End of the Internet's Tax-Free Ride? 426
News.com has a piece looking at renewed efforts by both state and federal lawmakers to subject Internet sales to state taxes. "Two bills are pending in Congress that would allow tax collectors to target out-of-state Internet and mail-order retailers, and their supporters are optimistic about their political prospects... Meanwhile, pro-tax states are trying their own ways to circumvent a long-standing rule saying a retailer must have physical presence before it can be forced to collect taxes. One effort came from New York state, where legislators recently approved a measure requiring Amazon and other online retailers (that lack a physical presence in the state) to collect sales tax on New Yorkers' purchases... This is not exactly a new debate... But now, with a Democratic Congress and a potentially Democratic administration next year, the arguments may gain more political traction."
Use Tax (Score:5, Insightful)
Re:Fantastic (Score:2, Insightful)
I'm surprised they don't just make it federal (Score:5, Insightful)
Of course, they'd never consider REDUCING SPENDING, not so long as there's any citizen's assets left untaxed at a rate lower than 100%
Re:Fantastic (Score:5, Insightful)
Which, if you're a major retailer, is probably the point. With the stroke of a pen, all of your smaller competition can be eliminated.
It doesn't have to be that sinister, of course. It could be as simple as the fact that it's an election year, and what better way to raise money for Congressional campaigns (and make sure that retailers throw a few bucks for ex-Congressmen currently "working" as lobbyists) than to threaten to do something unpleasant between now and the election...
Re:Standing (Score:3, Insightful)
Election year agitprop (Score:2, Insightful)
You had me up until you got to that last sentence. More election year tripe. Woooo, the evil Democrats are going to tax my intarnets!!
Re:Use Tax (Score:1, Insightful)
2) Use taxes are just a means to apply a tax without the transaction being considered "interstate commerce".
Bad Summary (Score:5, Insightful)
Double taxation (Score:5, Insightful)
What they are trying to do is shift the burden of collecting tax from themselves to somebody else, the vendors. They have already successfully done this for in-state Vendors via sales tax collection, and also shifted the burden of collecting income tax, Social Security and Medicare to employers. All they really have to do anymore is sit back and get paid.
The problem with requiring Out-of-State vendors to collect sales tax, is that there are approximately a half million tax districts in the United States. As a vendor, I know that there are over 15,000 in my state alone. They change constantly. I get notices in the mail every two to three days of a tax district instituting, increasing, occasionally decreasing or abolishing a sales tax rate. A brick and mortar can just plug in the tax rate for their current community into the desk calculator and they are good to go. A mom and pop internet outfit would have to spend probably 24 man-hours a day updating sales tax rates, or spend extra money to pay an outside outfit to calculate their sales tax for them.
I am sure new York just wants money without having to pursue it themselves, but the assumed unintentional side effect is that they are going to hurt small business on the internet by and large without effect on the large businesses.
WE GOTS TO GET US SOME PORK! (Score:3, Insightful)
Their claim: It's Not Your Money (Score:5, Insightful)
"...money has been unfairly left in taxpayers' pocketbooks. "
"Verenda Smith, government affairs associate for the Federation of Tax Administrators, framed the decision as a moral one of sorts: "Do you want to be a good American, or do you want to be an American who wants to cheat your government deliberately?"
It's not your money. You are cheating the government out of funds to spend on their favorite pork project.
More fear mongering (Score:3, Insightful)
Tax and spend! (Score:4, Insightful)
Oh of course not! And why should they when they consider it their money in the first place. How else to explain the mind set that calls every tax cut 'a giveaway to the rich', refers to how much a tax cut will 'cost' the government, how much it will 'cost' the government to implement a tax cut, etc. In their evil brains it is ALL theirs and they begrudge each and every cent they are forced to 'spend' when they allow a taxpayer to have a dollar with no strings attached.
And the summary is spot on folks. Since the Internet becane bigtime either Congress of the White House has been outside the control of Democrats so the net was safe. Divided government is usually the best kind. Something the Dem leaning slashdot users might want to keep in mind come November. Congress is almost a statistical certainty to remain in Dem hands so ask yourself, Is Maverick really THAT bad?
Re:Standing (Score:3, Insightful)
Re:Tax and spend! (Score:3, Insightful)
BTW you might want to read this: http://slashdot.org/comments.pl?sid=521014&cid=23059926 [slashdot.org]
Re:Double taxation (Score:3, Insightful)
New York will sue and probably win. Do you forget that New York state will tax you [pcworld.com] if you telecommute to work for a company based on NY while you live outside NY. Enter the state on business and you own NY state tax for the YEAR.
