" sale tax ?

[glesga_kiss]

Leave it to the U.S. to take a simple tax idea and complicate the hell out of it.

You can blame all the tax return accountants for that. If it were simple, they'd be out of a job! ;-)

Re:Why fight "Internet" sale tax ?

[mph]

I don't understand why you'd pay tax when you buy something locally, but wouldn't if you order it from a remote place.

Because the sales taxes are levied by the states, to support state programs. Living in California, if I mail-order tires from Nevada (to use a real example), the merchant does not collect the Nevada sales tax from me, because I do not live in Nevada and do not benefit from the programs the tax fund (education, roads, etc. in Nevada).

In many (all?) states, you are actually legally required to pay sales tax to your state for such purchases, so I should remit California sales tax to the California authorities for my tires. (Disclaimer: I don't know for sure that California has such a law.)

Of course, nobody does that, because the law is not enforced.

It's really the same as when I travel in Europe and can have the tax refunded when I leave; I am not liable for the tax because I don't live in the place funded by the tax.

Re:Why fight "Internet" sale tax ?

[nbougues]

So the main problem is : there is a system which is fair (ie, you pay the tax in your home state, whether you bought there or abroad), but which is not enforced.

There is a lot of fraud, and people don't seem to want to do "by the law". So the question is not whether there should be a new "internet tax" or not. The question is to apply existing law. Or change it.

Said it before, I'll say it again

[wowbagger]

ANTYTHING that increases the tax burden on the average person has a harm associated with it. It may also have a good, but there IS a harm to it as well. Remember, taxes are moneys taken from you by force if necessary and spent on items that you did not choose to spend it on.

Back when government did as little as possible the harm taxes caused were less than the good they did. That is no longer the case, as government grows larger and starts doing things that are not in the common interest.

It is therefor the duty of every citizen to see to it that the government gets as little tax money as legally possible.

Giving more money to the government because they are having a budget shortfall is like buying an achoholic a drink because his glass is empty - it might seem like a charitable thing to do, but it really is harmful.

NOTA BENE - I am not a "Business is Good/Goverment is Stupid" sort of person. I don't like big business any more than I like big government - I like small businesses and local government, because they tend to be more responsive to the individual. That is why taxing interstate commerce, be it done via the Internet, via the mail, via the telephone, or via carrier pideons is a BAD THING - it discourages local government and benefits larger governmental bodies.

Why is there sales tax anyway?

[Anonymous Coward]

I have never understood where the moral grounds for sales tax comes from anyway. Person A has something to sell. Person B wants to buy it. What is the basis for a government to interfere in that transaction forcing Person B to pay more and forcing Person A to collect, account for, and forward that extra money to the government?

How is the government justifiably part of that private transaction?

Re:Why is there sales tax anyway?

[calethix]

What if Person A's 'something to sell' is a service, i.e. they work for Person B and the government collects income tax. Or how about property tax, Person A has something and so the government wants Person A to pay them a tax just because they have something. I personally think that's about the worst tax there is. At least sales and income taxes are based on the fact that I've earned money and have some to give to the government.

Re:Why is there sales tax anyway?

[AGMW]

Like most Government legislation, some Gov. bigwig thought it would be a good idea and suggested it. Some people winged, but most said it seemed OK (like the fcukwits in the UK at the moment who seem OK about national ID cards - "Well, if you've done nothing wrong, you've got nothing to hide!" - Arsewipes!), then the law got passed.

Most people don't see the wider picture when seemingly harmless legislation is proposed. The Gov. count on this.

Government. It just goes to show, you really can fool most of the people most of the time!

Re:Why is there sales tax anyway?

[LMariachi]

Because the government provides the environment that enables that transaction to take place, the common currency that it takes place with, and mechanisms of redress should the transaction go awry.

Without all that, a merchant could sell you a poisonous, falsely-labeled product in exchange for a hard-to-quantify barter item, and once you discovered you'd been taken there'd be no police to chase him, no Better Business Bureau to report him to, no EPA to clean up the poison, etc. etc.

Re:Why is there sales tax anyway?

[UnknownSoldier]

> Because the government provides the environment that enables that transaction to take place, the common currency that it takes place with,

They provide the earth and the resources out of it??

Re:Why is there sales tax anyway?

[Anonymous Coward]

Congratulations, you've found that rarest of things in the English language -- a word with more than one precise meaning! We'll notify the OED, genius.

Re:Why is there sales tax anyway?

[Anonymous Coward]

actually, the most offensive tax is the death or estate tax. a tax on money which accumulates over time but has already been taxed, a double tax which last time i checked is illegal (or at least unethical) in all other circumstances.

if you actually look carefully at the situation the government tries to tax ANY transaction between two parties that involves the transference of money or property of any kind.

Re:Why is there sales tax anyway?

[Anonymous Coward]

would you prefer income taxes instead? That is also a private tansaction between two individuals.

The issue is: which tax does the least harm.

Allan

Re:Why is there sales tax anyway?

[Anonymous Coward]

Its quite simple why there is a death tax. The dead do not speak, and in most cases do not vote :)

Productivity

[seanadams.com]

It's amazing how hard people will work... if you let them keep the proceeds. I had a web designer friend who would work until about half-way through October, and then take the rest of the year off FOR NO OTHER REASON than to avoid being put in a higher tax bracket.

Our tax code is fscking horrific. Let's just have a flat sales tax or a flat income tax, and quit the bullshit. Our country would return to incredible prosperity if we could just do that.

Re:Productivity

[ratamacue]

I agree, but what you are suggesting would spell obsolesence for those in power. And they are certainly not about to sacrifice their lucrative positions of power.

