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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..."
Amazing how quickly they look to tax more instead of looking at their budget and ridding themselves of all the bloat of government.
Why don't they just tax the tax revenue? There'd be a recursive loop and money FOREVER!
Life is the leading cause of death in America.
They are simply closing a (well-known) loophole.
If you buy expensive software (i.e. chip-design tools at >$100k per user) and you take delivery via FTP instead of physical media (CD/tape), you do not owe sales tax. On a big purchase (multi-million $$) the 8% is a BIG deal. It happens a lot in the Valley.
I'm surprised that it took the bureaucrats in Sacramento this long to find a revenue "source" this big.
With all this taxing crap, I can't wait until the US realizes that they are shooting themselves in the foot!
Life is the leading cause of death in America.
"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 can imagine my statement:
You have downloaded: SupAR WArEZ!!! $0.50c
You have downloaded warez, and and broken copyright laws: $5000
Also, doesn't it defy the entire point of the internet? (apart from nuclear safty) a free database of information for the education of the people?
Why doesn't the federal government help CA out, we 'were' a major source of taxes, all we need is a break. Sigh...
how long would it take for every server with any kinda taxable activity to relocate to Nevada? or Vanatu? You can bet that after any government starts taxing something, it'll never be free again. The power to tax is the power to destroy. This is an opening move in the destruction of high tech in California.
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?
They'll also be implementing a double-vision tax for people with more than one eye, who could potentially view internet content up to double the amount of times and still only get taxed for it once.
GMFTaxsujin
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.
Likewise, Internet sales taxes are desperately needed. Not only are the well-off more likely to purchase things online, but the fact that they can dodge sales tax by doing so while the poor must pay when they go to the local stores is nearly an insult: this is one of those 'rich getting richer' schemes that doesn't get much airplay, but it should.
I'll agree that it's been a pretty fun ride, but we've already discovered that the Internet isn't free. Now it's time for the tax collectors to catch up.
Try not. Do or do not, there is no try.
-- Dr. Spock, stardate 2822-3.
I have a better idea for getting California out of its budget problems. Shake Gray Davis upside-down until his campaign donations fall out.
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.
All this will do is accelerate the exodus of high tech firms from California. Many companies are already moving operations to cheaper states, Sun for example is moving a lot of its operations to Colorado. All this taxing is going to do is accelerate that process and leave California with a smaller tax base in the future. Few politicians seem to think more then 2 or 4 years down the road, basically what they need to do to get reelected.
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.
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.
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
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!
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...
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.
Heh, software downloads would undoubtedly apply to JavaScript, since JavaScript is software. I can see it now, Granny blunders into a porno site and after experiencing a JavaScript blitzkrieg winds up owing the state of California $47.86.
BTM
That was the turning point of my life--I went from negative zero to positive zero.
Let's tax all political contributions!
Bribes must be doubly taxed!
There are literally hunderds of programs that they should cut but they don't. However being the typical politician Gray has decided to piss people off into allowing him to tax ANYONE and EVERYONE by raising the spectre of nuking those prized programs.
In other words, Gray is doing what he has always done. There are two kinds of government employees. Essential and non-essential.
That should be an indicator of who needs cut.
For comparison, a local county is 67 million in the hole. They refused to cut their arts budget of 6 million, now tell me, whats more important? Buying art from people who can't sell it otherwise, or paying teachers?
That is the biggest difference between libertarians and those other two. Governments currently spend money on stuff they have no business doing so. But they have the guns to back them up, the idiocy of the general public to hide behind, and many cohorts in the press and special interest groups to run cover for them.
* Winners compare their achievements to their goals, losers compare theirs to that of others.
Well, they have to get the money to pay for all those Oracle licenses somewhere...
"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
"Why does my homepage say '3y3 0wnZ0rr j00 gr3y d@v1Z!'? What does that mean, exactly?"
-- California governor Gray Davis, looking at his computer in three months.
Yes, Enron and the whole power debacle had its role, but only a minor one. The real root of the problem is quite simple. While the Internet bubble was pushing California state income tax revenue to unsustainable levels the state government grew to consume every penny of revenue that came in. Now that the bubble burst the state is starved for revenue. Last year Gov. Davis signed a $75B budget. This year the proposed budget is $62B including $4B increase in income taxes and other fees. Roughly a 22% year to year decrease in revenue, but back to roughly what the budget was in 1999.
Virtually every tax paying citizen and business in California is seeing their incomes and revenues reduced in a similar manner. In many cases the reduction is MUCH greater than just 22%, but we are all dealing within it our own manner. It's time that both the federal and state governments learn to have the same basic fiscal responsibility asked of citizens and business in boom and bust cycles.
During the boom there were proposals to actually give tax rebates back to the taxpayers because we were simply paying more than the state government needed to run operations. In retrospect, this would have been the wise thing to do because it would have put some brakes on the state government growing to an unsustainable level. Instead, we are now seeing the politicians scramble to protect their favorite pork projects while funding for basic services such as schools, public safety and other public infrastructure are reduced to level less than they would have been had the boom never happened.
