California Balks At Internet Sales Tax

bob_calder writes "California has walked away from $2 billion a year in revenue by declining to get on board with a group working to standardize tax rates so a national tax on Internet sales could eventually be implemented by Congress. Supporters of the tax think they still have a chance in New York, Texas, and Florida. At the moment the largest states pursuing the Streamlined Sales Tax Initiative are New Jersey, Michigan, Indiana, and Ohio. California didn't want to give up its autonomy in setting taxes to a coalition of smaller states."

Comments

Who is the "orginization" behind this tax?

[Mc_Anthony]

I searched around and wasn't able to come up with the name of the group pushing for this Internet tax. Does anyone have more information on them? What are their politics? Who is funding them?

Re:Who is the "orginization" behind this tax?

[Average_Joe_Sixpack]

Originally it was brick and mortar retailers, but many of them now have ecommerce sites.

Re:Who is the "orginization" behind this tax?

[purpledinoz]

I always wondered this about the US. If you don't pay sales tax on out-of-state items, isn't this like a subsidy for shipping companies? One of the costs of buying products online is shipping. If you're not paying sales tax, that saving goes into paying for shipping. I think there should be a US wide sales tax standard for cross-state purchases.

Re:Who is the "orginization" behind this tax?

[i2amsam]

Something I actually know about!

My Dad is working on Streamlined Sales Tax Committee
It's an initiative that's being run by the states, but
the big push is from big online realators like Amazon and
E-bay because they don't want to face 50 sets of rules of
tax for all of the 50 states.

The current system is stupid on the face of it, since now
most states only tax commerce for corperations which have
a actual physical presence in that state, it encourages
companies to not setup any investment in states where they
do a high volume of sales.

It's been going on for *years* and I don't know that they're
making much progress, too many cooks.

Re:Who is the "orginization" behind this tax?

[maxume]

Look up 'use' tax. Most states charge it, it is a tax on goods purchased in other states; in my state, it isn't owed on goods that have already had sales tax charged on them. It's on the honor system, so people don't worry 'bout it much, I imagine the state pays more attention to rich folks. For a lot of people, because the law is written with people not keeping track in mind(there is an option to itemize small purchases or pay a standard amount), it amounts to cheating for about $20-30.

Re:Who is the "orginization" behind this tax?

[Maxo-Texas]

The problem is that sales taxes are spent in the state, not at the point of sale. Sales tax cover costs for roads and other services to brick and mortar establishments. All they are on the internet is mostly a money grab. In a lot of cases, the products being sold are not even delivered from the state where the sale was registered.

The second problem is that if states 1 to 47 have sales tax and 1-3 do not, then a lot of business is going to gravitate to those last three states.

Of course, if they tax them to be the same as brick and mortar, then folks will just shift back away from the internet.

Re:Who is the "orginization" behind this tax?

[alshithead]

I think almost if not all states require all companies who have a presence in that state are required to collect sales taxes for purchases from within that state. If a company has a retail outlet, warehouse, office, etc. they must collect and distribute that state's sales tax even if the sale is conducted over the phone or internet.

Re:Who is the "orginization" behind this tax?

[fkicker]

The big push is from brick-and-mortar retailers who want to "level" the sales-tax playing field. The Direct Marketing Association (DMA) which represents e-commerce and catalog retailers opposes the initiative. Amazon is carefully neutral.

The current proposal is a huge burden on small businesses. The biggest problems with the current proposal are:

Each participating state wants me to remit the collected sales tax to them separately. Why can't I send in one payment to my state and then they can make sure the money gets distributed fairly?

The use of certified (meaning expensive) tax software is required. If the program is "streamlined" why do I need $50,000 dollars worth of software to figure out how much tax to collect?

Each participating state wants the right to audit me. What happened to that whole "No taxation without representation thing?"

Product and service definitions are insane. For example, a Twix bar is a cookie but a Snickers bar is candy. In some states buying a Twix bar is tax free while a buying a Snickers bar is not.

It's a lot simpler to re-locate a rack of servers to a more tax friendly state than a brick and mortar retailer. But, hey, maybe re-locating to a small Caribbean island wouldn't be so bad?

Re:Who is the "orginization" behind this tax?

[Spacezilla]

lol, he got you twice. :)

Re:Who is the "orginization" behind this tax?

[mr_mischief]

1776 was a little more than a century and a half ago. It's more like 231 years ago. So you're a little off on the history yourself, but I'm not sure how you were trolling. Some moderator seems to have gotten overzealous.

I happen to agree that states other than my own trying to control my state's tax rate is taxation without representation, and that was a primary cause for the American Revolution.

Re:Who is the "orginization" behind this tax?

[budgenator]

That's what people really have to remember is that this IS Not a New Tax, they still owe the tax to the state, this is about requiring internet retailers to collect the tax for the state. As it stands now the internet retailers are sayiung it's too complicated to collect the tax because there is no rhyme or reason to them; for example Michigan doesn't require sales tax on unprepared food, so if I buy a bag of potato chips in a grocery store it isn't taxed, but the same bag of chips bought a sub shop is! How's a computer going to figure that out? Add to that some places the counties and cities also gave their own sales taxes the complication gets mind-boggleing.

Re:Who is the "orginization" behind this tax?

[dhasenan]

On the other hand, 1861 was just under a century and a half ago. It's more like 146 years ago. And then, the winning side suspended habeus corpus for American citizens and dealt a terrible blow to states' rights, basically blackmailed the defeated states into accepting a number of controversial amendments to the US Constitution....

It took eighty years to undo the Revolution. Not too shabby.

Re:Who is the "orginization" behind this tax?

[MightyMartian]

When the notion of "States Rights" comes into play, what leaps to your mind is the Revolutionary War? I suppose it's applicable, but surely there were enough hints (a century and a half ago, war, states trying to maintain their powers) that one ought to be able to come up with the answer fairly easily.

Re:Who is the "orginization" behind this tax?

[tompaulco]

Originally it was brick and mortar retailers, but many of them now have ecommerce sites.

As the owner of a brick and mortar retailer with an associated online store, I am not at all interested in a nationwide sales tax system. As it stands, I have to collect sales tax at my store for the state, and for the city it is based in. For internet orders within my state, I have been told by my taxing authority that I have to collect state sales tax (which I knew already), and also collect tax for the county (if any) and city (if any) that the item is shipped to. There is a conveniently downloadable 17MB zipped file detailing all of the tax zones in my state. Oh, and it changes every quarter.

A flat internet sales tax would be better than having to handle 50 different states' different sales tax rules. However, even easier than that would be to do it the way it already works now. I charge tax in my state, but in other states, the consumer is responsible for their Use Tax.

The only reason I as a retailer would ever push for a nationwide sales tax system is if there already existed a system whereby I as a retailer in a single state had to calculate sales tax for every state as I currently do in my own state. I am aware that large online retailers with presences in many states already do have to calculate this stuff, but they can probably afford the $500/year subscription to the services which will figure out the local sales tax for you.

Re:Who is the "orginization" behind this tax?

[Moofie]

OK, the other two posters have given you a more factual correction, but I just wanted to let you know that you're an idiot.

Re:Who is the "orginization" behind this tax?

[cayenne8]

"I always wondered this about the US. If you don't pay sales tax on out-of-state items, isn't this like a subsidy for shipping companies? One of the costs of buying products online is shipping. "

Well, most everything I buy online not only has no sale tax, but, also FREE shipping. So, it is a big savings all the way around. I usually look at what I want in a local brick and mortar...but, I buy it online and save the 9% tax...that adds up after awhile...

Re:Who is the "orginization" behind this tax?

[mr_mischief]

That particular war is most often considered to be about a triumph for human rights. Yes, state's rights were a big part of it. The most important part of the cause of that war was slavery, though, and it's not really any state's right to allow slavery. It's not anyone's right to allow slavery.

Citizens of the Confederate states were not technically American citizens since they had seceded. The Confederacy then lost, and the citizens of the Confederacy had to be treated as wartime enemies for a time before they were assimilated back into the Union.

Freeing blacks was making sure the ideals of the founding fathers about ALL men being created equal was progressing. We still had segregation until the 1960s, so it's not eighty years to undo the Revolution, but 190 to finish it.

Re:Who is the "orginization" behind this tax?

[mr_mischief]

When the issue is taxation without representation, the American Revolution comes to mind. When you cast it as a "States Rights" issue and tie a war to it, the Civil War brings up issues of economic disparity between North and South and whether or not slavery should be legal.

I see no arguments about economic disparity nor slavery here. I see a state refusing to allow other state governments to help set that state's taxation of its citizens and their businesses. It could be argued either way, I suppose, but as I see it there are more parallels here to the Revolution than to the Civil War.

Re:Who is the "orginization" behind this tax?

[mr_mischief]

OK, the two other posters seem to be upset that their families don't own black people, but I just wanted to let you know that you're an asshole.

Re:Who is the "orginization" behind this tax?

[Moofie]

You do understand that the Civil War had very little to do with slavery, right?

No, probably not. Still an idiot.

Re:Who is the "orginization" behind this tax?

[mr_mischief]

The war itself was due to states seceding from the Union and attacking Fort Sumter. A large part of the secession was, in fact, due to pressure to do away with slavery. A big part of the reasoning behind the secession was that Lincoln, a well-known anti-slavery advocate, was elected President. Economic disparity between the rich Northern states and the poorer Southern states was also a factor. Cultural differences between the North and the South were a factor as well. The fact that the North was growing in population faster than the South and that the House would favor Northern interests was an issue.

Now don't get me wrong, I think every President since WWII has held too much power. I do not think Lincoln necessarily held too much, though. A somewhat powerful central government is important. Too powerful is bad, but too weak is bad too. The 13 original states had tried a loose confederation before, and it failed to perform so badly that we got our current Constitution.

No, I don't understand that the Civil War had very little to do with slavery. I believe it had quite a bit to do with slavery, but not to the exclusion of other issues. So yeah, call me an idiot.

Do you understand that believing that slavery was a minor issue in the 1860's in the United States puts you in a very small minority? Still an asshole.

Re:Who is the "orginization" behind this tax?

[dhasenan]

"Citizens of the Confederate states were not technically American citizens since they had seceded."

Wasn't that what the war was about? Whether secession was possible? The victors were of the opinion that it was not; therefore, the Confederate states were still part of the US, still states, and their citizens were US citizens.

Of course, Lincoln confirmed most of their fears about the overreaching rights of the federal government; Lincoln suspended habeas corpus, imprisoned 18,000 people without trial, and spent funds on the war without Congressional authorization. All this, with less than 40% of the popular vote.

"That particular war is most often considered to be about a triumph for human rights."

It is now. Lincoln supported the Corwin Amendment, though, which would have asserted that the US government could not interfere with state governments on the subject of slavery. (This was as late as his inauguration speech.) His later Emancipation Proclamation was issued two years into the war, though, and only affected slaves in rebelling states that had not returned to the control of the USA. Maryland, Delaware, Kentucky, the counties that later formed West Virginia, and conquered portions of Louisiana were exempt.

After the war, though, Lincoln abolished slavery in the northern states as well, via the thirteenth amendment to the US constitution. This may well have been a political move to reduce enmity between the conquered states, or more likely to satisfy the hard-line Republicans of the day.

Moreover, considering Lincoln's precedents with federal powers, he may have done more to impair human rights than any other US President, even if he did help more people than he injured directly.

It's called Use Tax

[Anonymous Coward]

California already taxes internet purchases via a Use Tax law which is imposed on all goods purchased and then brought into the state by residents. You have to calculate the tax yourself when you file your state income tax return.

Re:It's called Use Tax

[AuMatar]

And amazingly, 99.99999% of Californians don't buy anything off the internet, as shown by their use taxes. Its an amazingly offline state.

Re:It's called Use Tax

[walt-sjc]

Most states have this, but compliance is pretty low, and nearly impossible to audit. While they could force you to give them copies of your credit card receipts, they would have to prove that you purchased items for yourself and not as a gift to Aunt Millie in Alaska, or something that you used on a trip in the state your purchased the item in...

I think the biggest challenge to a standardized nation wide sales tax is states with ZERO sales tax. So what are you going to do in these anti-tax states? Force them to implement a tax? Is it going to be a compromise mid-level, or is it going to be on the high-end like California?

I looked at my own internet purchases last year, and a number were from companies that already collect local sales tax since they have a business presence in my state, and the tax on everything else is a few hundred dollars at best. My state requires that I itemize everything for the use tax collection, which is just nuts. I put down zero as I have done every year for the past 25 years.

Re:It's called Use Tax

[MorderVonAllem]

45 states have the use tax(I can't remember which five don't off hand). It requires you to calculate it and pay it quarterly. How many people do that, however, is another question. I sure as hell don't.

Re:It's called Use Tax

[Doppler00]

I think it's called a use tax because I believe it's technically illegal for a state to impose an interstate tariff (tax) on goods purchased from another state. Anyone confirm this? Something I was remembering from the federalist papers. I mean, it makes sense. Why wouldn't they just call it a interstate import tax? "Use tax" is a ridiculous name and is obviously weasel wording around something.

Re:It's called Use Tax

[LordNimon]

What I don't understand is why vendors aren't required to charge sales tax on out-of-state sales, collect the money, and then give it to the state in question. All you need is a database of each zip code, the corresponding tax rate for that zip code, and the mailing address of where to send the check. Then the vendor just tabulates all that information, and at the end of the year sends out a bunch of checks.

Re:It's called Use Tax

[Professor_UNIX]

What I don't understand is why vendors aren't required to charge sales tax on out-of-state sales, collect the money, and then give it to the state in question.

Article 1, Section 8 of the Constitution: The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States; but all Duties, Imposts and Excises shall be uniform throughout the United States;

...

To regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes;

The States don't have the power to tax interstate commerce, that is a power specifically allocated to Congress by the Constitution... that's why they try to skirt the issue by demanding "Use Taxes" and the only time you need to pay sales tax is when a company has a brick and mortar presence in that state.

Re:It's called Use Tax

[appavi]

It's not only California, almost every other state that imposes Sales tax also applies Use tax.

Sales Tax - Tax that is collected by the seller on behalf of the taxing authority(state/county/city) on the goods that are purchased within the jurisdiction of the taxing authority.

Use Tax - Tax which needs to be paid by the buyer to the taxing authority for the goods that are purchased from the seller who is based outside the jurisdiction of the taxing authority.

It is easy to enforce Sales tax because you can identify sellers within the jurisdiction based on licenses. It is difficult to enforce/audit Use Tax because it is voluntary. Most of the time the sellers are based in jurisdictions outside the taxing authority and so sellers cant be controlled by state goverment.

New York Cigarette Tax is one example of Use tax that was enforced aggresively.

Wikipedia entry for use tax

Re:It's called Use Tax

[etnu]

As a California resident for nearly 2 years, I'm proud to say that I never use the internet, ever.

Re:It's called Use Tax

[falconwolf]

What I don't understand is why vendors aren't required to charge sales tax on out-of-state sales, collect the money, and then give it to the state in question.

Why should venders be required to tax out of state purchases?

Falcon

Re:It's called Use Tax

[LordNimon]

I would say that levying a "use tax" on items I purchase from another state is taxing interstate commerce.

Re:It's called Use Tax

[bcrowell]

I've done internet mail order, and it was enough work filling out and sending in one state sales tax return every year, based on the sales tax rate where my business is located. Filling out forty of them every year would be a crazy burden on a small business. Also, the rate is normally calculated based on the district where the business is located, for the very reason that they don't want the business to have to have the kind of database you're talking about. There are plenty of people doing mail order who don't even have computers.

Re:It's called Use Tax

[MorderVonAllem]

But technically it's voluntary and not forced. I've lived in a 'use tax' state most of my life and have never paid a use tax on my internet purchases. Part of the problem is that it is not enforceable, it requires people to be honest. The second problem is that nobody I know even knew what a 'use tax' was. So it's obviously not as well documented or brought to public attention because it would probably cost more to do that than it would bring in.

Re:It's called Use Tax

[Guppy06]

"Article 1, Section 8 of the Constitution:"

Granting powers to Congress isn't the same as denying those powers to the states, otherwise there'd be no need for most of Section 10 of the same article. So long as it's not an impost or duty on imports or exports, it's fair game for the state legislatures.

Re:It's called Use Tax

[LordNimon]

I don't think it's voluntary. I've never heard that. I have heard that it's never enforced, because it's too hard to enforce. However, that doesn't mean it's not unconstitutional.

My favorite internet tax quote:

[andres32a]

"The debate over the taxation of the Internet isn't about feeding the already well-lined coffers of government. It's about the fundamentally American idea that there should be no taxation without representation.

"While there is no evidence that Main Street firms have lost business due to tax differentials, that is beside the point. The answer to these concerns should not be to raise taxes on the Internet, but to lower taxes on Main Street businesses."

Colorado Governor Bill Owens
In a letter to Congress urging the extension of the Internet tax moratorium, and opposing his fellow governors' plea for Congressional approval to force collection of sales and use taxes from remote businesses.
August 20, 2001

Re:My favorite internet tax quote:

[Fry-kun]

And while we're at it, let's also overhaul the tax system.
The only ones losing out on that would be companies that work on tax returns (like H&R Block)

sigh.. i really really wish... :(

Re:My favorite internet tax quote:

[DogDude]

While there is no evidence that Main Street firms have lost business due to tax differentials...