As the saying goes, you can't rule a nation of innocents. The more complex and ambiguous the tax code, the more "responsibility" -- hence profit and control -- for those in power. A textbook example of this would be drug prohibition. Any rational, educated individual realizes that drug prohibition creates violent crime (from the resulting black market), requires insane tax rates and police effort, paves the way for corruption in government, destroys civil rights, and in the end, creates more problems than it solves. But again, you can't rule a nation of innocents. Imagine if drug prohibition was abolished -- business-wise, it would be the equivalant of dropping out of a profitable market. Entire government agencies (and the controlling elite) would have to be eliminated. And what business person wants to do that?

Re:Productivity

[guacamolefoo]

It's amazing how hard people will work... if you let them keep the proceeds. I had a web designer friend who would work until about half-way through October, and then take the rest of the year off FOR NO OTHER REASON than to avoid being put in a higher tax bracket.

No. He stopped working because he was either (1) truly at the very margin of preferring leisure to work or (2) stupid.

"Being put in a higher tax bracket" does not mean that every dollar you make is taxed at (say) 28% just because you pass the 15% bracket (or whatever they are now after the tax cut). It is only the marginal dollars that get taxed at the new rate.

So, for each dollar earned, he would end up with 72 cents instead of 85 cents, just considering federal income tax. I am ignoring state income tax, local income tax, payroll deductions, etc. Throw those in where I live, and you're looking at a difference between keeping about 60 cents and about 73 cents per dollar earned. It is conceivable that he would not choose to work based on that 13 cent difference, but I think that is highly unlikely, given the reason you say he gave to you.

If your web designer friend is truly on the margin between working and being idle, fine. I suspect he probably thinks that every dollar is subject to the 28% rate once he hits the lower end of that bracket. That is not fine, because it is erroneous.

Our tax code is fscking horrific.

No argument there. I used to do tax work for Ernst & Young. Now, I'm back to an honest business as a personal injury lawyer.

Let's just have a flat sales tax or a flat income tax, and quit the bullshit.

I prefer the sales tax for privacy reasons and because it is harder to politicize it and split the voting public by having a "progressive" tax base. It also taxes drug dealers and criminals, who currently avoid taxation, for the most part.

Income tax still requires the gub'ment to have its fingers in your financial records.

Our country would return to incredible prosperity if we could just do that.

I think that more transactions would reflect reality (although surprisingly few transactions are based solely on tax considerations now -- they are usually an influence, but not the raison de etre for doing a deal). Also, tons of time could be spent on business planning rather than tax issues. Lots of very smart people would be put to work doing something more directly useful (although by keeping would-be tax dollars in the private sector versus allowing the government to take them, tax professionals are probably making the economy more efficient by helping money flow to "natural" locations rather than being redirected to less efficient uses (from a market perspective) than the government would use the money for). Try parsing that one.

GF.

Re:Productivity

[Anonymous Coward]

Why does this myth continue? When you make enough money to put you in a higher tax bracket, only the new money in the tax bracket is taxed at the higher rate. In your example, only money made from October to December would be taxed in the new bracket. It's not hard to figure out, yet so many people think the whole year will be taxed at the higher rate. People actually think they will get more take home pay if they stop working. That's never the case, except for small amounts of money. I once had to pay $200 in self employment tax because we made $97 too much.

Re:Productivity

[Stonehand]

...or, the extra income pushes him into AMT land. Oooh, fun. One issue of _Forbes Magazine_ quite some time ago (a year or more) mentioned a few instances where people encountered, effectively, a >100% marginal tax rate because of this phenomenon. It's rare, but AFAIK it's still theoretically possible.

Re:Productivity

[Steve Hamlin]

Your friend needs the advice of a tax attorney, or even the basest of tax books.

A higher tax bracket only applies to that marginal income.

If your friend worked all year, his income taxes of the first 10.5 months would stay the same, and the rate of the higher bracket would only apply to the money IN THAT BRACKET, i.e. the money he earned from months 10.5 - 12.

Remember: tax rates apply to marginal income.

Re:Productivity

[geekoid]

"FOR NO OTHER REASON than to avoid being put in a higher tax bracket"

then he is a complete dolt.
When you enter a new bracket,you only get tax on the money you earn IN THAT BRACKET.

I would be nice if people who said are tax system is bad, and/or propose new system, would take the time to learn the most ELEMENTARY aspect of the tax system.

Re:Productivity

[guacamolefoo]

...or, the extra income pushes him into AMT land. Oooh, fun. One issue of _Forbes Magazine_ quite some time ago (a year or more) mentioned a few instances where people encountered, effectively, a >100% marginal tax rate because of this phenomenon. It's rare, but AFAIK it's still theoretically possible.

You make two good points.

1. AMT could cause this kind of behavior, and
2. It is rare.

I suspect that, given the money I've seen web designers making (and the "normal" levels of income associated with AMT) that this is probably not likely to be the situation in this case.

FWIW, AMT is becoming more of an issue as credits/deductions pile up. If you have beaucoup itemized deductions, it is surprising how low the AMT levels get these days. The AMT needs to be fixed.

GF.

I'm not American so the US won't tax me, but...

[mrjb]

...aren't you supposed to get something in return for tax? Taxes should be used for the common good, that's what democracies are about isn't it? You get roads for road tax, social security for income tax and so on. Of course the budgets get shifted around here and there, and 'the state' does get extra income out of it, but you see the point, but what would people get in return for Internet tax? More bandwidth? We're all already getting that. Not to mention that most people are probably *already* paying tax over using the Internet, by means of VAT. Now that the Internet no longer depends on US government funding for its existence, what would the US government offer the people in return to justify the tax?

