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Senator Proposes 5% Tax on Web Transactions
rhet writes "A South Carolina Senator has proposed a bill that would levy a 5% federal tax on all sales conducted over the web." I guess we kinda know its only a matter
of time, but its still a bitch. But Uncle Sam wants his piece.
But that was written before widespread mailorder was a concept. Time change and so should laws.
That said, I think it's more reasonable to set up a system where state sales taxes can be levied on mail order goods than for there to be an indiscriminate federal tax.
Now then, I realize that much of this e-mail will never be seen by the Senators, but the noise on the mail servers will be. That said, however, don't even begin to think about sending flames to these addresses. These are not the people we want to alienate -- these are the ones who can prevent Senator Hollings mistake from ever seeing the legislative light of day, e.g., killing it before it even has a chance to breathe. So if you are going to write, clarity and sanity counts, vulgarity and rants don't!!
Here's the addresses for the Senate Finance Committee Members:
- Roth(DE)
- Moynihan NY)
- Chafee (RI)
- Baucus (MT)
- Grassley (IA)
- Rockefeller (WV)
- Hatch (UT)
- Breaux (LA)
- Murkowski (AK)
- Conrad (ND)
- Nickles (OK)
- Bob Graham (FL)
- Phil Gramm (TX)
- Bryan (NV)
- Lott (MS)
- Kerrey (NE)
- Jeffords (VT)
- Robb (VA)
- Mack (FL)
- Thompson(TN)
Note: this was a lot of hand typing, so if I messed up an URL, I apologize.The full list of pages and addresses can be found at: http://www.senate.gov/contacting/index.cfm.
...Open Source isn't the only answer -- but it's almost always a better value than the alternatives...
How can we tax *all* web transactions, when some of those transactions occur outside the good ole US of A?
And there goes the incentive to conduct in this thing called "e-commerce." And then the states will charge a tax. And then the fed tax will increase to include a tax "for the children" and to "prevent terrorism" and to help fund the NSA...
Sales taxes are evil.
Ok, that's fair. I spent most of the Carter administration overseas, and remember the pain of trying to buy a house when we got back. Reagan was president at the time, but hadn't been long, and I suppose he was handed a messy house when he took over.
OTOH, by the late 80's, we also were well into a recession big enough that many wanted to classify it as a depression, including one of the largest stock market crashes in history. I wasn't really trying to say he was a worthless president (I voted for him myself), but his economic policy traded short term gains for long term problems; while it tended to benefit those with money, it hurt just about everyone else in the long term, and the overall economy with it.
Online retailers should be very, very worried. This is going to be pretty bad for the overall economy, too...
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Every year during my review, I just pray the words "slashdot.org" aren't mentioned.
If the Federal government doesn't fund schools, what's the Department of Education there for? Actually, the Federal government does provide funding for schools. Heard of Clinton's "100,000 teachers" program? Or the "Goal 2000" program, which is a federally-mandated set of educational standards? The Fed's don't run the schools directly, but they do have a lot of indirect control, but attaching strings to grant money and making the districts jump through hoops to get the money.
Besides, since when does anyone pay attention to constitutional limits on Federal power? 2/3 of the things the Federal government does are never mentioned in the costitution. But the Supreme Court has made up nonsense about the Constitution being a "living document," which means that if the plain meaning of the text doesn't suit them, they can make up a new meaning. The fact that Federal education spending is unconstitutional doesn't slow them down a bit.
That's not technically the trickle-down effect. For that to be a "proper" trickle-down effect, the entire economy would have improved to the extent that tax revenues did not go down. Somehow I doubt that happened.
Well, if the Japaneses are actually dumping (selling below cost or building up a gigantic surplus and then releasing it all at once), we should stop them. That is illegal and stopping it is not an abuse of the system (real dumping is when WalMart moves in and sells below cost to drive out. I don't think the Japanese steel mills are actually engaged in "dumping", though, and it is wrong to stop them.
I don't doubt that taxes play an important part in your purchasing decisions, but again I must say, "What if there were no taxes?" Would you have moved? Taxes may be lower in the second county because it is run more efficiently. In that case, it's good that you moved; society is better off now. If taxes are lower because the second county leeches off the services of the first, that is bad. It may be good for you that you moved, but it is bad for society that you moved.
Taxes are lower for online transactions just because there is no tax, not because it is an economically (different from "financially") disirable way of doing things; if prices were the same, people would not be inherently better off because you buy things online.
How does that tax encourage purchases, by the way? (not that I think that's an example of a "good tax" anyway)
Uhm, NO. Bad free schools beat ANY form of basic education that has to be paid for. I mean, isn't it somewhere in the UN Declaration of Human Rights, the right to free basic education?
