Slashdot Mirror
Internet Tax Moratorium Over?
clawson writes "Looks like Congress just can't resist it anymore.
This story, mentioned in The Naked PC e-zine, is in ComputerWorld.
Yeah, right, the tax will go to fund teacher salaries. This is pretty lame when the current congressional mindset is pretty much doing what it can to ensure that there aren't TOO many smart people in the future, but lots of semi-literate, idiotic consumeroids."
They get you someplace else. I spent a year in Texas once. No income tax, but car registration was high as hell. Delaware has no sales tax, but big highway tolls and some other "hidden" fees. Commercial limo licenses there, for example, are high as hell.
BTW, Maryland (where I live now) *theoretically* has the power to levy sales taxes on items bought out of state and shipped here, no matter how you ordered those goods. Now and then a state official rants about this, but then someone saner realizes that enforcement would cost more than any revenue enforcement could possibly generate and the idea dies down for a year or two.
If you want to see a *real* tax rip, check hotel taxes. Tourists don't vote, and locals don't usually stay in local hotels, so they're easy to levy without getting flak. They're over 10% in some places, including some states and localities that have low or no sales or income taxes -- and no, you don't get to duck the tax if you reserve the room online.
But there could be some real nice benefits from an internet tax. The money raised could pay for the printing and distribution of Ten Commandment Posters! Or better yet, it can go to purchasing new science books that don't mention evolution! And if they do increase teacher salaries, then the NEA can raise union dues so that they can give more campaign contributions to the politicians. It's a win-win solution!
You do realize that there's not much difference between an electronic transaction including/excluding sales tax, and an electric register (or manual) transaction including/exclusing sales tax?
The states that levy sales taxes also have enforcement divisions, and from time to time you do find a business that has been cheating. (Since generally businesses reimburse the government in lump sum payments representing the tax for many, many transactions, it is always tempting for a tenuous business to hold back some of that cash for itself -- something like adjusting withholding. You end up owing the same amount of tax; it's just a matter of whether you've paid it or not.)
Right now, the government DOES have the right to come in and examine your books, if they suspect tax cheating. So this really has little "internet" relevance.
lake effect weblog
{Network engineer in Chicago--looking for work!}
Whatever. I pay taxes on a lot of stuff I buy via the net already (since they have offices in MA). The things I do buy usually have a better than 5% (MA local tax rate) difference between what I get online vs. meat world store, so I'm not going to quit buying some stuff online.
Help me out here, does any federal money go to
pay teachers now? I don't know.
If they aren't paying for teachers now, this law
would allow them to start. And you know what
happens when the feds put money into anything,
they start to control it.
If only we could vote!
It's for the children! Won't you help?
Kind of like the line the state govt. fed us about
the lottery. The money will help the schools!
Sheeple
First off, a US-directed sales tax on Internet-distributed goods is great if you're interested in big issues like claims of ownership, national sovereignty and imperialism. Sorry to be political, but politics are the root of all taxes.
It's not so great if you're interested in growing markets and creating new channels for access to goods.
European 'net access is a good example of how taxes and questions like this can slow every initiative down to a crawl. Most of my friends in that area don't use the Internet much at all because of the high charges for phone use. And some countries (this may have changed) were taxing the Internet connection fees as "other than local" calls, making them subject to different tax structures and ultimately higher rates. While it's obviously tihsllub to say that we should all be tax free, there needs to be a smarter concession than what's being offered by Sen. Hollings.
A previous commenter noted that the Canadian purchasor should not (and, ultimately, will not) be charged a sales tax on their purchase of goods from an originating US seller. If the tax structure is not smart enough, then the next big Internet thing will be the offshore intermediary. It's pretty easy to write an app that automates this whole process. Drop it on Jamaica and avoid all taxes. Better yet, get a name like WalMart behind it and see how "brand equity" overcomes what would normally be politically problematic. It's pretty easy to see how this process could (and, I argue, WILL) develop. So now its up to our resident regulatory brain surgeons to redefine taxes. A national sales tax? That's NEVER worked. But its an easy model for some country bumpkin from South Carolina to say "hey, um, let's do this!!" At a local level, sales taxes are great. From a state level, they're difficult to manage but still effective. At a national level (and even international)?? Fuggedaboudit.
