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Wisconsin Governor Proposing Tax On Downloads
Christopher Reimer writes "Ars Technica is reporting that the Wisconsin's governor is proposing a tax for downloads. From the article: 'Wisconsin's Democratic governor thinks it's not fair that tangible items get taxed while downloads, like music, ebooks, software, etc., go completely untaxed. So, he proposes to rectify the situation by having Wisconsin's 5% state sales tax apply to Internet downloads.'"
Now p2p users can be charged with tax evasion!
Disconnect your television. Do your own research. Draw your own conclusions. They're probably lying. Don't be a sheep.
I think we should try to avoid the democrat vs. republican debate and just accept that the government is thinking about taxing the internet.
Discuss.
I am defenseless. Use your button. Mod me down with all of your hatred.
That should be real easy to enforce.
Is this really an important and pressing matter for the governor to concern himself with? Shouldn't he be more focused on.....I don't know, making more cheese? >_>
Hero of Allacrost, a FOSS RPG for *NIX/*BSD/OS X/Win
IANAL, but I thought this might violate the Internet Tax Freedom Act of 1998 (which was renewed in 2003)......
However, this comes straight from the federal law -
SEC. 1101. MORATORIUM.
(b) Preservation of State and Local Taxing Authority.-- Except as provided in this section, nothing in this title shall be construed to modify, impair, or supersede, or authorize the modification, impairment, or superseding of, any State or local law pertaining to taxation that is otherwise permissible by or under the Constitution of the United States or other Federal law and in effect on the date of enactment of this Act.
The funny thing is, the whole law is VOLUNTARY! Although I don't think it'll matter if they really want to get the money....If it comes to pass, they'll probably make a provision to make it mandatory
-thewldisntenuff
My MythTV HowTo
Users will have to pay tax each time they visit a webpage on a subscription based website? Visiting a page does involve downloading, of course.
Article summary is wrong and intended to cause a flamewar.
Wouldn't it be hare to figure out what state the downloaded files were comming from? I was under the impression that states could only tax items purchased which originated in their state, is this true?
I am a viral sig. Please help me spread.
I wonder how he intends to enforce such a tax, considering any time your computer recieves data, it could be considered a 'download'.
BeauHD. Worst editor since kdawson.
Having lived here all but 1.5 years of my life, I can say this certainly doesn't surprise me. We know we're one of the most taxed populations in the union. We know our state government is corrupt and unethical. In a state that is almost entirely M$ dominated, it shouldn't be surprising the population is ignorant about the nature of the Internet. I'd be surprised if people put up a fight here about it.
Aside from the fact that any tangible item purchased on the internet is subject to sales tax of some sort, this new proposed law doesn't make alot of sense.
From the article: "That's right: it's voluntary. In a country that can trace its origins in part to a dispute about taxes, does this man really think that people are going to voluntarily pay a tax? And what makes it even funnier is that he thinks people in Wisconsin are going to voluntarily pay."
This new tax on downloaded items would be completely voluntary. How many slashdotters are going to lineup to pay more taxes for items that they already receive for free. Next!
...I can truthfully say, I'm slightly scared by this, but at the same time, I have no idea how they'll enforce this. I caught this little gem in the article:
There would be no Internet sales tax police, however, because compliance would be on the honor system
Right.
Take off every sig. For great justice.
Okay, so this is obviously dumb, but I'll go one better. It's also probably unjustifiable and unconstitutional.
The general justification put forth for sales tax is that it's a tax on doing business in the state and using the existing infrastructure of that state so to do. The internet doesn't really do that.
Also, there's a good argument to be made that the Negative Commerce Clause prohibits this kind of action by a state or local government. In essence, Congress gets to regulate interstate commerce, not Wisconsin.
adam b.
The Wisconsin government could theoretically shut down the local computer store, but it does not have the power to shut down out-of-state websites.
If I lived in Wisconson, I would only be even willing to discuss the matter if it only applied to online stores located in Wisconson, not online customers. If someone drives over to where I live, they pay my local and state sales taxes when they buy stuff at a shop located in my community.