Too often it seems people are quick to criticize those who want to see smaller government or at least put severe limits on its growth. Often there are good reasons for doing so other than the accusation such people are stingy, selfish or worse.
Any one actually interested in seeing the numbers may be interested in this link. Check out the Chart A, Historical Data, General Fund Balance document.
It's unbelievable the amount of ignorance that exists when it comes to the California energy crisis.
First, I would like some sort of explanation and proof that California's deficit is almost entirely to blame on the energy crisis? Is the fact that most states are experiencing deficits also do to the California energy crisis? Or, perhaps, it has something to do with the fact that our economy has slowed down. Or the fact that during the 90's the Californian State Government increased spending way past inflation.
Second, the "deregulation" scheme enacted by the legislature was hardly a joke. They did not setup anything even remotely recognizable as a free market system.
Third, GWB and FIRC ended up setting price controls.
Fourth, GW Bush was not and is no longer vested in energy corporations.
Do you wish for me to continue? I'm not some huge GWB or Republican drone or fan, I just hate seeing all the FUD that surrounds the entire energy issue.
Forget the whales - save the babies.
Patently False?
Not
quite.
Sure, California's scheme for "deregulation" had some major flaws, but that doesn't excuse Enron, as well as other energy corporations from committing wire fraud, to the point of almost bankrupting the state.
How lame. An AC attributes a quote to the Governor of California overheard at a "private dinner" and it gets modded (+5). It's actually more revealing of the type of morons that frequent this great site than any thing the Gov. supposedly said.
"The net started as a fringe activity among geeks, and should have *stayed* a fringe activity among geeks. Imagine if we had kept it secret: no spam, no taxes, no newbies"
Imagine! We'd all be using dial-up which would cost us by the minute to use, p2p would not exist (or there would be a hell of a lot fewer people sharing files), there wouldn't be great news sites like the bbc on the internet, when you applied for a job and said you'd email them your cv you'd get a blank look, newly-released pc games would not have multiplayer over the internet options ETC ETC ETC.
The basic thing is- especially if you are being serious rather than trolling, is that although we now have spam, big businesses on the internet and other insane things, we do have a lot of advantages that we wouldn't otherwise have had.
Back when the www started I used to go out to our university's terminal room and see if anything had changed "on the world wide web". It was possibly to check a large percentage of the www and then go, "oh, nothing's been updated".
And don't even try to force me back to the pre-www days when I thought that downloading a weather picture over the internet that I couldn't even see until I sent it to the laser printer was COOL...
graspee
...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 will now be able to buy more copies of Oracle.
Though, even without taxes, why would a consumer pay $10 shipping for something he can get a 10-mile drive away?
You would if you're like me and don't have a car. It's usually a lot easier to find something online and have it shipped to your door than harass someone else to drive you to the store.
Have you read the Moderation Guidelines Addendum?
enron fun .com crash. California may have made some mistakes in its deregulation, but this was blatent abuse of the system, which was allowed by the president to go on WAY too long. You dont drain that much money out of an already faltering economy and expect it to do well, and its people to be prosperous.
This brings us to internet taxes: just a bad idea.
Eventually, every state is going to want a pice of the action, and in the end, its the consumer who gets dicked once again, and it will be the end of online shopping as we know it. I already find it hard to order items from in state, as shipping and tax together mean i can get a better deal locally a lot of the time. Maybe thats what they want, but I feel regualtiong this will be stupid, and it will do nothing to help the economy in the long run.
Califronia got hit in 2 huge ways at te same time. The above is just further proof of what people already knew: Enron and other energy companies bilked california out of millions? billions? This, at a time when californians were in a slide due to the
"Stuff... In my home!? NEVER!" - Zim on Invader Zim
"I want the toilet seat!" - Little Dog on Two Stupid Dogs
Why are you modding this troll up? Can the next moderation-happy person actually READ that this guy is suggesting to GET RID OF RETARDED CHILDREN (something about room with spikes in the follow up).
Good greif, sombody needs to lay off the crack pipe for a while.
It's called satire.
Moneyed corporations, non-working 'poor' and criminal prisoners are turning productive citizens into tax-slaves.
IIRC, starting from a surplus to boot, and blasting California's credit rating from A to (last I heard) C in the process.
:(
Tax-and-spend mentality, after all that's only a few thousand extra we need to suck out of each and every state resident...
BTW did anyone hear if the doubled vehicle license fee was signed or vetoed? Last I heard it had passed the state legislature, tho supposedly Davis was going to veto it (doubtless prompted by the peasants with flaming pitchforks who were storming the governor's mansion, rather than from any real concern for taxpayer's wallets).
~REZ~ #43301. Who'd fake being me anyway?
States are having budget crises for the same reason we are - there's a RECESSION. I therefore don't subscribe to the idea that the people, suffering under the same fucking recession, should somehow be expected to foot the bill to maintain the pre-recession budget levels of state governments.
If tightening our belts is good enough for us, why is it not good enough for them?