Re:Fantastic (Score:4, Insightful)
The only real negative effect for internet businesses is that they've been evading sales tax for years, and now their customers will have to pay more. Which I find personally a little annoying, but I don't really oppose it, it was kind of inevitable -- the only reason this loophole existed in the first place is that online commerce became so big, so fast, that the tax system hadn't yet adjusted to the changing consumer behaviors. Effectively, we've been experiencing a decrease in tax during the past several years while it was easy to purchase anything online tax-free, which was not the case pre-amazon. And decreases are nice for the individual, but the balance had to come out somewhere...
$10,000 per person is enough? (Score:2, Insightful)
Re:Fantastic (Score:3, Insightful)
How about the fact that federal receipts went up after the Bush tax cuts? It's called the Laffer curve.
Now, if you subscribe to Keynesian economics, you could argue that an increase in government spending by the same amount would have been more effective than cutting taxes because that multiplier is higher than the tax multiplier.
But, it's really time for the "tax cuts for the rich" propaganda to stop. Small businesses (LLC-types) are taxed as if they were individuals. If you want economic growth to happen from small business, you have to stop taxing the $200k income bracket to death. A lot of the "people" who fall in there are mom and pop shops.
Besides, nobody's moving the Alternative Minimum Tax. With any luck and present inflation, soon nearly everyone will be taxed under the AMT. This means that we'll have a de facto flat tax on income.
Re:Fantastic (Score:5, Insightful)
Re:Fantastic (Score:5, Insightful)
No, they haven't. Tax evasion is what happens when you fail to pay your taxes, or use phony deductions to lower your taxes. Internet businesses haven't been paying sales taxes to other states in the past because the law said that they didn't have to. If this law goes through, that will change until and unless the courts say the law is unconstitutional.
Re:If the Democrats were economically progressive (Score:1, Insightful)
Income taxes are written to be more like Robin Hood; take from the rich, give to the poor (well, in theory... but as the saying goes, the difference between theory and practice is greater in practice than it is in theory).
Re:Tax and spend! (Score:1, Insightful)
Re:I can't believe use tax hasn't been shot down (Score:4, Insightful)
It's an end-run around regulation of interstate commerce being reserved to the federal government. It's arguably unconstitutional in concept. I'm unsure of existing court rulings on it.
The real problem, as mentioned elsewhere, is that New York doesn't have standing to collect from Amazon in Washington (they can't possibly enforce this). Quill Corp v. North Dakota established that you may not even try to compel a company to collect sales tax for your state unless it has significant physical presence.
NY-based affiliates may be a different story, but even then, I'm pretty sure NY needs to collect from the affiliates in their state, not Amazon proper. I'm pretty sure it's more or less the same mechanism and legalities as eBay/PayPal collecting money for auction sellers.
As it stands, at least from media readings of the law, I fully expect this to get struck down, either in a limited way against Quill v. North Dakota, or in a wider way that puts use taxes in general in question.
Re:Their claim: It's Not Your Money (Score:3, Insightful)
Look, it's not the government you're cheating when you evade sales and use taxes -- it's me. And everyone else you know. Because we have to pay your share.
The fact that Ms. Smith sees it from the government's point of view is bad public relations, but it doesn't change the facts of the matter.
Re:Tax and spend! (Score:2, Insightful)
I'm just pointing out that that's not what McCain said.
As a matter of fact he said the opposite in that he would only want it if the fighting died down.
We can disagree, but lets not twist the words of others.
Re:I'm surprised they don't just make it federal (Score:4, Insightful)
The cost of roads is (supposed to be) paid by fuel taxes. These are paid by the shipping company and reflected in their prices.
The cost of fire and police protection for warehouse facilities is paid by property taxes. Any business, no matter where it's located (whether a warehouse in Montana or someone's basement), is properly paying property taxes (it's almost impossible not to; if you don't, some greedy opportunist can pay them and own your property). Peoples' basements and rural warehouses don't need the same level of police and fire protection as brick-and-mortar stores anyway, so it's more efficient for businesses to locate in those places.
Policing peoples' doorsteps is paid for by the customers' property taxes.