Slashdot: Where people pretend to be twice as smart as they really are by behaving like children.
That means I get a refund for uploads, right?
FLR
In the UK, we pay VAT on downloaded "goods" (I'm to taxpert, but I guess they'd be classed as taxable luxury services or something --- at least, Woolworths are running an offer where they pay the VAT on downloads). The tax is paid by the retailer and normally passed on to the consumer.
According to TFA, this is a tax on purchases, not downloads. So if it's free, keep on clicking.
This would only apply to things you pay for...
It won't include free websites, e-mail, free software downloads, etc... just the software you download and pay for.
Plus, this will only affect you if you live in Wisconsin, since states cannot tax interstate commerce.
umm - the answer of course is "yes", everything should be taxed equally ... and if you're math is up to scratch you too can figure out why 8% (or what ever the tax is) of 0 is not really an issue
Thank you for loading this page to view the comments. Please send $1.00 to the Wisconsin Tax office for your GET request, which now applies under the new downloading law.
Thank You.
-The Wisconsin "We make the laws, you pay for them" Government
While the while "voluntary" part of the bill seems to be quite silly, it is an insideous attempt to give an "internet tax" a legal foothold.
It is difficult to implement a mandatory tax from scratch. It is much easier to take an existing "voluntary" tax and make it mandatory.
Feed the need: Digitaladdiction.net
I'm wondering how they'll keep track of this. I just read how New Jersey residents were sent back tax bills for online cigarette purchases. So I could see, if this passed, downloaders getting back tax bills for ignoring the new sales tax.
What happens when a Wisconsin resident has an out of state friend purchase mp3's, software, etc. and then just emails them (or mail them on a CD)? How could you possibly keep track of all of the shareware authors? Does this governor think he'll be attracting IT jobs? I'm guessing he's one of the folks that still thinks the US government is going to add a charge for emails to save the USPS.
I hope this line of thinking doesn't spread to other states. This seems like a creative way to ruin legal mp3 downloads in that state.
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the guv'nor must be thinking 'hmmm, these people *voluntarily* pay a tax to Microsoft, and get very little in return--i'd like to get in on that racket!
It's _also_ stupid because it's obvious double taxation:
1) You pay a company for broadband, and you pay the gov't taxes for that
2) You pay the gov't for the only use of broadband
'Creative' taxes are dumb. This coming from a state (MN) where the governor is all about 'creative' taxing.
Just confirming, from the article linked inside the ./ linked article:
s p
Gov. Jim Doyle wants you to pay Wisconsin's 5% sales tax whenever you pay to download a song, book, movie or piece of art
Link: http://www.jsonline.com/news/state/mar05/307622.a
Governments raise money to spend on roads, schools, and police with taxes. The money comes from somewhere; if you want those things you've got to pay for them. You may well be spending too much for what you're getting, but that's a separate issue.
The question here is, what do you tax? It's easiest to raise money by taking a piece of the money every time it moves. Tax the money when it gets paid to you. Tax them money when you pay for something.
You can also tax the stuff that doesn't move, like the property taxes on your house. Or you can "tax" for use: toll roads, for exampe. But nobody wants to pay for police on an as-needed basis, and we like the idea that everybody is guaranteed an education, even if they can't afford to pay for it.
The article is suggesting that there are sales happening that aren't being taxes. Most states already try to collect taxes on physical objects, even if they're sold over the Internet, though the rules vary from state to state. They're trying to both increase revenue and be fair. The states really hate it when people buy stuff over the Internet, because that means that the money is being sent to another state; not only do they lose tax revenue but it means in-state businesses suffer.
If you believe that they can tax stuff when it's sold, why not tax nontangible items? They already tax services; in most states you pay tax when the guy fixes your refrigerator.
It doesn't sound like an "internet" tax to me. They're just trying to make sure that the Internet isn't any different a place to make sales than local stores are.
political suicide i think its called
Nonsense! The Luddites in Wisconsin will see this as a windfall that they should have a cut of. All the governor needs to do is claim that the money raised from this move will be put twords seniors, children or puppies. If anyone tries to stop him they'll be seen as a puppy killer. There will be terror on the streets as old men smash iPods with their canes. He knows his gig.