That's absurdly untrue. Of course "Main Street" companies are losing business due to tax differentials.
Slashdotters, which seem to have a tendency to shop online more than the general populace, are a prime example. Check out any new gadget article on Slashdot. Nobody talks about buying it locally. You'll find plenty of posts about which generic website has it for pennies cheaper than the other generic website.

Re:My favorite internet tax quote:

[Fleeced]

Maybe I'm missing some reference to (former) Governer Owens, but why is this modded funny? It's quite insightful, IMO.

Re:My favorite internet tax quote:

[miskatonic alumnus]

I would say that of all the purchases I make online, only about 10% of them can be found locally. And for that 10%, the base cost is cheaper online than what is charged locally BEFORE taxes.

Re:My favorite internet tax quote:

[tkrotchko]

"Nobody talks about buying it locally."

Mostly because it's impossible to find the latest gadgets locally, even if you live in a major city in the U.S.

And even then, it's not the sales tax that drives people away, it's the fact that the stores that have cutting edge gadgets are often boutique sellers that charge a significant premium over "regular" retailers.

For example, it's pretty difficult for most people to buy an Apple computer locally (defined as 45 minutes away or less), or BluRay recorder for your PC, or anything from Bose, or a Palm LifeDrive, Canon DSLR or pretty much anything else that is new and expensive.

If price and selection were the same, people would probably pay the additional 5% sales tax to buy it locally. But the price difference between internet and local is often 25-50%.

Re:My favorite internet tax quote:

[bogjobber]

This has to do with many, many other factors. Taxes are fairly far down on the list of reasons why buying things off the internet is superior. Companies like Amazon, eBay, NewEgg, Dell, etc. probably wouldn't exist without the internet, and if they did they definitely wouldn't be as successful. This has more to do with their business models than with the tax differences. Even in areas with no sales tax internet retailers are still killing brick and mortar stores.

Re:My favorite internet tax quote:

[dave1g]

45 minutes? I wouldn't drive more than 15 minutes (30 minutes max) to buy anything less expensive than a car!

Re:My favorite internet tax quote:

[David Greene]

No, it isn't. It's classic Grover Norquist anti-tax, anti-government rhetoric packaged up in populist clothing. We levy taxes for a very important reason: they fund the services necessary for us to maintain our society and prosper.

It's not insightful to blather on about government inefficiency. You've got to show where it can be improved. More often than not, government programs are running on barebones budgets. There's no fat to cut.

I'm sick of right-wingers fanning the flames of fear and isolation by claiming that there's not enough to go around and that we each have to fight to get our own. I'm sick of those who say we're too poor to meet the needs of everyone in this country. We're the richest country in the history of the world, for God's sake!

Taxes on internet and mail-order purchases are long overdue. I always try to buy locally so that my city, county and state can get just a little more of the funding they need to operate. But I know that not everyone is thinking about that. I've worked up at the Minnesota state legislature (on my own dime and my own time), I've talked with legislators and I've had discussions with staff. I know about the needs of the people in our state and how they are not being met because there are certain elements that want to perpetuate the myth of scarcity for their own benefit.

It's incredibly selfish to whine about a small tax increase when there are homeless children going without food, when low-income people can't get to a job because there's no bus and when funding for neighborhood libraries is being slashed. Doubly so when you complain about having to pay that extra $20 for your shiny new flat-panel display.

The sad thing is, most people buy into the rhetoric without ever understanding or trying to understand what the real situation is. People are aware that something is not right with the way our country is headed. When I point out that the nonsense anti-government and, ultimately, anti-community fear-laced rhetoric is at the root of the problem, they begin to understand and support raising new taxes for services they want.

We make choices. So far, we've chosen to leave people behind in a big way. It's an immoral choice. But it's the choice we've made. We can eradicate poverty and provide opportunity for all. We just have to choose to do it. That means choosing to raise revenue.

Governor Pawlenty, I make a good salary. Tax me a little more so that those less fortunate can have a chance at the same life that I enjoy. Please.

Re:My favorite internet tax quote:

[plover]

Tax me a little more so that those less fortunate can have a chance at the same life that I enjoy.

Actually, I'm a lot more selfish than that. Tax my gas more so that my streets can be repaved and potholes be filled in before they destroy my suspension. Spend more in public schools so I don't have to send my kid to a private school just to give him an average education. Raise my income taxes instead of my property taxes, so that when I get old I'm not paying a fortune I no longer have to live in my own house. Spend more public money on art and architecture to keep this a pleasant and beautiful place to live. I really dislike the recent increases in violent crime due to cuts in local government budgets, so add some more money to Minneapolis and Saint Paul to fund more cops, and have the state open more prison beds. And finally, give Public Radio enough money so they'll shut the hell up about their pledge drive after three days instead of ten.

If I wanted to live in a low-tax shithole I'd have moved out years ago. I *like* living in a beautiful place that doesn't have garbage constantly flowing in the gutters, and like you I am willing to pay for the privilege. If Pawlenty wants to pay less in taxes, he should go be governor of a state that has lower taxes rather than continuing to fuck up ours.

Re:My favorite internet tax quote:

[EllisDees]

>It's not insightful to blather on about government inefficiency. You've got to show where it can be improved. More often than not, government programs are running on barebones budgets. There's no fat to cut.

You've obviously never lived in Cleveland. Every single government program is just oozing waste. From the schools, where we manage to spend the most per-capita in the state while having the worst results, to government contracts being handed out to those who give the highest kickbacks, this place is a mess and a tax decrease could only help.

Re:My favorite internet tax quote:

[Darby]

I really dislike the recent increases in violent crime due to cuts in local government budgets, so add some more money to Minneapolis and Saint Paul to fund more cops, and have the state open more prison beds.

Oh for the love of anything decent. I had minor points of disagreement with some of what you said, based mostly on local (different locality than you) corruption related to some of those things, while agreeing with you on the whole, but this is taking one of the worst problems we already have (regardless of locality) and making it worse. We already have more people in prison per capita than any other nation in the world. We already have more people in prison *in raw numbers* than any other nation in the world. This includes nations with 3+ times our population to put the worthlessness of the per capita figure in perspective. Given those facts, we are clearly doing something wrong. Giving even more money to the prison industrial complex can not possibly help anything.

Rather than add to that problem, how does this sound.:
Eliminate all drug laws. The vast majority of the crime problem (especially violent crime) disappears overnight and not even mainly due to making "crime" into "not crime". It's not like we didn't already go through this before with prohibition. Exact same problem, exact same "solution", exact same unintended (or were they?) consequences of massive increase in violent crime, massive increase in organized crime and massive increase in the police state. Almost all problems commonly associated with drugs are caused entirely by drug laws. The rest could be dealt with with 10% or less of the money currently spent on *increasing the problems*.
Drug laws are only part of the problem as well.

I'm sorry for the rant, but you seem pretty reasonable otherwise and spending more money to lock *even more* people in cages to address a problem caused almost entirely by bad laws just isn't reasonable in any way shape or form. I can only hope you've just never really thought about the issues around increasing police power when it already dwarfs that of any other nation in the world, civilized or otherwise, and just want less criminals around you and will take a few minutes to ask yourself one question:

What problems commonly associated with drugs (pick prostitution, or other illegal "vices" if you have time as well. It generally works out the same) are really caused by drugs and which are caused by drug laws.

I think you'll find that your local police are already massively overstaffed and overfunded if they were only expected to deal with actual problems rather than enforcing simultaneously psuedo morality and the profits of the prison industry.

And I live in Chicago, so I'll see your high taxes (and raise your local corruption) and second your <paraphrased and altered>No way in hell would I live in one of the leech states even though I'm already paying their taxes too.</paraphrased and altered>

Re:My favorite internet tax quote:

[plover]

Sorry I didn't fully specify what I meant. As you quoted me above:

I really dislike the recent increases in violent crime

Until George Bush showed this nation how to seriously piss away money that he's been stealing from my son's future, drug laws had been by far the biggest waste of my taxpayer dollars. I don't associate drugs with violent crime -- but I do associate the illegality of the drugs forcing artificially high prices with violent crime.

Violent crime can be reduced. While I'm sure it's a combination of factors, prisons and money seem to help -- the 1980s and 1990s showed that if you lock away violent offenders for a longer period of time, violent crimes drop. Minneapolis violent crimes have steadily dropped since 1995, from 42,000 to 27,200 in 2002 (although they seem to be heading back up these last few years.)

And I'll call you on the local corruption -- but then again, you've held a royal flush in that department for almost a century now.

Re:My favorite internet tax quote:

[Darby]

Thank you for taking the time to respond.

I don't associate drugs with violent crime -- but I do associate the illegality of the drugs forcing artificially high prices with violent crime.

I think we're in perfect agreement there.

Violent crime can be reduced. While I'm sure it's a combination of factors, prisons and money seem to help -- the 1980s and 1990s showed that if you lock away violent offenders for a longer period of time, violent crimes drop.

That's certainly true. Heck, lock away enough people and all crime disappears.
What I'm trying to encourage you to do is promote repealing bad laws as a first priority instead of further increasing funding and power to police forces. History has shown that getting that money or power back is extremely difficult regardless of the level of crime. What we see instead is further lobbying by the police and the (increasingly *private*) prison industry to increase the number of acts considered criminal and the penalties for crimes victimless or otherwise.

Were your police to need only concern themselves with actual crimes, then they are already hugely overfunded for that role. While adding more funding might be able to reduce violent crime a bit more in your area, I think that we are way past the point of diminishing returns and the decrease in liberty required for those few percentage points of decrease in crime are a net loss.
Eliminate a few bad laws and not only will your funding needs go down, violent crime will go down and liberty will go up.

We seem to agree on the general idea that bad laws add to crime, and unless I'm not clear on what you're saying I think the only point of disagreement is whether better results could be attained by addressing the problems with the laws first or whether it's better to keep pouring more money into enforcement of all the laws good, bad, or indifferent.

I thought us Aussies were taxed weird

[inphorm]

That is a strange tax law, this is from TFA

"The state also requires its residents to report purchases made over the Internet and pay taxes on them"

How can they enforce that? Our tax laws are pretty uniform across the country, but I buy something from overseas, I don't have to pay our local GST (Goods & Services Tax) of 10% on the item. I may or may not have to pay the import tax to get it through customs, depending on what it is and how it is sent over.

I see buying something over the internet as the same as actually traveling to the state / country where the item is and buying it. As long as the seller obeys local tax laws, who cares what the buyer does?

I may have an overy simplistic view of things though.

- paul

http://www.paulpichugin.com.au/

Re:I thought us Aussies were taxed weird

[ScrewMaster]

I may have an overy simplistic view of things though.

Perhaps, but I think it more likely that our elected leaders have an overly complex view of things.

Re:I thought us Aussies were taxed weird

[inphorm]

Lol, I just spotted that spelling mistake and was waiting for someone to pick it up.. haha

- paul

http://www.paulpichugin.com.au/

Re:I thought us Aussies were taxed weird

[Jeff DeMaagd]

In the US, taxes on out of state purchases is called a use tax whereever I've heard it called by a technical name. I don't know if Australia does random audits, if a person is not reporting them, I think at least some of it might show up, I don't know. My state has a very lenient amnesty program such that I pay a very small amount, proportional to my annual income so that I don't have to keep track of all the out of state purchases to stay honest. I think I paid $3 US. At least the state will mis-spend it on education.

Re:I thought us Aussies were taxed weird

[Red Flayer]

How can they enforce that?

Ever been audited? It sucks. They will comb through your credit card statements looking for online purchases. Paypal account? If they suspect malfeasance, don't be surprised if those records are made available to the state -- just like b&m banks are subpoenad to provide records in the case of suspected income tax evasion.

All they need to do for enforcement is make sure that (probability of begin audited * average perceived punishment for audited people) is greater than the amount of money people save on their taxes. A good PR campaign that threatens jail time for big offenders wouldn't hurt, either.

What you'll likely see is that sellers will be responsible for remitting the tax. As a cost of doing business, it will be a cost they just have to bear.

Of course, people will still evade the tax, but it's surprising how many people will do something just because "it's the law".

Re:I thought us Aussies were taxed weird

[hurfy]

"How can they enforce that? "

well, they can't very well. That is why the other states want an easier way. Currently to do the US there would be thousands* of tax codes and rates :(

*thousands assumed but there are around 250 for Washington :(

Washington is even better, they do it the same way except there is NO personal income tax thus no form, thus probably less than the 00.0001% someone else made up ;) I don't even know how to pay it if i wanted to, i am sure people are just racing to look up how to pay taxes that noone ever double-checks or even asks for......

Sales taxes are a horrible mess:/
I finally got our computer to do sales taxes for 2 states at once, quite nasty as we are medical supplies with 2 locations in WA (diferent tax rate depending on warehouse it comes from!)Some stuff is taxable in 1 state but not the other AND vice-versa. Some is taxable to a vet but not a doctor. No tax to medicare or ID state, but DO tax WA state medicaid. The computer system actually lets me do more than Y/N for taxable to handle the maybe and sometimes, but the logistics and planning are a pain to figure to set up :)

Re:I thought us Aussies were taxed weird

[inphorm]

Yes I got a massive tax return (like over $10K) at the end of one financial year, they did an audit and went through everything, but it didn't affect purchases made outside their jurisdiction (so to speak), they also worked out that I had paid too much tax and that they still owed me $250... they weren't particularly happy, I keep good books.

We live fairly close to the border between states. On our side of the border we get a 9c per litre subsidy on petrol, we constantly have people driving 5 minutes to our side of the border so that they can save 9c or more per litre on their fuel. The New South Wales government doesn't have any right to try and claim the tax that they have "avoided" on the fuel by buying it over the border though.

It should be the same for things bought over the internet, the same as if you were to travel to the state and buy the product. That said if I try and avoid paying the GST on an item I sell over the internet then they will probably not be very happy and I'd be in trouble. Even then though, if the income on it is less than $5K per year you can class it as a hobby and if your total income is less than $50K per year you don't have to register to collect GST. That would be a very fine line to walk though.

Just my 2c (actually 2.2c including GST.. which is like .0000000000001c in US dollars)

- paul

http://www.paulpichugin.com.au/

Re:I thought us Aussies were taxed weird

[lelitsch]

Use tax laws are actually pretty common in the US. For example, Illinois has a similar law that requires you to pay sales tax for all purchases made out of state. Strictly speaking, anytime someone from Chicago buys anything in Indianapolis or New York, they would be required to keep the receipt until April 15 of the next year, then fill out a ST44 tax form for all these purchases, and file it with all your receipts. Even if you fill up your car in Gary 20 miles from Chicago, you would strickly speaking have to file a tax return.

This is of course patently insane and absolutely unenforceable. But politics and politicians being what they are, this law never seems to be repealed. On the other hand, it also never gets enforced. Just 4700 Illinois tax returns in 2006 included the use tax for a total of $4 million.--That amounts to 30 cents per citizen. California takes the insanity a bit further by having people moving to the state pay sales tax on the cars they bring to the state. Unfortunately, that's pretty enforceable.

Re:I thought us Aussies were taxed weird

[inphorm]

They do industry random audits, they will pick an industry at random and randomly audit people within that industry. I haven't heard of use tax, but I know they don't tax you for stuff you buy inter-state, well other than whatever tax the seller puts on it. Our tax laws are pretty uniform across the country.. but we only have 21 million people, so it's probably an easier prospect than the 300 million+ you have in the US.

- paul

http://www.paulpichugin.com.au/

Re:I thought us Aussies were taxed weird

[inphorm]

"California takes the insanity a bit further by having people moving to the state pay sales tax on the cars they bring to the state"

You know what? All of a sudden I love living in Australia a whole lot more. That is absolute insanity, under that reasoning they should also charge the unfortunate person moving into California (I'm sure it's a lovely place) tax on everything else they own and bring into the state, it's the next logical step.

The only things you have to pay for if you move interstate in Australia (which happens a lot, everyone is moving to Queensland, over 1700 per week move here on average) are your moving costs. Sure you have to transfer your car registration across, that does require what we call a "blue safety certificate" basically just a road worthy for your car before you register it, you also have to transfer your licence across, but that's about it.

- paul

http://www.paulpichugin.com.au/

Re:I thought us Aussies were taxed weird

[Pinky3]

This isn't just for the internet. If I go to Nevada and buy a new car and bring it back to my home in California, the law says I need to register (license) it in California and pay the use (sales) tax just as if I had bought it in California. The same is true of furniture, a new tv, or any other item I buy out-of-state and bring back to California as a new item.

Purchases from a mail order catalog are treated the same way by the law.

Re:I thought us Aussies were taxed weird

[minion]

I may have an overy simplistic view of things though.

Perhaps, but I think it more likely that our elected leaders have an overly complex view of things.
 
You're both wrong. I think our elected leaders have an overly greedy view of things.

Re:I thought us Aussies were taxed weird

[ScrewMaster]

Yes, and I think that while those trends were in force for a long time, you can look at World War II as an inflection point for big government.

Re:I thought us Aussies were taxed weird

[inphorm]

Well that would be a difference between Australia and the US, because of the fairly uniform tax laws you are going to attract the same amount of tax in just about any state in Australia. There are some exceptions (there always are), but for the most part it doesn't really matter.

Our taxation is worked on a national level, as far as I understand (I'm no accountant or tax law expert, but I do operate 2 of my own businesses). Some taxes like stamp duty on cars and houses go straight to the state. We only have to pay those when there is a transfer of ownership though.

I think Australia may have a simpler tax system, but we also have a lot less people, so it would be easier to govern.

