Internet Sales Tax Gets a New Champion

Archness1 writes with an excerpt from Declan McCullagh's piece at CNET about the recently renewed push for a sales tax on Internet purchases, led by Massachusetts Representative Bill Delahunt. "At the moment, Americans who shop over the Internet from out-of-state vendors usually aren't required to pay sales taxes. Californians buying books from Amazon.com or cameras from Manhattan's B&H Photo, for example, won't be required to cough up the sales taxes that they would if shopping at a local mall." That could all change, though.

Comments

And then there are New Yorkers

[Machupo]

Who always get screwed by our over-taxing, yet somehow insolvent, state government.

Legalize pot...

[pinkj]

Legalize pot and tax that instead please.

Taxation is the power to destroy - Marshall, John

[unixarcade]

Yeah another hurdle for business where the cost will be given to the consumer as it always is. That's what I find to be most funny. Give the business's any sort of tax and the tax goes upon the heads of the people. So in the end the consumer is taxed the most. Which means the majority is taxed the most. Would it not be better to let the people decide where their money should go. So that maybe people could have money to make a hobby a business or even to have a hobby.

Taxation is the power to destroy which means they constantly want to destroy us the people, on capital hill.

Stop killing us with theft and extortion.

Everyone

[fyngyrz]

Instead of allowing them to constantly add new programs and new spending, how about electing some folks on the platform to reduce spending until you have a balanced budget (which means you won't need any new taxes), and then reduce spending, which means you'll need less taxes.

Make some noise. At the state level, you might even get something done.

One of the biggest problems our government has is an inability to revisit past decisions; bad law, bad spending, obsolete law, obsolete spending. All they ever do is add; that's a key reason why taxes go up, freedoms narrow, and law-books only get heavier.

Re:Everyone

[NotBornYesterday]

What, exactly, are you talking about? Is all your "news" from the op-ed pages?

Gov. Deval Patrick yesterday refused to rule out a tax hike [emphasis mine] next year - handing his opposition a hot campaign issue - as he signed a pared-back $27.6 billion budget and looked ahead to an estimated $2 billion deficit [emphasis mine] with a nearly dry rainy day fund.

Those are the facts, no matter how you slice them. They have drained our state's savings, continue to overspend, and continue to raise taxes. Mind you, this is the same guy who got into office and immediately started spending money on himself (office, car, etc) way beyond what was appropriate. He (and his liberal tax-and-spend buddies in the MA houses of congress) has spent us to ruin.

• The sales tax hike from a year ago raised taxes on existing items, and started taxing items that had been exempt before. It has directly hurt MA businesses by sending sales across the border.
• This is the same state politicians who have kept increasing tolls on the Mass Pike despite the fact that the road has been paid off for years, because our corrupt pols can't bring themselves to give up a cash cow.
• The "temporary" income tax hike is still in place, years after we were promised it would be gone. They even refused to act on the referendum the voters passed to reduce it to where it by all rights ought to be.

Massachusetts has been abused by its corrupt politicians for decades. It is STILL Taxachusetts. Pick on Glenn Beck after you get your facts straight.

Seems fair

[TorKlingberg]

As nice as it is with cheap stuff, I cannot come up with a good argument why internet sales should be except from tax while in-store sales still pay. Internet stores can compete just fine on actual efficiency improvements over physical stores.

depends on what state you live in

[bl8n8r]

To collect that revenue, some states require you to report sales tax due on out-of-state purchases when you file your income tax every year. Most people try to play ignorant when it's pointed out to them however.

Re:I have never understood this.

[Mortaegus]

The reason why this is stupid is because the tax would be going to the wrong place!

If I purchase something online, then the tax, if I am required to pay it, should go to that small city in Pennsylvania where their warehouse is located, not my local municipal. That's the place I am buying from, anyhow. The internet is like a magical doorway that teleports me into their store, all the way across the country, where I browse around and make a purchase. Then the internet teleports me back and I wait for them to ship it.

If the states wanted to argue that they needed to tax goods coming in from other states that would be one thing, but that isn't within their constitutional powers. Interstate commerce is governed by the federal level of government. Which makes the whole argument even more ridiculous.

How the government will FIST you

[tepples]

If the states wanted to argue that they needed to tax goods coming in from other states that would be one thing, but that isn't within their constitutional powers. Interstate commerce is governed by the federal level of government.

Then the federal government has the power to tax interstate business-to-consumer mail order and use that to fund currently unfunded mandates. I probably won't read the bill until it hits the House floor, but a federal interstate sales tax sounds like one way to implement what the article discusses.

It's just to to make things "fair".

