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Mississippi Bill Would Tax Software Sales 293

Posted by kdawson
from the join-the-crowd dept.
Byzantine writes "The Mississippi Legislature has passed MS House Bill 1461 which would amend the state's tax laws specifically to charge sales tax on 'electrically transferred digital products,' including products bought via mail-order. The bill is currently on the governor's desk awaiting signature." Softpedia claims that 20 states have enacted download taxes of one sort or another — most of them for iTunes music — and that New York is considering taxing downloads of all kinds.
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Mississippi Bill Would Tax Software Sales

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  • Tax Evasion? (Score:5, Insightful)

    by veganboyjosh (896761) on Tuesday March 10, 2009 @06:55PM (#27142411)
    I wonder how this will play out with regards to illegal downloads? If one gets caught/charged/accused of transferring "digital goods" to which they don't own the copyright to, are they then responsible for the taxes those goods would have generated had they been legit?
    Reminds me of Al Capone's downfall...
  • Re:Tax Evasion? (Score:5, Insightful)

    by geekoid (135745) <dadinportland@yBLUEahoo.com minus berry> on Tuesday March 10, 2009 @07:01PM (#27142471) Homepage Journal

    tax fraud, that's how they will nail downloaders.

    Ingenious.

  • Re:Inevitable.... (Score:3, Insightful)

    by geekoid (135745) <dadinportland@yBLUEahoo.com minus berry> on Tuesday March 10, 2009 @07:02PM (#27142479) Homepage Journal

    There Job is to find way to pay for services that people demand.

    No one taxes to just tax. It's hard enough to tell people you need to tax for the things they want!

  • Logical Move (Score:3, Insightful)

    by nurb432 (527695) on Tuesday March 10, 2009 @07:03PM (#27142489) Homepage Journal

    When the chips are down, tax people even more and damage the economy further.

  • by Chabo (880571) on Tuesday March 10, 2009 @07:11PM (#27142585) Homepage Journal

    Because there's no "value added" by introducing a Value Added Tax.

    Why should a business transaction be taxed simply because it happened? Taxes are meant to give the government the bare minimum of income necessary to conduct government business, not to punish people for spending money they received in exchange for their labor.

  • Re:Inevitable.... (Score:2, Insightful)

    by geekoid (135745) <dadinportland@yBLUEahoo.com minus berry> on Tuesday March 10, 2009 @07:12PM (#27142603) Homepage Journal

    I lived in CA long enough to remember when they had an excellent schools system, both K-12 and community college. Watched it all go to hell when they passed prop 13. Limiting taxes.
    I left in 2000.

  • Re:Inevitable.... (Score:2, Insightful)

    by Anonymous Coward on Tuesday March 10, 2009 @07:25PM (#27142751)

    No, their job is to preserve individual liberty and to stay within the boundaries set for them by the Constitution. The US government is failing terribly at both.

  • by CrimsonAvenger (580665) on Tuesday March 10, 2009 @07:29PM (#27142801)

    Thing is, the federal debt in the USA has been spiralling so fast since 2000 that all of these "reports" and pointing to same as the portents of the Four Horsemen are going to go the way of the dodo in a dozen years or so - or less.

    All very well and good.

    But Mississippi isn't the Federal government, and Ms can tax whatever it likes without affecting the Federal deficit in the slightest.

    Note, by the way, that Ms, like pretty much all the States (and unlike the Federal government), are required to balance their budgets.

  • by girlintraining (1395911) on Tuesday March 10, 2009 @07:30PM (#27142813)

    I think you misunderstand our method of government. Unlike most "western european" countries, our government is based on a division between the county, state, and federal levels. And it's not a clear division either. For example, a federal law trumps a state law, unless it happens to be in the state constitution, in which case only the federal constition can override or restrict it. You might imagine what merry hell this plays on our justice system (give you a hint: Everyone in this country is a felon, it's just that some of them haven't been caught yet). The law books are just that damned dense, and have that many competing administrations. And laws are rarely, if ever, repealed. Now, imagine how hellacious that is, and multiply it by a hundred and you have the tax codes in this country.

