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Wisconsin Passes Digital Download Tax
McGruber writes with news that the State of Wisconsin has passed legislation to extend sales tax to digital downloads. The new law will go into effect on October 1st. Estimates suggest that the 5% tax on "downloads of music, games, books, ring tones and other video entertainment" will bring in $6.7 million annually. "[Wisconsin Governor Jim Doyle] has been fighting for the change for years. He and other state officials say it is a matter of fairness: Internet vendors shouldn't have a tax-exempt advantage over Wisconsin's brick-and-mortar retail stores." Similar legislation has been proposed in North Carolina, and we've previously discussed New York's foray into taxing sales made online in addition to downloaded purchases.
I believe Wisconsin internet vendors can only tax Wisconsin buyers. Out-of-state taxation would basically be taxation without representation, which is what previous legal precedents have disallowed... that is, until the federal government decides to pass a law enabling states to cooperate on internet sales taxation.
And just wait until the federal government gets involved directly. For only pennies on the dollar, an eBay sales tax could fund Social Security and Medicare for through the baby boom crunch. (Or could it...?)
interesting... let's say someone downloads something from the pirate bay. There's no sales tax involved, and that's not "fair".
There are two solutions:
Do you even lift?
These aren't the 'roids you're looking for.
That's the problem with "business" taxes that aren't on property values. Michigan's reeling too, because the auto makers can basically pick and choose how much "profit" to have in a year. You and I are taxed on Income, with few deductions for "capital" investments (hint YOU can't deduct rent or car payments.. your company can). We can't choose to not make income. That's why PEOPLE have to pay the taxes. California has Hollywood and Silicon Valley.. they should generally be rolling in cash... both industries that are highly profitable.. .and very good at not actually showing that profit on the bottom line where the state gets a cut. That's why you don't ever let businesses off the property taxes.. it's the only thing that's hard to filch out of.
"Taxes are what is really annoying. I claim zero dependents with only 35,000 a year salary and i still owe NY state taxes."
That's about right. You have to spend money on tax-deductible things to get past the "standard" exemption. Your company accountant isn't pulling enough from your paycheck figuring you have something to claim that will get you a little back. When my wife and I bought our house the mortgage interest wasn't high enough to kick us past the standard deduction... you have to have a lot of tax-effecting bills (mortgage interest, business expenses like training, school, or travel, etc) to get over that "standard" deduction hump.
Let's put is this way: taxes are never fair.
Or, they're always fair, but "fair" doesn't mean "you get back exactly the amount of services that your taxes paid for".
I mean, as you say, one could argue that a tax on brick and mortar stores pays for such things as roads to get to the stores, police to watch the store, etc. But it's not like a $1000 piece of jewelry (for which you pay $80 in sales tax) costs that much more to transport and guard than a $10 package of steaks (for which you pay 80 cents in sales tax). And it's not like the money is earmarked to be spent only on things that directly apply to retail stores.
The fairness in taxes, or lack thereof, comes from how they're applied to people, not how the money is spent. Sales tax is arguably fair because everyone pays the same rate per purchased item. Income tax is arguably fair because the burden is highest for those who have the most disposable income. (Of course, these arguments are conflicting: if you like income tax because it's progressive, you ought to dislike sales tax because it's regressive.)
Robert Heinlein said it best, "The power to tax, once conceded, has no limits; it contains until it destroys." ("The Moon Is A Harsh Mistress", 1966)
Hmm... judging from the fact that countries with far higher tax rates than ours are still around, facilitating higher standards of living rather than becoming dystopian hellholes of oppression, it looks like Heinlein was wrong.
Visual IRC: Fast. Powerful. Free.
YOU ARE SUPPOSED TO BE PAYING TAXES ON ON-LINE PURCHASES. THEY'RE CALLED USE TAXES.
http://en.wikipedia.org/wiki/Use_tax [wikipedia.org]
Here is the deal:
- If you don't pay them, your state can send you nasty grams in the mail saying "We see you have filed zero dollars in use taxes, please pay them." These notices are fairly common. IOW, the state tax departments are saying "Look, we aren't stupid, you're buying stuff on line, pay your tax". Now who here wants to keep records of the crap they buy JUST so you can pay use tax at the end of the year?
- With a mandated sales tax, it means YOU don't have to keep records for paying end-of-year taxes. They just add it on to your purchase like any other state(if your state has a sales tax). I don't know about you but I'd much rather pay the friggin tax up front then worry about the stupid EOY paperwork.
One thing to make life easier for consumers AND businesses: only allow one tax rate per state. example: Wisconsin has a moronic tax system where every county can charge differing rates something up to like 1/2% on top of whatever the state charges. Some counties are 5%, some are 5.5%, or like 5.25%. So to make it easier on on-line retailers, just legislate single tax rates per state for those that have a sales tax. End this moronic madness now.