So, what's a country to do? Catalog and Internet sales are booming (well, compared to the GDP of a small African country, but it makes good headlines!). You could tax the sellers, but that makes producers move off-shore. You could tax the buyers, but that only works until an international billing address is found. I think, instead, we need a new model (sorry, I haven't thought it through yet...no real headlines here, no matter what my Econ degree says).
Oh, wait. This is the big flame opportunity: to tell me to my face that you're going to tax every Internet purchase and use this to fund teaching is the strongest sign of disrepect I can think of. They're full of shit and they know it, and this pisses me off terribly. Any initiative at your national, state or local level that's done with the intent of "providing funds for teachers" is lying to you (except for bonds...). Vote against it. Instead, look to vote in legislators who will allocate their budgets towards education. That's the only "tried and true" method of increasing funds. BTW, I'm including initiatives like STATE LOTTERIES in this list of worthless stuff. More money has gone to the administrations for the California State Lottery and the California Board of Education than to any of California's schools.
Moderate Democrat, Berkely Alum. Troubled youth.
---- Please be nice in case my Slashdot karma ~= my real life karma.
Congress can too regulate interstate trade. They can't regulate intra-state (within the same state) trade, and in this case, state law says that you have to pay the local/state tax on items purchased. Congress can easily write a law that says "if you buy something from joe schmoe in idaho, you pay idaho state tax on it" or your local tax on it, or whatever. Paying the vendor's state tax rate would probably be easier for all around.
The instant something crosses state lines, Congress has authority.
You're mostly right, except that MS's pricing strategy is one of the oddities of the modern business world. Pretend they were normal. They see the cost of computers go down from an average of $2000 to an average of about $1200. This means their demand curve has shifted (since the complimentary good--actual computers in this case--have fallen in price). A perfectly competitive firm would just sit there since they're not supposed to be making any profit and it doesn't behoove them to shift prices. But not even Bill Gates would claim they fit the description of "perfectly competitive". A normal non-perfectly-competitive company would then lower the cost of their good, since the demand curve has shifted. And yet for some reason they've chosen to keep the price of their product at exactly the same price that it's been at for the past several years. It boggles the mind--actually they did use this in their defense, though I doubt anyone was convinced.
Taxes go down all the time but people don't sit around and exclaim joyous phrases for months on end the same way people bitch about tax increases. Here in Massachusetts the governor is trying to lower the income tax from 5.95% to 5%. People rarely, if ever, talk about it. It makes the news maybe once every few months.
If it were a tax increase every person on the sub would be bitching about it. Every issue of the Boston Globe would have an article about it.
People have selective memory.
[BTW, 100% of your income going to one tax or another is not communism. Understand what you are talking about before you sling around words intended merely to incite an emotional reaction.]
Section 8. The Congress shall have power to lay and collect taxes, duties, imposts and excises, to pay the debts and provide for the common defense and general welfare of the United States; but all duties, imposts and excises shall be uniform throughout the United States;
--The basis of all love is respect
Americans for Fair Taxation is a group promoting the replacement of federal income tax with a federal sales tax on retail goods.
One of the goals of the group is the repeal of the 16th amendment (the amendment which gives the federal government authority to tax income directly). They also plan to disband the IRS. The proposal is backed by Representatives John Linder (R-GA) and Collin Peterson (D-MN)
I have mixed feelings about a national 23% sales tax. Mostly, I'm afraid that we'll enact the sales tax and never get around to repealing income taxes. At this point, though, I'm starting to think just about anything would be an improvement over the status quo.
Save the whales. Feed the hungry. Free the mallocs.
You ignored the fact that she's aspecial ed teacher, which places extra responsibilities.
