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California Considering More Internet Taxes
dcg writes "San Francisco Chronicle is reporting on how web taxes could help the states, especially California, with its budget woes. One particularly disconcerting comment is from California's Controller Steve Westly. 'In addition to sales taxes, Westly said he is considering a tax on Internet access like those that appear on telephone bills. He also is looking at a tax on software downloads.' Would this affect only purchased software, or could sourceforge.net become a source of revenue for the state..."
"I know as well as anyone how much we owe the tech industry, but what are the geeks going to do if we piss them off with Internet taxes? Leave?"
-- California governor Gray Davis at a private dinner
I still see the Internet retail stores as a flawed design. Yes, buyers should be paying taxes based on where the product ends up, like any other company that ships products. Though, even without taxes, why would a consumer pay $10 shipping for something he can get a 10-mile drive away? I fail to see how Internet retail really makes it, except in a few rare cases where products are rare.
This could be very unfair, how that be controlled? By monitoring access to software vendor's ftp servers? sourceforge? This will mean once and for all the rise of p2p protocols, for a good reason now.
Or counting bandwidth used? This will cause problem with any piece of software that check for updates (antivirus, "smart" operating systems, advertising software/spyware, etc).
At least if they return taxes on received spam some people will not be so angry, in fact, could mean finally that "get rich fast" schemes work at last.
Yes, it IS an insane invasion of privacy. But, on the other hand...
Why doesn't the federal government help CA out, we 'were' a major source of taxes, all we need is a break. Sigh...
You're also (and have been) quite a sinkhole too. The only thing that's kept you afloat so long is your insane amount of Congressmen (and thus, Electoral College votes).
If I pay an internet access tax like I do the 911 tax, does that mean that I will no longer have to pay for internet to some ISP, instead I will just get it?
I would like to know what exactly he considers an internet download. Because technically, almost everything that flows through the Rx pair on your NIC is a download. So, taxing slashdot index.pl for every view? Or maybe only 'programs', but then are java applets and client side web code considered programs? Or how about online games, would those be taxed per connection, per hour?
I can only see that part failing miserably, or if it doesn't, that man is going to lose his office quickly.
an interesting effect would be to see allot of E-Tailers move out of California if this were enacted.
Maybe say to Oregon or Texas, just somewhere more buisness friendly.
Then they would be screwed out of alot more than sales tax.
Dear sirs,
I know you are looking for an alternative source of revenue for the state. However I feel that an internet tax will only stifle a already hurt sector of the economy.
Driving up the 101 by where I live, I see thousands, if not millions of square feet of office space empty. If you had not worked here during the boom you would not know that at one time these offices were filled with people paying income tax to the state.
Which brings to mind a question for me, what happened to the 100k in taxes you took from me over a 3 year period between 1997-2000? I know I was not the only person who contributed that much in taxes, yet I only got 6 months unemployment and still can't find a job in IT. Why should I try and go into another career? I'm 30 years old, this is what I trained for, and right now my skills are being severly underused.
So again, please don't add more gas to this fire by taxing an already hurting economic sector. We're suffering out here in Silicon valley living month to month on the small consulting jobs which are nothing more than a handout compared to a real paycheck.
And yes John Katz, i'm still eating ramen.
My dad worried about out-sourcing union jobs to Mexico. I worry about out-sourcing programming jobs to India. What's to stop the out-sourcing of all the other high-paying professions to low-tax areas?
You know, your first two sentences make sense.
But that lest sentence is HORRIBLY misguided. If you honestly believe taxes are at all related to businesses moving jobs oversees, you really need to catch up on modern times. India is practically a communist country, and let me tell you their taxes and government restrictions are far more oppressive than in the US. But they have lots of people. People are just like any other resource, thus the term human resource. When the supply far exceeds the demand, prices drop.
Even Adam Smith realizes this one and advocates tariffs as a result.
FYI, Nevada has in the worst fiscal shape in the whole of the US, even worse than California. And besides, jobs will never move too much to that state because its a hell hole. They would never be able to attract the talent they are looking for. Some REALLY want to eat at other restaurants besides casinos and Applebees.
I don't read or respond to AC posts
I think he might be making noises about adding an internet access and download tax in order to appear more fiscally conservative than Gray Davis. If he actually implements such a tax, it would probably sink his chance at winning the election.
It looks like some big companies decided to voluntarily start collecting taxes, so you can't just blame the government. However, it looks like there is one concrete reason why these companies are starting to tax, and one speculative reason (on my part). First, the article says they are collecting taxes, now, so that the states won't "back-tax" them in the future. Second, I speculate that some of the big companies that are ready to start taxing want to force everyone to start taxing. That way they will have a leg up on the competition. Some companies won't even be able to afford to implement a tax system, they'll just go out of business.
--naked
Very popular slashdot journal for adul
California is in the hole because they allowed themselves (with the insistance of the Bush government) to be ripped off for billions by the Texas energy firms. Trying to recover the losses to the mostly-criminal energy sector by going after the mostly-ethical tech sector is really, really wrong. California has to go after the thieves that done it to 'em, not round up the innocent and good-willed in order to make up for what they lost to the thieves.