Actually, private schools are typically cheaper *and* higher quality than their govt. counterparts. This is the free market in action. Monopoly schools have guarunteed funding, so they have no incentive to please their customers. A private education market would be a lot better than what we have now.
As for those who can't afford it, there would be a lot less of them if people weren't forced to pay twice, once for the public school and once for the private. And I'm not necessarily against a limited voucher program to help pay for the education of those who really cant' afford it. But this should be done at the state and local levels, not the federal.
Please, why does this always come up? Do yourself a favor, read up on Waco. The FBI weren't the only evil idiots on site there. The IR footage shows, during the fire, Waco members firing INTO their own structure, killing their own people.
I suggest you watch the documentary "Waco: Rules of Engagement." They have extremely well documented evidence on several fronts that the government used excessive force, lied about what happened, and ended up murdering the Davidians. This includes video footage of them shooting into the compound.
IT WORKS. Look to Canada. We have a system that functions. One of the best free systems around. Sadly, the US keeps stealing our doctors cuz they get paid better elsewhere.
Doesn't that tell you something? Doctors are probably well-paid enough in Canada that they don't really need the money. I suspect a large part of it is the ridiculous beaurocracy that acompanies an government program.
In any event, I know too much about economics to believe that government health care is a good idea. The US has the best medical care in the world for a reason: they have the closest thing in the world to a free market.
Buddy, there's more to the world then just the US. Militaries can be effective internationally. Peacekeepnig is a Good Thing(tm), although a mass unsolicited air campaign isn't really.
I can agree with military spending too, but only for self-defense. If you look at the history of US foreign policy, most of our imperialistic actions since WWII have fallen flat, causing more misery than they caused. You might be able to make the case for occasional intervention, but 90% of the dozens of places we have gone are worse off for it. That includes Korea, Vietnam, Iran, Iraq, Yugoslavia, Haiti, Somalia, and many others. In all of these places, we came in with some feel-good idealistic goal, and came out with body bags, a nation that hates our guts, and a local government in shambles. Not much of a track record.
The world would be better off had the US been "isolationist" for the last 50 years.
Same thing in New York. What I always did when I bought a used car was lie on the registration application, and say I paid a lot less than I did.
Usually the seller agrees to give me a receipt saying I paid him less than I did. Helps to pay in cash and make that part of the deal when you get the car I suppose.
I'm not sure about the legality of this, but they didn't seem to check these things very carefully anyway.
A nation can tax transactions which occur inside itself.
The problem is that the Net is not physical. It does not exist in any nation. Not even the US, even if the US created it.
If the Net were to create its own governing body (yeah right, like that's going to happen, though it might just have its uses) then it would have the right to tax transactions within itself (of course, it would need a form of currency first). But for a nation to tax transactions within something which isn't even within its borders, but in a sense isn't even on its plane of existence? Absolutely preposterous. I hope it doesn't pass, even though I know it probably will (that's the government for you; it used to be that it'd tax the hell out of you and still spend more, now it doesn't even spend all the money it gets yet it taxes even more).
Doesn't that tell you something? Doctors are probably well-paid enough in Canada that they don't really need the money. I suspect a large part of it is the ridiculous beaurocracy that acompanies an government program.
Actually, having lived in Italy, USA, Canada and France, I have to say that there is more (or much more) burocracy in the US health system; and it's definitevely more evil. As far as quality goes, a student plan in the US sucks; better: it sucks a lot!
And worst yet, you had better odds with the numbers operations that you do with the government. My parents have wasted thousands of dollars on lottery tickets, and I keep telling them they'll have much better luck finding a local game.
-- This and all my posts are in the public domain. I am a lawyer. I am not your lawyer, and this is not legal advice.
Teachers are employees of the school district in which they work, not the federal government. They are funded by the local school district, which is funded either by local levies, or by the state. Teachers are not paid by the federal government, so a federal tax cut will not affect their wages.
And, just FYI, the average wage for teachers at the high school I attended is over $55,000 per year, for 9 months' work.
--
Not to nit-pick, but if less consuming were going on, more saving would have been going on. More savings means more investement. We then hit a recession during the early 90s, which might have been prevented if there had been less "consuming going on". Not that I think this guy had any idea about that. Maybe he really didn't know what he was talking about.
Federal taxes don't help local commmunities; local taxes do. The federal tax would go into a pot for someone to tap into. And guess who is going to tap into it? The same idiots who tapped into the Social Security Fund.
"Oooooh look! More money to fund our stupid projects."