- paul

http://www.paulpichugin.com.au/

Re:I thought us Aussies were taxed weird

[lachlan76]

My understanding is that during/after World War Two, the states agreed to let the Federal Government collect taxes and disburse them to the states. As far as I know, GST isn't any different. Besides, if it was a state matter, we wouldn't have had that "We have no plans to introduce a GST" moment.

Of course, this means that Canberra can make the states do anything by denying them taxes if they don't bend to their will.

Re:I thought us Aussies were taxed weird

[dean.collins]

Being an Australian who now lives in New York I wanted to jump in here.

When we moved to the USA we were stunned with the differences between states, they really do have 50 different countries loosely tied together as states.

EG
several states have no income tax.
in florida if you are sued you can be sued for everything 'except' for your house (explains why so many people in risky business decisions reside in florida (btw nothing to stop you selling your $20million dollar hourse after the court case either).

i think the best example is when I catch a cab in New York it has meters for determining cost etc - catch a ferry into New Jersey and cabs have no meters and price is determined by negotiation -lol

Freaky,

Cheers,
Dean Collins
www.collins.net.pr/blog

Re:I thought us Aussies were taxed weird

[budgenator]

The tax is for the locality that the item is sold or used in. I understand that as an American, I can buy something in Ontario Canada and the retailers will give me a form to fill out and send into the provencial gov and they'll refund me the GST I paid there. Michigan allows or allowed residents to import one vehicle sales tax free (sales tax on vehicles is paid when you first register the vehicle at the sec of state) in a lifetime, my dad m bought a truck in Canada, registered it in Michigan tax-free and then got reimbursted for the Ontario GST!

a better idea

[cashman73]

Congress should instead just focus on implementing a 1% national sales tax on everything (brick-and-mortar stores, internet sales, the whole 9 yards). Don't discriminate. Then, they could wipe out the income tax and seriously downsize the IRS (sorry, can't completely eliminate 'em ... they still need to handle the national sales tax).

More than just the autonomy.

[WindBourne]

Many of the servers reside in CA. In addition, so many sales. As such, CA gets to collect the sales tax on those sales. Once an internet tax comes through, then you can bet that many of the servers will change location basically to asia. Now California loses not just the tax base, but all those lucrative jobs.

Fair Tax

[John.P.Jones]

I direct you to FairTax.org where the dream lives on, although I believe its more like 23% to be revenue neutral.

Re:Fair Tax

[evilviper]

I direct you to FairTax.org where the dream lives on,

Yes, I suppose the extremely wealthy have dreams of pushing even more of the tax burden upon the poorest and middle classes, so I _guess_ calling it a "dream" is a fair characterization.

Re:Fair Tax

[midnighttoadstool]

If the defenders of the poor could get their collective heads out of the beggar's bins perhaps they would recognise that that which benefits the rich might also benefit the poor in the longer term. It's always in the longer term for the rightest, always in the short term for the leftists. And for that the rightist is said to lack compassion.

Re:Fair Tax

[chromatic]

If the defenders of the poor could get their collective heads out of the beggar's bins perhaps they would recognise that that which benefits the rich might also benefit the poor in the longer term.

Or that the poor have very little money to "steal", which is why they're poor.

Re:Fair Tax

[bnenning]

The FairTax is progressive; because of the universal rebate the poor will pay low or negative taxes. Try again.

Re:Fair Tax

[Copid]

The FairTax is progressive; because of the universal rebate the poor will pay low or negative taxes. Try again.

The interesting question is, after accounting for the rebate, is it as progressive as our current income tax is? I strongly doubt it.

Re:Fair Tax

[evilviper]

they would recognise that that which benefits the rich might also benefit the poor in the longer term.

That's called "trickle down" or "voodoo" economics, and it's been completely and throughly disproven many times over.

Re:Fair Tax

[evilviper]

The FairTax is progressive; because of the universal rebate

Bullshit. There is a rebate for the poor, but once you're ONE DOLLAR above the "poor" limit it's as regressive as it can get. The [manager] (making $30,000) at McDonalds is paying the same tax as Bill Gates (making billions upon billions of dollars).

You don't go straight from poor to rich... There's the vast majority of the population in-between, that gets stuck paying for EVERYTHING.

Re:Fair Tax

[midnighttoadstool]

No it isn't. Re-read what I wrote.

Re:Fair Tax

[midnighttoadstool]

I wouldn't disagree with you.

But you aren't addressing what I wrote, you simply presume the rich are nasty and evil. Which many are, but is that a reason to decapitate them all?

Re:Fair Tax

[evilviper]

It says the same thing as it did when I read it the first time.

Re:Fair Tax

[midnighttoadstool]

You have presumed that the "benefits" I mentioned is money/goods that gets trickled down from the rich to the poor. However that is your presumption, and the presumption of many a lefty (the phrase itself is usually used by lefties to mis-characterize rightist economic policy).

I only mentioned "benefits". You have presumed the nature of those benefits. However the benefits I am actually thinking of, and not what you are telling me I am thinking of, are those that encourage the talented to put their talents to economic use, thus benefitting the poor. As for exactly what those benefits are, I left that question open, and you tried to close it. It would be fair to assume that taxes might have something to do with it, but not to presume that upon me, sinc eI may not be thinking of taxes at all, and you can't read my mind even though you seem to think you can.

Re:Fair Tax

[midnighttoadstool]

Hi Again,

Thanks for that 'other' reply. But, er, who are you trying to deceive by you twisty answer? I'm probably the only person here, so the answer looks like: you.

Re:Message from Oregon

[sydbarrett74]

And an income tax isn't? With all of the loopholes, our 'progressive' income tax is actually quite regressive for all but the wealthiest of individuals. FairTax(sm)

Glad I live in Oregon

[linzeal]

When will states realize that they do not have to tax their citizens to death to implement progressive policies and programs? I live 10 minutes from the California border, I spent almost 10k a year more when I lived in California for the same level of living. They will implement a tax, you can bet your sweet zombie jesus they will. It was the only state I have lived in where I was paying ~9% sales tax. Look at the fucking metrics on taxes and where your state stands.

Re:Glad I live in Oregon

[Forbman]

Lake Co. illinois (circa 2000): sales tax varied between 7.8% and 8.2%, depending where you were. Cook County was about 10%, Chicago city limits was 12% (plus, special Chicago income tax on top of state income tax). But, hey, if your alderman kissed Bill Dailey's ass good enough, your streets got plowed in the winter. If he didn't, well... funny how the snow built up on your streets.

Upper midwestern states still rate high in overall tax burden on citizens (IL, WI, IN, OH, MI).

what? Congress implement new taxes?

[President_Camacho]

Congress should instead just focus on implementing a 1% national sales tax on everything ... Then, they could wipe out the income tax and seriously downsize the IRS

Somehow I feel like they'd be more than happy to accomplish Step 1.

Step 2, I'm not so sure about.

Re:what? Congress implement new taxes?

[falconwolf]

Congress should instead just focus on implementing a 1% national sales tax on everything ... Then, they could wipe out the income tax and seriously downsize the IRS

Somehow I feel like they'd be more than happy to accomplish Step 1.

Step 2, I'm not so sure about.

Congress would dump step 2. SO, instead the order needs to be turned around:

Step 1: Abolish income tax.
Step 2: Institute a national sale stax.

Falcon

Re:Message from Oregon

[micktaggart]

Actually a sales tax just transfers wealth from the non-political class to the political classs. And you call yourself a Marxist.

Re:Message from Oregon

[DogDude]

Sales tax is just another way to transfer wealth from the poor to the rich.

How so? That doesn't make any sense to me at all. Sales tax is the great equalizer. The more you spend, the more you pay in tax. Sales tax also encourages people to save and invest. I think you have your logic backwards.

Re:Message from Oregon

[hedgemage]

As an Oregonian, I echo the OP's resistance to sales taxes. I'm also a proponent of keeping the taxing body as close to those taxed as possible. If you have more local control over taxes collected, there is less chance for corruption, inefficiency, and more control over how the money collected is spent. I'm very dubious of adding another layer of government between state and federal that would have power to regulate taxes even if states enter into that layer voluntarily. Taxation needs to have more controll by the general population and less by government, as the population has a vested interest in how their money is spent.

Re:Message from Oregon

[Marxist Hacker 42]

And an income tax isn't? With all of the loopholes, our 'progressive' income tax is actually quite regressive for all but the wealthiest of individuals. FairTax(sm)

Federal yes- Oregon takes great pains to make sure our income tax is extremely progressive. It's the main complaint of business people in this state.

Re:Message from Oregon

[Marxist Hacker 42]

How so? That doesn't make any sense to me at all. Sales tax is the great equalizer. The more you spend, the more you pay in tax. Sales tax also encourages people to save and invest. I think you have your logic backwards.

Savings and investment are things only the rich can afford to do- a tax shelter in a state that lives on sales tax would be getting Howard Hughes Syndrome- living very poor off of your investments. Likewise, in a state like mine that is already cash poor, you don't WANT people to save. You want them to buy stuff and provide money that supports jobs for other people in your state.

California wants to be a State now?

[Speare]

In the last story, California wanted to be a bland featureless part of the Federation letting someone else manage the citizen identification issues. Now in this story, California wants to retain full sovereignty over taxation. I know there's more than one person, and therefore more than one opinion on the whole statehood thing here, but come on, fellas.

why standardize tax rates?

[amigabill]

I'm curious as to why this organization is attempting to get the states to standardize on tax rates. While it might be somewhat convenient in calculating things, it would only be slightly different than having a table of tax rates in the calculation process to send out taxes due to various states. I don't get why that detail would be so important to the people trying to make this happen. Would they rather dictate rates to the states, or would they rather have states "with the program" at whatever rate the state chooses for itself?

Re:why standardize tax rates?

[nvrrobx]

Somewhat convenient doesn't begin to describe it.

If the retailers were expected to charge the local sales tax rates for where the buyer is located, this would require an large amount of data, as states and counties can set their own tax rates. This is especially problematic as the retailers would need to make sure this data stays up to date. It also adds an extra burden to the retailer to submit the monies and forms back to said localities.

This will undoubtedly cause the cost of buying things on the Internet to rise.

This is not good for consumers.

Re:why standardize tax rates?

[nero4wolfe]

The standardization effort is the response of a group of state government to complaints by mail order businesses (not specifically internet businesses) that if they had to pay local taxes for every customer purchase... there would be hundreds, if not thousands, of local tax rates to keep track of (state, county, city, special district, etc.) you couldn't depend on customers to tell you the rate; they may not know; they may be wrong, etc. each mail order business would have to register with potentially hundreds of different taxing authorities; could potentially be audited any any combination of those, etc. would be spending lots of money to send very small checks (maybe just pennies) with accompanying tax return forms to those tax authorities

Etc. Maybe Amazon, etc. would be able to handle it. But a local small startup either couldn't handle it (and hopefully get away with ignoring it), or just give up on mail order sales.

The proposal from those states was to replace (for purposes of mail order sales) all the individual state/county/city/etc. tax rates with a single tax rate, and a single national tax authority, that would take in money from all mail order businesses, and distribute that money to the states, etc.

Re:why standardize tax rates?

[walt-sjc]

The problem is bigger than you realize. It's not just 50 different state taxes, it's local taxes too. Cities in California can add their own sales tax. Also, in some places clothing is taxed, and not in others. The exceptions and special cases for sales taxes nationwide is a total freakin nightmare.

Re:why standardize tax rates?

[mack knife]

mod parent up!

Of all the arguments against Internet sales taxes, complexity in administration is not a valid one. When a citizen in state A buys an item from a company in state Z, there could easily be some table for computing the relevant taxes. This is exactly what computers are for.

Re:why standardize tax rates?

[LWATCDR]

Actually yes it really is. It isn't just a different rate per state but a different rate per town and or county. Some locations even have different rates per type of item. Then you have tax holidays. For example some states have tax free days for school cloths and or hurricane supplies. Then you have the problem of writing checks for 20 cents to cover that mouse pad that you sold in North Dakota.
A small operation could have file 300 different tax reports a month and write 300 checks for 10 cents too ten dollars.
Yes it is dumb and a nightmare to deal with for a small business. Then consider that each of those counties and or towns could audit you at any time....

Re:why standardize tax rates?

[Forbman]

sounds like a simple local service for people to work on. There are companies that keep on top of this, and people/companies pay for the service. Why the BFD about it?

We bitch and moan about the income tax system, but it's a big enough field that there are plethora of individuals, Jackson-Hewitt, H&R Block, TurboTax, et al models for paying someone else to do federal and state income taxes.

Besides, the overhead for companies just gets passed on to the purchaser anyways. It wouldn't take too long for Quicken et al to come up with subscription-based models for keeping up-to-date with local sales tax laws. I would bet that they do this already...

We're also not talking about moving a company's books from simple one-country currency model to international model, where FOREX rates change daily...

It's called a "red herring".

Re:why standardize tax rates?

[LWATCDR]

"Besides, the overhead for companies just gets passed on to the purchaser anyways."
Yep and it will make small companies less competitive with larger companies. Isn't that just peachy. Yes it is DUMB to have to deal with sales tax by zipcode. Frankly it shouldn't even be an issue since states can not tax interstate transactions. That is why the states are trying to do this dumb use tax. Yes they want you to keep track of what you buy and then pay tax on it.

Considering that I have set up an online shopping site for a small company I can tell you that even in state taxes are a total pain to deal with. Why not make it simpler to do business than complex?

Re:Message from Oregon

[Somnus]

If the rich consume more resources, presumably they're paying for such consumption, and so they pay a consumption tax proportionally.

There are at least a few good reasons to have a progressive income tax instead of a consumption tax, but you have not offered a single one.

Re:Message from Oregon

[pilgrim23]

I am also in Oregon and Mister, I don't care if your oposition to the sales tax is due to alien communications or your pet ferret thinks its a bad idea as long as you oposes it!

NINE times we have voted on a sales tax. 9 times it has been voted out... and they STILL keep proposing it.. When will the wastrels we call Gu'bmint figure it out? WE know your game and we want NO PART OF IT HERE!

Re:Message from Oregon

[Marxist Hacker 42]

In Corporatism, the only class that is political is the class that is rich enough to hire lobbyists. Only they have any real power, voting is just a show for the masses between two people picked by the lobbyists.

I HACK Marx, I'm not a communist. Marx wasn't a communist either, strickly speaking. Das Capital and the Manifesto are the same document written from different perspectives. Right now I'm more of a distributist- I prefer small economic communites (of no more than 6000 people at the most, preferably more like 500) that are isolationist and defend their borders against foreign imports with large amounts of force.

Re:Message from Oregon

[Marxist Hacker 42]

Me too- life's just easier when you can find the guy who cheated you, in either government or business, and punch him in the nose if you need to. You must have grown up rural Oregon like I did- few of the Yorkies or Californicators who have moved into the valley in the past 15 years would agree with us.

Don't do it

[inphorm]

In theory I thought that it would be a good thing. They brought in a 10% Sales Tax (called GST, Goods & Services Tax) on everything, with some obvious things taxed more (alcohol, tobacco and fuel). The only thing is that they barely lowered any of the income taxes.

They tax us for everything here in Australia. Anything you buy attracts a 10% GST, I get taxed roughly 40% of my income as well.
here's how our income tax works:
http://www.ato.gov.au/individuals/content.asp?doc= /content/12333.htm&mnu=5053&mfp=001

I think a fairer way would be to just tax people on things they buy. The only way you could really avoid tax (other than becoming a non-profit organisation) is to just save your money and not buy anything. But that won't happen here in Australia.

- paul

http://www.paulpichugin.com.au/

Re:Message from Oregon

[Marxist Hacker 42]

If the rich consume more resources, presumably they're paying for such consumption, and so they pay a consumption tax proportionally.

Doesn't work that way because they hide behind fake persons called Corporations, and Corporations don't have to pay local taxes. Likewise, the corporations can afford to save, unlike regular people.

There are at least a few good reasons to have a progressive income tax instead of a consumption tax, but you have not offered a single one.

Ok, here's one: taxes as a percentage of income- the guy living on the street can't afford to avoid sales tax, but the billionaire living in the mansion only spends 1/100th of what he earns. With corporations being exempt from sales taxes- that leaves more money for savings and spending on out-of-state lobbyists to twist other laws towards corporate control. At this point, it's not even worth voting anymore- the candidates are always chosen by corporate lobbyists ahead of time, and they don't really care who wins, because they've paid off all viable sides already.

So you want to tax the baby boomers twice?

[Ungrounded Lightning]

And while we're at it, let's also overhaul the tax system [linking to the "fair tax" {a national sales tax proposal} wikipedia page].

Federal sales taxes have a number of problems.

The biggest, IMHO, is that switching to them ends up taxing people's savings - especially retirement savings - twice. It was taxed once, at various rates, while it was was being squirreled away. Then it gets taxed again, at confiscatory rates, when it is spent.

Right now is especially nasty, since you've got the entire baby boom just reaching retirement age. They've already been massively soaked by the Social Security pyramid scheme to give bread and circuses to previous generations - amid constant predictions that it would collapse when THEY retired. So they had to build their own retirement nest-eggs on top of it, while paying the ever-climbing interest on the national debt (which first became intractable when their parents ran the Vietnam War on credit, back when the bulk of the boomers were opposing it). Now, as they're about to retire and have to live on what little they were able to save: And people talk about "replacing" the income tax (which they already paid on much of that money) with a similar percentage of sales tax.

