Jeff Bezos Calls Sales Tax Requirements On Amazon Unconstitutional 623
Steve1960 writes "Amazon.com chief Jeff Bezos says the online retailer won't collect tax from most of its 90 million customers until Congress clearly mandates it. Although a growing number of states are demanding that Amazon collect and remit tax on sales within their borders, such demands are 'interference in interstate commerce' and prohibited by the Constitution, Bezos said."
If you don't believe him... (Score:5, Funny)
...just buy a copy of the US Constitution on your Kindle and read it for yourself.
Re:If you don't believe him... (Score:4, Funny)
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What's the moderation for either missing the joke completely or failing by making a joke pretending to miss the joke completely that no one gets? Overrated will have to do!
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Obviously a fake. Gouverneur Morris et al. were learnèd men who would never substitute a contraction for a possessive.
In other words (Score:2, Insightful)
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Collecting taxes for multiple states will require that we spend money on employing people to review, understand, program, and monitor these activities.
It means the States will need to employ people in sales tax audit departments to increase the revenues each state collects. It should be a net gain for them.
This isn't restricting interstate commerce - it's just requiring companies that sell to states they are not located in to collect the sales/use tax for those states. It's adding requirements to collect taxes but not saying they can't sell to other states. If they don't collect the taxes the States will have to go after the companies and not the Federa
Re:In other words (Score:5, Insightful)
This isn't restricting interstate commerce - it's just requiring companies that sell to states they are not located in to collect the sales/use tax for those states. It's adding requirements to collect taxes but not saying they can't sell to other states. If they don't collect the taxes the States will have to go after the companies and not the Federal government.
First, taxation is in fact a restriction of trade. Indeed it is one of the primary restrictions of trade exercised by governments.
Second, requiring a company to collect taxes in a state in which it has no physical presence could be construed as taxation without representation, an issue which historically speaking is unpopular in the USA - I think we fought a big war over it at one time... Which is why the interstate commerce clause exists in the first place. According to the Supreme Court (Gonzales v. Raich, 2005) "...For the first century of our history, the primary use of the [Interstate Commerce] Clause was to preclude the kind of discriminatory state legislation that had once been permissible."
Re:In other words (Score:5, Insightful)
taxation without representation
That's not the half of it. The real problem is protectionism. A state wants people to buy locally because it creates local jobs, etc., and an easy way to do that is to create a tariff on goods imported into the state. Of course, that's economically very inefficient because it's a waste of resources for every company to build a separate facility in every state just so they can avoid the tariffs, so we give regulation of interstate commerce to Feds who presumably won't do that.
So what's the problem with sales tax on interstate transactions? The problem is that the state can create raise the sales tax and then give the money to local businesses as subsidies, which has the exact same result as a tariff because the local companies can reduce their prices by the amount of the subsidy (i.e. the amount of the tax) and thereby have that much lower prices than out of state companies. In fact, basically any sales tax collected has essentially this result, because all else equal a higher sales tax will mean either more services/subsidies or lower non-sales taxes, which are both effectively subsidies to local businesses and individuals.
In other words, collecting sales tax on interstate transactions effectively create state-level import tariffs because out of state companies have to collect the tax but they don't receive the benefits from it. It's taxation without representation and protectionism.
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Taxes only impose a deadweight loss on a transaction, or otherwise dis-incentivize it, insofar as the supply of the good is elastic. A perfectly inelastic good, such as a land, or a license to a fixed good like radio spectrum, can be taxed at an arbitrary rate and there will be no distortion of economic decisions.
So yes, taxes are a restriction on trade. And land and radio spectrum aren't perfectly inelastic. Both have a finite value. If the tax is greater than the value to the owner plus the costs of unwinding ownership, then the owner has economic incentive to get rid of the property. That implies demand isn't inelastic. As to supply, land isn't equivalent in quality and location. As demand for land increases, poorer and poorer quality land will be purposed for the demand. Similarly, if demand goes down, then the
Re:In other words (Score:5, Informative)
Except it is unconstitutional for a state to tax or regulate interstate commerce. Imagine if California could put a tariff on Florida Orange juice coming into the state to protect California growers?