Re:I'm not American so the US won't tax me, but...

[jmulvey]

...what would the US government offer the people in return to justify the tax?

Freedom. From jail, that is.

Re:I'm not American so the US won't tax me, but...

[geekoid]

Schools. RnD for futures technology, like Arpanet was.

BTW, people are allready obligated to report sales to there state franchise boards, and pay tax on them.

Re:Dice Finance - Crazy mortgage qualificiations

[IsThisNickTaken]

My wife and I are looking for a house. I want to keep our mortgage in the $120K range. We have a decent chunk to put down ~$45K.

I was told that I qualify for a $320K mortgage. That is nuts. If I took out a mortgage that big, the bank would own the house in a few years or I would not eat, go out, have heat and electricity, etc.

Duh

[dubbayu_d_40]

Probably for the same reason catalogs have been around for so many years...

Re:Dice Finance - Crazy mortgage qualificiations

[glesga_kiss]

I was told that I qualify for a $320K mortgage. That is nuts. If I took out a mortgage that big, the bank would own the house in a few years

I think that's the point!

We have a decent chunk to put down ~$45K

That's why you got offered so much. If you default on the payments and the bank takes the house, they also keep your deposit. It makes you a very safe bet either way.

They tried this with catalog sales too...

[Jack William Bell]

They tried this with catalog sales too and the results were mixed. It comes down to one simple factor -- either they all have to do it or it will never work well.

Why is this? Simple, if ten states enact Internet sales taxes and agree to cross-enforce then a company selling out of one of those states may be prosecuted by another state party to the agreement if they don't collect sales taxes for that state. But a company in a state not party to the agreement can thumb their nose at them!

IANAL, but my understanding of the Interstate Commerce clause of the US Constitution is that a state cannot enforce laws restricting commerce between states and this applies. Only when you can get the government of the other state to act as your enforcer can you accomplish anything.

All well and good, and perhaps lots of states will sign up to act as enforcers for each other. But all it takes is one state to hold out. Say Oregon, which has no sales tax and could use the extra business and employee income taxes if Amazon relocated south to Portland. Suddenly the states with the reciprocal agreement are not only *not* collecting sales taxes, they are also losing jobs as Internet companies move where they don't have to pay the tax. It is a loose/loose proposition and fundementally regressive.

And, unless the consititution is changed, the US congress critters can't do anything about it either. That is, with one exception; they can enact a nationwide VAT and enforce that. But who gets those tax revenues?

Once again, IANAL and might be blowing smoke. If Glenn Reynolds is reading this perhaps he can give us the real skinny...

Re:They tried this with catalog sales too...

[jratcliffe]

The issue with catalog/phone orders is actually pretty damn simple (Squibb v someone is the relevant SC case). Technically, you're supposed to pay sales taxes on everything you buy from an out-of-state vendor. The vendor only has to _collect_ those taxes, though, if they have a presence (called nexus) in your state. If you order from the JC Penney catalog, you probably have the tax collected by JC Penney, since they almost certainly have a store in your state. If you order from LL Bean, the tax is almost certainly not collected, since their only store (AFAIK) is in Maine, and you probably don't live there. In the case of the LL Bean order, you're technically supposed to pay that "use tax" at the end of the year when you file your state tax return. Fact is, practically nobody does, which bugs the hell out of the states, and merchants, like Penney, who have in-state locations, and hence have to collect the tax, putting them at a disadvantage to companies that don't have in-state presence. Same thing applies to most Internet sales. If you live in Delaware, you're paying state sales tax on stuff you buy from Amazon, since they have a fulfillment center there, for example.

Re:Dice Finance - Crazy mortgage qualificiations

[IsThisNickTaken]

Yes, I understand that is the point. My original intent is that "crazy" is from my perspective, not the bank's. They'd be laughing all the way to the, uh, bank (couldn't resist).

This would kill ecommerce...

[gillbates]

The reason why most people buy online is convenience. When shipping charges are added in, the total cost of most online products is around the same that a person would pay by visiting a brick and mortar store. But with online buying, a person doesn't have to deal with the inconvience and time involved with actually going to the store to make a purchase.

So now the state governments want to start taxing internet sales. Problem is, in doing so, they are negating the price advantage for online retailers - consumers would pay both shipping charges and taxes, and online goods would cost substantially more than their brick and mortar counterparts. In tight economies, consumers are willing to forego convenience for the sake of getting a better deal.

IMHO, the states aren't going to generate any substantial revenue from online taxation. In fact, what this will do is shake out the less profitable online companies from the business altogether, leaving a few powerful conglomerates with all control of online sales. And I think that the states will make much less money on this than they envision - online sales will shift back to the brick and mortar stores. The desired effect of this tax is to help brick and mortar stores by killing off online competition.

Re:This would kill ecommerce...

[awfar]

I agree and think it sucks.

The *only* saving grace is that you cannot legislate a *good* and *competitive* business. Even if I pay taxes and shipping, finding a better retailer online is more likely; better prices, better service, more knowledgeable. Competetition still exists.

And, as my roads get worse despite how much I spend locally, I'd prefer someone else drive on them!

It bothers me that local gov. gives a lot of attention to brick and mortar; for obvious reasons of course.

Re:This would kill ecommerce...

[Reziac]

I do believe you're right -- and it would be interesting to know who exactly is backing the idea, and which gov'ts they've shopped the concept to. I'd bet there'd be a nice correlation between budget deficits in the most-interested states, merchants who are primarily B&M, and the relative enthusiasm of the pro-internet-tax lobbyists.