That's one big voting block that will oppose such a measure until they die - by which time additional generations will be in a similar situation.

Next: Like all taxes, once imposed it will never go away and will always go up. Sales taxes, being largely hidden, make it much easier for the government to jack the rates. (See the "value added tax" debacle on the other side of the Atlantic pond for details.)

And: Sales taxes zap the lower income earners harder than the upper (since the lower-income people are working hand-to-mouth and need to spend pretty much all of it, while the upper can avoid spending much of it - investing it to make more, moving it to places and situations where the tax can be avoided before spending it, etc.). This scheme attempts to avoid the effect by "rebating" a certain amount of tax to each individual - approximating a flat-tax plus dole scheme. What a massive opportunity for cheating (by creating multiple fake identities to get multiple "rebates".) What a massive excuse for the government to impose a national ID / registration / citizen tracking system.

I could go on...

Re:So you want to tax the baby boomers twice?

[bnenning]

The biggest, IMHO, is that switching to them ends up taxing people's savings - especially retirement savings - twice.

That's true, and it's definitely an issue. But some of the double taxation already exists today; when I buy something with my after-tax income, a significant chunk of the payment goes to corporate taxes and other taxes embedded in the purchase price, which would be eliminated under the FairTax. And if I invest the money instead of immediately spending it I end up paying capital gains taxes, which also goes away with the FairTax.

Next: Like all taxes, once imposed it will never go away and will always go up. Sales taxes, being largely hidden, make it much easier for the government to jack the rates.

IIRC the FairTax calls for the tax to be clearly identified on all receipts. Because everybody pays, it would be harder to sneak in tax increases than with income taxes, where you can pretend that only the "rich" will be affected by an increase.

This scheme attempts to avoid the effect by "rebating" a certain amount of tax to each individual - approximating a flat-tax plus dole scheme. What a massive opportunity for cheating (by creating multiple fake identities to get multiple "rebates".) What a massive excuse for the government to impose a national ID / registration / citizen tracking system.

Well, you can do that today by inventing extra children for more deductions, and that's just one of the countless ways to cheat on income taxes. And I don't see why we'd need a national ID other than the existing SSN.

The FairTax isn't perfect, but compared to the current mess I'd say it's a clear improvement.

Re:So you want to tax the baby boomers twice?

[Ungrounded Lightning]

Well, you can do that today by inventing extra children for more deductions, and that's just one of the countless ways to cheat on income taxes. And I don't see why we'd need a national ID other than the existing SSN.

The point is not whether you'd need any additional ID number.

With the current SSN, while it's not legal to register more than once, there's little incentive to do so, because benefits are largely proportional to pay-in. Somebody who switches identities loses his accumulation in return for anonymity. (Yes there are ways to scam it, but they're complicated and tend to leave other tracks if attempted.) So there isn't a big need to impose SSN as a "Your PAPERS!" national ID system with massive and intrusive enforcement.

With something like the "Fair Tax" proposal having a second ID number automatically means having a second payout of the "rebate" - which is a major chunk of cash. Criminals jump on it right away, putting a major drain on the system. So the government jumps on investigation and enforcement (with the approval and encouragement of much of the taxpaying base, which sees it as a ripoff of themselves).

EVERYBODY gets identified and all the IDs cross-checked. Fingerprints, retina and iris patterns, life history investigation, databases, ... And of course lifelong updates and tracking (to "make sure the dead go off the roles rather than a crook appropriating their dole".)

Big Brother, big time!

Re:Message from Oregon

[SonicSpike]

What kind of tax do you suggest then?

Re:Message from Oregon

[Marxist Hacker 42]

NINE times we have voted on a sales tax. 9 times it has been voted out... and they STILL keep proposing it.. When will the wastrels we call Gu'bmint figure it out? WE know your game and we want NO PART OF IT HERE!

I think they're hoping for the day that foreigners and Californicators outnumber 'Gonies like you and me.

I am also in Oregon and Mister, I don't care if your oposition to the sales tax is due to alien communications or your pet ferret thinks its a bad idea as long as you oposes it!

Six more like you and I'll have hit my limit on friends and defriended all my freaks.

REPEAL PROP13!

[MilesNaismith]

If they want to make more tax money magically appear in California budget, they just need to repeal Proposition 13. This is the ridiculous measure from decades ago, wherein property tax is decided at time of purchase. So if you bought your house in 1979 well you never have to pay higher property taxes. This measure has also been called "Screw The Newcomers!" as anyone buying a house now, will not only get to enjoy the outrageous mortgages, but disproportionately high taxes. Unfortunately, much like Social Security, it's one of those FUNDAMENTALLY FLAWED ideas that nobody wants to do anything about.

Re:REPEAL PROP13!

[konekoniku]

actually, prop13 provides for a 3% property tax increase a year, in order to take inflation into account. the idea behind it is that people who bought their houses decades ago should not be at risk of having them repossessed by the state just because property taxes have risen too high, too fast for them to pay it. i agree though, that it has led to some negative side effects like those you just mentioned.

Re:REPEAL PROP13!

[bradford3454]

Prop 13 wa implemented by the voters of the state in the late 70s to stop the government from increasing taxes on property by 10 to 20% per year just to cover wasteful spending. It placed a reasonable maximum increase of 2% per year unless the property was sold. While it may not have been the best ides possible, it sure beat the heck out of the tax increases we were experiencing back then. It also required a 2/3 vote of the people before any new taxes could be imposed. And yes, the state is is a financial mess, but I don't understand why California can not balance its budget when states like Utah has a less than 1 percent property tax, only a 6% sales tax, tops out its income tax at 7% and still has a state surplus. Maybe we should send gov Schwartzenager to Salt Lake for a week to figure things out.

Re:REPEAL PROP13!

[moreon]

it's one of those FUNDAMENTALLY FLAWED ideas that nobody wants to do anything about. How is it flawed idea to allow people to stay in the homes they had previously bought and planned to spend the rest of their life in (or a good portion of it)?

Without prop 13 a lot of elderly people would be living out on the streets or at the very least forced out of their current home and perhaps out of the state altogether. If you buy a home at a certain value and expect to pay a certain yearly tax for it, is it really fair if that tax goes up 10% a year when you haven't made any changes to your home ??

Re:REPEAL PROP13!

[Doppler00]

Property tax == rent you pay to the government to exist

Otherwise they kick the door down to your house, arrest you, seize your assets, and throw you on the street.

That is all.

Re:REPEAL PROP13!

[Mspangler]

Prop 13 was one of the best ideas CA ever had. I've believed this ever since the assessed valuation on my former house went up $20,000, (one sixth of its value at the time, and with a corresponding increase in property taxes) because I put a new coat of paint on it.

Also you might want to read up on the "view" tax they have come up with in New Hampshire. High property taxes are a great way to force land rich but income people to sell to developers. And there are a lot of people in the countryside that fit the description land rich, income poor.

Re:REPEAL PROP13!

[Copid]

How is it flawed idea to allow people to stay in the homes they had previously bought and planned to spend the rest of their life in (or a good portion of it)?

Your question presumes that the property tax in general is a good idea. I tend to think that taxing the primary property of residence is not a wise policy. However, taxing two houses in the same neighborhood at ridiculously different rates is a worse policy. Likewise, when dealing with skyrocketing housing costs, giving home owners a strong disincentive to sell their homes falls into the category of "insane."

Without prop 13 a lot of elderly people would be living out on the streets or at the very least forced out of their current home and perhaps out of the state altogether. If you buy a home at a certain value and expect to pay a certain yearly tax for it, is it really fair if that tax goes up 10% a year when you haven't made any changes to your home ??

Well, as it stands, Prop 13 is doing a great job of helping to price nearly everybody except the elderly out of home ownership. California has experienced an insane increase in the price of homes over the past generation, and the government is doing everything it can to crush the secondary home market and transfer the tax burden to newcomers and the young. That's a great way to get votes, but it's not a sustainable policy.

My wife and I are young professionals in the SF Bay area and we're simply priced out of the market in most places. We make quite a bit more than our home-owning friends who graduated with us and entered less lucrative careers in other states. We know that we'll be fine because our earning power is at the high end of the scale, but I can't help but worry about the Californian economy when the vast majority of people in an area can only afford to own homes by entering into deal-with-the-devil mortgages and hoping that prices continue to climb. Prop 13 isn't the only cause (but, by the same token, the home price crunch isn't the only problem it causes), but it's definitely a bad idea to throw an unbelievably screwed up market distortion into an already broken--and crucial--market.

Of course, the Prop 13 problem will eventually solve itself when the demographics shift to the point where it hurts more people than it helps. At that point, the beneficiaries of Prop 13 who have turned a blind eye to the problems it caused should hope that the people who repeal it are more considerate when they're the voting majority. Finding an alternative to property taxes altogether (or at least means testing property taxes) seems to be the only sensible way of getting around the problem long term, though.

Re:REPEAL PROP13!

[gujo-odori]

The only fundamental flaw in prop. 13 is that it allows for a reassessment when a property is sold. Even *that* should be prohibited. My monthly taxes on a house I bought in '05 are 1/3 of the mortgage amount, which is ridiculous.

Time for a Prop. 13.5, to roll back the taxes again and prohibit reassessment at transfer (I could maybe go for a 10% boost at transfer, but no more).

As others in this thread have noted, California is enjoying windfall profits from reassessment resulting from the real estate boom of 2004 - 2005, has one of the highest sales taxes in the nation, and the government *still* manages to make a financial mess of things through wasteful spending. They have no right to the amount of money they get in taxes, much less to get more by reassessment, in light of their terrible track record.

And how did this travesty of government come about? Because most Californians continue to foolishly vote Democrat. Vote Libertarian and Republican (Libertarian preferred) and watch problems with government shrink. But if you vote Republican, make sure it's a true conservative like Tom McClintock. Lots of Republicans are just as bad as Democrats, and largely indistinguishable in their policies (The Governator, for instance).

Re:Message from Oregon

[SEAL]

NINE times we have voted on a sales tax. 9 times it has been voted out... and they STILL keep proposing it.. When will the wastrels we call Gu'bmint figure it out? WE know your game and we want NO PART OF IT HERE!

Funny... it's the exact same thing with income tax in WA state. We keep voting it out; legislators keep putting it on the table. (For those not familiar: Oregon and Washington state legislatures are both fairly liberal and love their taxes. OR has a state income tax but no sales tax. WA has the reverse. Citizens of each state are borderline fanatical about keeping it that way.)

While Oregon and Washington state citizens may differ on what kind of tax we prefer, we both know that once a SECOND tax is allowed to creep in, we'll never get rid of it.

Different rationale

[Qwavel]

> California didn't want to give up its autonomy in setting taxes to a coalition of smaller states.

Let's restate that. CA didn't want to give up it's opportunity to score some political points. Autonomy and tax bashing sell extremely well in politics. Voters pay much less attention to issue like the efficiency of a harmonized tax system.

If this is done on a state by state basis it will be an inefficient mess with many more ways to get around paying. The result will be much less revenue for the states (and therefor no opportunities to reduce other taxes) and the honest citizens will get screwed because they will be the only ones paying this tax.

Re:Message from Sir Blames-a-Lot.

[Marxist Hacker 42]

And we come to why no one should ever take financial advice from someone titled "Marxist Hacker 42". I could save and invest and I'm certainly NOT rich. I just had the discipline to do it, instead of playing the "blame game".

I suppose this could be true- but I find living in a cardboard box usually means that employment soon ends. If you were truly *not rich* then you'd be spending all of your money on food, clothing, shelter, water, heat, electricity, and enough tools of the trade to get hired. By definition. If you're earning enough to save and invest, then you're doing better than 45% of American citizens.

True fair tax formula.

[NotQuiteReal]

(Cost of Government) / (Number of Citizens) = the fair tax per citizen.

Anything else is unfair, but necessary simply because not everyone can afford their fair share.

All the shenanigans of modern tax code boils down to the politics of extracting unfair amounts of money from whomever will pay.

Re:True fair tax formula.

[Bob(TM)]

... but only when

fair tax individual citizen income

If that condition is not met, then the cost of government is either too large or disproportionately applied. Together, these alternatives get us politics and a tax code.

Re:True fair tax formula.

[Bob(TM)]

I beg to differ. Equal share has nothing to do with individual income. However, equal share is not the same as fair share.

Suppose you have a city in which 70% of the populous are above the poverty line while the remainder is below (a few are very much below). The city services are understandably geared to the majority which, given the constituency, can be substantial (larger houses = a more responsive fire department, more police, greenways, and many amenities). Many of these services are not required or desired by those with more modest incomes. How is it "fair" to ask them to pay a substantial percentage of their income to cover costs for services they do not benefit from and do not need?

Re:True fair tax formula.

[Ibag]

I think this is an overly simplistic view. If my rich friend invites several people out to an expensive restaurant for his birthday, some people share dishes while others get for themselves, with one person getting something obscenely expensive that nobody else could even afford, what is the fair way to pay the bill? It wouldn't be fair to just split things evenly, because not everybody contributed to the cost equally. It could be argued that the fair way is for everybody to pay for what they ate, but what about the people who can't afford even that, and wouldn't have come unless explicitly asked to? Maybe, since it is his birthday, the rich friend shouldn't have to pay anything? Maybe since he invited the people out, he should have to pay everything? Maybe just the tip should be split evenly? There are dozens of different ways to split the bill, each with it's own rationale, and none of them clearly "the" fair bill payment method.

Taxes are the same way. Not everybody uses government services the same. Many government services (like having a military) are not directly used by the majority of people. Everything needs to be funded* somehow, and charging the people who both use less and make less an amount which is more than their annual salary is not fair by any means. What is the most fair tax plan, then? It doesn't exist! But a system that charges more money to the people who can afford it or who use more government services is a lot more fair than charging a homeless man more money than he has spent in the last decade while charging Bill Gates less than he makes in 5 minutes from bank interest.

*let's not debate whether the budget is just or not.

Re:True fair tax formula.

[Ibag]

You may pay far more than your equal share. That does not mean that you pay far more than your fair share. In this context, the word "fair" is a loaded, and mostly meaningless term. That's the entire point.

Re:True fair tax formula.

[falconwolf]

Many government services (like having a military) are not directly used by the majority of people.

Whether they know or recognize it every US citizen uses the military. Of course, maybe what we need now is what Thomas Jefferson said, the "blood of patriots and tyrants", a new revolution.

Falcon

Re:True fair tax formula.

[Ibag]

The fact that the average person might know or recognize the extent to which they are using the military is why I don't consider it a direct use. But point taken.

Re:Message from Oregon

[walt-sjc]

Savings and investment are things only the rich can afford to do

I think you meant to say that "Savings and investment are things that everyone except the very poor can afford to do." Hell, even freakin Walmart has a 401K plan. It all depends on whether you decide to spend all your cash and buy all the coolest toys, or whether you live frugally and put money away. I sure don't consider myself rich, and I have been saving since high-school, and minimum wage jobs. I just save a heck of a lot more now.

Re:Message from Oregon

[lasthemy]

Perhaps one that taxes the way most wealthy entities (people and businesses) use their money as well: http://www.apttax.com/

Re:Message from Oregon

[siwelwerd]

Taxation is just another way to transfer wealth from Group A to Group B. It is always a scam. I reccomend always avoiding it whenever possible.

Re:Message from Oregon

[The One and Only]

There's a certain floor level of spending that's required to sustain a living. You might talk about exemptions for food and stuff, but unless you exempt every single thing that poorer people buy (thus making your "sales tax" more of a "luxury tax"), it still affects them more than richer people who can and do invest.

No, Income Tax is "Progressive."

[Garrett Fox]

Not true. Although some super-rich people are able to skate out of much of their taxes, the rich in this country pay a vastly disproportionate share of all income taxes. Income tax is a highly "progressive" system, meaning it's designed to hurt the rich the most. Corporate profits are in a sense double-taxed as well.

Having said that: The "FairTax" proposal would be a good idea.

Re:Message from Oregon

[Somnus]

First, corporations do have to pay local and state income taxes, but the amount varies by location and business; this is why corporations shift their headquarters to places like Delaware and South Dakota, which have very low corporate income tax rates. Corporations certainly have to pay state sales taxes on goods purchased for use.

Even if this weren't the case, how would wealthy people hide their income behind a corporation? Any "realized" gains in stocks (i.e., proceeds from sale or dividends) are subject to personal income tax as with salary, as are "fringe benefits" above a certain value that are not used solely for job functions (e.g., company car).

You're correct that the big argument in favor of progressive income taxes w/ standard deductions is that the rich have more "discretionary income" than the poor, since food, rent, health care and education have minimum costs.

Finally, regarding influence peddling through campaign fundraising, I submit that the problem isn't that it takes money to buy speech, but that lawmakers have so much discretion over business regulation and taxation.

Re:Message from Oregon

[the eric conspiracy]

I recommend always avoiding it whenever possible.

Tax avoidance is always a worthy goal, and sales tax is one of the least fair taxes there is for the simple reason that it is a flat tax levied against what are the necessities of life for many people with low incomes.

There are so many large problems with the current hodge-podge of taxes as implemented in this country that I believe that it is an affront to morality.