That is one of those things that is clearly forbidden in the constitution. The issue is that the internet confuses where the commerce is taking place but it is no different than catalog sales and those are also not taxed.
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No, no tax on most (unprepared, raw?) items. Snack items and other items (I don't recall all the rules) are taxed.
Today I bought a Subway sandwich. I did not have it toasted. If it was toasted it would have been taxed (no extra money in Subway's pocket, just the states). Any hot sub is taxed as well.
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Yes, but this isn't an interstate transaction, the transaction is considered to be at the home of the individual who is making the purchase. The only reason why Amazon collects tax in states with a definite presence is that it's not able to twist things that far.
And Amazon is arguing that it can't be required to collect the tax, there's no argument about the taxes being owed.
Re:In other words (Score:5, Insightful)
this isn't an interstate transaction
That's some pretty specious logic.
Are you going to claim that sending an envelope of money to someone in another state is not an interstate transaction? If it is one, then sending a digital representation of money to someone in another state is functionally no different. If it is not one, I'd like to propose that your Kool-Aid be listed as a Schedule II drug.
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Fine then, we'll just have everyone pay sales taxes to the state where the warehouse is located. (Of course, this means the warehouses will be located in no-sales-tax states.)
Buying on the internet isn't all that different from getting in your car, driving to another state, going into a store there, and buying it, and then having a private shipper ship it back to your house for you. In that case, the only sales tax you pay is to the state where the store is located, not where your house is located.
Similar
Re:In other words (Score:5, Insightful)
> this isn't an interstate transaction
Well, I guess I'll agree with you as long as the item was warehoused at, purchased within, and shipped to the same state, and at no time during the transaction did any of the http packets or funds cross state lines.
Otherwise, it's interstate commerce.
Re:In other words (Score:5, Informative)
Amazon collects tax it has actually presences in, such as Washington State.
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Routing is wierd. You'd have to look at the packet source and destination - looking at the path would really be unfair.
I've seen shit go from atlanta to texas and back instead of just going around the metro 'ring'
Re:In other words (Score:5, Insightful)
This isn't Amazon twisting anything. The precedent has been established for eons back to mail order catalogs (and probably before). When you order from a company residing in a different state they are not obligated to collect the taxes from you to pay *your state for the purchase. *You are actually obligated to report such purchases and make the tax payments yourself. This is highly unenforceable (and many people have no idea they have to do so) so this ends up being a vast sea of tax evasion which the states are always trying to recoup as much of as they can.
Yes, it would be a pain for Amazon to figure out every state's tax laws and have their systems properly calculate, charge and then pay in the tax payments BUT that's not the point. They are in no way required to do so by the only entity with authority over interstate commerce (The Federal Government) and they have no incentive to do so given the costs and liabilities they would incur. SO we who don't live in states where Amazon has a significant presence get to evade taxes and procure products significantly cheaper than those who live in Amazon encumbered states, the states get to whine about their lost tax revenue, and the federal government gets to stay out of the fight until the states try to usurp their constitutionally protected powers.
The only thing that has changed between Ye Olde Sears Catalog and mighty Amazon is the scale and ease at which money is slipping away from the state's grasp AND current budget shortfalls causing states to look anywhere they can for that money.
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You might have missed Amazon canceling affiliate programs with residents of states which have attempted to enforce that rule. This is because Amazon actually doesn't have physical presence in most states without the affiliate programs.
Re:In other words (Score:5, Informative)
The states are wanting Amazon to pay YOUR taxes,
No, they want Amazon to COLLECT your taxes. The same as McDonalds, and Payless Shoes do when you make a purchase and they add sales tax to the bill and then cut the state a check for that amount.
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No, you're simply wrong. I'm astounded at the level of flat out wrong statements in this thread. The GP described the reality accurately (at least in California). If I slip over the border to Oregon and buy goods to avoid sales tax, and then I bring them back to California I am legally required to report them and pay the sales tax I would have paid if I had purchased them in California. This isn't some new law that came up because of the internet. It is decades old. It is not unconstitutional. Most (
Re:In other words (Score:5, Informative)
If states can allow and levy taxes on Indian Casinos, why can they not levy taxes on corporations selling to or from their state?