I'm sure they need more Tax Money

[kc8ioy]

I am sure they need more tax money. Maybe to buy their own ISPs and more Porsches, some air conditioned dog houses (like we need more of those), some big towers that store dog bones.

If they are going to tax us, why not just just put a $2,000 per month tax on our ISP. (Please don't) They don't really need all the taxes they have now. If they do add taxes, then the internet, for at least the US, will be hurt forever. What's next, may be taxes to turn on light bulbs (like $200 per time you turn on an incandescent light??). They will probably make incandescent light bulbs illegal by then, the time when SUV's are illegal. When this happens, they will be glad I am in another country, maybe my own planet :-).

They should just let the people give donations, via PayPal over the internet to the government. I am sure the people who hate SUV's will chip in. If people in debt can get donations from people feeling sorry for time, I am sure that the government will get some.


kc8ioy

Two notions...

[crashnbur]

1. Incentive. Let people keep the money they earn at work. Commissions and productivity bonuses, etc.

2. FairTax. Flat tax rate. Let the social programs take care of people where they need to, and even keep those below the defined poverty line off of income tax rolls. Fine. But otherwise, despite that it seems like it should be okay to tax the wealthy at a higher tax rate, it violates the American principle of "equal treatment under the laws" that we fight so hard to attain. Do you ever wonder why it's so hard to get that in other aspects of the law? I don't. It's because of all the double standards. If the law isn't absolute, then where's the "law" in it, or isn't it just a theory?

Fairness to Mail-Order/Catalog Merchants

[HighOrbit]

Internet sales should be taxed the same as mail-order/catalog sales. They are the same thing for all intents and purposes. The only difference is the media of the catalog and order form, one is on paper and the other on your monitor. Why should mom & pop catalog company have their goods taxed while Amazon and Buy.com get a free ride? If mail orders are taxed, then internet orders should be taxed too. If internet sales are not taxed, then mail orders should be freed of the taxation.

Re:I once watched....

[NeoSkandranon]

Maybe he thought Jar Jar was just the result of bad camera shake..

Maybe I'm missing something...

[tsg]

How is buying something over the internet different from mail or phone order? If they're going to start charging sales tax for things ordered out of state, what difference does it make how it got ordered? Even if it's delivered over the internet, how is that different from being delivered UPS ground on a CD?

Why is this an "E-Commerce Tax" and not an "Interstate Commerce" tax?

Just say (HELL) NO!

[clarkw]

If one were to draw a graph of the tax burden on the average citizen plotted against time, you would notice that the slope is getting much steeper.

We are already being taxed too much, and it amazes me that people will discuss more taxes of any kind.

I for one, am frustrated over sending 30% plus of my hard earned dollars to the government. And don't tell me that it is buying me something. That may have been the case at first, but these days for every one thing that the govenment spends money on that is worthwhile, there are dozens that are not.

I feel like a sucker every year I fill out a tax return.

We are suffering a slow death of 1000 lashes.

When (and how) can we make it stop??

sigh...

Credit for losses

[Anonymous Coward]

Wrong!

You do get a credit if you capital losses
exceed your gains. You can deduct up
to some amount($3000?) in capital losses.
If your losses are greater than that, you
carry them over and can apply them the next
year.

To keep track of it all you'd need a...

[DavidBrown]

...computer. It'll never work. I mean, there can't possibly be any technical solution allowing each internet retailer to keep track of the proper amount of sales tax to charge for each jurisdiction. Gee, you'd have to put a street map of the whole US on the Internet, and we all know that's impossible.

Seriously, this can be done. I'm not sure if it's a good thing or not, but there's no technical hurdle to having an online database coupled with mapping software that will allow a retailer to get easy confirmation of the proper amount of tax for any given transaction.

Will this kill internet commerce? No. It'll just cost more. I don't really believe that people will give up amazon.com and bn.com, etc. if their customers have to pay tax the way everyone else does.

Its flat out unconstitutional.

[El Camino SS]

I have said it before and I will say it again:

It is against the US constitution for any state member to place tax that in any way that restricts interstate commerce. Period. End of discussion.

Guys, this has been around for two hundred years. It would require a Constitutional Convention to change that. That sure ain't gonna happen in this day and age. If a Constitutional Convention is suggested at this political climate, the public will suggest right back radical legistlator removal from Congress come next elections. And there is only one legislator fear in the world, that is losing their incumbancy.

This concept has been in the US Constitution since probably before the first Constitutional Convention, and was probably one of the first major reasons for the Constitutional Conventions. Colonial States were using tariffs as a source of funding for their states... screwing one over the other, and screwing overall revenues of the colonies. States can act like they can do what they want. They need to shut up. It will never happen because it screws with revenues at the federal level.

Besides, that kind of law would allow states to fix tax rates that would effect the ENTIRE NATION. That cannot occur. That would mean that the heavy populated states would get more freeways and the ones that don't have a lot of industry would get the shaft. THINK HOW FAST THE "SMALL STATE" AND "LOW COMMERCE" MEMBERS OF THE US SENATE WOULD GO AFTER THAT PLAN. Keep in mind how the Senate works.

Well, let them have their meetings. This is a pipe dream that will never work.

Re:Its flat out unconstitutional.

[unDiWahn]

What??? I think perhaps you don't understand the issue here. There are no new taxes being created -- they are not trying to implement a 'special' e-tax when you order interstate.