"with their freedom lost all virtue lose" - Milton
Spoken like a true Libertarian (or a demagoguing Republican). There are budget cuts happening all over California. They're coming in public schools, rural healthcare, state parks, higher education, and more. Those are services that most Americans, and especially Californians, think are important. In fact, in order to cover the necessary gap, Gov. Davis has proposed more cuts than new taxes.
Incidentally, I decided to reply instead of modding you down, even though zapping your "insightful" bonus was very tempting.
Right...
When you're taxing "software downloads", where do you make the distinction between non-executable data, and executable software? Does a document containing a macro count? If I sell you a .pdf file, doesn't it "program" your computer to show you the document? The distinction between data & software is a hazy one.
Instead of scaling back its operations and looking for useless projects that could be eliminated to fund core services, the state blithely adds new taxes. Why not just do something really progressive like *gasp* privatize the public healthcare and housing services. Let poor citizens in good standing keep their houses, apartments, etc that they get from public housing. You want to give them a sense of pride? Do that or give them a really really small 0% interest mortage on it to the tune of say.... $50-$100 a month. That way they're paying their way like everyone else and surprise, surprise the rest of California isn't paying for them anymore, and is now getting money back!
California is what Socialism on a greater scale in the US would be like. Non-essential public services such as free healthcare for the indigent, public housing and welfare services aren't here to actually fix a problem, they're here to punish the middle and upper classes. Don't give me that bullshit about "that's not really Socialism." No shit sherlock, Socialism exists only on paper and in the head of utopian hippies who are pathologically incapable of dealing with reality. The reality is that big government destroys civil rights and encourages violence. You want to make a difference? Vote for a Libertarian and take that percentage of your income that would have gone to welfare and give it to a homeless shelter or a free medical clinic. Those people genuinely care. The money won't get lost in a bureacracy and will actually help the poor.
I live in Virginia so I can only watch CA's problems from afar. CA's problems are of their own making. The people of california deserve this problem. I have no respect for a group of people that have police departments as institutionally corrupt as the LAPD yet have enough faith in the government that they think gun control will protect them. You can't trust your own fucking cops and yet you give up more rights to big brother. What will it take Californians? Bin Laden getting ahold of a stolen nuclear weaponing and vaporizing LA for the majority of you to realize the government can't provide for and can rarely pre-emptively protect you?
Click here or a puppy gets stomped!
It is also GW Bush's fault for not intervening (by ordering FIRC to control prices). He chose not to intervene for two reasons: 1: To try to sink Grey Davis (which didn't work), Republicans argued unsuccesfully that the energy shortage was his fault, even though it was a REPUBLICAN governor that deregulated the industry. 2: Enron and other energy companies in which GW Bush is vested in benefited from the energy crisis. Enron avoided bankruptcy for an extra year with the cash from ripping off California.
Religion is a gateway psychosis. -- Dave Foley
Ie. the GST (Goods and Servicecs Tax), similar to VAT in England, and other systems around the world.
The Americans really need to implement a flat tax rate across the country at a federal level for this kind of thing.
Having lots of different tax rates is fine if you are only selling your goods in one area, or you are big and can afford the complex tax software.
An internet tax system will hurt small businesses unless it is a simple flat rate everywhere, or tax is played from the purchase point.
ie. Order from New York pay New York tax, although this system would be rorted as well as companies move to areas with the lowest tax rates.
37 - what does it stand for really...
Why didn't California build more power plants instead of buying their energy?
This is patently false. The California state legislature voted to cap energy prices for consumers under the guise of deregulation. So you had consumers paying a fixed price for energy despite an energy shortage. And when there's a shortage of anything, prices rise. So there you had Californians paying pennies on every dollar the state of California expended for energy.
California's energy plan was anything but deregulation. You don't get something for nothing, but that's how the California state legislature saw it, and so you have them to blame, not one man in a marble house thousands of miles away.
Maybe they could start taxing groups who have special exemptions such as religions. ."
The American Constitution provides for freedom of religion in the United States. Its first amendment concisely spells this out: "Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof. . .
So why do we have laws exempting these groups from shouldering their share of the burden of society. If they use city services, it is only right that they pay their fair share. To not do so is theft, irregardles of any special exemption they may currently have.
Would making rape legal, make it right? Allowing some groups to take without paying is no more right. As the Constitution says, government should make no law allow a religion special privliges privileges. What next, will these groups be allowed to do as they will, take what they want, because laws prohibiting them would void the free exercise of religion? Next thing you have 911 allowed as an expresion of a fundamental religous group that is exercising their religous jihad!
WRONG! I live in NV and have a purely online sales business (except for about 5-10% mail order) and I'm looking at alternatives. Sure, Nevada has low corporate filing rates and no state income tax. But when the issue is attracting, and maintaining the attraction for customers, having no sales tax is a larger advantage. I think the more avantageuous thing is to offer sales without the burden of sales tax. Therefore Oregon makes great sense to me. And, I'm looking at moving from NV to OR. As our server is colo in NV, I don't know how that will all work - the sale is executed on the server inside NV, but shipped from OR (possibly in the future anyway).