"You're trying to cut the tax money that pays for my Depends (TM) undergarments? I'll call Matlock!"
Dedicated Cthulhu Cultist since 4523 BC.
Yes, considering the proposal is for 5% of the purchase price. If the purchase price is $0, the tax is zero.
The article (not the Ars Technica writup) specifically states its for purchased downloads. For example, I recently purchased some software online that gave me a choice of either having a CD shipped to me (in which case the cost of shipping was added) or downloading the software for instant gratification. The proposed law would mean that if I chose the download method I would be subject to the same sales tax I would have paid had I chosen to have the CD shipped to me.
There is no proposal to tax all downloads.
Its a sales tax, meaning that some form of sale had to have occurred.
There is another sort of sale which is also generally exempt. Catalog sales are unusally untaxable unless the vendor has a physical branch in the state. Why should internet downloads be treated diffently.
Of couse one can argue that they are actually being treated the same, many states also expect their citizens to volunatrly report and pay sales tax on catalog items as well. It doesn't work so well since there is really no way to enforce the tax.
That is really my problem with all such proposals. On one hand I think an internet tax could be somewhat good for the community, there is no better way to get govement support then to give them a piece of the action. I supect DCMA and the like would have come out diffently if the govemental pocketbook had been weighted the same way the public interst was.
On the other hand passing an unenforcable law is simply foolish. Every law that can be ignored with impunity throws all others in to suspicion. One also wonders how we could possibly need a law to govern something that cannot even be tracked.
Prehaps insted of downloaded sales they should simply consider a small tax on datastreams in general. It would at least be trackable, and might result in WI encouraging file swapping to get those taxes up (kidding!)
"This year's $170 million package includes proposals to levy sales taxes on software that is purchased on the Internet instead of bought on a computer disk"
a rt icles/2005/03/02/romney_rethinking_new_powers_for_ tax_aide?pg=2
http://www.boston.com/news/local/massachusetts/
Man are you ever behind the times...just check with your local telephone co for this one :(
Taxes on the taxes on the surcharges......
It's not fair that taxes are applied to a CD, but not applied to an iTunes download. Solution:
Repeal the tax on the CD and cut government spending.
A similar technique will solve all other cases of taxation that aren't fair.
I'm not familiar with Wisconsin tax law, but I would assume that these taxes should apply anyways, assuming that you are buying from a business with a physcial location in that state. At least that's how I believe it works here in Canada and provincial taxes.
I don't think downloads should be any different than any other product or service simply because its off the internet. If I buy a service contract, I have to pay tax on that, and its as intangible as a downloaded mp3 or ebook. However, if the company does not have a physical location in my province, I don't have to pay provincial tax, only federal tax. I live in Saskatchewan and frequently by hardware from a Canadian distributor in BC. I have to pay GST (federal) but not PST (provincial) on the hardware and the same on any labour I pay (I usually have them build the computer for me for $25 if I'm ordering a full system).
However, I can see this being very difficult to enforce. You can't base the choice on the originating IP, those can easily be proxied from another state. Since we're talking about non-physical goods, there's no shipping address, and even if there was, what says you aren't shipping it to a friend in another state. The only thing I could think of would be if you could validate the "home" address of the credit card and base it on that address, but there are ways around that as well.
Geez....why can't the legislatures see we're freaking taxed ENOUGH.
You're a wage earner. You will never be taxed enough. Each dollar that the government seizes is one that it can spend on buying votes rather than you spending it on your "selfish whims" (you know, like feeding your family). Votes are for sale, and the means to buy them are government programs. Votes are the key to power. If you're a politician, then why don't you take someone's money and buy some? If the victim isn't going to vote for you anyway, then you've got nothing to lose!
Both Democrats and Republicans play this hideous game. The ultimate long-term goal is to move 100% of the tax burden to a minority of citizens. That way, every tax increase will be immune from voter resistance. One side will be able to say to 51% of the electorate, "Vote for the other guy and he'll make you pay taxes!"