- Cigarette taxes - rather than treating tobacco as the giant public health problem it is and trying to stamp it out state legislatures treat it as a cash cow.
- Gasoline Tax - Some level of gasoline consumption is a necessity of modern life. More than that is a problem that distorts international relations, requires a large military to support and threatens the environment in many ways. Yet we have a flat tax administered by the states. This is not sound policy.
- Sales tax - the people who can afford it least pay the largest percentage of their income in this tax.
- Real estate tax - used by locales to support their school systems, resulting in great inequities between neighboring towns in the funding they can provide their schools.

And so on, to nausea.

Re:Message from Oregon

[bnenning]

I prefer small economic communites (of no more than 6000 people at the most, preferably more like 500) that are isolationist and defend their borders against foreign imports with large amounts of force.

So like North Korea, but with no economy of scale. Let me know how that works out.

Re:Message from Oregon

[Marxist Hacker 42]

Well, I actually perfer a form of income tax based on multiples of the minimum wage / 10 (with all money below the bracket being tax free- you're only taxed on additional income. Which gives you ten brackets between the poorest and the richest Americans out there. More than enough to preserve motivation, but a low enough maximum wage to minimize the hyperinflationary aspects of allowing people to be excessively rich due to inflation, savings, or investment. At minimum wage, all money you earn between minimum wage and twice minimum wage would be taxed at 10%. At 2mw, all money you earn between 2mw and 3mw is taxed at 20%. Here's the real table:

Range Tax Free Income Taxable rate for taxable income
1mw-2mw 1mw 10%
2mw-3mw 2mw 20%
3mw-4mw 3mw 30%
4mw-5mw 4mw 40%
5mw-6mw 5mw 50%
6mw-7mw 6mw 60%
7mw-8mw 7mw 70%
8mw-9mw 8mw 80%
9mw-10mw 9mw 90%
10mw+ 10mw 100%

I also believe that counties should collect this tax- states should collect taxes from the counties at the same rates, but mw*population. States should owe the feds mw*population rates as well. With a current federal minimum wage rate of $7.50/hr, this means that the first $21,600 you earn per person in your household is tax free (kids included). For a family of two, this means $43,200 is your household minimum wage, etc. This also means that the top single wage is $216,000; the top for married filing jointly is $432,000. Add another minimum wage modifier at your current bracket for each dependants for your household (based on the assumption that you deserve to have as many dependants as you can afford to take care of). If you're single and can't feel rich enough to save and invest at a salary of $216,000 a year, you either need to lobby to change the minimum wage (thus automatically changing the maximum) or seriously consider changing your lifestyle. :-) That's enough money to live a life of luxury, but not enough to control the lives of your fellow citizens (as it should be). Hmm- I wonder what my take home vs taxes would be at 51,000 and a family of three? ooops. I guess I'm too poor to pay taxes under this plan- in fact I'm willing to bet most people would be...for a household of three, my taxes would start at $64,800. If you want to be a billionaire- you still can. Just get yourself a household full of freeloaders- and you'll probably be able to afford to make your house a small city.

Re:Message from Oregon

[maxume]

And anybody that can afford to save or invest is automatically rich right?

In a sales tax state, you can live poor off of any source of income at all to avoid that particular tax.

Spending shifts and transfers wealth. Production creates wealth; doing things that encourage productive activity is generally a better idea than encouraging spending.

Sales Tax vs. Use Tax

[jevvim]

It should be the same for things bought over the internet, the same as if you were to travel to the state and buy the product.

Actually, it is.

No matter where an item is purchased, the purchaser owes a "use tax" payment to the state in which the item is first used. If "sales tax" has been paid on the item, the amount paid in "sales tax" is deducted from "use tax" payment which is due. When you buy an item in your state of residence, the "sales tax" and "use tax" amounts are equal, so while it was collected as a "sales tax" by the merchant, you actually DEDUCTED that amount from your "use tax" liability, resulting in no additional "use tax" payment.

When you buy something from out-of-state, there is generally no "sales tax" collected. When the "use tax" payments come due, there are no "sales tax" payment to deduct, so the entire amount of "use tax" must be paid. If you traveled out-of-state to make a purchase and the "sales tax" paid on that purchase is less than your state's "use tax", then the difference is still due to your state.

Re:Sales Tax vs. Use Tax

[inphorm]

Wow, talk about making things complex for people. That would make most people, technically speaking, tax evaders, something that is illegal in 99.9% of countries in the world.

In Australia you just pay sales tax on something when you buy it, but you don't get taxed for using it. I can go to Melbourne and buy a car or a piece of furniture or whatever and bring it back here to Brisbane and not have to worry about any extra taxes on the product.

I'd hate to have to keep track of everything I bought interstate, I travel frequently for work and buy clothes and electronics while I'm away.

- paul

http://www.paulpichugin.com.au/

Re:Sales Tax vs. Use Tax

[falconwolf]

When you buy something from out-of-state, there is generally no "sales tax" collected.

No matter what state I was in when I bought something I still had to pay sales tax on it. The only tyme anything like this I faced was when I was in Germany, there I had to fill out a form so I didn't have to pay the VAT, Value Added Tax. Most of the tyme I went ahead and paid the tax as it wasn't worth taking the tyme to fill out the forms.

Falcon

Re:Message from Oregon

[naff]

I'm planning to earn all my money up here in WA, then retire and spend it in OR. Please keep rejecting the sales tax!

-naff

Re:Message from Oregon

[Copid]

How so? That doesn't make any sense to me at all. Sales tax is the great equalizer. The more you spend, the more you pay in tax. Sales tax also encourages people to save and invest. I think you have your logic backwards.

In absolute terms, you're right. In relative terms, there's a big difference. A person making millions of dollars typically spends a much smaller fraction of their income than a middle-income wage earner. As a result, the average person pays sales tax (7.75% in my locality) on a much larger percentage of their income. Just running the calculation of a fixed sales tax rate times the percentage of income it's paid on shows very clearly that the poorer you are, the higher your sales tax burden as a percentage of your income. That's why people refer to it as a very regressive tax.

Re:Message from Oregon

[Marxist Hacker 42]

I think you meant to say that "Savings and investment are things that everyone except the very poor can afford to do." Hell, even freakin Walmart has a 401K plan.

401k plans are not investment. 401k plans are the federal government using a tax loophole to funnel money from the poor into brokerage acounts, at which point it gets eaten up between "stock market downturns" and "brokerage fees", with the total zeroing out every 5-10 years. REAL investing doesn't use the con game known as a stock market; instead you give the money to a venture capitalist who invests it in small businesses and inventors who haven't gone public yet. For this, you get pre-market stock. You make your real money when such businesses go public, and you sell at a rather high rate on IPO day to the pyramid scheme that is the stock market, thus getting somebody else to take all the real risk when the business goes bankrupt a few years later from the short-sighted behavior that is encouraged by going public.

Re:Message from Oregon

[Marxist Hacker 42]

I watched my hometown economy go down in flames, when the "Spotted Owl" scandal happened, I don't want to see that here.

Unfortuneately it already happened. I used to live in a town that had logging trucks roll through every day- but the sawmill was based on old-growth sized trees (most were really 80 year old 2nd growth), and spotted owls killed it.

Re:Message from Oregon

[Marxist Hacker 42]

So like North Korea, but with no economy of scale. Let me know how that works out.

A slightly less violent form has worked out for the past 1600 years: Catholic contemplative communities. Many are self-sufficient now, especially since the teachings on environmentalism came along.

Re:Message from Oregon

[Marxist Hacker 42]

Spending shifts and transfers wealth. Production creates wealth; doing things that encourage productive activity is generally a better idea than encouraging spending.

The number one thing that creates production, is having somebody to buy your production. In other words, spending. Destroy your customers, and you destroy any hope of having a business OR wealth above minimum wage.

Re:Message from Oregon

[tkrotchko]

"What kind of tax do you suggest then?"

Lower.

Re:Message from Oregon

[bogjobber]

Are there municipalities in Oregon that have sales tax? I lived there when I was younger (Eastern OR), and none of the places I knew had sales tax. It would seem to make sense, though, because the Portland-area cities especially really love public works and in other states it's very common to fund local projects through slight increases in sales tax. Do they just cover it with property/income taxes?

The real reason this won't work

[deblau]

Most government services are funded through excise (purchase) taxes. Road maintenance is funded through user fees (the gas tax). National parks are funded through user fees (including fishing and camping permits). The patent office is funded through user fees. The national phone & electric services are funded through use taxes on your bill. Etc. The only real reason to tax the Internet is to pay for administering Internet services. But the Internet is largely run by private companies, not the government. What, exactly, would the Internet sales tax pay for? Lining politicians' pockets. There is no need to tax the Internet.

Re:The real reason this won't work

[teebob21]

As this article relates mainly to taxes in the US, and I don't know where the parent is located, I'll grant him the benefit of the doubt.

Firstly, in most local governments (and a large portion of state govts as well), basic services are funded through a combination of property and sales tax, NOT excise tax. Excise taxes in the current form apply to mostly to luxury items, or NON-ESSENTIAL goods and services. In legal terms, yes, sales tax = excise tax, however not in principle. The reason phone services are taxes as excise tax is because prior to 1900, if you had a telephone, it was a luxury.

The national phone grid is not funded by taxes, rather it is funded by the service fess collected by the companies that operate the copper and fiber. The power grid in 49 of 50 states is also privately owned and funded. Only one US state, Nebraska, operates a totally public power system. Even then, only about 14% of its operating budget comes from the tax rolls; the rest is funded through usage-based billing.

Nonetheless, I agree with the spirit of the post. Enacting a internet-based sales tax would only serve to line the coffers of politically controlled interests. I like pork on my plate, but not in the government budget.

Re:The real reason this won't work

[Forbman]

And all of the telco services that make up the Internet and most of its backbones are already taxed by a variety of local, county, state and federal methods, as are UPS, FedEx, DHL etc. on the delivery side, companies pay various business-related taxes, etc., and it is just as easy for companies to pass those costs on to customers ("Shipping & Handling Fees").

Re:taxation = slavery

[AK Marc]

It follows that under our current system, where the average person is taxed in the range of 45% of their income (income tax + payroll deductions + sales tax + property tax + capital gains tax + estate tax), we're 45% enslaved.

Well, I make above average, and I paid about 8% in federal income tax for 2006. Add in all the taxes I pay (including the portions of all companies I own parts of through stock and such, as well as "taxes" I pay that I will get back in old age) and I'm still well below 20%. And yes, I own property (two pieces of property worth over $600,000 total) and I am including all federal, state and local taxes. No, I did not count any taxes paid by my company on my behalf. That is a benefit of working for someone else, and it is something hidden from me, like health insurance, that I did not pay and have no legal claim over. Though I did have some good deductions this year, and I was quite close to getting hit with the AMT that would have caused me to pay significantly more taxes.

I think that for someone right around the top 15% of wage earners, less than 20% total tax is very low. The taxes in the US are low for those with money. I find it funny that as I make more income, I end up paying a smaller percentage in tax. The last time I added it all up, I had to say "under 25%" but that was when I made less money, so I paid more in tax. Our system pays lip service to being mildly progressive, but I've found that it is regressive when you look at the lower-middle class on up. The wealthiest people pay a smaller amount of their wealth than the middle class, by far. That is not progressive.

And 20% enslaved is not enslaved at all. Maybe you should claim that you have 1000 freedoms, and every law takes away one, so we have more than 1000 laws and are thus 100% enslaved. Calling some appropriation of wealth in the defense of that wealth through a contract you are part of (yes, you entered into a social contract by not leaving when you turned 18) slavery is stupid. If you are enslaved here, move. Part of slavery is the inability to leave that condition. A slave couldn't move from Georgia to New York freely. If your taxes are high, go to Texas, with no state income tax. If you can't stand the sales tax, try Alaska, you would have no income tax and no sales tax. If the federal and real estate taxes are too much for your liking, then try another country. You are free to move, and thus 0% enslaved. Owing someone money is not slavery. If that were the case, every slave would have declared bankruptcy and walked off the plantation. You either have no clue about what slavery is, or you are purposefully using an analogy you know to be greatly flawed because the emotional connotations behind it. I'm guessing that you are trying for an emotional response to a non-emotional problem.

Re:Message from Oregon

[maxume]

Gee, I would have gone with hunger.

If you make something people want, they will find you. If you make something they really want, they will move mountains to get to you.

I don't really disagree with you, it doesn't make a whole lot of sense to spend time making stuff that won't have a buyer(it's a waste of a valuable resource, time), but in the world as it is right now, if you make something of value, you can usually find a buyer.

If California did not accept it...

[mkiwi]

There is absolutely no way Texas will ever agree to something similar.

Re:Message from Oregon

[Jeff DeMaagd]

How do "the rich" get the money that is taxed from "the poor" based on your view?

Re:Message from Oregon

[SonicSpike]

But that is NOT equality under the law. Why should one be rewarded or punished by the government based on the amount of money they make? People should be taxed equally. We should not discriminate based upon income.

Re:Message from Oregon

[SonicSpike]

I agree with that. Cut spending, and cut taxes! Vote Libertarian.

I truly hope...

[wizzahd]

I truly hope that this tax gets shot down. They tax our money when we get it, they tax our money when we spend it. The only safe haven from the latter is the 'net, and now they want to tax that too. Give us a break, you bastards!

Re:Message from Oregon

[Mr. Underbridge]

Sales tax is just another way to transfer wealth from the poor to the rich. It is always a scam based on a will for the rich to avoid any responsibility for their greater consumption of natural resources that they would otherwise be paying for. I recommend always avoiding it whenever possible.

Great speech, comrade. Read that in Pravda, did you?

Getting same effect with less downsides

[Ungrounded Lightning]

You can get most of the same effect as the (un)"fair tax" with less downsides (including avoiding the double-tax effect of switching):

  - Stick with an income tax but make it DEAD flat. Collect the full amount as withholding at paycheck time. Everybody pays the same percentage, so there's no need to track I.D.

  - Do the flat "rebate/dole" as a separate (though related) item: One to a customer, regardless of income. Registration is voluntary, as is picking up the payment. Anybody who wishes to trade in the money for anonymity can simply refuse to sign up or to collect his check that year.

This would also eliminate much of the financial incentive for illegal immigration / "undocumented workers" and their cost advantage over citizens and legals under the current "look the other way" system (which amounts to a subsidy to business paid for by the documented/citizen workers.)

  - They'd be paying their taxes regardless of whether the rest of the money was spent locally or sent back to the old country.
  - They couldn't get the "rebate" unless they went through the normal immigration channels.
  - Decriminalizing their working would eliminate an employer's ability to impose unconscionable (but cheaper) working conditions and fire or arrange the deportation of any who complain.
  - With the "rebate" replacing welfare most "services" and "programs" (and their costly bureaucracies) could be eliminated. "Undocumented" dependents would, of course, be ineligible, eliminating the major income "redistribution" from legal workers to the families of illegals.

Re:Getting same effect with less downsides

[Eskarel]

Flat taxes are moronic. Taking 30% from someone who makes 20 grand a year, is very different than taking 30% from someone who makes a quarter of a million dollars a year. The percentage of income stays the same, but the impact does not. That's why we have graduated tax schemes in the first place(the one in the US is needlessly complicated, and can end up with a raise lowering your after tax income instead of raising it, but a flat tax is not the answer to that.

I wouuld also like to know exactly how you believe that a flat tax would do anything at all to illegal aliens(don't even get me started on how the whole illegal alien thing in and of itself is screwing us). They already don't get welfare(you have to have worked full time for a period of time to get that), and they're paid under the table, so they wouldn't pay any more income tax that they already do. Do you really think that a business or individual who is employing illegals(which by the way carries rather stiff penalties) is going to stop paying them cash under the table just because you have a flat tax system? The businesses(not the illegals) are already rorting the system, why would they stop?

Re:Getting same effect with less downsides

[Moofie]

So, um, don't take 30%. The flat tax schemes I've read about are less than half that, and have mechanisms for low-income persons (and families).

Re:Getting same effect with less downsides

[Slashdot Parent]

That's why you have a rebate. That makes it progressive.

Say you make 20/yr and the tax rate is 30% with a rebate of $6k. You pay $6k in taxes and get $6k back so your tax rate is 0%.

Say you make 250k/yr. You pay 75k in taxes and get $6k back, making your tax burden 69k or roughly 28%

See? Progressive.

Re:Message from Oregon

[hedgemage]

I live in a medium-size community who's original roots are in small family farms and orchards. Aside from the local government fixing potholes on Main St. or the local police fighting the growing meth problem (like many rural areas), I understand that much of my tax money goes to state agencies. That's ok with me, as I drive on state highways, and outside city limits, the state police are the law enforcement. In Oregon, I can see where my money is going - healthcare for the poor, maintenance on the infrastructure, and law enforcement.
What I do resent are companies that come into the region and basicly dangle the prospect of jobs to a n economically depressed area in exchange for massive tax breaks. This kind of corporate welfare means that the community supports some out-of-state based industry rather than the industry supporting and adding to the community.

Re:Message from Oregon

[MadUndergrad]

But that is NOT equality. Why should one be rewarded or punished by the store based on what they buy? People should pay the same for every item. We should not charge more for a Ferrari than for toilet paper.

Makes about the same amount of sense.

should there be a sale tax on online purchases?

[falconwolf]

The current system is stupid on the face of it, since now most states only tax commerce for corperations which have a actual physical presence in that state, it encourages companies to not setup any investment in states where they do a high volume of sales.

Are you saying it is stupid that online stores don't have to collect sales tax? If so why should they have to to collect and pay state's sales tax? As far as I'm concerned there sholdn't be any sales tax on online purchases. If what is purchased is a physical item then taxes are already paid for when it's shipped, ie the shipper has to pay tax on fuel which pays for the roads used. Any other tax is just a money grab by the states.