Bzzt. Wrong. States do NOT levy taxes on tribal casinos that are operated on tribal land.
Per federal law, tribes operating gaming establishments must enter into Tribal-State Compacts. [wikipedia.org] with their respective States.
Any money the State gets is per Compact negotiations ultimately derived from Federal law, and in fact these compacts are not legal until they are accepted and entered into the Federal Registry. Furthermore, the federal laws governing this entire situation specifically point out that they do NOT give the States the authority to "impose any taxes, fee, charge, or other assessment upon an Indian tribe."
Now get off my lawn, nub.
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It's a joke, son. Lighten up.
Why not just raise taxes on the rich? (Score:4, Insightful)
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including from canada. Where we have a strong currency, diverse economy and marginally less incompetent politicians than in the US.
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You are just going to create a pursuer/evader problem with this brain-dead "tax the rich" panacea.
What makes someone rich? Pick a number. During the last US election cycle the number of what constitutes rich varied in values (the ones that came to mind were 40k, 250k, 1mil and 5mil). Anyone who is near or at the limit of being thrown into a higher tax bracket because of an idea like yours is going to do the most natural response: Keep themselves just shy of that limit. The reason "tax the rich" doesn't work
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The reason "tax the rich" doesn't work is because it creates incentives for people becoming underachievers.
I have never understood this. If taxes are increased for you you're not going to be able to increase your total take home by reducing your tax bracket. For example say they increase the tax on income over $250,000. You still pay the same in tax rate as everyone else under $250,000 on your first $250,000 but now on income over that amount you pay an additional tax. You're still going to take home more than if you were under $250,000, just not quite as much as before.
And rich people don't create jobs just
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Let's see, your base your premise and conclusion with an ad hominem attack
Just because it is an insult does not make it an ad hom. And I'm not saying that you are stupid and that therefore your argument is wrong (without actually examining whether it is right or wrong). I'm saying that having examined your argument, it is wrong, and that you believe in it anyway, and therefore you are stupid. I think there's a difference.
Certainly, it is easy to discover that in a system of progressive income taxation, tax rates only apply to taxable income within a particular tax bracket; not to
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you are implying that taxation should be based on need. Implying that the needs of carrying the poor on the backs of the rich is a good thing.
It's based on what's practical, and within those bounds, a mixture of utility and empathy. People with money are better-equipped to assist people who have none; people who have more money more so than people who have less.
Other than abandoning the poor to their fate, or shifting the lion's share of the harm caused by being taxed to people who are less able to bear it (the middle class), what alternatives are there in the short term?
In the long term it would be nice to help poor people all escape poverty and
Re:Why not just raise taxes on the rich? (Score:5, Informative)
Just raise the income tax back to pre-Regan era levels
I would say I'm amazed at the economic illiteracy of /.'ers, but it's not really a surprise given political discourse these days. I'll let the Joint Economic Committee do the talking for me. http://www.house.gov/jec/fiscal/tx-grwth/reagtxct/reagtxct.htm [house.gov]
During the 1980s ERTA had reduced personal tax rates by about 25 percent, while the Tax Reform Act of 1986 chopped them yet again.
after the high marginal tax rates of 1981 were cut, tax payments and the share of the tax burden borne by the top 1 percent climbed sharply. For example, in 1981 the top 1 percent paid 17.6 percent of all personal income taxes, but by 1988 their share had jumped to 27.5 percent, a 10 percentage point increase.
The share of the income tax burden borne by the top 10 percent of taxpayers increased from 48.0 percent in 1981 to 57.2 percent in 1988. Meanwhile, the share of income taxes paid by the bottom 50 percent of taxpayers dropped from 7.5 percent in 1981 to 5.7 percent in 1988.
The 1993 Clinton tax increase appears to [sic] having the opposite effect on the willingness of wealthy taxpayers to expose income to taxation. According to IRS data, the income generated by the top one percent of income earners actually declined in 1993.
according to the FY 1997 Clinton budget submission, individual income tax revenues as a share of GDP will be lower during the first four years of the Clinton tax increase, which include the effects of the 1990 tax increase, than under the last four years of the Reagan tax changes (FY 1986-89)
Even so, individual income tax revenues rose from $244 billion in 1980 to $446 billion in 1989.