    It's not about tax as a percentage, or tax of a certain good or service, but simply knowing what to pay in. The tax code has become so horribly complicated that nobody wants to fix it, so they throw monkeys at it and they flip levers and switches and hope that it dials into the desired amount of income. It never does. Recently they approved a federal tax on cigarettes, one of a variety of so-called "sin taxes" that we knew the democrats would push forward as the solution to the deficit (if you're a minority of some kind or another -- prepare to be taxed. Alcohol is safe for now though because everybody drinks in a crap economy). Next they'll be taxing food with "trans fat" in it, and other acts of sheer idiocy, and the pattern will continue.

    You have this attitude that if you sprinkle magic european-thinking fairy dust over america there problems will all be solved. That's really naive. The current state of affairs is a byproduct of how this country's government is structured, and while at times it irritates all of us, it is all about tradeoffs. As I'm sure you're discovering across the pond right now, the European Union is a giant clusterf--k of monumental proportions. Our country did the same thing -- and then we abandoned that system of organization and created the US Constitution. The European Union is experiencing many of the issues our country dealt with 200 years ago -- which is, how do you organize a number of autonomous and sovereign member states into a cohesive whole? There must be a balance struck between the power of the central authority, and that of its member states.

    Our balance point may not be perfect, but it's been around for 200 years. I doubt the European Union will last another twenty. For starters, their constitution is way too long. ;)

  • Re:Logical Move (Score:3, Insightful)

    by geekoid (135745) <dadinportland@yBLUEahoo.com minus berry> on Tuesday March 10, 2009 @07:34PM (#27142855) Homepage Journal

    Please show me where taxes on the citizens hurt the economy. I am not talking about corporate taxes; that is a different matter.

    They only way out of this is education, and education costs money. You need things for civilization, and that takes taxes. Increasing purchase, and decreasing income will not work.

  • Re:Inevitable.... (Score:3, Insightful)

    by Obfuscant (592200) on Tuesday March 10, 2009 @07:35PM (#27142859)
    There Job is to find way to pay for services that people demand.

    No, their job is to provide the services they are supposed to be providing. They have gone so far afield in the last few decades that many people believe that "I want" is justification for the state to do something. "I want a place to live", and politicians jump to help. "I want a free college education". "I want a museum honoring left-handed butterfly collectors."

    It's hard enough to tell people you need to tax for the things they want!

    It's supposed to be hard to say that, and they SHOULD be saying that, but they don't. They pretend that it's "free". "Free" education. "Free" healthcare. "Free" housing. Don't ever expect to hear a politician that is in favor of spending on something to call it "taxpayer-funded" service. It's always "free".

  • Bad news (Score:2, Insightful)

    by fishbowl (7759) on Tuesday March 10, 2009 @07:40PM (#27142909)

    The bad news is there might be a sales tax on downloads.

    The far, far worse news is you are in Missinhippie. Get out while you can.

  • Re:Inevitable.... (Score:2, Insightful)

    by Anonymous Coward on Tuesday March 10, 2009 @07:58PM (#27143115)

    I think the next tax will be computer taxes... for every computer you own you will be taxed appropriately. Doesn't matter if the computer is a TI-2 or the latest Dell super computer. To make it easy a computer will be defined by a cpu, for every cpu in your house you're taxed...

    If you can't afford to have a quad core computer, microwave, refrigerator, tv, remote control, digital cable box, digital thermostat, hot water heater, alarm clock, cell phone, LAN telephone, home router, home entertainment center, ps3 (ooo x8), xbox 360 (x3), I could probably go for awhile.

    I hope this puts into light that property should not be taxed, because guess what, property is property regardless of land or home electronics.

  • by CrimsonAvenger (580665) on Tuesday March 10, 2009 @08:04PM (#27143203)

    I didn't suggest Mississippi was the Federal Government. I did suggest - and do suggest - that the overall deficit burden at all local state and Federal levels is interdependent and is certain to result in cessations of funding and transfers from one government level to the next, requiring significant increase in taxation over the next 12 years to come close to maintaining current commitments.