Falcon

Re:should there be a sale tax on online purchases?

[i2amsam]

What I'm saying is that the states are activly discouraging investment from companies, because that might force those companies' customer's to pay state sales tax. (E.g. there was talk back when Amazon never charged any sales tax except CA that if they built a new data center in state X, that residents of X would have to start paying tax on their Amazon purchases, which discouraged Amazon from brining that investment in)
1) All tax is a money grab by the states
2) Everyone wants lower taxes, but the current setup clearly creats a loophole where I'm encouraged to buy out of state because I can get it "tax free".
Right now if I buy a $100 widget in NY I'll pay $7 to the state for that right, or if I buy a $100 widget in TX, I'll probably pay (I don't know) $6 for that right. But if I buy it from woot.com with $5 shipping, I can get it from TX to NY for $105, saving me $2. Does that mean I'm "getting" NY? No, they'll make up their $7 loss with a raise in the Income, Gas, Sales, Luxury, etc. etc. tax, or a decrease in subsidies for farmers, or lowering of state employee raises or whatever. Who wins? I either pay the same amount in total tax burden, or get less services from my state, so it's a wash (remember, I only made $2, NY lost $7) or worse for me. Woot.com got the sale over NYBasedStore Inc, and FedEx / UPS got the $5 shipping. Remember, TNSTAAFL

Re:should there be a sale tax on online purchases?

[falconwolf]

What I'm saying is that the states are activly discouraging investment from companies, because that might force those companies' customer's to pay state sales tax. (E.g. there was talk back when Amazon never charged any sales tax except CA that if they built a new data center in state X, that residents of X would have to start paying tax on their Amazon purchases, which discouraged Amazon from brining that investment in)

Ok, I see what you're saying. If a business has to collect and pay sales tax if it were to open a location in the state then this would discourage them from opening any location i the state.

2) Everyone wants lower taxes, but the current setup clearly creats a loophole where I'm encouraged to buy out of state because I can get it "tax free".

You're not really getting it tax free, not if it has to be shipped. The shipping company has to pay a tax on the fuel they use and this is incorporated into the shipping costs. And sometymes the cost including shipping is more than instate purchases with sales tax would be. I found this out more than once, twice I've bought things from Amazon only to find it later in a store selling for less. Now I look for the prices in several stores before I order from Amazon.

I only made $2, NY lost $7) or worse for me.

Wrong, NY collected the fuel tax from the shipping company, unless the fuel was bought in Jersey. While it isn't $7, to say NY lost all of it is wrong. On the other hand NY's costs are lower and shouldn't need more revenue as the tax on fuel should be enough to pay for the roads. And from what I've heard NY has both high income tax and high sales tax, so it's no wonder people would rather not pay more tax.

Remeber, TNSTAAFL.

Where does a free lunch enter this?

Falcon

Re:should there be a sale tax on online purchases?

[AndersOSU]

Alight, I'm not going to go as far as saying that there shouldn't be a tax on anything bought online, but I'm not content with your explanation either.

Levying any tax discourages investment in that state. Go to any state boarder and you can see dozens of businesses that were build in the pre-internet era right along the state line on the side with the lower tax. (Sometimes when different goods are taxed differently you will see furniture stores on one side and liquor stores on the other) So the fact that sales tax is a disincentive for investment is something states should just have to deal with, either they should be content with a lowered investment, or they should lower taxes and make up for it in volume. Look at Delaware - there is a reason so many of your credit card offers come from Wilmington (extremely favorable tax laws for banking and incorporating).

So this whole argument really strikes me as the states wanting it both ways. Not that that is anything new.

On the otherhand, I'm originally from Ohio, and their sales tax system is just crazy. Sales tax varies county to county, and is almost universally high (6-8+%). Streamlining that mess so that I can pay the same for a widget in Lucas county as it cost in Franklin county would be a big positive. It is also a major reason that Streamlined sales tax will fall on its face. Ohio seems to be totally disinterested in sorting things out (especially with the current governor - although he is on his way out,) which would involve figuring a way to rectify the different counties income.

And then there is the idea of state's rights - which has been waning in popularity since the new deal to be sure, but is still brought up when it involves income streams. Of course this isn't a federal mandate, and the states are more than within their rights to enter into an agreement to harmonize taxes, but it would hamper their ability to make changes to their tax codes when they wanted to - it is after all the reason the summary states for Cali dropping out.

Re:should there be a sale tax on online purchases?

[kickassweb]

This may make sense to you but it will put a LOT of small businesses OUT of business because of the extra bookkeeping and other chores associated with it. Sales tax charged by a state should only be assessed on purchases made within that state. Doing it any other way is madness.

It also doesn't take into account the variations in state sales tax laws. PA doesn't charge tax on clothing, grocery type food (as opposed to restaurant food) and a few other things (prescription drugs, maybe? can't remember.) New York City charges larger tax and it's on every damn thing. Delaware has no sales tax at all. So whatever is done, someone is gonna be a loser here. Most of the burden will fall on the little guy.

Geez, leave this ALONE, it's a CAN OF WORMS.

Re:REPEAL SUCCESS.

[Copid]

One could make the argument that it is fair because the newcomers are benefitting from the effort of those who have came before. Consequently the newcomers can do better than those who starting lower in the effort ladder.

I'll certainly buy into that argument for GDP. I'll heartily thank the generations that came before me for my high standard of living. I don't think that they're to thank for the housing bubble, or that a housing bubble is really something to be thankful for. It's more of an unhealthy artifact of a number of issues.

As for the property inflation, you're going to have that wherever the demand exceedes the supply. Tax or no tax.

Well yes, that's fundamentally true of any market. The question is, why does demand so far outstrip supply? My point is that Prop 13 exacerbates a problem that's already killing us. On one hand, the number of people who are willing to sell their homes and move out of high demand areas is smaller because they'd face a substantial tax burden on their new home, so we're providing a strong disincentive to contribute to the supply on the secondary market in tight markets. Turnover in areas where young professionals would normally find work is low enough that they generally have to live far from their places of employment. Additionally, new developments in areas with older homes tend to need to be extremely high value in order to pay for the services that they consume as the older home owners in the neighborhood aren't pulling the same amount of weight. The net result is a drop in affordable housing across the board.

And of course, all of this ignores the fact that the whole thing is a massive transfer tax based on factors that shouldn't really be taken into account in order for the system to be reasonably efficient. Other than that, it's a dream.

Federal sales taxes have a number of problems.

[falconwolf]

The biggest, IMHO, is that switching to them ends up taxing people's savings - especially retirement savings - twice. It was taxed once, at various rates, while it was was being squirreled away. Then it gets taxed again, at confiscatory rates, when it is spent.

Sales tax does not tax savings, it only taxes spending. When it is spent it changes from savings to spending money. Actually income tax should be abolished and replaced with a national sales tax.

Right now is especially nasty, since you've got the entire baby boom just reaching retirement age. They've already been massively soaked by the Social Security pyramid scheme to give bread and circuses to previous generations - amid constant predictions that it would collapse when THEY retired.

If you want to save Social Security then what you should do is get rid of all those immigration laws. Let all of those "illegal immigrants" to legally work and pay the SS tax. After the Immigration Reform act of 1996 the Social Security Administration issued dummy SSNs to "illegals" and using these SSNs immigrants were able to get jobs and pay income and SS taxes. Using these SSNs $50 billion has been paid by the immigrants using them into SS thus helping to keep it solvent. And because the numbers are dummies, the immigrants using them can never use them to collect Social Security.

So they had to build their own retirement nest-eggs on top of it

Social Security was never meant to replace retirement savings, it was only meant to be a safety net. Everyone should save for retirement. If an 18 year old person saves and invests just $2000 a year for 7 years, until they reach 25, and keep it and all dividents and interest invested by the tyme they are 65 with an ROI, Return On Investment, of 10% per year that $14,000 invested will grow to almost $1,000,000. Ah, the miracle of Compound Interest.

And: Sales taxes zap the lower income earners harder than the upper (since the lower-income people are working hand-to-mouth and need to spend pretty much all of it,...

This is wrong. That I know of not one state has a sales tax on food and some don't tax clothing. If the poor are spending money on more than just clothing, education, food, and shelter then they are keeping themself down. If you're poor, once you have paid for the "essentials" of life you should using the rest of the money to improve your life by seeking an education or investing. If instead you are buying the next iPod then you only have yourself to blame.

Falcon

Re:Federal sales taxes have a number of problems.

[Shadow99_1]

Since I work with low income families all the time I can tell you were the money goes (so we don't need to argue over what they spend their money on). Numbers from largest portion to smallest:

Rent
Utilities (not normally included in rent)
Food
Misc Materials (dishes, utensils, chairs, couches, beds, pillows, etc...)
Clothes
Children's Toys/Amenities
Extras (Cable TV, Internet access, etc)

Rent normally avoids most taxes, however utilities do have fees including phones, water, electricity, and gas. Low income families may or may not qualify for discount programs and it's still one of the largest chunks of money per month.

Depending on program and work status food may or may not be offset somewhat by 'food stamps' or similar programs. However often if the person/family is low income and working, these benefits are reduced to levels insufficient to actually feed a family.

Misc Materials is hard to classify, but they are the things richer families buy on credit. The poor however often cannot do that. Things like a bed for their child can easily cost $500 which is more than they can get with their limited credit and so instead are 'rent to own'. The same goes for anything over $50. I know a family where the mom has dreamed for 6 years of owning a blender (~$30 from Walmart), but hasn't been able to afford it. Do you even think of a blender as an amenity?

From personal experience most states do tax clothing, however their are tons of low cost alternatives as long as you don't require something fancy. In the family from the above example: the mother has had a entry level mail room job at a good company for ages, but she can't afford nice 'business' style clothing and so she has been repeatedly passed over for real jobs she's trained and qualified for because they feel she doesn't project a 'business image' they want. All because she can't afford to buy blouses and pants from even JC Penny's let alone 'Old Navy' or something like that.

The children's needs often come before theirs... Why? They feel guilty they can't provide more for their kids. So instead they spend money they should save to appease their conscious. Companies love them for it. They may not own an iPod (in fact they probably don't), but if Jane or Tyrom wants an iPod for christmas they will try their hardest to get it for them... They want better for their kids than themselves...

After that come extras they feel they need (because they've always had it and everyone they know has it). Cable TV comes in here, and the amount of internet access is growing here as well. Every rental place is more than willing to offer dozens of PC's to 'rent to own' just for them. It's the ghetto version of keeping up with the neighbors.

It's also a cycle that doesn't including ever owning a house, effects even fairly well educated women, and begets more people who will end up in the same cycle unless those better equipped to deal with things help them out. The family I've used above is a mom and 2 kids, the father died after the second child was born and left them no money (no life insurance of note). She was 21 years old then, with no family able to help her out. She has a associates degree in business which should let her get a job as a administrative assistant or other office lady, but no one wants to hire her for that. So she works in a mail room making $7/hr to feed herself and 2 kids.

She also is unlikely to ever get a better paying job and never end the cycle without marrying someone who could support her. However how many men would really want a wife that has 2 kids and is close to 30 years old? How many men that age are still unmarried if they wanted a family...? How many could afford to support her even if they meet criteria 1 & 2? I'll keep the answer short: Not many.

Re:Federal sales taxes have a number of problems.

[Slashdot Parent]

Rent normally avoids most taxes

I wish.

I Am A Landlord, and have many low-income residents. Included in the rent are property taxes, apartment taxes (such as registration fees, etc.), sales taxes that I pay on everything I put in that apartment, the tools and materials I use to keep the apartment in top shape, etc. My income taxes are included. I could probably think of a dozen more. But my point is, when any one of these goes up, rent goes up. I don't have to worry about my competition, because the tax went up for them too, so they have to raise.

Misc Materials is hard to classify, but they are the things richer families buy on credit. The poor however often cannot do that. Things like a bed for their child can easily cost $500 which is more than they can get with their limited credit and so instead are 'rent to own'.

Reread that and decide if it makes sense. Any of it.

First of all, $500 for a child's bed? I have never spent $500 on any bed. Not for myself, and not for a child. This is poor decision-making. Get a crib or bed from a friend. Buy one at goodwill or salvation army. Put a mattress on the floor. Make a bed (it's not hard. My wife made her bed that she used throughout college.). Do any number of creative things to get a bed for under $500.00.

One thing you'll notice in my response, is I don't believe that "rich" or "poor" is in someone's bank account. I don't believe it can be found on someone's W-2. You can't see it in a person's home, and you can't see it in someone's clothes. Rich or poor is only a state of mind.

Just as a point of fact (not bragging or showing off), my family is more or less well-off. We don't have a 7-figure household income or anything like that, but we get by ok. As a result, most of our peers are also well-offish. A friend of the family just had a kid and they paid nothing for the crib (borrowed from a friend). Could they afford $500 for a crib, not on credit (just write a check)? Of course they could. They could lose $500 and never even realize it. My wife and I never paid for a crib, either. So why are people with fewer resources spending $500 on a crib? Heck, you can get a brand-new bottom of the line crib (but still meeting all safety standards, of course) for under $100.

Oh, and another thing. That rent 2 own $500 crib is costing a lot more than $500. But you already knew that. Again. Poor decision-making.

"Rich families buy stuff on credit, poor families cannot, so they rent to own". Renting to own is buying on credit, just worse terms.

I know a family where the mom has dreamed for 6 years of owning a blender (~$30 from Walmart), but hasn't been able to afford it. Do you even think of a blender as an amenity?

I've had residents ask for things like that before. Each year I give an anniversary gift and I've given ceiling fans, microwaves, etc. I give a choice and residents select a gift. Maybe she should ask her landlord. ("You know, I've always wanted a blender. If someone moves out and leaves one behind, instead of throwing it out, do you think I could have it?") If a resident showed good thinking skills like that, I'd prolly just order her one on amazon and have it shipped to her. But they never do.

In the family from the above example: the mother has had a entry level mail room job at a good company for ages, but she can't afford nice 'business' style clothing and so she has been repeatedly passed over for real jobs

I've bought suits for under $10 at ragstock. Try salvation army, goodwill, churches, etc. Nobody is going to check the label at a job interview.

Her problem isn't that she can't get a better job. Her problem is that she isn't even trying. Remember, rich is a state of mind.

if Jane or Tyrom wants an iPod for christmas they will try their hardest to get it for them... They want better for their kids than themse

Clueless much?

[alexhmit01]

I know it's all a conspiracy, and the people that actually put money in the stock market over the past few decades and live off of their investments are a myth. I also know that only rich people have money, and they have everything, which is why the people in the big houses and fancy cars are often leveraged to the hilt, and their neighbors with smaller homes and cars aren't seen as wealthy, but may or may not have more wealth.

However, your understanding of the VC market is illusionary. The real rate of return from VC funds, compared to the risk assumed, is no higher than the stock market as a whole. There is no "alpha" to VC investing.

Do people get rich, absolutely. VC investing is much more of a crap shoot, there is MUCH more variance in the returns than in an S&P 500 fund, so some people get fabulously wealthy, and others lose the investment. Who makes money in VC land? Generally the partners of the VC fund, because they raise a series of funds, and give the investors a preferential rate of return, after which, the VC's tae 20%. Let's assume that it is double in 5 years, well, if the VC firm has 10 funds, it's very likely that in 5 years, the OVERALL performance of their investments is up 50%-60%, but to get there, some funds have probably collapsed, but if one increased by 10x (had a Google or similar super star), well they may not collect on the double, put 20% of 10x the fund, if the fund was $250m... that's a $500m management fee for the VCs.

Pension Funds and other institutional investors use hedge funds, venture funds, LBO funds, stock funds, overseas funds, and bond funds to diversify. In some years different asset classes do better, and institutional investors aim for consistency, hence the package of funds. It's true that when the early Internet companies went public, the VCs that backed them (and their investors) made tremendous amounts of money. But after that the system was flooded by money chasing hot returns, and the returns dropped.

The overall market may go up 10% per year, but an investor who rode out the 70s stagflation made nothing, while someone that started investing right have the 1987 crash made out like a bandit. Markets are rarely steady, and generally drift for stretches then shoot up for stretches, just the way markets work.

Re:Clueless much?

[Marxist Hacker 42]

The overall market may go up 10% per year, but an investor who rode out the 70s stagflation made nothing, while someone that started investing right have the 1987 crash made out like a bandit. Markets are rarely steady, and generally drift for stretches then shoot up for stretches, just the way markets work.

And that to me is the problem with markets. BTW, somebody who got a 401k in 1998 does NOT have that 401k now, either, it was as bad or worse than the 1970s. Crashes can and do wipe out any brokerage account with less than $5000 in it, all the time. I will NEVER trust the stock market again. It's better to keep your money under the mattress than trust a market that crashes every few years.

Re:Clueless much?

[alexhmit01]

No risk, no reward. Expected return = Beta * (Market) + Alpha

Higher risk firms have a higher rate of return required (Beta). Better firms have Alpha, but as the market becomes efficient, Alpha goes to zero... eventually out performing companies are priced higher and Alpha goes away.

People get wiped out all the time. However, most people with 401(k)s consistently put money in. Over time, the market moves up... Sure, the weekly contributions in Sept '87 were wiped out in October, but the ones in Nov '87 funded their retirement.

