States Push for Net Sales Taxes

Marnhinn writes "Lawmakers in several states are asking Congress for the right to begin collecting sales tax on interstate internet purchases. CNN has the scoop."

Comments

And what about mail-order?

[Atario]

Mail-order businesses have avoided cross-state sales taxes forever and a day, and no one makes a peep. Start taking the orders via 'net instead of via phone, and suddenly it's "me too" field day time for states? Feh. They can all bite me.

Re:And what about mail-order?

[TWX]

Well, if they start taxing internet-based purchases, I'll just use the Internet to find a vendor, and I'll start purchasing through them by mail instead of by phone or internet.

I personally don't give a shit if it's by email, web, phone, mail, smoke signals, shortwave radio, or whatnot. As long as it's interstate, it shouldn't be taxed by a state.

Great, KILL our economy

[agent dero]

If I know that I am going to be charged an extra tax for buying stuff online, i'll buy from Canadian or other foreign vendors.

If I pay tax for selling stuff online, i'll try to sell from another country, such as Canadia.

it's that simple, nobody likes useless taxes, look at the german tax system, everybody hates that, and they have taxes on drinks, cigarettes, damn near everything.

The key to keeping taxes low and within reason, is to not spend so much on other unnecessary things! *cough*war, welfare, politicians paychecks */cough*

Re:Please thank Mr. George W Bush!

[Richthofen80]

Or...
You could see that Mr. Bush is trying to stop the $pending $pree that states are on. Don't blame him for 'forcing' states to do anything. States have been relying on the federal tit for way too long.

States are refusing to accept that they must cut fat in their budgets in order to meet them. This means auditing the books and eliminating unnecessary services. Every penny of the 'surplus', i.e. the excess cash from federal/state taxes that happened during the internet bubble, should not have been spent. When you plan your budget on an economy that was continuously warned as overvalued, then shit your pants and refuse to roll back the increases when the economy finally re-balances itself, well, you have no right to complain.

Mr. Bush is not responsible for the economy. The economy is the results of millions of business transactions every day by businesses, individuals, and groups. It *generally* increases in the long run, with ebbs and flows in between. Planning on a good three or eight years of economy is just plain stupid. And that's what the states and governments did, and now their paying for it. Or not paying for it, as the case may be.

Sales Tax Bad, Period

[GrouchoMarx]

No no no! Internet sales taxes are bad, but not for the reason people think. Well, not quite. In truth ALL sales tax is inherently bad.

Sales tax is inherently regressive. A loaf of bred (or book from Amazon) costs the same regardless of whether I make 10k a year or 500k a year. Put simply, the cost of living does not scale with income.

Increasing the cost of the bread/book via sales tax increases it for everyone, but that's not equal taxation. A difference of $1 extra in taxes is a larger percentage of the disposable income of a person making 10k per year than it is for someone making 500k a year. So in fact, a sales tax hurts the poor and middle class MORE than it hurts the rich.

No wonder so many rich people like it.

Conversely, even a flat income tax scales the burden with income, so that higher income brackets also pay for increases in taxes. A progressive income tax is better still because then it scales the rate so that the burden of taxation is felt equally by everyone, but that's another discussion.

So no, don't put a sales tax on the Internet. Don't put a sales tax on traditional stores, either. STOP CUTTING MY INCOME TAXES AND CUT MY SALES TAX INSTEAD!!!

With an all-income-tax system, everyone bears the burden of taxation equally. Sales tax makes the poor bear the burden more than the rich.

(And by "burden of taxation", I mean whatever the tax rate happens to be and whatever it's used for. Those are separate issues.)

Inevitable but for key reasons...

[Dukeofshadows]

Remember, the drop in the economy, unwillingness of the state governments to cut back on politically expedient expeditures (whether for the people as a whole or just the ones who finance the campaigns of current officeholders), and the laws passed immediately following 09/11 are putting the crunch on states. State governments are forced to pay for things like more security at airports, transit stations, etc. Kentucky is not releasing 600 prisoners because they feel generous. Federal laws are mandating implementations that states would have had difficulty funding before 09/11, but now states are stretched to the breaking point to do so. Federal fiscal responsibility is at an all-time low under the Bush administration, thus they have no money to spare and are using their resources to beg for what little cash may prove available to rebuild Iraq.

Sales taxes are one of the primary means of state government fundraising. In such a crunch time, they justifiably fear losing much of "their" income to retailers and possibly looking at struggling brick-and-mortar businesses disappear because someone can sell the same product for less while still making a profit because they can avoid sales tax. Thus the revenue lost is two-fold: tax from the item itself and from property, purchase, and income from any and all businesses that fail as a result of interstate competitors. In a free market this is just how life works, but this country is a regulated capitalist system, hence why MS can be prosecuted on anti-trust charges and slowed from trying to monopolize multiple Internet markets. How can we solve the problem?

The logical solution IMO would be to have the sales tax of the state in which the vendor is located applied to the item if purchased domestically and the sales tax of the state of the recipient applied if the items was purchased internationally. Does anyone have any thoughts on how to actually implement a (potentially) workable sales tax on internet items?