The issue at hand is that when you purchase an item over the net from another state, _YOU_ are responsible for paying the sales tax on that item, _NOT_ the merchant. The sales tax is still applied -- only no one is about to get all the neccessary forms and fill them out, then volunteer their money to the appropriate state.

Thus, the state tax, which applies to everything (not just specially to interstate commerce) is what is being discussed -- or more specifically, policies and methods of collecting the taxes and dues.

They're not trying to create a new (unconstitutional) way of getting your money -- they're trying to figure a way to get the money you already owe them (consitutionally).

Re:Its flat out unconstitutional.

[geekoid]

Unless its a federal tax, and all states tax equally.

Besides, If your state has a state tax, you are legally obligate to pay the state tax on item you buy from out of state, right now.
If you don't you are commeting tax fraud.

Flat Taxes penalize the poor

[hellfire]

You are absolutely right, its amazing how hard people work if you let them keep the proceeds. Its amazing to me however that one would tax someone at $10,000 a year at the same rate as someone who makes $500,000 a year. If I take $100,000 from the second person, they can still survive and have all the necessities. If I take $2,000 from the first person that could mean the difference between paying the rent or being out on the street.

Also note, as many people have pointed out in article after article, sales tax is a regressive tax that the rich pay less of... quite simply because they HOARD money, that's why they are rich!!

Re:Flat Taxes penalize the poor

[Just Some Guy]

Its amazing to me however that one would tax someone at $10,000 a year at the same rate as someone who makes $500,000 a year.

It's amazing to me that the person making $500,000 deserves to keep less of his money than the person making $10,000 simply because he is more financially successful.

If I take $100,000 from the second person, they can still survive and have all the necessities.

You think so? Let me give you a counterexample. My wife is a doctor just a few years out of med school, and I'm a recent college graduate. Our gross income is enough that class-envyists probably hate us and think of us as capitalist scum. What they don't see, however, is the numbing amount of debt we had to assume in the form of student loans to get where we are. When the day comes that we've paid off our loans (which are more than our home mortgage), and assuming that her malpractice insurance doesn't continue to skyrocket due to the liability thieves^Wlawyers, then we'll have a nice income. Until then, we probably don't net a whole hell of a lot more than the person making $10,000.

So, tell me again why the goverment should tax us much more than people making less than us? Aren't we (my wife in particular) providing a valuable community service?

P.S. In the old days "HOARD"ing money was known as saving. Yes, I'd probably agree that a lot of rich people (especially those who started off as poor people) tend to do it more than others.

Re:Flat Taxes penalize the poor

[sheldon]

It's amazing to me that the person making $500,000 deserves to keep less of his money than the person making $10,000 simply because he is more financially successful.

Then you may appreciate this quote:

"The subjects of every state ought to contribute towards the support of the government, as nearly as possible, in proportion to their respective abilities; that is, in proportion to the revenue which they respectively enjoy under the protection of the state."

- Adam Smith, Wealth of Nations

Re:Flat Taxes penalize the poor

[Just Some Guy]

I do, particularly: "in proportion to the revenue which they respectively enjoy". I'm all for a flat income tax.

Re:Flat Taxes penalize the poor

[beanball75]

No one forced you to go to college or your wife to go to medical school. By your logic, you would have been better off financially just getting a job and not racking up such massive loans.

I'm in the same position as you -- wife in med school, still paying off my own loans. Choices were made by both of us to spend money to have more fulfilling jobs and make more money in the long run.

I don't think your story will get many tears from the average American.

What gets me more upset is when my tax money is wasted and the hands go into my pockets for more.

Re:Flat Taxes penalize the poor

[madro]

I strongly believe that the interest on loans used to finance an education to make you a more productive member of society should be a fully deductible expense. If your net is the same as a person making $10K (although I seriously doubt that), you should pay the same amount of tax, all other things being equal.

However, you have more to lose from the crumbling of modern society. You were able to secure loans to finance your education. You were able to attend schools that prepared you for college. Heck, you *own your home* (albeit with a big mortgage). Does this make you or any other successful person necessarily evil? Of course not!

But if you think it sucks getting taxed at a higher rate for making more money, try being poor *without* access to the opportunities that your hard work took advantage of.

Re:Flat Taxes penalize the poor

[Just Some Guy]

I strongly believe that the interest on loans used to finance an education to make you a more productive member of society should be a fully deductible expense.

That would be nice, and it's true unless you have a household income of more than $50,000 (which is not significantly more than the national average).

But if you think it sucks getting taxed at a higher rate for making more money, try being poor *without* access to the opportunities that your hard work took advantage of.

I'm trying to understand what opportunities those are, though. My wife and I are both products of decidedly working-class households. We didn't grow up in rich neighborhoods with terrific schools. In fact, from a financial perspective, it was probably a poor choice to go to college, as we'll only see a payout from the loan investment in 15-20 years, and that's assuming that the financial climate doesn't change dramatically so that we can't make as much or have to pay radically higher expenses (see again: malpractice insurance).

Basically, we rolled the dice. I'm not complaining, mind you; we have a nice home, plenty of food, and reliable heat (which is important when the outside temperature is -15F, as it was yesterday). It's just that when people complain that us "rich people" (ha!) should be paying more, I want to slap them.

Re:Flat Taxes penalize the poor

[Just Some Guy]

No one forced you to go to college or your wife to go to medical school. By your logic, you would have been better off financially just getting a job and not racking up such massive loans.

You're right; we would've been. Still, my point was that we both made decisions that benefit us personally and are good for society (the modern would would sucketh most heinously without an information infrastructure and people to cure you). I can't think of one reason why we should be forced to give more of our money to the government than people who made other, easier choices.

