true objective of the game is to hoard as much as possible.
You can't build wealth by hoarding money. People only flee to cash when there is (1a) a ton of uncertainty or (1b) very high interest rates and (2) low inflation. The last crisis nearly sank a bunch of companies that could no longer depend on loans. Count my company as one which has spent the last few years de-leveraging and socking away money for the next downturn instead of growing.
I'm hourly as well, but if I weren't, the analogy would be more like a dog shits on your lawn: you can either leave it there to turn white or you can pick the shit up. Either way, your life sucks a little bit more.
There are services that keep track of all the tax rates for all products in all states and that will also remit the taxes for you.
But there aren't services that will go through all your inventory and classify what items are and aren't taxable in each state.
This takes care of most merchants selling online.
Not if every state can constantly harass them to make them prove that they have revenue under $1 million. I don't know what the text of the amendment says, so I don't feel like I can intelligently discuss the details.
1) Agreed. I meant that you would need an amendment that allows the federal government to forbid a state from collecting use tax. There could be a loophole, similar to how they do Medicare and road funding - you could hold the money back unless the states meet certain conditions, one of them being the abolition of their use tax. On the other hand, the Supreme Court just struck down some of the Medicare expansion... so I'll have to leave it to people who know more about Constitutional Law than I do:)
It's not an interstate commerce problem, the tax is the same for things in or out of the state that the resident pays. The tax is on the customer, not on the retailer.
That is the "use tax" in place today. Since the retailer is outside of the state, the state cannot make demands of it.
What's going on here is that the Federal government is interfering with it.
Not currently, they aren't. This bill would get the Federal Government involved in a way that they currently aren't.
Retailers are not forced to sell in all states if they find it to be onerous, this is just a matter of them trying to take advantage of a tax loophole to gain a competitive advantage over less fortunate companies.
Yes, if this amendment were to pass, that would certainly be the case. I have no reason to support such an environment. I don't mind taxes, and I don't mind closing loopholes, but unnecessary complexity gets me going.
1) You would need to amend the US constitution to allow the Federal government to abolish state taxes. Some individual states already have no sales tax. Some others make it less regressive by not taxing food and clothes. 2) They can do this now, if they like. The reason that they don't is that it puts their shipping businesses at a disadvantage to states without such a tax.
Even my "solution" might be unconstitutional, since the Federal Government probably would not be able to tell the states that they need to abolish the use tax. On the other hand, the recent Obamacare ruling sends mixed signals in this regard.
Dealing with 50 tax codes? Never necessary. In Europe, a business pay tax where it is located. Obviously, taxation varies from country to country. And if a country thinks another gets too much of an advantage, they simply tax goods as it crosses the border. foreign mail is inspected.
It's the same here, except that the states are not allowed to inspect "foreign" mail or impose duties on "imports". Except for alcohol, but I digress...
So, a business only need to know the tax code where they operate. Customs officials only need to know rules for their own country. Customers only need to know how much their own government will tax the stuff they import. Taxes everywhere, but no need to know several systems.
It is currently the same here in the US. This proposed law would change that, which is why it is so stupid.
Just because you're too stupid to realize that this is already settled case law, doesn't mean that it's not the case.
Before calling me stupid, did you not see that we are discussing a change in the law?
All the Federal Government is doing here is forcing retailers to collect and report the use taxes that the consumers were supposed to be paying.
And all I'm suggesting is that this proposed approach is cumbersome and onerous. It most certainly IS an interstate commerce issue, or the states wouldn't be waiting for a federal law - they'd be collecting taxes.
1) Yes.The state can do whatever they want with the money. They can even credit Joe Citizen. 2) Agreed, which is why I said 50 in my original post. Some else mentioned the other 10,000 jurisdictions which collect tax... I was just running with that. 3) Like I said elsewhere, I just pulled the 5% number out of my butt. Don't get too hung up on it:)
OK, good, now you have the feds involved - which is a big improvement over this bill.
In addition to what you suggested, the feds could also either collect the money or provide a uniform interface for payments. Can you imagine filing thousands of separate tax returns and writing individual checks to each locality?
Now, the only difference between your idea and mine is the flat rate.