I don't make the rules. I just make fun of them.
I hope the parent is moderated up as far as possible, but I am depressed to think that someone thinks of it as funny.
You are conveniently omitting the costs of the Greater Middle East Initiatives (i.e. wars), as is the budget proposed by Bush. Federal spending is not frozen; "defense" spending is skyrocketing.
Together, we will drive the rats from the tundra.
Both Democrats and Republicans play this hideous game. The ultimate long-term goal is to move 100% of the tax burden to a minority of citizens. That way, every tax increase will be immune from voter resistance. One side will be able to say to 51% of the electorate, "Vote for the other guy and he'll make you pay taxes!"
1% of the population already pays 33% of federal income taxes. Any across-the-board tax cut is met with cries of "33% of the tax cut goes to the richest 1%! Evil tax cuts for the wealthy!". What a system.
Socialism: a lie told by totalitarians and believed by fools.
Make people write a check so they can see how much they are actually taxed. Everything will then fall into place.
Except for ending slavery, the Nazis, communism, & securing American independence, war has never solved anything.
Oh, yes, I can see how it's a fairness issue. It has nothing to do with a state budget issue. It's completely about fairness.
Say, we should find the highest sales tax in the country and raise the rest of the country's sales tax to that level too. It's only fair.
I wonder if this governor realized that when you browse the internet you download the pictures, text and whatever advertisement (or virii for that matter) you happen to stumble onto. Did this governor understand how the internet works? If that passes, that will have to be submitted to the dumb laws websites, but of course Wisconsin viewers will have to pay taxes to see that.
[!] No, I can't see my comments. They are not worthy of +3 moderation.
I should mention that the richest 1% in 2001 made 17% of all income. So their "fair share" would be 17%, not 33%.
A system in which the majority says "we'll tax that minority more but not impose the same tax on ourselves" is quite simply immoral.
Except for ending slavery, the Nazis, communism, & securing American independence, war has never solved anything.
Besides, taxing interstate transactions is illegal under the "Commerce Clause" of the US Constitution (3) so it'll most likely be placed in within the State "use tax" category which has been very difficult in the past to enforce.
Putting aside the fairness issue taxing ultra low dollar electronic purchases IMO just isn't worth it.
(While many states currently do require a State issued drug tax stamp, because of marijuana's current status as illegal under prohibition few people actually purchase them. The "drug tax stamp" law is most commonly used to add the extra charge of tax evasion to a drug dealer and squeeze him for a little extra money and jail time.)
1. Marijuana prohibition facts
2. Thinking about Drug Legalization
3. Interstate Taxation and the Commerce Clause
"I hate to advocate drugs, alcohol, violence or insanity but they've always worked for me" - HST
You still have a Legislature that has to approve his budget for the year - you can't dump all the blame off on him.
A legislature which happens to be completely controlled by a republican party which, due to circumstances of the moment, follow and support every single decision of the bush administration without question.
How convenient.
Also, it's false that anyone who voted for Bush supports "don't tax and spend (and spend and spend and spend)" - people vote (or not vote) for candidates for any variety of reasons.
If unconditionally re-electing someone who demonstrates fiscal irresponsibility is not support for fiscal irresponsibility, then what is?
It doesn't matter if that was the individual voter's "swing issue". They voted for it.
I am continually perplexed by the extent to which people defending the Bush administration jump through bizarre hoops to prevent anyone taking any sort of blame or even responsibility for that administration's actions. If the president is not responsible for the budget when he has complete sway over congress, who is? If the people who voted that president into power knowing full well what he would do with it are not responsible for or "supporting" him, what do those words even mean?
There was one specific time at which the president's desk had on it a plaque saying "the buck stops here". The Bush Administration and its defenders, despite having no credible opposition or oversight for their actions either in congress or the media and a complete control of the agenda of the Republican party, seem to disclaim either that the buck at any point passed through their hands or even that they have a clear idea what, if they saw it, the buck would look like.
