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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."
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What can you expect the states to do? They're fucked budget-wise and need to get back in black as soon as possible. This is just one of the lousy things that'll probably pass siimply because of the horendous budget situation the entire country is currently in.
I think it's only a matter of time before this occurs; there's just too much money at stake. As a consumer, I'm against it though.
CB
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Amazon.com is crazy to even consider voluntarily collecting sales taxes for online purchases. That would negate the reason I purchase most of my expensive >= $100 goods online. Since many companies now offer free shipping for >= $50 purchases it typically saves me 10% or more compared to what I would pay at the local store. Start taxing online sales and I would not bother purchasing from Amazon or most other online companies. Of course, states would love to get their grubby little hands on my wallet, but they always do.
Yes, I know one is supposed to declare those purchases on your state's income tax form but I prefer to chuckle and enjoy the thought of screwing the state even if only a little. I am tired of taxes, taxes, taxes and more taxes on everything and anything. Pretty soon they will tax the fact one exhales CO2.
It is no secret state budgest have been in the hole for a number of years. But guess what? That is the fault of the states for being irresponsible. Now they want to dip further into the wallets of their citizens because they were spending money in the 90s as if the Roaring 20s were back in style. Here is a simple solution for all those states who want to put a tax on everything: Spend less money. Yep, you heard me right. If I go into debt, I don't go to my employer and demand more money -- I cut back on my expenses. No matter the rhetoric of the tax and spend supporters, its clear that most people want to keep their money instead of having the state spend it for them. We've seen this everywhere from the most conservative backward regions in the South to the mythically liberal Californians.
I don't believe their should be taxes on things sold on the internet.. that's one of the only advantages the internet has (other than shopping from home). If taxes were there, I would imagine most internet stores would have to close.. thing's would just be too expensive to buy online, then have shipped to your house. Then you run into problems.. think of Amazon.com. Which state gets the taxes? Is it a federal tax? What about people buying things internationally, will they be taxed too?
No, I just believe it isn't time for internet sales taxes. Our economy is hurt enough, we don't need extra taxes on one of the best performing markets. State taxes are bad enough (and I say this hailing from Kentucky.. 6% isn't that bad.. but being a college student, every penny counts.....)
"Victory means exit strategy, and it's important for the President to explain to us what the exit strategy is." G.W.Bush
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.
"A great democracy must be progressive or it will soon cease to be a great democracy." --Theodore Roosevelt
I think internet sales tax is a bad idea and will discourage on-line purchasing.
But I wonder if this could be good for Oregon if we decide not to do it. We don't have sales tax in Oregon. I don't know of any other state that doesn't have sales tax and whenever someone stops by to visit they are always surprised to get 1 cent back when they pay a dollar for something that costs 99 cents. Every time some politician tries to start up a sales tax it gets defeated. (so far). I don't know if we are one of the 45 states that require taxes on internet sales but hasn't been enforcing it that are mentioned in the article.
There are other things that could come of internet sales tax if its not enforced uniformly by all states. Encouraging on-line business to open up shops in their states could be done by lowering or removing state internet sales taxes for those companies.
Amazon is located in Washington State. However when someone orders a book from them its often shipped from Eugene Oregon. Does that mean they could avoid the internet sales tax through some loophole if Oregon doesn't start an internet sales tax?
How about the states/feds start doing what most normal people do when they have less money coming in.
STOP SPENDING SO MUCH FSCKING MONEY.
Just look at the budget for you state and see how much money they waste.
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*
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I find it interesting that when a business experiences tight finances, they must improve efficiency and trim costs in order to stay afloat. Heaven forbid a government entity have to do the same thing! Cut one penny from a bloated government program (or even cut the rate of growth!), and suddenly the headlines scream about no school lunches and seniors losing social security.
Sickening.
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.
Reason, free market capitalism, and individualism
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.)
--GrouchoMarx
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As I recall, States were not allowed to levy tariffs and such against each other. Doesn't imposing taxes on a particular method of transaction fly in the face of the rules that define us as a union and have been tested in the past in courts?
This is the price we must pay for the mess the Iraqi war caused budget-wise. Otherwise there would be the possibility that the federal government could assist the states, and businesses would not have to be so conservative because of the uncertainty lurking over the horizon. Instead we must bend the rules to work around this serious lack of funds.
How will this be enforced? If I buy something from Dealware, and the company ships it to me...how would California collect the tax? How would they even know?
Is every vendor going to have to start keeping tax records for every state they do business with?
And if Vendor X in Delaware decides to tell California 'screw you' - what can California do? (realistically I mean). Issue a warrant? File a civil suit?
Chaos, panic, disorder...my work here is done.
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?
As long as there is a Second Amendment, there will always be a First Amendment.
Colorado's Governor Owens is seeking a moratorium on the grounds of "taxation without representation" I am no fan of Owens but he is on the right track here. Best
Disclaimer: I am not a CPA, but my wife is and holds a Masters in Taxation. We talk about this subject often.
With the state tax systems being the way they are, it would be impossible for a small seller on the internet to comply with the laws. Forty-seven states have sales taxes (or is it 48?) and each one is different. A seller on eBay would need to compute that tax for the buyer (state, county, city, in most cases) and then file quarterly with that state. Oh, and to file, you need to apply for a tax id number in that state which may require a business license depending on local laws. Say goodbye to all the small businesses who sell anything on the web.
Or, you could always have a store on the web and have an order form printed that needs to be faxed. That would make you a mail order business which no one seems to be talking about taxing.
Viv
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Oregon is going to have to raise more money somehow. Already they've had to resort to closing schools three weeks early, and I suspect that the amount of dererred maintainance of critical infrastructure has reached dangerous levels.
Also, Oregon has relatively high property and income taxes, which any companies moving there will have to pay. Of course, there's the trick of living in Washington State (no state income tax) and shopping in Oregon, thus freeloading on the other citizens of two states.
On the way to work, I saw state-contracted workers pressure washing the center divider.
That's just one example that is repeated throughout government, as it becomes more and more of a jobs program.
Just last week, my father got a bill, and a fine, from the state of Connecticut, for purchasing cigarettes online. The bill was for exactly two purchases, of maybe a total of a dozen cartons, from the same company. The fine was for not accounting for the unpaid CT Sales Tax on last years tax return. With the fine, the total bill was $400.00.
Just wait until States get the brass balls to audit Amazon.com, to get the purchasing history of State residents.
Not only is everyone, and I mean EVERYONE, going to pay fines and taxes out the ass - their purchasing histories will also likely be disclosed.
Not only is there potential to charge EVERYONE with tax evasion, there is also the same privacy concern as in monitoring people's liberary activities.
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anyway, the size of the money taken out of the budget for the next year was 10s of billions and well under 50 billion. that is Chump Change when you look at the total losses taken during the recession and stagnation periods. it made more sence to cut taxes, because more economic stimulation happend from that than would have if it filtered through to special programs, of which it would have made little impact.
The long term economic stimulation from tax cuts is negligible, if it even occurs at all. Notice the latest spin from the Bush team: the tax cuts helped shallow the recession.
The Bush tax cuts went to the rich. Unlike a lot of poor people, the rich don't piss away every extra dollar they make. They lock their dollars away in banks or stocks or real estate.
Look, Bush probably doesn't even know why he's cutting taxes. Go read about Grover Norquist and see the real reasons taxes are going down. The extreme right wingers are trying to starve the federal goverment as a way to cut "social" spending programs. Y'know, all that good stuff from the New Deal and other social reforms of the last 50 years.