There's nothing that internet businesses needs to pay for, which it is not already paying for. The reduced tax revenues are simply the result of the astronomically greater efficiency involved in internet business, relative to B&M businesses, and don't need to be "made up" for.
Re:Election year agitprop (Score:5, Insightful)
The Democrats want to spend lots of money on stupid social programs that don't help anything, and make things worse (see welfare in the 70s).
The Republicans want to spend lots of money on foreign wars, and corporate welfare (Halliburton, Blackwater, etc.).
The Democrats want to pay for their ridiculous spending with ridiculous taxes. The Republicans want to pay for their ridiculous spending by borrowing from the Chinese, printing more money, increasing inflation, etc.
With either one of them, the end result is disaster.
Re:Tax and spend! (Score:5, Insightful)
Pretty much, as a fiscal conservative I understand the need to not spend more money that you make, or can reasonably pay back. I certainly do not understand people paying, for example, half a trillion dollars in a discretionary war with no plans on how repay the debt. It has crossed my mind that these so-called conservative, mostly christian, persons do not feel they have a moral obligation to pay debts that they can paw off to other people, but that, frankly, makes more sense. Any responsible moral person knows the first rule to keep your word and pay off debts.
At the end of the day, taxes pay for things we use and need in this great country. I have no problem paying taxes, because the United States has given me an education, opportunities, and freedom. None of those, especially the last, are free. Why would I want to use things that I don't pay for,a nd perhaps even be charitable. For instance, everyone complains about gas taxes, and they suck. I mostly use about 30-40 miles of road, mostly in crap shape. Outside of town we have a beautiful 6 lane road through cow pasture, built so that developers could make money building and selling houses, and used by by a few commuters who do not even come close to cover the costs of the road. I could complain, but what good does it do. I pay taxes to pay for what we need in America, not for what I need.
OTOH, I do order for amazon, and the lack of taxes is a consideration in my purchase. But it is my states decision to base their income primarily on a sales tax, a tax which is both regressive and extremely difficult and expensive to collect. They could do payroll taxes, or investment taxes, but they don't. Everyone, even those would make barely enough to live on, have to pay the tax. Well, i am sorry. I don't think sales taxes work, and the lesson they should be taking from the internet is and globalization is to create a tax based on ability. Remember, as many conservatives know, a penny from a pauper is worth much more than a dollar from a millionaire.
Re:Fantastic (Score:3, Insightful)
Re:Tax and spend! (Score:4, Insightful)
Re:Tax and spend! (Score:4, Insightful)
I wasn't exhorting the dishonest lefty trolls to consider the virtues of divided government, I was asking the more moderate ones to think on it. The material below is for them, btw.
> Seriously, most of the federal deficits of the last 30 years have been under/due to spending under Republican administrations.
Agreed. But dig in a bit and notice Clinton went crazy taxing and spending and trying to socialize 1/7th of the economy his first two years and suddenly became the 'third way' triangulator we were promised when he was campaigning... just as soon as Newt took the House away from him.
Bush II was much less spend happy in the years when Repubs didn't have both ends of Penn. Ave. Heck, just as soon as San Fran Nan took charge in the House he got so much religion on reigning in spending he found his long lost veto pen. He even waves it around from time to time... too bad he still doesn't actually USE it much.
The exception is Reagan. In his case deficits seem to have been the price he was required to pay to win the Cold War. Democrats would agree to let him build up the military, research DSI, etc. so long as he would go along with them continuing to spend to buy votes. Odds are most folk posting on
But in summart, divided government is good. Less gets done with divided government, and I can live with that a lot more than what we have seen the last decade or so when one side reigns supreme. Because sometimes the best action is inaction.
Re:Tax and spend! (Score:3, Insightful)
At the risk of getting burned at the stake, I do see a problem with the mentality that it's "our money" implying we deserve to pay no taxes. We drive on the roads, we expect the fire dept and police to show up if necessary, we cheer on the troops - then we expect it all to be free. Could we disband public education and save a few bucks in tax money? Sure, in the short run, but about 20 years later the GDP would fall by many times the amount "saved." Sometimes taxing and spending is worthwhile.
I think we need a balanced budget amendment to the Constitution. This idea has come and gone many times, such as Grahm/Rudman, and later Ross Perot advocated it. Our current course, especially since Reagan, is nothing short of robbing our children and grandchildren. Whether the deficit is resolved by cutting spending or increasing taxes, at least it would force us to be honest. We have proven beyond doubt that we're not capable of using the good times to repay deficits incurred during slowdowns.