I'd agree George W. Bush himself is of course not personally responsible for any of this, since it seems to me most of the time frankly that almost none of the decisions in this administration are made or possibly even entirely understood by him, but the fact is it is his job to oversee and take responsibility for the members of his administration and the legislation he signs into being. He's the president of the united states of america. If he isn't doing this he isn't doing his job.
Irritable, left-wing and possibly humorous bumper stickers and t-shirts
Votes are the key to power. If you're a politician, then why don't you take someone's money and buy some?
Congradulations, you've discovered the reason democracies over history eventually fail; the proletariat discover they can vote themselves "free" benefits from the public coffers and get into a greedy spiral until the system explodes.
The way most downloads you have to pay for work, you technically haven't bought a product. You've bought a service. Downloaded songs? You don't own your copy - you own the right to play the copy that you have stored but don't own. Software? You don't own the software, you just bought the right to use the copy of it you downloaded but don't own.
You should never, ever pay a "sales tax" on a DRMed download becuase you haven't actually really bought a product - you've bought a service, and those don't get taxed as sales tax.
Don't label something "offtopic" unless you know the topic well enough to tell what's on topic.
Then its a service fee to access their servers, not a "payment for goods".
No sig for you!!
Reminds me of Mullah Nasruddin!
"Flyin' in just a sweet place,
Never been known to fail..."
Whoa there cowboy. I never said you couldn't be angry at republicans - I just wanted to make sure that George W. didn't get ALL of your anger wasted on him. There are plenty of assholes to focus on at the moment.
:]
Also, you're making the assumption that it was an unconditional vote for him. The fact is, people are NOT going to be able to vote for ANYONE who believes in and will do everything they want them to do but themselves. So they have to pick someone. For a lot of people, the feeling of "safety" or "morality" is more important than the current economic situation. Personally, I find it a VERY bad choice, but there is a huge difference between "I guess I'll sacrifice the fiscal wellbeing of our country for the illusion of safety" and "GOOD! Cutting taxes and increasing spending is a WONDERFUL idea!" That's the point I was trying to make.
People, in general, are too stupid to realize that voting for X or Y is going to save or cost them money in taxes. Look at all the poor people voting republican despite the fact that their tax burden is going up because of it.
Now, what politicians actually do is give money to their campaign (and pro-them PACs and 572s) contributors, who then give them the money they need to stay in office.
It's an inherent flaw in democracy. Unless you can think of a better solution, suck it up and pay your taxes, whiner.
ReadThe ReflectionEngine, a cyberpunk style n
I live in Washington State just a stone's throw south of the border. Anyway, WA get's its money -- at least every iTune I buy costs me $1.07 (99 cents plus our 8ish % tax). I need to get myself a credit card with an Oregon address - perhaps that would save me the tax.
What changed under Obama? Nothing Good
How the sales of software or other digital products that can be simply downloaded are different from the sales of tangible goods that get shipped by snail mail? I think he probably has a good point.
that we don't have a system in which Congress, rather than the president, authorizes spending . . .
.
.
oh, wait . .
well, Damn that Clinton and his Contract With America, anyway . .
hawk
for those outside the US: the Republican Reagan had a Democratic Congress (except for a couple of years in the Senate), while the Democrat Clinton had a Republican Congress (except for his first two years which led to it).
Our budget balanced not because of one party or the other, but because, after the Republican landslide, Clinton switched from calling the plan to balance the budget quickly irresponsible to a plan which it did a year faster. And after the one-upmanship between the two parties knocked another year or so off, falling interest rates knocked yet another year off.
But *shh*. Don't bother these guys (on either side) with the facts. All of the prudent cuts came from their own party, as did the idea of fiscal responsibility, while all the bad cuts and debts came from the other one . . .
Ohio's govenor rises to second least favorite state politician...
- AMW
...thanks for that bit of news which made me glad I don't live in such a backward-a$$ state as WI, that wants to completely screw up the internet. Yeah, go ahead an try it! Who would participate? How would it be implemented? Who would bother doing business with anyone or anything in WI anymore? Just plain stupid.
The next remark is false. The previous remark is true.