I certainly agree that the gov't really needs to learn the meaning of "budget". There are a lot of areas in my life that would be more enjoyable with a shot of cash, but you and I have to live within our means, and don't get to say "Hey! I need more money for the stuff I want to do, so cough it up!"

Re:Flat Taxes penalize the poor

[Anonymous Coward]

Regarding malpractice insurance, there's a recent study that shows that the price charged for malpractice insurance overall is directly correlated to stock market performance and has little correlation to tort litigation.

States with strong caps on malpractice suits don't have lower malpractice premiums than those without caps.

The reason malpractice insurance has been going up is because the insurance companies haven't been making money with their investments using the premiums paid into the pool.

I suppose you could argue that if those d*mned lawyers didn't win those huge judgements against doctors, then the insurers wouldn't have to pay out any claims and therefore could charge much lower premiums than the do now and still make money. But the fact is that the insurance companies want to make X amount of profit and do it either in the market or pulling it from their insureds' wallets.

Re:Flat Taxes penalize the poor

[sheldon]

You missed the last part... "under the protection of the state"

The wealthy benefit far more from the protection of the state than the poor, which is why it is understandable that they pay more.

The flat tax is a fine idea if you can figure out a way to make it fair rather than a regressive tax.

Re:Flat Taxes penalize the poor

[devleopard]

There's no reason why being poor has anything to do with anything. I came from a family where one adult, a grade-school janitor, supported a family of five. If we had a full fridge and heat at the same time, it had to be a full moon. However, rather than do what most poor folk do, and knock someone up (or get knocked up, if I was a girl), my only focus was on school. I didn't break down and get a full-time job. If I had to walk to school in 15 degree, or 105 degree weather, so be it. I went without a car until I was 22. Once I graduated high school, I never had trouble finding student loans, so there wasn't a lack of opportunity. If you want it, it's there. If you'd rather be another "poor chump", that's your right - but it's not because the opportunity isn't there. If your willing to fight and struggle, and know when to sacrifice, the opportunities are in your face. (of course, I say this as a white male - I don't have to deal with the racism and sexism that others have to deal with - but this is a social issue, not a financial one)

All of my sacrifice paid off - I'm a contract programmer, consistently billing out at $50+ an hours, 40+ hours every week. However, if I'd given in, I'd probably be a $15/hour chump somewhere thinking about how good I had it.

Re:Flat Taxes penalize the poor

[devleopard]

To add to that, I think it's important to recognize that some people make more money for a reason - their sacrifice, their risk, their value to society, etc. It's not like the "rich" woke up one day and had tons of money, and are automatically inherently evil. I think we need to be careful about how we tax the poor (personally, I'd love to see total abolishment of taxes for the first $20,000), but we shouldn't *unfairly* penalize success. Perhaps we should reward responsibility instead - lower income taxes, but increase luxury taxes. On the same note, I think the "poor" should be reward/penalized for their level of responsibility as well - like $1000+ tax penalty for each drug conviction in a household. It's all a matter of figuring who should be paying the money, without resorting to humanless mathematical equations (flat tax, IRS, etc)

Re:Flat Taxes penalize the poor

[len_harms]

What a load. Flat tax is as FAIR as you can get. Regressive is a word applied to taxes to make it sound bad. Its not bad its FAIR.

Voodoo economics actually marginalized peoples work. You will have people who actually decide NOT to be in a higher tax bracket. As most brackets do not cleanly fall off. There is overlap. It actually gets to a point where it does not make sense to make more money.

And what do people that have money do with it? They save it or they spend it. This helps the econ as well. For every dollar saved creates 1.80 in new cash that can be spent on something else. If they spend it, it is spent on good which creates jobs, or at least recirculates the money to be spent or saved again...

Voodoo economics actually encourages people to be lazy and to NOT work hard. Why work harder when it costs me more?

Now to take an example someone else stated. Lets say someone makes 10k and someone else makes 500k. Well lets say the 10k person pays 2k in taxs. Now with that rate the person making 500k would pay 100k in taxes. That is 50 times the amount of the original person. Then you add more? Its very 'progressive', as in increasing in extent and severity. Of course its understandable they pay more. Its a mater of math. It was very clever picking the word 'progressive' as pro-x usually is something good. In this case it is not, its wordsmithing.

'OH but they will not miss it'? So damn what its not YOUR money its theirs. THEY earned it, not you.

Not only is flat fair it gets rid of a chunk of goverment that must track this stupid crap, pure OVERHEAD. These people could be used to help find the FRAUD that is rampent in our goverment, and help lower taxes!

Everyone paying their equaly scaled share is fair. The goverment has muddled it up over and over. They rarely prove they can do it correctly. Do not confuse helping 'the poor', with giving the money to the goverment. You have very little control over how they spend your money. They may use it to build a bomb, use it to build a road, or to pay for the TONS of paper they print every day. You have NO idea what they will spend it on.

You want to help the poor. Go volunteer and donate money to orginizations that actually help them. The goverment will not do the job for you. They will make it worse, and then tell you they are doing a GREAT job.

The only reason I have ever seen for the Laugher curve that makes sense is for inflation. As most tax codes lag what is really happening. It will help soak up excess cash in the system. Notice it is used as an inflationary control device. It actually REMOVES cash from people. It disapears it, poof, it does not redistribute it. This works because most goverments both state and federal have no real idea how much money they really make. They dont even really want to know. They swager around monitary terms that make most peoples eyes gloss over. This way they can spend whatever they like and not be held accountable for what they do.