Someone who entered in 1998 is sitting here in 2007 right where they started, that sucks, but they will probably make money in the future, and any money that they put in in 2000, 2001, 2002, 2003, or 2004 has done well. Sure, they are BACK to 1998 on the pre-1998 dollars, but guess what, the 1992 dollars are still worth more than they were in 1992, even if 1999 - 2006 were a wash.

Alex

Re:Clueless much?

[Marxist Hacker 42]

True believers in the market are eternal optimists, no matter how many times they lose. Those of us who lost everything, simply have lost faith in market based economics, and will never allow the con artists to take advantage of us again.

The numbers are all faked anyway- there's no reality to any of it. It's all a myth, a fake just to keep the bankers and brokers in luxury producing nothing significant.

Re:Clueless much?

[cayenne8]

"And that to me is the problem with markets. BTW, somebody who got a 401k in 1998 does NOT have that 401k now, either, it was as bad or worse than the 1970s. Crashes can and do wipe out any brokerage account with less than $5000 in it, all the time. I will NEVER trust the stock market again. It's better to keep your money under the mattress than trust a market that crashes every few years."

I dunno where your 401K was...but, mine, started last in '98...has been purring along making about 19% since then....

Re:Clueless much?

[Marxist Hacker 42]

It was widely invested with different Fidelity funds- a more misnamed brokerage house I can't imagine. Mine hit zero balance in 2002, after seeing more than half it's value disappear in taxes, brokerage fees, and falling stock prices throughout 2001, putting it below that magic $5000 limit below which it's worthless to invest at all.

Re:Clueless much?

[walt-sjc]

A 401K does not require all your investments to be stocks. In fact, if you stick all your money in stocks, you are a total idiot. That said, go look at yahoo finance, and pick the max chart for any major indicator (Nasdaq, Dow, S&P 500). If you don't stick all your money in one company and spread it around, LONG TERM you will do just fine. Two and three years is not long term. When you are looking at retirement, look at the 20 year numbers. If you attempt to micromanage your 401K and are constantly buying and selling individual stocks, you are going to fuck yourself bad. If you DO want to do that, only do it with a small chunk (10%.)

Re:Message from Oregon

[SonicSpike]

What are you talking about? In a free-market system you have a CHOICE of where you can spend your money. With taxation you DON'T have a choice. Equal under the law means that everyone is treated equally, or at least proportionally.

A sales tax on non-essential items (food/medical/etc) at the same rate for everyone would be "equal". Taxing someone 10% while taxing others 20% is NOT equality under the law. In fact it's discrimination.

supporting local businesses

[falconwolf]

Check out any new gadget article on Slashdot. Nobody talks about buying it locally.

I have and do talk about buying locally. I have stated at least a few tymes that I am a member of two local coops that support both organic and local producers, Lakewinds Coop, and The Wedge Coop.

Falcon

supporting local businesses

[falconwolf]

For example, it's pretty difficult for most people to buy an Apple computer locally (defined as 45 minutes away or less), or BluRay recorder for your PC, or anything from Bose, or a Palm LifeDrive, Canon DSLR or pretty much anything else that is new and expensive.

I'm not sure where you are but I know of at least two locally owned and operated businesses that sale Macs, one of them is 10 maybe 15 minutes walk for me. And they specialize in Macs. Now a Canon DSLR, like the EOS 1Ds Mark II, or maybe the 5D might be a little harder though there's a store I know that probably will order one. Then again I haven't even seen either one of these stocked in national stores. Now what I am having trouble finding in local stores is a DL DVD RW drive I can install in my Linux box. I may end up ordering one.

Falcon

How can they enforce that?

[falconwolf]

"The state also requires its residents to report purchases made over the Internet and pay taxes on them"

States can't enforce it, it's all voluntary.

Falcon

Re:Message from Taxachusetts.

[Copid]

I don't think the issue is as simple as that. Yes percentagewise the rich spend less of their income, than the poor. However the poor spend their income on low cost, small profit goods, and services. The rich spend their income on higher-cost, greater profit-margin goods and services. A greater amount is passed down the economic chain. Also rich people's money can have a greater influence on the total system, than the poor. Investments, charitable donations, etc. As for taxes, generally in the US one spends more as one rises in the tax brackets. This also includes taxes that the poor don't pay. e.g. luxury taxes.

All of that is true to a greater or lesser extent, but it doesn't really have any bearing on a very important reason why progressive taxation is a good idea: Progressive taxes reflect the diminishing marginal utility of money. Wealthier people can pay out a larger percentage of their income while feeling the same "pain." Your first dollar is worth a lot more to you than your ten millionth dollar, and a sensible tax structure reflects that.

Do not piss us off

[n0w0rries]

You guys are missing the big picture... We're California. If we were by ourselves we'd have the 6th, 7th, or 10th largest economy in the world (depending on who you ask--says wikipedia). We'd have the TERMINATOR for president. Our army would be undefeatable in any 70-80 degree dry climate.

Re:Message from Oregon

[suky]

The only place that does is Ashland, which has a "prepared food" tax that's basically a sales tax on restaurant/pre-cooked food.

Re:Message from Oregon

[Forbman]

Except for the "corporate kicker"...

People in Oregon don't know what taxes are, relatively speaking (yes, I'm an Oregon immigrant). They haven't lived in Illinois, Wisconsin, Ohio, Indiana, Michigan...

Re:Message from Oregon

[Forbman]

Well, the state Legislature can't seem to raise most taxes (plenty of people are quick to add initiatives to roll back the taxes as soon as they spring up). Oddity a few years ago was Multnomah Co., which voted itself a special schools levy.

Now the big thing in Oregon is to sell roads to private companies. I'm one to argue that the money being spent on widening about 6 miles of I-205 maybe could have been spent instead on widening OR99 through Dundee (from SR18-99 junction to east side of Dundee), even taking out the federal monies. At the very least, it would get rid of that stupid gadfly's purple house that still has yet to be developed into his planned coffee stand, it could be done in about 7 months, and would settle the deal. Enough already. But there are too many people who stand to make some serious coin if they build the bypass...

Almost as wacky as the leaders of Washougal, WA, and their manifest lunacy trying to create this little sleepy redneck outback into a "destination" portal for the north shore of the Columbia River Gorge, and fighting the WADOT from making SR14 a 4-lane divided hwy through Washougal. Having driven through downtown Washougal, the delusions of grandeur are apparant (i.e., there is nothing in "downtown" Washougal).

Re:Message from Oregon

[Forbman]

Are you so sure about that? Blaming the spotted owl is easy. Most of the big logs get exported, raw. They were getting exported in the 80's (as well as running out), much like they are today. Y'all should be blaming the logging companies (the very ones shutting down your mills who export lots of raw logs, not dimensional lumber while importing as much softwood lumber products from British Columbia as they can), feller-buncher and other highly automated lumber mill manufacturers instead.

At best the big-log sawmills might have lasted 5 or 10 more years longer than they eventually did.

Me, personally, I have no problem with Georgia, Louisiana, South Carolina, etc trying to take over the pulp wood market. All those quick-growing pine trees hide the states, which is a good thing in general. I'm not too concerned with my toilet paper being locally manufactured or not.

I have lived more or less in the Pac NW since 1980... as a kid I was amazed seeing logging trucks with one- or two-log loads. That's how big old-growth douglas fir trees could be, but later on grew to understand the need to keep the rest of them around). Logging those things is a one-timer. No one is going to let a replanted stand of trees go another 1000 years to let the trees grow that big.

Really, the sad thing for me was the elimination of all the "tepee burners", especially in Puget Sound, burning up cedar sawdust... And now we have MDF instead.

Re:Message from Oregon

[Forbman]

Yes. Having lived in states where you pay BOTH sales and income tax (for me, that's IL and CA), nothing sucks more (especially in a state like IL that had pretty high property taxes, toll roads, etc).

But there is a reason why I chose OR over WA... I'll take state income tax over sales tax.

"companion" laws on taxes

[ebvwfbw]

Most if not all states that levy state sales taxes also have what is called a companion law so that if you buy something out of state, you still owe taxes if the amount paid is less than you would have in your state. For example Virginia has a 4.5% sales tax, maryland has a 5% sales tax. When you register your car in maryland, they collect that .5%. maryland has also been known to watch for furniture vans on the road and if they stop at a maryland house, they inspect and issue taxes. I got nailed for a 60 year old plane I bought in Virginia and brought back to maryland at the full 5%. Even though the amount of taxes paid on that plane so far is more than tripple what it is worth now. Seems that after a while it should be illegal to continue to collect sales taxes on something. Then it has to be registered with the feds and sometimes with the state.

I think it is amazing that California didn't go with it. Usually it is very hard for politicians to turn down money. I expected them to take it and figure they will iron it out later. Thanks California... for now. That's the spirit, keep on fighting. Teach those smaller states!

Who Wins?

[brunes69]

UPS / FedEX, that's who.

When you do the math, if all you're trying to do by buying online is saving the tax, you'll be in for a rude surprise with today's shipping charges.

The reason I buy online has nothing to do with tax. The shipping always cancels out any tax savings. The reason is because local retailers in most parts of North America still haven't woken up to the global economy... why in god's name would should I pay $50 for widget X, when it is selling for $30 in NY with $10 shipping? Tax is next to irrelevant - it's globalization that drives internet commerce.

Wherever in the world that item is cheapest, it is available to *anyone* at that price now.

Sales Tax

[JerryLs]

You would think that someone, somewhere would understand that we the people need something we can call our own,
without the government having to extract a tax on it. Please, just let us imagine we can surf without revenue.
We already pay dearly.

As in Beer

[wytcld]

Vermont has just signed on to this project. The biggest effect on most of us: Beer now has sales tax; that's part of this interstate standard. What does this accomplish? You cannot legally ship anything with alcohol into Vermont to a retail customer (unlike some states where you can buy wine that way), and none of Vermont's small brewers are trying to mail order beer out of Vermont. Would you want your beer delivered by UPS?

Those of us on the eastern side of Vermont already drive to New Hampshire to buy other stuff that's taxed at home. Now, since this new law to protect the taxability of future internet beer sales, we're getting our beer there too. Smart move, legislature.

IAmNotATaxLawyer

[abb3w]

Does that mean I'm "getting" NY? No, they'll make up their $7 loss with a raise in the Income, Gas, Sales, Luxury, etc. etc. tax, or a decrease in subsidies for farmers, or lowering of state employee raises or whatever.

And if you get audited by the NY Board of Revenue (or whatever they call their state-level IRS), you'll have to pay the NY sales tax, plus penalties for tax evasion.

IAmNotALawyer, and I have not specifically read the NY sales tax laws. I don't know of anyone in NY who's been bitten by this; I do know someone who lived in CT who was. (He has since moved to Florida.) Many states write their tax code as a "sales or use tax". This means, if you live in Foo county in the State of BAR with a tax rate of X%, and go buy something in Baz county in the state of QUX that only collects Y% tax (with X>Y) for use back in Foo county, you owe the remaining X-Y percent and are supposed to declare it on your state Income tax. In the case of buying things over the Internet, the collected Y usually is "0%", because of previous rulings.

Or, in short: the internet seller has at present no legal obligation to collect sales tax... but this is not because the buyer has no legal obligation to pay sales taxes on such purchases.

Confusion over this (along with basic greed) has led to massive consumer evasion of sales taxes, which in turn has cut state sales tax revenues. As I understand it, the scheme is to simplify the complex mosaic of sales tax regulations to something trivial enough to quickly computer code, getting around one of the main reasons the SCOTUS struck down the requirement on sellers in the first place.

Re:Message from Oregon

[Marxist Hacker 42]

If you make something people want, they will find you. If you make something they really want, they will move mountains to get to you.

And if they can't afford it due to the sales tax after they get to you, they still can't have it. :-)

I don't really disagree with you, it doesn't make a whole lot of sense to spend time making stuff that won't have a buyer(it's a waste of a valuable resource, time), but in the world as it is right now, if you make something of value, you can usually find a buyer.

That won't continue to be so if you excessively tax the buyers is my point. If all the wealth is concentrated in a few families at the top, and they can afford jet planes to go to other continents to buy what you make cheaper, and nobody else can afford what you make, what will you do?

Re:Message from Oregon

[Marxist Hacker 42]

People should be taxed equally. We should not discriminate based upon income.

Then we shouldn't have discrimination in income- the motivation factor disappears, and nobody does anything.

But that is NOT equality under the law.

We don't have equality under the law now- voting means nothing as long as people are able to pay to deny the will of the voters.

Why should one be rewarded or punished by the government based on the amount of money they make?

To preserve democracy. As long as special interests can afford lobbyists, we have no democracy. The key is obviously to destroy the earning potential of special interests.

Re:Message from Oregon

[Marxist Hacker 42]

Great speech, comrade. Read that in Pravda, did you?

Actually, no. It was originally written by the VAT tax guy who back in the 1920s sometime led Oregon's *first* anti-sales-tax brigade. Oddly enough- his VAT sticker tax would be almost as bad, had it passed. Instead, he did- back in 1997, about 10 years after I first met him at the Oregon State Fair.

Re:Message from Oregon

[Marxist Hacker 42]

Well, that and the wierdness of corporate taxes in this state. Minimum Income Tax for corporations: $10, and it hasn't changed since 1939. And the kicker checks, which I have to wonder what companies based in New York do with in the accounting department (who ever heard of the state GIVING BACK money to out-of-state corporations? They must think we're crazy.)

Re:Message from Oregon

[Marxist Hacker 42]

Are you so sure about that? Blaming the spotted owl is easy. Most of the big logs get exported, raw. They were getting exported in the 80's (as well as running out), much like they are today

I'm sure that when Silverton's sawmill could no longer get Detroit Valley Second Growth logs, it shut down. The rest? Well, maybe it was just coincidental that the Spotted Owl lawsuits took several thousand acres out of production just at the same time, but I kind of doubt it.

Y'all should be blaming the logging companies (the very ones shutting down your mills who export lots of raw logs, not dimensional lumber while importing as much softwood lumber products from British Columbia as they can), feller-buncher and other highly automated lumber mill manufacturers instead.

That is certainly a factor KEEPING them shut down- the evolution of the industry once logging in the area was closed or turned to more "sustainable" techniques. But the lawsuits were the "straw that broke the camel's back".

At best the big-log sawmills might have lasted 5 or 10 more years longer than they eventually did.

Well, they had a set-in-place 80 year roatation that was destroyed by the lawsuits- I'd say they could have gone on for several decades yet to come if the industry hadn't been forced in a different direction. But yes, automation would have hit in there, reducing employment anyway.

Me, personally, I have no problem with Georgia, Louisiana, South Carolina, etc trying to take over the pulp wood market. All those quick-growing pine trees hide the states, which is a good thing in general. I'm not too concerned with my toilet paper being locally manufactured or not.

I'm concerned with all extra shipping markets, but for pulp? Those markets were untouched because they were private Eastern Oregon tree farms, not a part of the old growth forests of the Willamette and the Coast.

I have lived more or less in the Pac NW since 1980... as a kid I was amazed seeing logging trucks with one- or two-log loads. That's how big old-growth douglas fir trees could be, but later on grew to understand the need to keep the rest of them around). Logging those things is a one-timer. No one is going to let a replanted stand of trees go another 1000 years to let the trees grow that big.

I've been here since 1970- all of my life. I knew some of the really old timers just retired from the logging industry- those one or two log loads were SECOND GROWTH, thanks to the replanting done after logging in the 1890s. The very oldest tree in the state is the 270 year old Klatchy Creek Giant- now after this winter's storms it's likely the 2nd tallest Sitka Spruce in the world at 200 feet. There is NO WAY that tree would ever be logged- even today no logging truck could hold it's truck whole. When it falls (and it will fall, the same storm killed it) they're going to have to cut through it just to reopen the trail in that state park. Today, of course, logging companies in Oregon since 1972 have had to replant three trees for every tree cut- and in the Willamette Valley, that was on 2nd growth 80 year cycle rotation lands before the Spotted Owl contraversy. In fact, asside from a few heritage trees here and there, there are no trees in Oregon more than 110 years old- EVERY stand has been cut at least once.

Really, the sad thing for me was the elimination of all the "tepee burners", especially in Puget Sound, burning up cedar sawdust... And now we have MDF instead.

Yep, the plywood you have to wrap in plastic as you're building to keep the rain from disintegrating it.

Re:Message from Oregon

[budgenator]

The reason this will not work is because the states have tax laws that are too varied for any central authority to be able to administer it, so the obvious solution would be to shift the burden of tax calculation to the states! If Michigan or California wants to collect Sales/use taxes from out of state vendors, they should set up tax servers so my website can send them a SKU and a delivery address and they can calculate the taxes, let my site know by doing a CURL thing and pay me for the admin expense and/or Credit card discount involved. Vendors are getting screwed now anyways, they collect the sales tax, but the transaction houses are paying at a discount of 30 cents plus 1 to 2.5% of the total, the difference can add up over a year.

Re:Message from Oregon

[Marxist Hacker 42]

By a severe lowering of income taxes. Government budgets are the original zero-sum game. The whole idea of sales tax is to shift the taxation burden from the extreme upper class to the poor.

Re:Message from Oregon

[Marxist Hacker 42]

First, corporations do have to pay local and state income taxes, but the amount varies by location and business; this is why corporations shift their headquarters to places like Delaware and South Dakota, which have very low corporate income tax rates.