Reminds me of Gingrich. Built a Coast Guard for his community. Dumb thing about it is they are landlocked; where's the coast? Oh I forgot. They have a coast called a lakeshore for that man-made lake they needed for their useless Coast Guard.
'til dawn...
Right now, the parties are playing PR games with taxes. While they would like to pass real changes, the Republicans know that the tax cuts they're passing will never become law with a Democrat in the White House, and the Democrats know that a national Internet sales tax will never become law until they control both houses of Congress.
If Republicans really wanted to cut taxes, they would pass their massive tax cut as a bunch of separate bills, each with one cut--the lower rates, capital gains cuts, marriage penalty relief, and estate tax elimination. Then Clinton would sign one or two and veto the rest, but at least we would get some tax cuts. Of course, that's bad politics because then it's easier to portray some of those as tax cuts for the rich, playing into the class warfare Democrats always use when tax cuts are proposed.
Well the problem is that the US Constitution specificly reserves to the Federal government the right to regulate and tax interstate buisness. That is why interstate catalog sales don't get taxed. There is no real legal reason why there could not be a national sales tax.
We have never had one as far as I know and probably won't any time soon. But congress *COULD* enact one if they wanted to.
Remember one of the main reasons of the US Revolution and the English Civil war was to enforce the idea that the Legislature had to consent to taxes.
Erlang Developer and podcaster
Copied from one of the first lines of the article:
A South Carolina Senator has proposed a bill that would levy a 5 percent federal sales tax on all goods sold over the Internet or through catalogs.
While I would agree with you if this article didn't mention anything about taxing methods other than the web, this "hypocrite" wants to tax other means too.
If I sell my 10-year-old car to someone I met on AOL, is that taxable?
If I sell my 10-year-old car to someone by charging their credit card, after getting the number via e-mail, is that taxable?
If I sell a motherboard to a PC reseller, who will charge retail tax to his/her customer, is our first transaction taxable *again* just because we made contact over the Web?
Huh? Huh?
Somebody better make some clear distinctions between business and personal transactions!!!
No tax or duty shall be laid on articles exported from any State.
That's in pretty plain language. They'd have to come up with an amendment to get around that one.
A federal sales tax would have states spitting mad, since the states eventually do want a cut, but their ability to get a sales tax put on top of a federal tax would make such a tax tiny, or even impossible to get through. Any congresscritter interested in getting stateside support for their reelection will get a very unsubtle hint from their respective governers to ditch the idea.
Besides, if the transaction were carried out entirely inside a single state, such a tax would be blatantly unconstutional. The supreme court has recently ruled in favor of states' rights on an unprecedented scale, so this would be a slam dunk.
What is the case is that you're not going to see net sales go untaxed forever. I mean yes, there's encryption, but then that's simply tax evasion, which the seller would be busted for (the seller pays the tax, the buyer reimburses the seller).
I've finally had it: until slashdot gets article moderation, I am not coming back.
Like most Democrats, Sen Hollings thinks government knows better than the common citizen. Further, like all politicians, he's a control freak. "Can't control the web, then tax it."
I, for one, still shop at my friendly old bookstore (and at Amazon.) There are reasons for both.
The web is great it adds to my life. Adding taxation would diminish the experience.
So long and thanks for all the fish . . . !!!
Counting tax revenues like this is fundamentally braindead. Last I checked, there were tax *RATES* not a fixed amount that the feds scooped out of the economy. Referring to rate decreases in terms of static decreases to tax revenues collected completely ignores the economic stimulation that tends to result from lower tax rates. Last I heard, when Reagan lowered tax rates in the 80's, the revenues went *up*.
Disclaimer: I'm not a Republican, so please don't attack me as if I were.
The proposed Internet tax is nothing special. Until telephone orders are taxed why should Internet transactions be taxed?
RantMode=1;
Of course, that kind of logic is irrelevant -- the real point is to increase taxes. The more kinds of taxes there are and the more sources and justifications those taxes have, the easier it is for people not to notice just how much they are being taxed. And, the easier it is for them to support taxes that they do not directly pay.
For example, taxing the manufacturing of automobiles only raises the cost of purchasing cars -- on which you will also pay sales tax. The net effect of taxing such production is to unfairly burden domestic goods while giving foreign goods from lands with lower production taxes an advantage.
The whole point of putting half of our social security taxes on the employer's side of the ledger is simply to make the citizens think they are paying less tax. The costs to the employer, however, are the same whether the whole amount is put in your column, the employer's column, or split as they are now. The cost to hire you is the same and the employer knows how much you cost. Just like the self-employed, the employee is paying this tax by his or her labor.