How difficult is it to query a database for transactions based on sales by state, multiply that total by the tax rate and EFT a payment?
Scenario 1: 1) Take order 2) Ship out goods
Your suggestion: --- first --- 1) Classify all of your goods in such a way as to determine easily whether they will be taxable or not under every locality's rules in the entire US. 2) Re-write or modify any computer systems you have to handle the new taxes --- now each time --- 3) Take order. 4) Look up customer's address in database that you have to pay for. Probably pay for constantly, since it will update frequently. 5) Match up each item to see if it is taxable or not. 6) Ship out goods --- later --- 7) At end of year, send out thousands of checks (or EFT payments) to every locality you have shipped to. 8) Fill out any paperwork required for audits or local tax returns. 9) Deal with mistakes on your part, mistakes in the database, and customer misunderstandings about the tax code in their locality.
My suggestion: 1) Take order 2) Multiply by 1.05 3) Ship goods 4) Send Uncle Sam a check. ( note there is no substantial paperwork required, because you already have this for your federal income taxes... arguably step 4 already was happening)
but i just dont think that that will fly or go go very far. or be implemented well, or distributed properly.
If the feds can't be trusted, then it's only a slight inconvenience to have the sellers submit taxes to all 50 states individually based on their customer's locations. Auditing would be a bitch, though.
What you're talking about is a pretty substantial violation of states' rights.
How is this not "Interstate Commerce"?
Quote from Article 1, 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 Defence and general Welfare of the United States; but all Duties, Imposts and Excises shall be uniform throughout the United States;"
Sound familiar?:)
And then a few lines down:
"To regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes;"
So I'm pretty sure we are on firm Constitutional ground.
So, asking the states to settle for anything less than the full sum they're asking for is unacceptable.
I'll give you points for sticking to your ideological guns, but that route is more expensive to us as a society. One set of national rules is clearly what the framers of the Constitution had in mind. Further, the whole concept of use taxes (which is what the states are trying to collect now since the Constitution won't let them tax someone in another state) requires such a level of surveillance to enforce that I'm just not comfortable with it. Basically ALL purchases in the whole country would have to be searchable by any state who wants to enforce their use tax. No thanks.
Why insert more ham-fisted bureaucracy when it isn't necessary?
How is suggesting interacting with a single bureaucracy worse than dealing with 50?
Vendors can issue tax payments directly to the states, instead of having vendors collect taxes, send it to the Feds, and then have them send it to the states?
I could get on board with that. I still want a single rate that applies to everyone. I, personally, would hate to write 50 checks and do 50 sets of paperwork every year, but I'm sure Intuit will get right on it.
The problem with that is that around here the sales tax is 9.5%, which would mean that the city and or state would be losing revenue that they're entitled to collect.
Right now they are getting 0%. Something tells me they won't complain that loudly. I'd argue that since the business has no local presence, it is not using any state services and should not be paying full tax anyway.
It's not just 50 states, it's all the municipalities that are entitled to collect sales tax in various states.
That would bring the total up to 10,000 different tax codes, then. I think my point is even stronger in that case.
Don't get too hung up on "5%". I just pulled that number out of my ass.
Under the existing bill, the states can all come after you individually. It might be 12%, it might be 2% - depends on where your customer lives. I'm proposing to either leave it the hell alone, or implement a single blanket rate that applies to all customers, who would then be immune from any local use taxes on that item.
Multiply the cost of that database and the time used to hook your systems into it and the cost of submitting all those taxes by the number of businesses shipping goods and you have a pretty big number, I suspect. The alternative is you could have a single simple rule for everyone that captures 90% of the problem.
If the tax crosses state borders, then it should be collected by the Feds - or at least the rules should be national and consistent. Collect, say, 5% from everyone and then distribute it according to billing address. Making merchants deal with 50 different tax codes is onerous. I hope this bill is defeated.
a) Yale is not Harvard. Incidentally, he also had his MBA from Harvard so I'm not sure why you mentioned Yale. b) He is exactly the kind of edge case I was talking about.
Slashdot Mirror
true objective of the game is to hoard as much as possible.
