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Will Amazon Get a Visit From the Tax Man?
theodp writes to tell us that according to the Wall Street Journal, Amazon.com has raised a few eyebrows with their strategy to avoid paying sales tax in eight states where they have warehouses or distribution centers. "As an online retailer, Amazon can avoid collecting sales tax in states where it has no presence, at least until Congress changes the law. But in states where a company has actual facilities, such as warehouses, states tax officials can require the company to collect sales tax. Despite operating hundreds of thousands of square feet of distribution facilities in the eight states, Amazon says it doesn't have any presence in them. The company argues that it doesn't operate the plants, its wholly owned subsidiaries do."
I disagree, they should be paying property tax for these services (which I am sure they are). They should only be paying sales tax on retail sales not on products that are merely being distributed and since this is a warehouse not a storefront, state sales tax is not the answer.
Really though, sales tax is always a regressive tax and I don't think it is a great idea in general for that reason...
Bottles.
Let's see a state with an Amazon distribution center tax it, and then let's see Amazon.com close it down. That which happened to Ohio and Michigan, will happen again.
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It's actually progressive, since necessities are usually excluded from the sales tax. Thus people with more expended disposable income are taxed more.
There's no particular reason to compare the amount paid via sales tax to a person's income; compare it to the amount he consumes. It's not regressive. It's perfectly flat.
Of course there is a reason, and it is that a person with a lot of income spends a lower percentage of that income on consumption.
The result: a sales tax is regressive.
So.. you're saying the rich should pay more? Why exactly?
With a sales tax, the rich tend to buy more non-necessities, and more expensive ones like cars and homes. So they naturally would pay more in sales tax than a lower income family.
True, they would only pay a smaller percent of their income if they tend to save and invest that income. Rather than spend it. But how many rich people do you know who don't go out and buy fancy cars and big homes?
Progressive taxes (income tax which increases in percent as the principal increases) are nonsense. Why should someone who works harder, innovates, starts their own business, or pursues a higher-wage career be penalized? It is not 'unfair' that some people have higher salaries than others.
Buy from Microcenter.com and if they have a store in your state, they will charge you sales tax and shipping - even though there warehouse that they ship from is in Ohio, they charged my GA sales tax.
Why are you upset about that? If they hadn't charged you sales tax, then you would have been required to file use tax, which would have cost you the same amount and taken you a few extra minutes, whereas Microcenter saved you all the effort.
Let me guess, you don't file use tax and so you will single out and punish companies who don't aid you in your attempt to evade taxes.
If you are not allowed to question your government then the government has answered your question.
Define Rich.
That's easy. Someone who has a lot more money than you.
Eagles may soar, but weasels don't get sucked into jet engines.
It's a strawman (and not a clever or subtle one) to claim that advocating a progressive tax means that one thinks different salary levels are "unfair".
One can advocate a progressive tax based on the Rawlsian argument, namely, why should someone who is naturally smarter or stronger benefit over someone who, through no fault of their own, was born crippled. These arguments beg for a tax on natural gifts. Unfortunately, income tax is the best stand-in.
Alternatively, one can use two economics arguemnts. The first is that the rich consume more goods then the poor. They have more possessions that require protecting, make more use of air traffic controllers, recieve higher unemployment beenfits, etc. etc.
The second is that law and order are worth more to the rich. Someone $300,000 dollars in debt, about to lose their house, car and all worldly possesions, might value a continuing rule of law at a very low, or even negative rate. They have little to lose, and can probably gain if they are limited to whatever they can hold in their hand. The rich on the otherhand have vacation homes, yahcts, etc. They have a lot more to lose.
Progressive taxes also result in higher salaries for those at the bottom, as the allure of the future raise is lessened, making it cheaper to give people at the bottom each a smaller raise. That, combined with the lower tax burden, increase the freedom to attempt to become an entrepuner. Progressive taxes increase the number of people who will attempt it, while only hurting those who succeed.
There's a practical argument. If you insist that everyone pay the same amount, people would quickly become bankrupt with their 1/300,000,000th of the national budget. The rich have to pay more taxes because, well, the top 1% owns 98% of the country.
There is also a question of original aquisition. The original obtainment of any good is never fair. The first farmer gets the best land. The strongest evil warlord stole the diamond mine. The money that you get paid with was never entirely yours, because the person who paid you never entirely owned it, etc. etc. back to when it was originally aquired. Hence, redistribution attempts to correct that in an ongoing fashion.
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