I do know for a fact that she has a masters. I doubt she makes $23k. I have no idea what she makes, nor does she know what I make. She's been teaching for 15 years, so I imagine it's more than that.
The amount of planning time is usually very limited, as she's keeping track of 15-25 children in the ages of 7-10 with learning or physical handicaps. I have no idea how that relates to high school or junior high teachers, but I do know she comes home with plenty of work to do. Plus the frequent meetings with parents. Plus the children who show up who she has to rate and see if they need to be in her class or not. This is for a good sized (maybe 15-20k students from K-12) school system.
Teaching isn't a profession that's glorious, easy, or going to make you the next Bill Gates. Perhaps that's my point.
Yeah, right. I'm sure they will have a separate tax pool for education. They don't have a separate tax pool for Social Security.
Money for such a task would go into the general pool, and thus be used anywhere and everywhere. Saying otherwise is counting on bleeding heart gullability. While I am very interested in funding education, doing it with a special Federal tax is not going to happen, no matter what they say.
Besides, states and municipalities do it pretty well, thank you. IMArrogantO, the Fed should keep its fingers out of things that the states are competent at.
Thought 2, about a specific Internet tax
IIRC, the bill taxes Internet and catalog sales. Why you tax something based on the way it is sold is beyond me, unless it is to get the word "Internet" in there. Remember, the word "Internet" means more money--maybe the bill is trying to go IPO? Or maybe Congress is? That would legalize buying Senators, at least...
If they just taxed interstate sales, this would make a lot more sense to me. This would be applied to most Internet commerce, catalog sales, etc. It also gets around the definition of "Internet commerce". Interstate commerce is pretty well defined. And regarding non-US sales, standard tariff law and/or NAFTA already regulates this. I live in a zero-sales-tax state (NH), and this makes sense to me.
Thought 3: regarding constitutionality
Article 1, section 8, US constitution: the Fed has the right to tax us, and to regulate interstate commerce. I don't see congress overstepping constitutional bounds here.
--The basis of all love is respect
Reasons not to panic:
* If you already pay state or local sales tax on the merchandise, that amount (up to 5%) is credited towards the tax. So it's not additional to state/local unless your s/l taxes are below that amount...
* Retailers that do business in your state, and are subject to taxing jurisdiction of the state, qualify as 'local merchants' and are excluded.
* The bill *does* specify a fund for education spending. Nominally, salaries, but states w/ above the average (mean, presumably) in teacher salaries (although it says nothing about adjustment for cost-of-living... !) can use the money for other educational purposes.
* It is an excise tax that only applies to products both bought and sold within this country. It's not attempting to tax international sales.
Reasons to go nuts:
* The funding can be withheld, basically at the Secretary's (read: President's) discretion. Read: blackmail opportunity.
* It includes a vague reference to excluding non-local transactions. Possibly, that'd make for an interesting political poker game as to what sort to exclude -- so more patronage.
How odd. Puerto Rico's explicitly included to benefit from the tax, but they won't pay it...
Only the dead have seen the end of war.
Introduced by Sen. Hollings from South Carolina and currently before the Finance Committee:
S.1433 Sales Tax Safety Net and Teacher Funding Act
Note that this is only a bill, and has not passed committee. There is nothing at this point to distinguish this bill from any of the other hundreds of proposals submitted by "our" representatives every year. No need to panic just yet, unless you are from South Carolina. Here is the contact info for Senator Hollings:
Ernest "Fritz" Hollings
And here is the webpage for the Finance Committee so you can see whether your senator might be influential in this process. If so, please contact him or her!
Senate Committee on Finance
-konstant
Yes! We are all individuals! I'm not!
You do not have a Constitutional right to freedom from taxation. Right to free speech? Check. Protection from unreasonable searches? Check. Right to not be taxed? Not in there.
We need taxes. Sad but true. Nobody likes them, and few people like the government. But taxes are necessary. Especially sales taxes, which help fund local and state governments.
