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.

Comments

Enhancing the tax base and the Internet's role...

[Sun Tzu]

The proposed Internet tax is nothing special. Until telephone orders are taxed why should Internet transactions be taxed?

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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.

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