If you like having corporate headquarters which have a tendency to use resources and produce nothing, then yes, replacing your income tax with a sales tax is a very good idea.

Corporations certainly have to pay state sales taxes on goods purchased for use.

They can just avoid it by importing goods from Oregon.

Even if this weren't the case, how would wealthy people hide their income behind a corporation? Any "realized" gains in stocks (i.e., proceeds from sale or dividends) are subject to personal income tax as with salary, as are "fringe benefits" above a certain value that are not used solely for job functions (e.g., company car).

Not since the new Capital Gains tax cut went into effect.

You're correct that the big argument in favor of progressive income taxes w/ standard deductions is that the rich have more "discretionary income" than the poor, since food, rent, health care and education have minimum costs.

Yep, that's a big one- percentage of total income paid in taxes. Of course, if we had a truly progressive income tax with a maximum wage rate, that would not be a problem.

Finally, regarding influence peddling through campaign fundraising, I submit that the problem isn't that it takes money to buy speech, but that lawmakers have so much discretion over business regulation and taxation.

Yeah, sure, because paying for a 8000 man private army is so much cheaper than buying off 550 legislators. They're going to manipulate the regulation and taxation laws one way or the other- if not by subverting democracy, then with force.

Re:Message from Oregon

[Marxist Hacker 42]

For good reason! But yes, I agree on the Corporate Kicker. It's even worse when most corporations that do business in Oregon aren't owned by 'Gonies.

Re:Message from Oregon

[SonicSpike]

Perhaps I was misunderstood. We should all be taxed at an equal rate; in other words we should be taxed proportionally.

And you're right, we don't have democracy. We never have! The United States is a constitutional republic in which the representatives are democratically elected. The idea that the US is somehow a democracy is a misnomer.

Unbelievable reverse of opinion since Clinton

[heroine]

In the Clinton age, internet tax hikes were unthinkable. Now suddenly we have extremely positive articles about internet taxation. Opinions have changed dramatically, proving with enough effort, persistence, and money, people can be made to think anything.

Re:Message from Oregon

[Marxist Hacker 42]

Perhaps I was misunderstood. We should all be taxed at an equal rate; in other words we should be taxed proportionally.

I completely disagree, for you're wrong about the next bit:

The United States is a constitutional republic in which the representatives are democratically elected. The idea that the US is somehow a democracy is a misnomer.

We're not even that, and haven't been since the 1840s. We are a constitutional republic where the constitution is continually broken and the "representatives" are chosen directly by the rich for fake elections to make you think we've still got democratic elections. The vote means nothing- the politicians who have a big enough campaign chest to get elected have already been bribed and bought to the point that they are just shills for big corporations and their stockholders. THAT is why I want to limit the ability to earn- to give American citizens back the level of democracy YOU think they already have. We don't have a choice in voting- and won't until the most a person can earn is 10mw. Taxing at an equal rate really means that the person on the bottom doesn't have enough money left to survive, and the person at the top has enough money to pay bribes.

Re:Message from Oregon

[Somnus]

If you like having corporate headquarters which have a tendency to use resources and produce nothing, then yes, replacing your income tax with a sales tax is a very good idea.

It's an annoying but cost-effective way to reduce the corporate tax bill, with the real executive work being done at production sites.

They can just avoid it by importing goods from Oregon.

Most states charge a use tax on good imported for use. Individuals don't get audited for them, but businesses certainly do, since they keep books on all business transactions.

Not since the new Capital Gains tax cut went into effect.

The tax cut is small for higher income brackets, big for lower income brackets, and will sunset in 2010 anyway. Read about it here. It's true, some trust fund babies living off of dividends have benefited for a short period, but it's also been a help to many middle-class retirees.

Yep, that's a big one- percentage of total income paid in taxes. Of course, if we had a truly progressive income tax with a maximum wage rate, that would not be a problem.

With a maximum wage, how would you incentivize performance in the most lucrative industries? Hell, even in academia, people are making ~$500k based on performance.

Yeah, sure, because paying for a 8000 man private army is so much cheaper than buying off 550 legislators. They're going to manipulate the regulation and taxation laws one way or the other- if not by subverting democracy, then with force.

Corporations are a legal construct, and so force would engender anarchy. A recent World Bank study shows convincingly that rule of law and an educated populace are the principal factors in prosperity, for all strata. Over decades it's in the interest of the upper/chattering class to promote these values.

Re:Message from Oregon

[Marxist Hacker 42]

It's an annoying but cost-effective way to reduce the corporate tax bill, with the real executive work being done at production sites.

Why not just spin off the production sites as local corporations on a franchise model? That way, you don't need a corporate headquarters at all, and local people get the pride of buying products from a local company.

Most states charge a use tax on good imported for use. Individuals don't get audited for them, but businesses certainly do, since they keep books on all business transactions.

You'd think that'd be against the current interpretation of the interstate commerce clause. They certainly use it against individuals enough.

The tax cut is small for higher income brackets, big for lower income brackets, and will sunset in 2010 anyway. Read about it here. It's true, some trust fund babies living off of dividends have benefited for a short period, but it's also been a help to many middle-class retirees.

Yeah, like any corporate puppet in Congress will let that sunset in 2010.

With a maximum wage, how would you incentivize performance in the most lucrative industries? Hell, even in academia, people are making ~$500k based on performance.

You just give people smaller raises slower. Same incentive, less increment. And anybody who pays a professor $500k is somebody who needs to lose their position on the university board- what a WASTE of trustee money.

Corporations are a legal construct, and so force would engender anarchy. A recent World Bank study shows convincingly that rule of law and an educated populace are the principal factors in prosperity, for all strata. Over decades it's in the interest of the upper/chattering class to promote these values.

Who in the upper class cares about DECADES? All they seem to care about is the 4 month bottom line. And in any anarchy- like a free market, most of which are chaotic anarchies- the rich man has no problem enforcing rule of law on the peons below him. Just kill off any who don't agree with you.

Re:Message from Oregon

[Somnus]

Well, at least you aren't cynical :)

Internet sales tax

[griffi8518]

To Whom It May Concern, I'm right in there with California. I don't want there to be an internet sales tax either,thank you. Sincerely, EJ Griffith

Internet consumption tax

[celero]

The Streamlined Sales Tax and its supporting organization is truly a bizzar thing. www.streamlinedsalestax.org

Who is behind this? State Governments and large multinational retailers (wal-mart)

Why? States are interested in any new source of money. The primary states that are pushing this tax are net importing states. Only 15 relatively small states have passed fully joined this cartel. They see their citizens buying things online and want the sales tax. These states are unwilling to collect use taxes directly from their citizens, so they want to force businesses to collect the tax for them. PROBLEM: It's illegal.. Thats right boys and girls, the Supreme Court has ruled, in Quill v ND that states dont have any authority to force an out-of-state retailer to collect its sales tax, if the business doesnt have a physical presence in the state. Ultimately these states need congressional approval.

Business: It cost money, and a lot of it to comply with all the various sales tax laws throughout the U.S. The same candy bar that is taxable in one Wal-Mart store isnt in another just accross the state border or city limit line. Additionally, each state crawls up a business' backside regularly with costly audits. Simply making uniform the definitions of products accross all jurisdictions and limiting the number of sales tax audits would save the business community millions. BUT WAIT, THERE's MORE: The way the SST is set up now, these states hungry for new sales tax revenue on internet purchase have offered to PAY the wal-marts of the world to collect these new taxes.

At the end of the day, ask yourself these questions: After my next internet transaction, who has more of my money, me or the government. I hate to quote Dick Armey, but he had a good one where the SST is concerned. he called it: "Streamlining a path to your Wallet"

Re:Message from Oregon

[SonicSpike]

We (as a People) shouldn't want democracy. Outright pure democracy is a bad thing. In a pure democracy your neighbors can vote to divide up your land. There is no rule of law in a democracy.

One thing that needs to happen is that the US Senators should be chosen from their respective legislators again instead of a popular vote. The States need to have more of a say in the Federal government.

Besides, limiting the amount of income that people can earn is unconstitutional.

Re:Message from Oregon

[MadUndergrad]

You also have a choice of salary, if you're lucky. Don't want to pay 30% income tax? Quit lawyering and start flipping burgers. That $200,000/year will go to $20,000/year and your income taxes will go way down. You choose to earn the big bucks, then you can pay the taxes that come with them. If it's not worth it to you then take a lower paying job.

Re:Message from Oregon

[Marxist Hacker 42]

We (as a People) shouldn't want democracy.

If you don't have a democracy, how do you know what the majority wants?

Outright pure democracy is a bad thing. In a pure democracy your neighbors can vote to divide up your land.

If you're that hated, you shouldn't be living there anyway.

There is no rule of law in a democracy.

Actually, there IS rule of law in a democracy- the mob makes the law and individuals are ruled by the law. If you can conform to the majority, you'll be just fine. If you can't conform, maybe you'd be happier in a monarchy.

One thing that needs to happen is that the US Senators should be chosen from their respective legislators again instead of a popular vote. The States need to have more of a say in the Federal government.

The legislators are not the State. The citizens are the state.

Besides, limiting the amount of income that people can earn is unconstitutional.

Where in the constitution does it say you have the right to enslave your neighbors?

Re:Message from Oregon

[SonicSpike]

What the majority wants isn't always a good thing. What if the majority wants to ban porn? Or ban Linux? Or ban black people? Or Mexicans? Have a Constitutional Republic protects the rights of all, not just the majority.

And in a democracy if your neighbors vote to take your land doesn't mean they hate you, it might just mean they are greedy. Ever here about the eminent domain abuses?

I hate to tell ya but the United States was founded on the ideals of every individual having the right to life, liberty, and the pursuit of happiness. Forcing someone to "conform" is contradictory to those ideals and is also unconstitutional.

The original setup of the Federal government was such that it was bicameral (two houses). An upper house (senate) and lower house (house of reps). The Senate was a place for the States to be represented, the house was the place for the People to be represented. Perhaps you might not be aware, but each individual state in the US is its own sovereign nation. In other words, if all of the states got together tomorrow to have another Constitutional convention they could abolish the Federal government in a matter of 24 hours if desired.

And you are talking about enslaving your neighbors? What is your point? It doesn't make sense.

Re:Message from Oregon

[Marxist Hacker 42]

What the majority wants isn't always a good thing. What if the majority wants to ban porn?

Good idea, I'd say. Promotes good, life giving heterosexual marriage.

Or ban Linux?

It's hard to ban something that isn't even a real product yet.

Or ban black people? Or Mexicans?

Those two are easier. If we had banned the first in 1776, we wouldn't have had the problems in 1840. If we had banned the second in 1876 (by finishing the job) we wouldn't have the problem with illegal immigrants now because they all would have been American Citizens in the biggest state in North America.

And in a democracy if your neighbors vote to take your land doesn't mean they hate you, it might just mean they are greedy.

Why would anybody bother to be greedy, if they already had all they need? Greed is just brain damage- it only affects the few, not the many.

Ever here about the eminent domain abuses?

Yes- and I also heard about the MAJORITY protests afterward- since eminent domain ABUSE suggests a minority special interest, like a single developer.

I hate to tell ya but the United States was founded on the ideals of every individual having the right to life, liberty, and the pursuit of happiness.

I see nothing about unlimited wealth and destruction of other people's rights there.

Forcing someone to "conform" is contradictory to those ideals and is also unconstitutional.

Actually, it's in those ideals. Conform to right to life- be heterosexual and anti-abortion. Conform to right to liberty- don't mess with your neighbor and don't let your greed take away his property. Conform to pursuit to happiness- happiness is in conforming.

The original setup of the Federal government was such that it was bicameral (two houses). An upper house (senate) and lower house (house of reps). The Senate was a place for the States to be represented, the house was the place for the People to be represented.

Once again, if you have a functional democracy, there's no difference between People and State. The Original Founding Fathers were a bunch of Monarchists.

Perhaps you might not be aware, but each individual state in the US is its own sovereign nation. In other words, if all of the states got together tomorrow to have another Constitutional convention they could abolish the Federal government in a matter of 24 hours if desired.

I not only was aware of that- I vote for it every time it comes up, because as I see it, we haven't had a Constitutional Republic since 1840.

And you are talking about enslaving your neighbors? What is your point? It doesn't make sense.

Wealth is FINITE, not INFINITE- therefore it's all a zero sum game. The only way to gain wealth is to impoverish your neighbor- take resources that rightly belong to him.

Re:Message from Oregon

[SonicSpike]

I think I'm going to stop feeding the ignorant troll now.

low income

[falconwolf]

I know a family where the mom has dreamed for 6 years of owning a blender (~$30 from Walmart), but hasn't been able to afford it. Do you even think of a blender as an amenity?

I don't think of a blender as something I need or will use, so I don't have one. And though I hope the family you know can improve their circumstances, I knew and worked with some homeless people. While between jobs and in college I worked some through day labor pools, where you go in early in the morning and sign up to work then wait until they pick you to go somewhere to work. While working there, you could say I was an oddball there as I was in college, I met and worked with some who literally slept on the streets, under bridges, or or in some woods.

the mother has had a entry level mail room job at a good company for ages, but she can't afford nice 'business' style clothing and so she has been repeatedly passed over for real jobs she's trained and qualified for because they feel she doesn't project a 'business image' they want. All because she can't afford to buy blouses and pants from even JC Penny's let alone 'Old Navy' or something like that.

I don't know if she has looked into it but there might be some non profit organization, or thrift shop, she may be able to get good even if used cloths from. A roommate I had years ago went to a Catholic social services org where he got help with clothing and food even though he wasn't Catholic himself.

She also is unlikely to ever get a better paying job and never end the cycle without marrying someone who could support her. However how many men would really want a wife that has 2 kids and is close to 30 years old? How many men that age are still unmarried if they wanted a family...? How many could afford to support her even if they meet criteria 1 & 2? I'll keep the answer short: Not many.

"how many men would really want a wife that has 2 kids and is close to 30 years old?" It may seem a nitpick but I have a problem with the word "want". Change the question to "who would marry a 30 year old with two children", heck change it to a 45 year old and I might very well marry her. If I loved her and I felt ready for it I would ask. Then again since growing up I've wanted four children, two that were mine and two that I'd adopted. However I'm getting to the point where I'd rather just adopt instead. That is if I had the financial capability, which I don't have. More than 10 years ago I had an accident it would of been better if I had died from, according to the docs it's a "miracle" I lived, and I've been on disability since. I hate it, not working, but I have no idea what type of work I can do with my injury. I'm not directly physically handicapped, instead I am a survivor of a TBI, Traumatic Brain Injury. However I don't believe I could do much physical labor, and my memory is bad. And as for being or getting married, I'm over 40 and though I've never been married I do want to get married and have a family. However some medical research I've heard of is that the older the parents are when they have a child the more likely it is the child may have health problems. I have two problems with this, one is I think it's be irresponsible to bring a child who won't be healthy into the world if you, well I, know this. And two I don't know if I'd even be able to take care of a family.

Falcon

Re:low income

[Shadow99_1]

Well as with all examples, they are never perfect.

The blender is something that a large number of people own and isn't terribly expensive. I could have made it a microwave or any number of other things, but those are all more expensive.

No one offers 'real' (aka in fashion business attire) clothes locally. Or if so they've managed to hide themselves so well no one would no they offer such services. I work with my local CAG (Community Action Committee) which acts as a clearing house for such services and they no of no one offering such a thing. Plenty offer basic clothing, but not the sort of stuff that someone trying to become a administrative assistant would be expected to wear.

You (& myself) are exceptions... A lot of guys (especially around her age) write her off as being to 'needy'. Not for money per se, but in requiring a lot of things a single woman her age or younger without kids wouldn't. She is hardly unique in examples I could give, but she is a good example of the types I see. Normally they aren't considered 'desirable' in the community they are from for any of several reasons and are thwarted in leaving that same community.

Re:Message from Oregon

[Marxist Hacker 42]

Isn't it amazing at how an ignorant troll can get an "Insightfull" for this cynical critical analysis of broadband price in the United States, yet you disagree with the obvious solution to such greed- a maximum earnings limit.

States with Sales Tax on Food

[Slashdot Parent]

That I know of not one state has a sales tax on food

States with Sales Tax on Food:

Alabama, Arkansas, Georgia, Hawaii, Idaho, Illinois, Kansas, Louisiana, Mississippi, Missouri, North Carolina, Oklahoma, South Carolina, South Dakota, Tennessee, Utah, Virginia, West Virginia, Wyoming.

Care to open your mouth again?

Didn't think so.

Re:States with Sales Tax on Food

[falconwolf]

States with Sales Tax on Food:

Alabama, Arkansas, Georgia, Hawaii, Idaho, Illinois, Kansas, Louisiana, Mississippi, Missouri, North Carolina, Oklahoma, South Carolina, South Dakota, Tennessee, Utah, Virginia, West Virginia, Wyoming.

Thanks, I didn't know that some states have sales tax on food per se. I'm glad I don't live in any of those states above. I know some states had it on prepared foods, like in restaurants, but not grocery. I totally disagree with taxing food bought in a grocery store that is later cooked at home. Also though at least some state do tax them I also don't like sales tax on clothing. Those items a person "needs" to live, clothing; food; and shelter; shouldn't be taxed. Oh and medicine!

Falcon

Re:States with Sales Tax on Food

[Slashdot Parent]

I think sales tax on food and clothing is truly awful, and I do live in one of the above states. :(

And yes, many states tax prescription medication, and even more states tax nonprescription medication. Ouch.