Linear is fair, a bell curve sticks it to the middle class, not the upper class. And the lower class usually has a break on the first 10k anyways. They pay 0%, on that. The middle class is who gets stuck with the bill...

Re:Let states compete on low cost of doing busines

[jmulvey]

Yes, this is also the mechanism that corporations use. Most corporations choose to incorporate in Delaware because the laws are corporate-friendly and the taxes are low. Delaware, the smallest state in the union, needs the corporate income to overcome its small citizen tax base.

Unfortunately, A major barrier to applying this concept of competition to Internet taxes, is that all of these states are colluding together (in a non-competitive way?) to raise taxes. Imagine if all the oil companies got together to determine future price hikes? There'd be an outcry.

Actual responsibility for this

[Anonymous Coward]

Why should states collect tax for out of state/mail order/internet businesses?

Why should Alaska and Hawii, both which joined the US in 1959, be responsible and held to the same regulation burden as the rest of the US for any and all laws concerning the US Civil War, slavery, affirmitive action, etc ?

Slavery was abolished in 1865 by the 13th Admendment.

Re:The next .com boom!

[Jeddawg]

I would agree. We've already seen things like this in the past. Take for instance mail order. If I'm not mistaken, if you own a mail-order catalogue and you have "operations" in a sales-tax-free state like Montana, consumers don't have to pay sales taxes on the purchases, even though they reside in a taxing state.

No different than a phone order

[Boomer2]

Online sales should be treated just like other sales. If the company has a presence in the state in which you live, the state should be able to tax it. If not, no tax. Just like ordering over the phone.

Using computers rather than talking on the phone should make no difference on whether or not a transaction is taxed.

People act like commerce via the Internet is some special thing. It's not. The Internet is a tool. The same rules should apply no matter what tool is used.

Re:No different than a phone order

[Anonymous Coward]

Finally, someone that actually understands what they're talking about.
Right now, you're required to pay your state's sales tax no matter how
you buy it. The issue is that vendors are not required to collect and
remit the tax for you unless they have a presence in your state. The
only reason they're not required is because the tax rules are so
complex that it would create an unreasonable burden. In fact I'm
right in the middle of loading a 1.5 million row database that
contains the tax rules across over the country.

What all this is about is creating a simplified tax calculation and
collection method where it is not an unreasonable burden to collect
the tax.

Read the facts... Most are missing the point

[Anonymous Coward]

Ok here are a few points you are ALL missing. This tax is not being paid to where your package is being shipped from but to where it's being delivered too. So if you living in Kansas buying something in California you are paying the taxes to Kansas not to California. This makes it completely constitional, and why the states are going to be able to do it. Its taxes paid to your own tax entity. Secondly, while almost no one does this, you are suppose to pay taxes on anything you buy outside of the state and don't pay taxes in and have it brought it. This is usually known as compensating use I believe most states have it, but no one pays it. Did you actually think the states were going to let you skip out on billions in unseen taxes?

Copy the European scheme

[Anonymous Coward]

For does of you believing in a certaint reuse, perhaps it is a good idea to look at the Europeanlaws where we have had taxes on Internet/postorder sales since the beginning..

It is always taxed in the orginating country..

Offtopic

[Anonymous Coward]

Is anyone going to talk about the real issue (a fairer tax system), or do you all just want to whine about how much you hate taxes?

That's not a real question, the answer is obvious.

It is perfectly constitutional...

[sirwired]

When you think of unconsitutional, you are probably thinking of two parts:

Article I, Section 8, Clause 3: "[Congress has the power] To regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes;

Article I, Section 9, Clause 6: "No Preference shall be given by any Regulation of Commerce or Revenue to the Ports of one State over those of another: nor shall Vessels bound to, or from, one State, be obliged to enter, clear, or pay Duties in another."

1) The obvious: Of course the federal government is the only power that can regulate commerce "among the several states". Duh. That means that State C cannot do anything out of the ordinary (i.e. charge special tolls) for vessels going between States A and B that happen to pass through State C.

2) Amendment X states that any powers neither reserved by the federal government, nor prohibited to the states, the states are allowed to have. That means that unless it says "No state", or Congress retains the power for itself, then the state may do it. That means the feds can pass no law giving preference to the "ports" of one state over another, but that does not limit what the states may do in any way. When the founding fathers meant to restrict states, it was explicitly called out. (i.e. Art. I, Sec. 10)

3) State A cannot compel State B to collect tax for State A. However, State B is perfectly allowed to voluntarily do so, and pass the revenue along. They can do this because Art I, Sec. 9, Cls. 6 does not limit states, only the federal government. That means that Amd. X lets that power default to the states.

4) But that is regulating Interstate Commerce, you say! A power explicitly reserved for Congress! Nope. State A may tax businesses within State A more or less however it pleases. Just because the money comes from out of state matters not. Right now, it is perfecly constitutional for State B to make residents pay tax on goods purchased from State A. (This is the case in most states, actually.) This is becasuse State B has the power to tax it's own residents.

SirWired

Viability of Currently Defined States

[PB8]

Maybe this problem is just a symptom of a bigger issue, the failure of current states to adequately govern for the people in an electronic age.

Is retaining the currently defined regional states still viable as a way to govern our people? Is it time to merge a bunch of states into more efficient regional units? Do we need adapt to a virtual global universe?

Most of our states, big and small, are going broke, often more than billion dollar deficits. Governors and legislatures are panic-stricken to find new revenue sources. Let's not race to tax the internet like a big fat tasty pie to divide. Maybe the right answer is to redivide how we do city, county, state and regional government so they don't need so much pie. This current parochial layering sorely needs streamlining. Federal dollars go into so many coffers for reshuffling and redividing, with administrators at each level reallocating and approving or denying. Streamlining alone should reduce the amount of needed tax revenue.