[PieterBr]

Bookstore owners have to pay sales tax. Amazon doesn't have to. End result: said store owner goes bankrupt because Amazon has a competitive advantage because of tax differences. More unemployment and less tax-income for the state because of less sales-tax income AND because less people have a job. So actually this means a smaller amount of people have to cough up the taxes the state needs, while if you have regional businesses, all that is smeared out over more people. This is just plugging a loophole.

Re:It's just to to make things "fair".

[Lehk228]

bullshit, amazon has to ship as well, and whether the cost is integrated into the product with "free" shipping (no such thing) or if it's an added cost. they usually balance out so online orders pay as much in shipping as they save in taxes.

Taxation is necessary for government to run.

[elucido]

You have to pay for cops, for firefighters, for medics, in some cases for healthcare and schools.

The problems start when one state has to pay for another state. Why would people in one state want to help people who aren't even their neighbors, who don't contribute to their state at all, who don't benefit their state in any direct way?

Libertarian socialism is the answer. Tax locally. Govern locally. Fight wars federally. Build infrastructure federally. Maximize individual liberty.

How about letting the feds be the war machine?

[elucido]

And stop using the feds for social programs? We have state governments for social programs. The state reps who actually are our neighbors have a better idea of what is best for our state because they actually live in our state rather than in Washington DC like the majority of Senators and establishment types.

Healthcare is not something the feds are qualified to handle. The feds cannot even handle public education. That being said if the feds would like to fund it without any expectation of control that is something I can support as a libertarian, but then you have the problem of how much money to give to each state which causes problems in itself.

Ideally the local governments should handle the social programs if we are to have any form of socialism at all. The federal and global government should focus on winning wars and building infrastructure.

Re:As long as it's not a federal tax.

[elucido]

What we don't want is federally controlled healthcare.

We? Speak for yourself. I do want federally controlled healthcare. I want private sector medical insurance to be illegal, and medical care to be universal just as education is universal, only more so. I am delighted to see we've taken a few baby steps in that direction. A society that doesn't put the health and education of its citizens first is, in my opinion, wrongheaded - and I'm trying to be polite about it.

Thats because you credulously have faith in the federal authorities. Do you not realize that they don't really care about citizens in your state because they don't spend time living among them? So you get exactly the level of representation that you deserve when you put all your faith into the establishment responsible for fighting wars. The talk about death panels might be conspiracy theory but it's the same government that tested viruses on it's own military. It's the same government that gets paranoid and sees everybody and everything as a potential enemy.

Do you really want the Pentagon, DOD, and individuals like this to be in control of healthcare? Do you really believe this could be better than having your neighbor who you grew up with in control? Do you know any of these people in the Pentagon to have faith in them like this?

You can put the health and education of your citizens first by focusing on reforming your local government to put this first. You probably have no influence on the federal government which may or may not be influenced by foreigners. So you could end up with federal agendas which promote ignorance and sickness because. Not everything coming from the federal government is free from corruption because the federal government operates on the international level and other nations can easily influence politicians in DC, perhaps even more easily than you can.

Use tax

[SteelZ]

One thing the article doesn't mention and most people here don't seem to understand is many states that have a sales tax also levy a "use tax" on out of state purchases. In my state you're supposed to report your out of state purchases with your income tax form but almost nobody does it.

Re:I have never understood this.

[dgatwood]

I mind it a lot for several reasons:

• The purpose of sales tax is to pay the cost of police, fire, and other local services that a business requires. A business in another state does not have those requirements, gains no benefits from the taxes it pays to the city where I live, and thus should not pay those taxes.
• Sales tax is inherently regressive. The poor spend a high percentage of their income on taxable goods. This is still true even if you eliminate taxes on food. The rich spend very little as a percentage of their income, and thus are impacted far less by sales tax. This is exactly the opposite of what a proper tax scheme should be.
• The states need to be weened off of sales taxes anyway. Sales taxes are a notoriously unreliable way of bringing in revenue. When times get tough, people stop buying things, and sales tax revenue dries up. States that depend heavily on sales tax revenue (Tennessee and California come immediately to mind) end up with massive budget shortfalls. The only way to fix that is to continue to deny them the sales tax and force them to find a more robust way to bring in revenue.

Sales tax shouldn't be expanded. Sales tax should be reduced and possibly eliminated. It is pretty much the worst kind of tax you can create because it discourages spending that is necessary for a healthy economy, is hardest on the people who can least afford it, and has a tendency to drop off steeply when the states need the money the most. Pushing for expanding sales tax betrays a lack of even a basic understanding of economics. It's the sort of thing politicians like because it "closes loopholes" instead of "raising taxes", but in the long run, it will only harm the U.S. economy and drive sales tax revenue down.