You can't build wealth by hoarding money. People only flee to cash when there is (1a) a ton of uncertainty or (1b) very high interest rates and (2) low inflation. The last crisis nearly sank a bunch of companies that could no longer depend on loans. Count my company as one which has spent the last few years de-leveraging and socking away money for the next downturn instead of growing.
Dung shui?
I'm hourly as well, but if I weren't, the analogy would be more like a dog shits on your lawn: you can either leave it there to turn white or you can pick the shit up. Either way, your life sucks a little bit more.
There are services that keep track of all the tax rates for all products in all states and that will also remit the taxes for you.
But there aren't services that will go through all your inventory and classify what items are and aren't taxable in each state.
This takes care of most merchants selling online.
Not if every state can constantly harass them to make them prove that they have revenue under $1 million. I don't know what the text of the amendment says, so I don't feel like I can intelligently discuss the details.
Burma Shave!
1) Agreed. I meant that you would need an amendment that allows the federal government to forbid a state from collecting use tax. There could be a loophole, similar to how they do Medicare and road funding - you could hold the money back unless the states meet certain conditions, one of them being the abolition of their use tax. On the other hand, the Supreme Court just struck down some of the Medicare expansion... so I'll have to leave it to people who know more about Constitutional Law than I do :)
It's not an interstate commerce problem, the tax is the same for things in or out of the state that the resident pays. The tax is on the customer, not on the retailer.
That is the "use tax" in place today. Since the retailer is outside of the state, the state cannot make demands of it.
What's going on here is that the Federal government is interfering with it.
Not currently, they aren't. This bill would get the Federal Government involved in a way that they currently aren't.
Retailers are not forced to sell in all states if they find it to be onerous, this is just a matter of them trying to take advantage of a tax loophole to gain a competitive advantage over less fortunate companies.
Yes, if this amendment were to pass, that would certainly be the case. I have no reason to support such an environment. I don't mind taxes, and I don't mind closing loopholes, but unnecessary complexity gets me going.
1) You would need to amend the US constitution to allow the Federal government to abolish state taxes. Some individual states already have no sales tax. Some others make it less regressive by not taxing food and clothes.
2) They can do this now, if they like. The reason that they don't is that it puts their shipping businesses at a disadvantage to states without such a tax.
Even my "solution" might be unconstitutional, since the Federal Government probably would not be able to tell the states that they need to abolish the use tax. On the other hand, the recent Obamacare ruling sends mixed signals in this regard.
Dealing with 50 tax codes? Never necessary. In Europe, a business pay tax where it is located. Obviously, taxation varies from country to country. And if a country thinks another gets too much of an advantage, they simply tax goods as it crosses the border. foreign mail is inspected.
It's the same here, except that the states are not allowed to inspect "foreign" mail or impose duties on "imports". Except for alcohol, but I digress...
So, a business only need to know the tax code where they operate. Customs officials only need to know rules for their own country. Customers only need to know how much their own government will tax the stuff they import. Taxes everywhere, but no need to know several systems.
It is currently the same here in the US. This proposed law would change that, which is why it is so stupid.
Just because you're too stupid to realize that this is already settled case law, doesn't mean that it's not the case.
Before calling me stupid, did you not see that we are discussing a change in the law?
All the Federal Government is doing here is forcing retailers to collect and report the use taxes that the consumers were supposed to be paying.
And all I'm suggesting is that this proposed approach is cumbersome and onerous. It most certainly IS an interstate commerce issue, or the states wouldn't be waiting for a federal law - they'd be collecting taxes.
Agreed :)
But if the feds are going to get involved, then they should do it as simply as possible. The proposed law is an unholy mess.
Which is?
1) Yes.The state can do whatever they want with the money. They can even credit Joe Citizen. :)
2) Agreed, which is why I said 50 in my original post. Some else mentioned the other 10,000 jurisdictions which collect tax... I was just running with that.
3) Like I said elsewhere, I just pulled the 5% number out of my butt. Don't get too hung up on it
OK, good, now you have the feds involved - which is a big improvement over this bill.
In addition to what you suggested, the feds could also either collect the money or provide a uniform interface for payments. Can you imagine filing thousands of separate tax returns and writing individual checks to each locality?