Now, if all taxes were accumulated in one big tax -- without even the fiction of claiming the employer is paying some -- we would finally know how much tax we pay and we might offer more resistance.
Internet-specific taxes are just another source of revenue. The taxing opportunity here is to divide and conquer the tax base by convincing the non-connected that we Internet users are not paying our fair share. Further, we are probably rich as well, considering recent high-profile Internet property acquisitions.
Hide some taxes, make others confusingly indirect, use the popular programs to justify additional program-specific taxes, and even call a few taxes "fees". And, most important of all, make each new tax apply to a minority of taxpayers so the remaining majority will support, even demand, it. That is the plan.
The proposed Internet tax is just a small piece in a much larger and very successful taxing scheme.
RantMode=0;
Geeky modern art T-shirts
Your used widgetstation would be exempt from any existing sales tax unless you're in the used widgetstation business and you sell dozens of them a month. Then you're a business. Your work doesn't fall under sales tax in any state I know of because services are not taxed.
Look, the government isn't going to apply this to every damn garage sale, it would cost more to enforce (and probably even collect) than it would be worth. I'm opposed to it because I just don't want the fed with their fingers in yet another damn pie.
As for what they'll do with the money? Probably make more defense contractors rich, I imagine.
I've finally had it: until slashdot gets article moderation, I am not coming back.
Not even close.
.... The rest of the story.
Comes from Samuel Wilson, who ran a slaughterhouse during the war of 1812. He already had the nickname "Uncle Sam" (being a rather avuncular kinda guy I guess), and he would stamp barrels of meat rations for the troops with "U.S." (as in United States. The troops started nicknaming it "Uncle Sam Rations", and since everything else for the army had U.S. on it, they started referring to every piece of property of the US as "Uncle Sam's".
His hometown apparently preserved a lot of historical data to back this story up, and now it's about as official as it gets: in 1961, Congress enacted a resolution honoring him as the man behind the "Uncle Sam" moniker.
And now you know
I've finally had it: until slashdot gets article moderation, I am not coming back.
Uh, maybe if they ship the books from Botswana. Hell, then congress could just levy a tariff.
I've finally had it: until slashdot gets article moderation, I am not coming back.
I absolutely agree. Online ordering sure isn't that much more convenient. I can typically run down to my local book or software store and pick up what I need and have it the same day, rather than waiting a week or two to get it shipped to me. It's the money I save that makes me willing to wait. If I'm suddenly paying just as much to get it online, I'll just run to the local store and save myself the troulbe. Even if I'm only saving a couple of bucks, I'll still go local, because the "have it right now" factor is usually worth a couple of bucks.
Now Congress has every legal right to tax transactions over the net.
BZZZZZT!!!! Please consult your copy of the US Constitution, Article I section 9, and thank you for playing!
I find the rabid opposition in some quarters to a tax on internet transactions to be very odd. I think the argument for taxing internet transactions (as well as mail-order) is clear.
First, let's assume that sales taxes are a reasonable way for states to raise money. Given that, isn't it odd that internet transactions are exempted from state sales tax? In fact, the current exemption for such transactions amounts to the tax code preferring interstate transactions over in-state transactions.
When the tax code encourages something, you get more of it, so the tax code will push more transactions web-ward. This will eventually seriously erode the state's tax base, which is a real problem.
The solution seems clear: set an interstate sales tax rate that is close to the average state sales tax rate. Then, via some formula, divide the revenue between the two states involved in the transaction (i.e., the vendor's state and the buyer's state.)
This hardly seems like a mad power-grab by the government. Just a sensible way to regularize the tax system.
Uhh, everybody else doesn't have to pay taxes? There's no taxes for transactions done over the phone, etc. Try thinking outside of the box for once.
If we here in the USA had the
right to vote
I don't understand your comment. Last time I checked, we directly elect our senators and representatives.
If you mean that we should vote on the tax itself, holding a referendum on every single change in the tax code would be impractical.
Wouldn't it be nice to be able to
dump everybody in congress every 2 years?
Your representative is up for re-election every 2 years. Each of your senators faces an election every 6 years. You can dump them if you'd like, by voting for someone else.
A better solution: you should tell your elected officials how you feel about this issue. We can complain about our government all we want, but if we don't inform our representatives of our wishes, how can we expect Congress to heed them? Write your senator today and tell them how you feel about this tax proposal. (Be polite.) With the amount of people who visit Slashdot, I'm sure this would make an impact.
And also, people should make sure they vote! We live in an age of low voter turnouts. You cannot expect to have your wishes reflected in a democracy if you do not exercise this fundamental right.
The DMCA--for corporations, the best copyright law money can buy.