    Not so much as you might think. Federal commitments are just that - Federal. If the Feds don't, or can't, send the money to the States to cover Federal commitments, the States aren't actually under any obligations to find money to pay for those Federal commitments.

    That means when the federal government runs a deficit, all ogvernment levels will ultimately be paying taxes to deal with the fallout of that red ink on their budgets in subsequent years. There is no free lunch.

    Nope. Feds can't pay their bills, they can't. Doesn't obligate the States to pay the Fed's bills.

    My point: You will not have a choice. You once had that choice and you made that choice. You have been enjoying a dollar's worth of government for much less than a dollar for decades. That dollar's wortg of government was not "on sale". The bill for the difference - between what you got and what you paid for it - comes due.

    Won't argue with that. But much of that "dollar's worth of government for much less than a dollar" has been at the Federal level. States aren't allowed to play those games, generally.

    So, when the piper comes calling for his payment, the Feds will be raising taxes on everyone and everything to make up the differences. But the State governments won't be in that pickle - they have no deficit spending to make up, and the Feds can't really require the States to spend money (well, they DO do so now and then. But the Courts generally tell them to take a flying leap if the States don't want to play).

    So, in ten or twenty years (I'm betting closer to ten than twenty, myself), the Feds are going to be in a serious crack. But the States will, in general, be fine.

  • by rtrifts (61627) on Tuesday March 10, 2009 @08:40PM (#27143615) Homepage

    I well understand the overall complexities of monetary policy. Spending money you do not have means borrowing it. You didn't have it, now you borrowed it. There. No you have it to spend.

    We're clear on that part, right?

    I'm not talking about pating the mortgage and groceries. Governments don't work that way. But in the end, they entire monetary system still depends upon governments paying it back - and being charged interest in the meanwhile.

    At the ned of tha day, when the interest on your debt forms such a great portion of your overall budget that it squeezes out vital programs, you will have no choice but to raise the tax. There is a level of service that people will not accept being cut-off. The bill comes due.

    Put another way, the people you borrow the money to fuind the difference between what you collect and what you spend? They want their interest. That's the deal. They'll probably float the pricnipal again, but that only goes so far. Time comes, they want it for other things, too. Like, say, buying stuff for themselves instead of lending it to America. That's the problem about looking to china to fund your deficit (a problem tied to a very undervalued Chinese currency, doubtless) but there it is just the same.

    Fiscal and Monetary policy is easy when you owe most of the money to yourselves internally. But America crossed that Rubicon long, long ago. There is a very real price to all of this.

  • Re:Inevitable.... (Score:5, Insightful)

    by Buelldozer (713671) <cliffNO@SPAMgindulis.net> on Tuesday March 10, 2009 @08:46PM (#27143691)

    Sorry, I know this is off topic but I can't let it pass without comment.

    So you REALLY think that it was Prop 13 that sank California?

    Why is it always the income side of Government that is deficient? How about examining the expense structure of the state and how it changed.

    Somehow more tax money NEVER solves the revenue problem faced by Government. NEVER. NOT ONE TIME.

  • by rtrifts (61627) on Tuesday March 10, 2009 @08:55PM (#27143797) Homepage

    Last I checked, we've spent $15,000,000,000.00 on a war in Afghanistan and lost a couple hundred Canadian soldier's **lives** there fighting a war because of some nutbars who attacked AMERICA. They attacked you - not us. Mainly because of shit you do and have done - and NOT because of some shit we do and have done.

    We fairly clear on that part?

    Still, given the audacity of the motherfuckers in attacking our closest allies and best friends, spending all that blood and treasure to assist America in kicking their asses was the least we could do for our best friends. And unlike most of the the Western Europeans, we actually put our guys in harm's way in Afghanistan. Our troops are there to fight. Not to be stationed in a base with orders not to fight and just fly a flag and call it "helping".

    We fairly clear on that part too?