It's time for states to review what they do and get rid of unnecessary tasks.

How much does EPA mandated state-run emissions testing really helps with automobiles now? Most of the fleet runs pretty clean. Time to ax that program. Focus on testing and taxing trucks and SUVs due to their larger share of the remaining pollutant emissions problem.

Education funding is in dire need of reform on every level. A simple formula is needed here that focus on enabling each school age kid to have a good education, in preparation for work, college, and life. The money should be directed to the lowest level government, to be controlled by the parents for the kids, not feeding directly private corporate charter schools, religious schools, public schools, etc. Give parents the vote and choice on how this is spent.

Highway paving funds...huge pork barrel problem here.

Move the entire Federal employee group and Congress into Social Security instead of their special little plans...hmm, maybe that deficit there goes away. Then can they can really care about it like it matters to everyone.

Slash military spending by 50%. Even then we'd be the biggest superpower remaining.

Government should be asked to take over healthcare since the private approach is resulting in 20 to 25% cost increases annually, and less people can access care now than 20 years ago. States can't cope with this adequately.

So, taxation without representation is indeed an evil. Taxation to support an outmoded way of governing requires the citizens to rise up and dismantle that government and restructure a more fair system!

States don�t have rights anymore

[Anonymous Coward]

Didn't you get the memo?

Our federalist layer cake is at best a marble rye, and the federales want the whole shebang.

A core set of federal roles with a free market of states with different tax rates, levels and manner of social spending, and morality legislation with a free market of mobile Americans to reward/punish such legislation would require acceptance of states rights.

All I see is federal mandates, highway funds carrots and if your state gets uppity and pulls some medical pot stunt, gay rights or right-to-die nonsense, the so-called champions of states rights (Republicans) are the first to attempt to ram a federal stick up your state's ass.

boston T-3 party

[petsounds]

I think it's about time to dress up as Bill Gates and dump some fiber optic cable in the harbor..

Gold backing...

[idontneedanickname]

The Swiss Franc is the last currency in the world baked by gold. That means they have more gold stored, than currency in circulation at any point in time.

Re:Productivity - QUESTION

[matt_maggard]

Warning: I know next to nothing about tax issues.

Does your response regarding marginal dollars hold true for self-employed workers? I was (until recently) self-employed and throughout the year no tax dollars were withheld except for what I submitted myself in my quarterly payments.

Under this scenario, how are marginal dollars measured (based on quarterlies?) or are all the dollars earned in the highest tax bracket? Under that scenario, the parent's web dev friend may be more justified - correct?

thanks.

-matt

Re:Productivity - QUESTION

[guacamolefoo]

When you are self-employed, you are essentially paying quarterly to make up for the withholding that would ordinarily be done by an employer if you worked for someone else. This has nothing to do with the amount of tax you pay on April 15, except that you are required to make quarterly payments that approximate your income -- there are different ways to do this, but simply put, quarterly payments have nothing to do with determining the amount of tax you pay.

As far as calculating your tax, I am sure that you are familiar with the idea that your first X dollars are taxed at rate A. Your next Y dollars are taxed at rate B. Your next Z dollars are taxed at rate C. The tax rates in each bracket apply only to dollars "in" that bracket.

Let's use some numbers. All are hypothetical.

Here is your income:
X = first 10,000 dollars
Y = your next 10,000 dollars (or 10,001- 20,000)
Z = all the rest of your income (or 20,001 to infinity - I will assume that you earned 30,000)

Tax rates:
A = 10%
B = 25%
C = 50%

Your tax paid on the X tranche of income is 10% x $10,000, or $1,000.

Your tax on the Y tranche of income is 25% x $10,000, or $2,500. The amount of tax you are required to pay on dollars 0-10,000 does not change. It remains $1,000.

Your tax on the Z tranche of income is 50% x $10,000, or $5,000. The amount of tax you are required to pay on dollars 0-10,000 does not change. It remains $1,000. The amount of tax you are required to pay on dollars 10,001-20,000 does not change. It remains $2,500.

The fact that you may make $10,001 will not cause all of your income to be taxed at 25%. Only the $1 above $10,000 will be taxed at the "marginal rate" of 25%. Your "marginal rate" is the rate your next dollar of income will be taxed at. This depends on how much you have already earned in a year. Your effective tax rate is the total tax you pay as a percentage of your taxable income.

So, if you earn the following amounts, here are the useful tax facts:

Earnings: Tax Due: Marginal Rate: Effective rate:
10000 1000 25% 10%
20000 3500 50% 17.5%
30000 8500 50% 28.33%

Withholding (or the self-employed version of this, which is payments of quarterly estimates) has nothing to do with the calculation of your total taxes you must pay or your marginal tax rate.

GF

Biting this tax troll

[Peter Eckersley]

That would be the point. What's wrong with private schools? What's the betting that they'd be both better and cheaper than the current state provisioned systems.

What's wrong with private schools? Well, it depends. It can be great to have independently run schools, provided they're publicly funded. But if you have to pay for your private school, then only wealthy (or smart & organised) parents will be able to get their kids into decent schools.

The more education is privatised, the more the population of poorly educated, alienated people grows. The kids who get the dregs of a market-based school system have a hard enough start in life as it is.

Note: the United States has further complications in its school system, if I understand it correctly, because public funding for schools comes from local government, and thus the value of your property determines the quality of your local school...