Now, the only difference between your idea and mine is the flat rate.
How difficult is it to query a database for transactions based on sales by state, multiply that total by the tax rate and EFT a payment?
Scenario 1:
1) Take order
2) Ship out goods
Your suggestion:
--- first ---
1) Classify all of your goods in such a way as to determine easily whether they will be taxable or not under every locality's rules in the entire US.
2) Re-write or modify any computer systems you have to handle the new taxes
--- now each time ---
3) Take order.
4) Look up customer's address in database that you have to pay for. Probably pay for constantly, since it will update frequently.
5) Match up each item to see if it is taxable or not.
6) Ship out goods
--- later ---
7) At end of year, send out thousands of checks (or EFT payments) to every locality you have shipped to.
8) Fill out any paperwork required for audits or local tax returns.
9) Deal with mistakes on your part, mistakes in the database, and customer misunderstandings about the tax code in their locality.
My suggestion:
1) Take order
2) Multiply by 1.05
3) Ship goods
4) Send Uncle Sam a check.
( note there is no substantial paperwork required, because you already have this for your federal income taxes... arguably step 4 already was happening)
but i just dont think that that will fly or go go very far. or be implemented well, or distributed properly.
If the feds can't be trusted, then it's only a slight inconvenience to have the sellers submit taxes to all 50 states individually based on their customer's locations. Auditing would be a bitch, though.
What you're talking about is a pretty substantial violation of states' rights.
How is this not "Interstate Commerce"?
Quote from Article 1, Section 8:
Sound familiar? :)
And then a few lines down:
So I'm pretty sure we are on firm Constitutional ground.
So, asking the states to settle for anything less than the full sum they're asking for is unacceptable.
I'll give you points for sticking to your ideological guns, but that route is more expensive to us as a society. One set of national rules is clearly what the framers of the Constitution had in mind. Further, the whole concept of use taxes (which is what the states are trying to collect now since the Constitution won't let them tax someone in another state) requires such a level of surveillance to enforce that I'm just not comfortable with it. Basically ALL purchases in the whole country would have to be searchable by any state who wants to enforce their use tax. No thanks.
Why insert more ham-fisted bureaucracy when it isn't necessary?
How is suggesting interacting with a single bureaucracy worse than dealing with 50?
Vendors can issue tax payments directly to the states, instead of having vendors collect taxes, send it to the Feds, and then have them send it to the states?
I could get on board with that. I still want a single rate that applies to everyone. I, personally, would hate to write 50 checks and do 50 sets of paperwork every year, but I'm sure Intuit will get right on it.
The problem with that is that around here the sales tax is 9.5%, which would mean that the city and or state would be losing revenue that they're entitled to collect.
Right now they are getting 0%. Something tells me they won't complain that loudly. I'd argue that since the business has no local presence, it is not using any state services and should not be paying full tax anyway.
It's not just 50 states, it's all the municipalities that are entitled to collect sales tax in various states.
That would bring the total up to 10,000 different tax codes, then. I think my point is even stronger in that case.
Don't get too hung up on "5%". I just pulled that number out of my ass.
Under the existing bill, the states can all come after you individually. It might be 12%, it might be 2% - depends on where your customer lives. I'm proposing to either leave it the hell alone, or implement a single blanket rate that applies to all customers, who would then be immune from any local use taxes on that item.
Multiply the cost of that database and the time used to hook your systems into it and the cost of submitting all those taxes by the number of businesses shipping goods and you have a pretty big number, I suspect. The alternative is you could have a single simple rule for everyone that captures 90% of the problem.
If the tax crosses state borders, then it should be collected by the Feds - or at least the rules should be national and consistent. Collect, say, 5% from everyone and then distribute it according to billing address. Making merchants deal with 50 different tax codes is onerous. I hope this bill is defeated.
But then the first link claims that the limos run on gasoline.
I'm not sure I care anymore. :)
a) Yale is not Harvard. Incidentally, he also had his MBA from Harvard so I'm not sure why you mentioned Yale.
b) He is exactly the kind of edge case I was talking about.
And yours! It's recursive!