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Internet Sales Tax Bill Dead In Congress
jfruh writes: Last year, a bipartisan coalition helped get the Main Street Fairness Act approved by the U.S. Senate. The bill would have allowed state and local governments to collect sales taxes on Internet sales by companies in different jurisdictions. But House Speaker John Boehner, a longtime opponent of Internet taxes, won't bring the matter to a vote in the House before the end of the year, which should kill it for the immediate future.
We'll just have to see. The Republicans are in charge of congress now, so we'll see if they're actually going to shrink the size of government or spend the next two years repeatedly trying to repeal obamacare another 40 times.
I doubt they're going to try and end the war on [insert everything here] or roll back IRS harassment powers or end civil forfeiture or rein in the NSA or anything else that I'd really like the government to stop doing.
If I have been able to see further than others, it is because I bought a pair of binoculars.
There's no state sales tax on out of state purchases; that would be an unconstitutional tax on interstate transactions. There is a use tax on out of state purchases that you didn't pay sales tax on. I consider this "use tax" to be a transparently obvious evasion of the restriction on states taxing interstate commerce, and therefore invalid. Then I exploit the fact that the states can't force Internet retailers to collect those taxes to avoid getting into a dispute with the state over whether they are actually invalid.
but at least they got this one concept correct.
No, they got this one wrong. Taxes should be sensible, fair, and enforceable. The current system of "use taxes" is not sensible, not fair, and not enforced at all (~98% cheat). Almost everyone evades the tax, and many don't even know they are cheating. That penalizes the small number of people that are both informed and honest. It also unfairly penalizes local merchants over internet merchants that thrive (partly) because of the tax evasion by their customers.
This was a sensible reform, and it is a shame to see it blocked.
I love how government goes about naming bills to make them sound a certain way so that voting against them appears evil. I suppose the makers of the bill would argue that they are coming up with a short name that defines the "essence" of the bill. But when you get into the details, it just makes them seem like they are trying to hide something from you ... aka: being politicians.
"Main Street Fairness Act" - It's simply a bill to apply fairness. You don't like fairness?
"Affordable Care Act" - It's just making care affordable. You don't want care to be affordable?
You could have a lot of fun with this actually. Increased NSA surveillance? "Terrorist Identification Act". Or even better "Protecting our Children from Terror Act". Free cars for all politicians? "Political Accessibility Act".
roll back IRS harassment powers
If they were smart they would increase IRS funding since it results in something like a 10:1 return rate. You know where the extra money would come from? Tax cheats! People who don't pay their taxes aren't your heros, they are your parasites. While I'm being wistful about things that will never happen, increased funding might even give us more streamlined processes and overcome the turbotax lobby...which for years has been lobbying against simpler taxes that you can do yourself on the IRS website, reducing errors and thus the likelihood the IRS would want to talk to you.
There's no state sales tax on out of state purchases; that would be an unconstitutional tax on interstate transactions.
Actually, it isn't even that... it would be an unconstitutional attempt by one state to tax a transaction that takes place in another state. Not an "interstate" transaction at all. And allowing such taxation would open up a can of worms the size of China.
If one state can tax a transaction in other state -- for ANY reason -- what's next? Wisconsin taxing your grocery purchases in Los Angeles? It's easy to see how absurd that concept is.
BUT... there is also this fact, which is uncomfortable to lawmakers: the ONLY way to effectively have online transactions is to consider the purchase made in the state of the seller. This is very much old hat, as it was hashed out in the courts to a VERY definite conclusion more than 150 years ago, when mail order became common. That's why the company having a "physical presence" in your state makes a difference... only then can the sale be considered to be in your state.
And... internet sales are mail order. The ONLY differences are how the payments are made, and how you view the catalog. You're still getting your product by mail.
When you add all these things up, the inescapable conclusion is that an internet sales tax is unconstitutional, since it is de facto an absurd tax on transactions made in other states. (Except, of course, when the company has a presence in your own state.)
How do 'things' get fixed in states like Delaware and New Hampshire where they have NO sales tax? This law appears based on the idea that your home state is entitled to collect sales tax on anything you buy, no matter where you buy it...
Of course they're not going to. Both the republicans and democrats are responsible for all of that.
Indeed. The GOP has a chance here - the GOP congresscritters are now younger and more diverse than the Dems. They might just turn over a new leaf. Maybe.
I'll be all for them if they do - they keep talking about smaller government, than maximize pork distribution. Let's see them shut down anything, anything at all. Get rid of the TSA. Get rid of any government department -- I don't even care which -- just do something to show one party really intends to shrink the government machinery, rather than making BS claims about "spending" that no one at all still believes.
Socialism: a lie told by totalitarians and believed by fools.