    Still, that's the least Canada could do, given 9/11.

    The least you could do, otoh, might be to maybe acknowledge that and say thank you (and sorry for making the war unwinnable and your sacrifice meaningless with that second front in Iraq thing. Real sorry about that guys.)

    Just sayin'.

  • by Buelldozer (713671) <cliffNO@SPAMgindulis.net> on Tuesday March 10, 2009 @09:00PM (#27143863)

    So, will the downloads that Radio and Televsion stations make from their content providers be covered by this?

  • Re:Inevitable.... (Score:3, Insightful)

    by shutdown -p now (807394) on Tuesday March 10, 2009 @09:00PM (#27143869) Journal

    Brilliant use of capitalist arguments to support socialism. Just curious--which are you?

    Probably a pragmatist. People who are not willing to restrict themselves by purely ideological arguments tend to be that.

  • Re:Tax Evasion? (Score:1, Insightful)

    by Anonymous Coward on Tuesday March 10, 2009 @10:13PM (#27144625)

    I'm not sure it's quite the same thing. Al Capone was prosecuted for failing to pay income tax. The source of income was treated as a separate matter than the fact that the tax wasn't paid.

    Serious question: Is there precedent for prosecuting for failing to pay sales tax on stolen physical goods? If so, how is the sales price determined? Since the product was acquired at no cost, wasn't the appropriate tax paid on the cost (nothing) paid by the consumer (thief)?

  • Re:Inevitable.... (Score:5, Insightful)

    by shaper (88544) on Tuesday March 10, 2009 @10:20PM (#27144695) Homepage

    If there's no incentive for people to make productive use of capital, the economy stagnates.

    The incentive for people to make productive use of capital is the reward / gain they get from doing so. I'm no rabid objectivist or "big-L" libertarian, but that's just fundamental economics.

    it's not fair to society to let him keep it for no/low cost when it might be put to better, more productive use for society by someone else.

    Spoken like a true communist. Other than life itself, there is no more fundamental right than the right to property. From your comments I get the impression that you are not a property owner or you would not be so cavalier in taxing it away.

    Reallocating property from one person to another based on "productive use of capital" for the benefit of society over the rights of the individual is always going to be a negative incentive to productivity. Why acquire property if it can just be taken away (or taxed away) at the whim of some powerful individual or group? Some property taxes are probably inevitable to pay for necessary social services (fire, police, etc.) but those taxes should never be used to penalize for some imagined lack of relative "productivity".

    Unfortunately, there are others who agree with your line of reasoning, most notably some US Supreme Court justices. See Kelo v. City of New London [wikipedia.org] for a real world example of the results.

  • Re:Inevitable.... (Score:1, Insightful)

    by Anonymous Coward on Tuesday March 10, 2009 @10:39PM (#27144851)

    So someone who doesn't make a lot of money, but inherits land (which was cheap in the past) should be forced into bankruptcy because a property tax they hadn't planned for was suddenly introduced?

    You go on to compare the assessment policies on a condo in CA with a large amount of land in CT without knowing how their policies differ.

    Try again.

  • Re:Tax Evasion? (Score:2, Insightful)

    by larry bagina (561269) on Tuesday March 10, 2009 @10:52PM (#27144969) Journal
    Let's say you go on wheel of fortune and win a car. You pay taxes on it, as if it were income. Not only that, but you pay taxes on the MSRP, not the discounted price you would have paid, had you actually bought it.
  • Re:Inevitable.... (Score:4, Insightful)

    by cayenne8 (626475) on Tuesday March 10, 2009 @11:13PM (#27145163) Homepage Journal
    "It might not be fair to the teacher to have to pay high taxes on the land, but it's not fair to society to let him keep it for no/low cost when it might be put to better, more productive use for society by someone else. If he can't afford it, let him sell it to someone who can. If there's no incentive for people to make productive use of capital, the economy stagnates."

    So..you're saying you are against the idea that people own things like land/property. That they ONLY 'rent' it from the government (tax==rent)

    Boy, now that is a big change from how things in this country started....

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