Re:Why not just raise taxes on the rich? (Score:5, Interesting)
So eliminate all exemptions for those above a certain income. No overseas stashes, no lower capital gains rate, no nothing. Attempt to hide or underdeclare a significant amount of income, you pay triple and do time.
Oh, you'd prefer to have a "residence" in Bermuda, would you? Enjoy your trip! Just sure you keep paying every nickel of your taxes from there, too. Traveling abroad remains much more pleasant if your passport doesn't get revoked with a wanted felon watch on it.
Those who have benefited most greatly from society can damn well pay most greatly for its upkeep. If they try to evade, society has every right to turn on them. No more accepting this "They'll duck it anyway, who cares?" If that's the case, get them to quit ducking it. Multibillionaires are notorious for demanding government handouts, but I imagine they'll draw the line at getting a mandatory vacation at Uncle Sam's expense for a few years, and they'll pay their damned taxes. They'll screech, but they'll pay.
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OK, any of these Billionaires want to trade my wealth and tax burden with theirs is welcome to.
But seriously, the "tax burden" went up when Millionaires became Billionaires.
If I'm a CEO, and instead of making 30 times the base workers salary, I now make 300 times the base workers salary -- how many fools will I have in the media quoting the stat that I now have a "higher tax burden."
This really isn't complicated math folks. This is more the result of brainwashing otherwise intelligent people by repeating a
If the rich have all the money.... (Score:5, Insightful)
after the high marginal tax rates of 1981 were cut, tax payments and the share of the tax burden borne by the top 1 percent climbed sharply. For example, in 1981 the top 1 percent paid 17.6 percent of all personal income taxes, but by 1988 their share had jumped to 27.5 percent, a 10 percentage point increase.
The share of the income tax burden borne by the top 10 percent of taxpayers increased from 48.0 percent in 1981 to 57.2 percent in 1988. Meanwhile, the share of income taxes paid by the bottom 50 percent of taxpayers dropped from 7.5 percent in 1981 to 5.7 percent in 1988.
Look, I'm simply fed up and exhausted with people such as yourself endlessly spouting these same statistics about the supposedly ever increasing relative tax burden on the rich and how this supposedly makes everyone with a 7 figure income some kind of martyr. Claiming or even unequivocally proving that the rich account for higher percentages of total tax paid today than yesterday does not amount to proving that the rich are getting screwed or that their taxes are rising at a faster relative rate than other people's.
What percentage of all personal income earned by US citizens do the top 10% make, today vs. yesterday? The top 1%? It's complete chicanery to bemoan the rich paying an ever increasing percentage of the tax pie without addressing whose income is rising and whose is falling. If the rich have been claiming an ever increasing percentage of total gross income earned by US citizens then no shit their taxes should be going up. That is, in fact, the claim of every liberal economist in the US: that the relative wealth of the top 1-5% continues to increase by a couple points per year while the middle and lower classes have experienced year-over-year losses in relative economic power for 39 years straight (I seem to recall claims that 1972 was the modern-era maximum for purchasing power and financial stability in the lower 90% of earners).
Convince me that the rich don't have all the money and then I'll agree that they shouldn't pay all the taxes.
The 1993 Clinton tax increase appears to [sic] having the opposite effect on the willingness of wealthy taxpayers to expose income to taxation. According to IRS data, the income generated by the top one percent of income earners actually declined in 1993.
There shouldn't be any fucking choice about whether you "expose" income to taxation! If it's income, it gets taxed. This quote in comparison with your other choices amounts to admitting flat-out that while claiming they're sad little martyrs who pay all the taxes for everyone the rich are simultaneously hiding money from taxation. I can see things like a slightly lower (and by "slightly" I mean "sure as fuck not 20%+ lower") capital gains rate or a respectable deduction for capital gains to create investment incentives, but there should be no category of income, no method of accounting, that makes millions of dollars totally tax free.
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It's because the federal government is barred from setting tax rates on a state by state basis. What's doing well financially in South Dakota would likely be impoverished in many other parts of the country. So, you do wind up with those situations where somebody is getting money back, but doing OK. But in general it doesn't work out like that.