Local governments depend on sales taxes for 36 percent of their annual budget. They use that money to do practical, everyday things like:
* Pay for teachers salaries
* Put police on the roads
* Or, for those who hate the police, they put firemen on the roads.
* Hey, let's be honest, they build the roads and other necessary infrastructure with that money
* Put on your local Peach Cobbler festival
When people talk about government excesses and waste, they are seldom talking about local governments, they are talking about the Feds. It's okay to hate the federal government. That's almost the national pastime.
I would like to add that the taxation bill discussed here is no a good idea. It is poorly thought out.
The money would be collected by the federal government and used to to fund grants for teacher salaries exclusively. What if you need money for road improvements or more police? You're out of luck.
Also, I think that it is too early to tax the net. While we will need to do it eventually, e-commerce is not a large enough piece of the retail pie to make taxing it necessary yet. I'd vote to let it grow more before we take the drastic step of implementing taxes.
Just my $.02.
HipNerd
Hipnerd
It strikes me that the only reliable means of enforcement for a bill of this kind is to bring government into the loop on every transaction. But consider that commerce over the internet is at least supposed to be conducted over SSL. So... unless the gummint is prepared to accept the receipts of electronic businesses and take on faith that they are accurate, the only way that a bill like this could be enforced would be to require the IRS to snoop on secure transactions.
If a bill of this kind ever makes it out, the IRS might mandate that every secure sale also be encrypted to their published key and sent to a massive Audit-bot hub. Imagine the incentive to crack that key! But even if no third party gains control of the information, the blow to personal privacy would be immense. Not only will they know what you're buying, but also when, with what credit card, to what address, etc etc.
Another means of enforcement (and I'm sure this sends guilty erotic shivers up and down some spook's spine) is to require that secure transactions be performed using a key-escrowed or otherwise governmentally-crackable protocol. Then they could perform random audits. Of course, this capability would never be abused...
-konstant
-konstant
Yes! We are all individuals! I'm not!
Let's start off by saying my mother is a special ed teacher, and has been for about 15 years.
Okay, so they only work 9 months a year. But for those 9 months, it's very often 50-60 hour weeks. Teacher conferences, parent meetings, meetings with therapists (in my mom's case anyway) and so on. No to mention time to create the curriculum or grade exams or other tests. That's all done outside of work, since that's the only time you have to do it.
Then you've got the inflexibility of the job itself. No vacation time (aside from when everyone else is on vacation), limited sick time, and few real freedoms during the day (can't skip out early for lunch, for example, limits on phone calls, and so on).
For all that, teachers are supposed to do that, make surekids actually *learn* something, and make only $23k? If I'm expected to work that long, I'd like to make more than that. It's not like schools are going to have an IPO anytime soon.
And in response to your education question, it's really on a state-by-state basis how much training you need to be able to teach. In NY, I believe you need at least a masters in education before you can take the teaching exam.
Finally, it doesn't hurt that the most heavily populated areas of Oregon enjoys fairly comfortable weather year round, and (IIRC) a fairly low crime rate.
When my family moved to the Midwest, our percentage of spendable income to wages went up by about 10% just in the reduction in taxes, even though where I live now has sales tax on basically everything ('though at a lower rate on food.)
...Open Source isn't the only answer -- but it's almost always a better value than the alternatives...
Methinks we are in violent agreement. The section I quote (article I, section 8) gives Congress the right to pass an internet tax. I was using it to oppose amendment 10 (loose translation: anything we don't cover in the constitution and amendments is not a power given to the Federal Government). I simply showed what piece of the constitution did give that power to the Fed, so amendment 10 is irrelevant here. As another has noted, Congress may or may not have the right to fund education, but that's another story.
Again, I agree that singling the Internet out for taxation, though legal, seems fairly stupid in my book. Too many loopholes.
--The basis of all love is respect
heheh! I thought he was talking about Florida... I guess we all got hit with the same scam, eh?
Geeky modern art T-shirts