Hmmm. Now, I was paying taxes in the '80's, and that's not quite how I remember it. I know that Reagan passed a huge tax increase (adjusted for inflation, it's still the largest increase in American history), and that the vast majority of that increase was paid by people whose income was less than $50k/year (and the majority of that hit people making less that $35k).
IIRC, he did lower capital gains taxes (a couple of times), and also lowered the maximum tax rate. Both of these changes primarily benefitted people whose income was in excess of $100k/year.
His brilliant economic policy also gave us 21% inflation, 18% mortgage rates, sent the budget deficit and national debt through the roof, created the largest economic gap between the rich and the poor that we've seen this century, and guaranteed that minimum wage could not be a "living wage" (it's whole purpose for existing).
I would not hold him up as the poster child for the right way to run an economy.
do you REALLY want to live in a county with no public schools
The public school system does a lousy job, so yes, I'd like to see them privatized. But even if we are going to have government schools, why should they be funded at the federal level? The Feds just take a cut and send it right back where it came from, with some strings attached. I don't see the point.
no law enforcement
Like the NSA's "counter-terrorism" activities? Or the FBI's murder of a peaceful religious cult in Waco, Texas? Or their sniping women, children, and dogs at Ruby Ridge? Or their locking up hundreds of thousands of non-violent pot smokers? Or the FDA's harrassing of alternative medical pracititioners?
The list goes on practically forever. I'll agree that we need some law enforcement services, but the Feds have too much power as it is. I'd be happy to see The ATF, FBI, NSA, and most of the other alphabet soup agencies disbanded.
public healthcare
The government is responsible for the skyrocketing costs and lousy services of our health care system. I don't want them to get more control over it.
social services
Like the pyramid scheme called social security? I'll pass, thanks. I'd rather put my money into a private system that has a shot at giving me something back when I retire.
no military defence.
The US has been attacked once in the last 100 years. I don't think that we need the ridicuously large government to protect us from invasion. What our military has done is not protect us from harm, but gone around the world bombing innocent civilians, propping up petty dictators, subsidizing the militaries of Europe and Japan, and generally wasting our money while simultaneously makeing the entire third world hate our guts. You wanna know why we are always getting attacked by terrorists? because our government has screwed over some ethnic group in almost every country in the world. If we didn't undertake to get involved in every petty conflict, we wouldn't be the target of every single terrorist group.
So no, I don't think I'm getting my money's worth, and I don't think that more taxes are going to do any good.
The notion you express (in a carefree flowing way), that military spending is necessary but education spending is not, is disturbing. Many of us would argue that both are important areas where our government (translation- us, or those we choose to represent us) has a place.
But the difference is that education can be privately funded, while the military cannot. A private educational system would do a lot better job at educating our children, at lower cost, and with more parental control.
The choice is not: government education or no education. It's: governemtn education versus private education. I'm opposed to government schools because I know how important education is, and I'm not willing to leave it to the government, which manages to screw up pretty much everything it touches.
An example of "trickle-down" theory in action (I believe the phrase "trickle-down" to be deplorable, by the way) is my county and the one to the south of us. I moved to Butler county (north of pittsburgh in Allegheney county) for one reason and only one reason: TAXES. I was paying 2.8 percent for income, I now pay 1. Sales tax is 7% in Allegheney, outlying areas have a tax of 6%
You'd be amazed How much of a difference this makes. Also, if they taxed the internet transactions, I'd stop buying things online. The only reason I buy online is the tax break as well. For example my purchase of a palm IIIx saved me a heck of a lot of money:
Compusa $370 + 25.09 in tax = ~400 dollars.
Buy.com $293 + 10.00 s+h = 303 dollars.
You see, I saved ~100 dollars on my purchase! That's called being a smart consumer. Take every advantage.
BTW: you mentioned how taxes discourage purchase, but you don't mention encouraging purchases.
I'll give one:
Japanese dump foreign steel. We tariff them to make sure things are "fair" (which is an abuse of the system) Steel mills are happy, American car manufacturers are not.
Lowmag.net
His brilliant economic policy also gave us 21% inflation
21% inflation? I don't think so. If I remember right, we had "stagflation" throughout the 70s, with an average inflation rate of about 10%. It's possible the inflation rate was up there in 81 or 82-- but that's more Carter's fault than Reagan's By the late-80's, inflation was down to just a few percent. And it's been all but non-existent since the middle of Bush's term. Remember that Alan Greenspan was originally appointed by Reagan (or maybe bush, don't remember exactly) so Reagan should get at least some credit for the lack of inflation we have today. To blame Reagan for inflation that had existed for a decade before he came to office and which he helped reduce is ridiculous.