And no jackass, not everyone who lives in NV eats at either McDonalds or a Casino. There are just as many selections of great eating establishments here as anywhere else.
San Francisco considers the Sierras "their" playground, so why not move closer to where you play? Nevada welcomes any and all e-business. Indeed, there is a pool of high-tech workers already in place, sufficient housing that is considerably less expensive for employees that move with the companies, crime rates that compare very favorably when compared with the Bay area (for example, there have been seven murders where I live in the past 11 years), an international airport that is underutilized right now, and Internet bandwidth almost for the asking. South Reno is where many e-tailers have already set up shop...but there is plenty of room for more.
One reason that some e-tailers came here is that Nevada has no reciprocal arrangement with any other state regarding sales tax. (Don't believe me. Check it out for yourself.) With less than 2 percent of the population of the United States, our sales tax situation is much more friendly. Instead of hundreds or thousands of taxable areas to track, you only have to worry about 17 areas -- the Nevada counties. Out of state taxes? Right now, you don't sweat it if you are completely in Nevada. Let the other states deal with the problem as they see fit. Until the Feds step in, don't expect Nevada to force the burden of collecting other states' taxes on you. (But get rid of all ties to all other states to make this work.)
The body of Nevada law is MUCH simpler, and the taxes are low. (Governer Quinn is trying to raise business taxes, but the level is nowhere near where California has staked a claim on yourrevenue.) Traffic jams? Where?
The advantage that Reno/Sparks/Carson has over Las Vegas/Henderson is that we don't have an upcoming water shortage. That makes Reno more attractive to businesses currently in the Southland who want to move east to avoid Sacramento's nose in their tent.
Think Reno is too expensive? Consider Carson City. Fallon (Amazon.com and the Navy did). And other places in the Silver State.
If you are worried about the morals of Reno and vicinity, you need not be. During the past decade, the southern part of Reno has become family-friendly. For example, by law there are no brothals in Washoe County, and the "strip joints" are all in the northern, industrial part of the city. There are some parts of Reno where Bay area people would feel right at home, as we have many of the same chain stores and amenities -- but in addition our houses have open space and lawns, instead of the alleys that characterize many of the housing developments in places like Mountain View or the "row houses" of 19th Avenue. You can find schools in which the parents have a lot of say in what is taught in them. Parks? Yes. Ask a Realtor for more information on what Reno and vicinity has for the kids.
If you are rich and clean, consider coming to my home, Lake Tahoe, to set up shop. Incline Village has many people like me just waiting for you to bring your business and succeed. Or, if you prefer a louder lifestyle, consider coming around Wayne Newton's land on the East side of the lake and give Stateline and Zepher Cove a look-see.
It's four hours from where you are now (less if you are on the East side of the Bay) so you can still easily go to the places you know and love, and see the friends that decide to stay behind.
All you have to lose are the individual income tax payments -- Nevada has a personal income tax rate of 0.000%, and even the current Governer isn't asking for a change in that tax rate. Sales taxes are less, at 6.0-7.5% throughout the state. Property taxes are less than those in the Bay area or Los Angeles, according to people who own houses here and "there".
Check it out. Many ex-SF people live here now.
If servers were located in Delaware, they would benefit not only from a friendly climate, but by the lack of any sales taxes. Delaware has none. (This has historically been maintained by a certain emphasis by state legislators on extracting money from out of state...the state is only a few miles wide...by allowing merchants in-state to offer lower effective prices than those in surrounding states. Every now and then someone suggests a sales tax, and is roundly shouted down. I expect the no-sales-tax situation to continue indefinitely for that reason.
Internet sales taxes are desperately needed. Not only are the well-off more likely to purchase things online... this is one of those 'rich getting richer' schemes that doesn't get much airplay
This is pure left-wing bull crap. First of all, the idea that rich somehow get off scott-free when it comes to taxes is laughable. The richest 5% already pay over 56% of the entire income tax base (Source). They are not getting any richer because of anything the government does.
Your just playing the same liberal card over and over. Try to convice the poor that the only reason they are poor is because some rich bastard stepped all over them to get rich. It doesn't work that way.
...if the retailer and the customer are in the same state. And there is no tax if they are in different states. In fact, this is valid for over-the-phone purchases as well (anyone ordered flowers to a different state?). If they decide to tax all internet sales, then they should also tax all telephone sales.
Anyone know why interstate purchases are not being taxed? ( No, I am not in support of interstate taxation )
---
The Pig, if I am not mistaken,
Gives us ham and pork and Bacon.
Let others think his heart is big,
I think it stupid of the Pig.
-- Ogden Nash
> California hadn't built any plants for years before the power crisis, possibly a decade or more. The main reasons are all the environmental studies, regulations, NIMBYism, and protestors.
This is dead wrong. You don't know what you're talking about. There have been zero plants denied for environmental reasons.
California has more generating capacity than it needs. The "crisis" was created by Enron gaming the markets.