Re:Tax and spend! (Score:4, Insightful)
> balance a budget or stimulate an economy.
> It is cold, hard fact.
No exactly. Go look up the numbers after you jot off a flame at me for being a neocon fool. But the 'cold hard fact' is that revenue to the Federal Government, measured in total or just from the Income Tax is up bigtime. The problem is spending rose even faster than revenue.
And it can't be blamed on the War either. The revenue increase easily covers the War, the problem is we went on a spending binge. While a partisan could try to fuzz the issue with whinging about the razor thin majorities of the Republicans or the RINO problem I won't.
With the President willing (yeah, right) to veto the Republicans had sufficient numbers to have reigned in spending. Democrats would have howled bloody murder, slung the usual accusations about Republicans being uncaring monsters...blah blah the children! blah blah. but they could have made it stick. The problem was they went native, becoming the thing they went to Washington to fight.... they became Incumbents. They discovered the POWER of spending other people's money and they discovered they liked it.
Re:Tax and spend! (Score:3, Insightful)
No argument from me on that one.
> At the risk of getting burned at the stake, I do see a problem with
> the mentality that it's "our money" implying we deserve to pay no taxes
It is MY money, if you don't want YOUR money the Department of the Treasury accepts donations. I lean Libertarian but not so much I think all taxes (and by extension all government) is wicked. Call me a Constituitionalist. So I think taxes are morally acceptable, but we should never lose sight of the fact that is OUR money they government is seizing by force. Keep that in mind and it makes the whole 'is this program worth the money' question a whole different kettle of fish.
> We drive on the roads, we expect the fire dept and police to show up
> if necessary, we cheer on the troops - then we expect it all to be free.
And I don't have a problem with paying for those things. Arguments about the proper level of government which should be responsible, what forms of taxation are most efficent, etc. are of course patrotic.
> Could we disband public education and save a few bucks in tax money?
> Sure, in the short run, but about 20 years later the GDP would fall
> by many times the amount "saved."
Here, I'll argue with ya. If we burned down every Government school and lined out the budget of the Dept of Education I suspect it would lead to a new golden age. Allowing the current system to get near a child should be considered child abuse.
> I think we need a balanced budget amendment to the Constitution.
That is one solution, and one we should consider in the short term. Enforcing the 9th and 10th Amendments would be my preferred solution.
Re:Tax and spend! (Score:3, Insightful)
Well, what your saying doesn't necessarily prove anything. The situation is more complex then that.
-Both George Bush 43 and Reagan's massive tax cuts for the wealthy were accompanied by massive deficit spending for the military industrial complex. This massive infusion of deficit money all goes to corporations and into people's pockets, which raises income, which raises revenue. But the increased revenue from this is all from borrowed money. Both Reagan and Bush raised the budget deficit to record highs.
- In 1993, Clinton 42 raised taxes on the top 1.2% of taxpayers, while giving tax breaks to fifteen million low income families and small business. (This was on top of large tax increases Bush 41 made in 1990). This was followed by several years of increased tax revenue, which led to a balanced budget. By your logic, this proves we can safely raise taxes on the ultra wealthy, while cutting them for the poor and small business, and the economy will benefit even more.
- About the Bush 43 tax cut / increase revenues, fleshing out what I already said; Bush invaded Iraq around the same time he made the tax cuts. So for the years after that, hundreds of billions of dollars were pumped into peoples pockets and corporations to finance that war, which wouldn't have been pumped in otherwise. Of course, people and corporations paid taxes on this money, so it increased tax revenue.
-The country is now in a recession. Retail sales are down, prices are up. Things don't look as good for tax revenue. Does that prove the long term effects of a tax cut are an eventual decline in revenue?
There are too many factors involved to prove tax cuts cause an increase in tax revenue. It could be due to the normal business cycle, or the government pumping huge amounts of deficit spending into the economy.
Note - I am in favor of cutting taxes in principle, but I am more worried that massive deficit spending will lead to our eventual ruin. And in case you haven't notice, deficits have reached an all time high under Bush
Re:Tax and spend! (Score:2, Insightful)
Whether they raise or lower taxes, there is an additional costs in paying of the implementation of the new precedures from printing and mailing notification to re-training the departments responsible for collecting the new tax or tax rate.
Re:Tax and spend! (Score:4, Insightful)