Has everyone completely ignored the whole "double taxation" thing our country's Founders were against? We're getting taxes on INCOME that is being spent and taxed AGAIN. That is double taxation.
Its time for a political uprising.
-- If we don't stand up for our rights, now, there will be no right to stand up for them later.
And... no one would care.
Information wants to be free.
Entertainment wants to be paid.
You just want to be cheap.
The electoral system of the US isn't capable of supporting a third party for long. It will either die soon after being popularized or it wil take the place of one of the other two established parties. Any other result is so remote as to be practically impossible.
The US party system will not change without changing the way elections are run, and the US party system controls the process for changing the electoral system. Also, it would take a Constitutional amendment for starters. Not likely to happen.
The US government will more than likely have to collapse before such a change in US politics is likely to happen.
That's why you should have a flat tax with absolutely no deductions at all. Start with 25% and work your way from there.
A 25 percent flat tax rate would break the backs of poorer people. Here is the percentage of adjusted gross income that people pay in federal income taxes (source, IRS, 2003 figures:
AGI TAX/AGI TI/AGI
(dollars) (percent)(precent)
0 to 15000 2.8 19.2
15000 to 30000 4.3 40.6
30000 to 50000 7.3 58.9
50000 to 100000 10 68.2
100000 to 200000 14.7 75
200000 and up 24.2 87.7
AGI = Adjusted gross income
TI = Taxable income
TAX = federal income tax paid This does not include social security, state tax, sales tax, and property tax. It does not reflect loopholes that allow the reduction of adjusted gross income. These are not marginal tax rates; these numbers are calculated by dividing the total amount of income reported or tax paid in those tax brackets by the number of returns in the same bracket and so they reflect the average incomes and federal income taxes paid by those in those brackets.
Currently, the biggest chunk of money comes from those making over 200K per year. A 25 percent flat rate would move the burden down onto lower income groups with those making 50K to 100K contributing the most absolute dollars and with the poverty level group (
These figures do not include social security which is 7.5% employee contribution or 15% self employed on the first 90K or so of income. The rich pay very little in social security as a percentage but those making less than 50K pay more social security than income tax. If you include social security at 15% (because the employer also pays half and this reduces wages) the federal income tax actualy comes much closer to a flat rate tax with the poor paying about 16 percent and the rich paying about 25 percent of AGI.
The idea of eliminating all deductions and credits has some serious problems. Many deductions exist for a reason. Small businesses that don't file separate returns must be able to credit cost of goods sold and other expenses; otherwise, it would be the equivalent of taxing an employee on their share of their employers gross income rather than on their salaries. Catastrophic health costs need to be deductable. Uncollectable bad debts on which you have already paid taxes need to be deductable; otherwise you are paying taxes on money you never made. Eliminating charitable deductions would have serious repurcussions. Individual income tax deductions actually favor those making less money.
Deductions and tax credits and taxes levied on particular items can actually be a good way of implementing social policy. In many cases it makes much more sense to tax something rather than ban it outright. Asbestos causes cancer but eliminating it entirely can be a real problem in applications that have no viable substitutes; so instead of banning it, you could tax the hell out of it and let the market work to eliminate it where it can be eliminated. Providing deductions for those who donate to non-profits that provide useful social services costs less than the government providing those services. Deductions and tax credits for alternative energy encourage essential spending in those areas and are offset by reduced need to spend money on environmentmental cleanup, health care, and the military.
So the rich appear to pay more taxes than many believe. I think they should pay even more. The rich are able to bully others out of their fair share of income. A progressive tax is a way of partially correcting inequities in our economic system. Should everyone make the same amount? No. But do those who make over 200K per year (this tax bracket averages 1.3 million per year) actually contribute that much more to society than those making less? No. Most of them contribute far less.
One random example of bullying: when you apply for a job, your employer will bully you into r
Actually there have been democracies for thousands of years, but don't let that stop you from thinking that the world started two-hundred years ago.
Due to youth or general cluelessness, I have yet to find such a method. Could you enlighten me, or at least give me some ideas/places to look?
-Yndrd1984