Should the government charge you every time you utilize the education system or the police force? Of course not. Therefore, they have to assess taxes on something else, and the general sales tax is the primary source that state governments use. It's the cost of living in a civil society.
What the government spends the money on is precisely not the point of this discussion. Let's try to stay on topic.
California's so called "use tax" is the sales taxes by another name. The primary problem with use taxes is that there are no general, reciprocity agreements between states for the refund of sales/use taxes for out-of-state buyers. For example:
I visit Illinois from California and purchase a television, which I bring back to California. According to the Illinois Department of Revenue's FAQ, I must pay Illinois sales tax at the point of sale, with no provision of getting it refunded once I'm back in California with my purchase. At the same time, as many posters have already pointed out, California expects me to tell it that I've purchased this television, and to pay "use" tax on it.
This is the kind of double-dipping that is not allowed for personal state income tax, and I don't see why it should be allowed for "sales" tax. As I've advocated elsewhere, set the sales tax at the seller's home rate, and apply it to all sales: brick-and-mortar, catalog, internet. Businesses and their customers will only have to deal with one rate, and states can compete on sales tax rates, along with personal income tax, and other measurable differentiators.
Those who suggest that "use" taxes are more fair should consider that any business operating under this tax regimen automatically accounts for "use". E.g., if I sell a million dollars' worth of physical merchandise from my store, that's a million dollars' of inventory that has to be shipped to me, processed, unpacked, stored, packed, and shipped back out. What makes that possible is the infrastructure ostensibly provided/regulated/promoted by the state, which is really what "use" means.
On the other hand, if states really intended the "use" tax to be some sort of tax on spending, then they can simply apply a formula based on the difference between someone's income and savings/investment. Obviously, what you didn't save or invest you must've "spent".
>You don't think it will end up this way no matter what?
I prefer to think that there is still some hope that increased public awareness and participation in the politcal process might still make a difference.
So getting back to my suggestion, besides the fact that most states won't like any attempt to change their tax structures, what are the practicle problems of having the same tax rate for brick-and-mortar purchases applied to internet/catalog purchases?
Charging sales tax based on the buyer's home location makes no sense to me. When I go play tourist in another state, do they first ask for my home address before calculating my sales tax? No. Then catalog/internet sales should have the exact same rules applied to them: Tax them based on the seller's "home" state. Advantages:
A business only needs to care about one tax rate. An immediate, beneficial side-effect is that any brick-and-mortar business can start selling online without having to invest in tax look-up databases and/or tax calculation software.
States can use sales tax to compete for relocating businesses, just like they do now with income tax and relocating people.
I expect that many people reading this are opposed to the idea of "taxing the internet". Let's get real here. Sales taxes are not going to go away; and the longer we fight it with an "all or nothing" mentality, the more we risk having truly draconian (and incredibly brain-dead) solutions imposed by Congress or the courts.
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What the government spends the money on is precisely not the point of this discussion. Let's try to stay on topic.
California's so called "use tax" is the sales taxes by another name. The primary problem with use taxes is that there are no general, reciprocity agreements between states for the refund of sales/use taxes for out-of-state buyers. For example:
This is the kind of double-dipping that is not allowed for personal state income tax, and I don't see why it should be allowed for "sales" tax. As I've advocated elsewhere, set the sales tax at the seller's home rate, and apply it to all sales: brick-and-mortar, catalog, internet. Businesses and their customers will only have to deal with one rate, and states can compete on sales tax rates, along with personal income tax, and other measurable differentiators.
Those who suggest that "use" taxes are more fair should consider that any business operating under this tax regimen automatically accounts for "use". E.g., if I sell a million dollars' worth of physical merchandise from my store, that's a million dollars' of inventory that has to be shipped to me, processed, unpacked, stored, packed, and shipped back out. What makes that possible is the infrastructure ostensibly provided/regulated/promoted by the state, which is really what "use" means.
On the other hand, if states really intended the "use" tax to be some sort of tax on spending, then they can simply apply a formula based on the difference between someone's income and savings/investment. Obviously, what you didn't save or invest you must've "spent".
I prefer to think that there is still some hope that increased public awareness and participation in the politcal process might still make a difference.
So getting back to my suggestion, besides the fact that most states won't like any attempt to change their tax structures, what are the practicle problems of having the same tax rate for brick-and-mortar purchases applied to internet/catalog purchases?
I expect that many people reading this are opposed to the idea of "taxing the internet". Let's get real here. Sales taxes are not going to go away; and the longer we fight it with an "all or nothing" mentality, the more we risk having truly draconian (and incredibly brain-dead) solutions imposed by Congress or the courts.