Around here somebody making 30k is barely scraping by when you consider the retirement savings and high cost of living. Sure, one can be much more comfortable if one i
If they lay off people (Score:2)
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so you can safely assume that any firm is at their current minimum level of employment given their sales. Raising (or lowering) taxes is not going to increase their sales,
The fallacy of ignoring the demand side of the equation. Raising taxes will be passed on to the consumer, and higher prices will result in lowered sales due to lower demand.
(And presumably, when they invest that money elsewhere, that will create jobs.)
Yes, for the Chinese, the Mexicans, the Costa Ricans, the ... wherever else the taxes are lower. If they're going to shut down the domestic business, they might as well move at the same time.
"Why would they lay people off...?" (Score:3)
Why would they lay people off if these people are making them money? If the government takes a little bigger chunk of profits, the logical thing would be to hire more people to make up the difference.
Because the marginal cost of a given employee exceeds the marginal value, and therefore they become a net loss to the business. It's a straight cost/benefit calculation.
The same goes for unfunded government mandates for workers comp and other per-worker costs to the business: if it costs me 75% to pay two people time and a half for 4 of 12 hours, my cost has gone up by only 1.5 times the hourly cost times two plus fixed costs I would be out no matter what. As long as that amount is less than the regular h
Re:Finish your sentence! (Score:4, Insightful)
Re:Finish your sentence! (Score:5, Insightful)
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If we spent on the military and in NASA what we spend on welfare and medicare in the US. We could replace every aircraft and ship in inventory with new equipment EVERY YEAR. We could build a new space station in orbit EVERY YEAR. We could build a new moon base EVERY YEAR. We could take a trip to Mars EVERY YEAR, and the sad part is we would have money left over.
True, but a few million senior citizens would be dead, partially because they spent their lives working in jobs where instead of providing a decent
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What the fuck are you talking about?
DoD budget this year is $553 Billion. http://www.gpoaccess.gov/usbudget/fy12/pdf/BUDGET-2012-BUD-7.pdf [gpoaccess.gov]
The Department of Health and Human Services, which funds both Medicare and Health and Human Services has a budget of approximately $80 Billion. http://www.gpoaccess.gov/usbudget/fy12/pdf/BUDGET-2012-BUD-11.pdf [gpoaccess.gov]
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You can easily get a substantial portion of that $1,4 bn by cutting the defense spending down to something reasonable, last I checked we were spending almost half that much on defense. Then you close tax loopholes, such as the ones that allow businesses to book losses without booking gains at the same time.
Lastly, you keep in mind that the deficit right now is in large part a reflection of the economy being in the dumps, tax revenue is down on the individuals who are paying taxes, and we're having to spend
Re:Finish your sentence! (Score:5, Insightful)
Re:Finish your sentence! (Score:4, Informative)
It does up to a certain point. Increasing the tax rate from 0% to 5% will certainly raise more revenue. From 5% to 10% almost certainly will as well. From 85% to 90% probably won't. The tipping point is usually considered to be about 60% for total tax take from all sources.
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Re:Finish your sentence! (Score:5, Insightful)
The poster might be aware of this, but when Dick Cheney said "Reagan proved deficits don't matter", he meant "Reagan proved deficits don't matter" when it comes to re-electing Republicans.
Cheney didn't say they didn't matter economically and that was the point. GWB's first Treasury Secretary was shocked at Cheney's psychopathic immorality---Cheney didn't give a crap about actual general economic welfare or the future, just more power for his kind of people in order to lower taxes on them.
House Republicans are deficit-cutting dragons until the nanosecond their budget actually can get passed. Then it flips to spend spend spend (on old people & military, no brown people), and what they really want, yet more tax cuts for the rich.
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If that's the case, then why don't we see that happening when the tax situation changes drastically? I don't recall having huge numbers of wealthy people moving to the US when Reagan cut taxes from ~73% down to the mid 30s, and likewise there's no evidence that prior to that that the rich had fled high taxes elsewhere.
It's easy to say that they would move, but guess what, the only places that they'd likely want to live have taxes which are substantially higher than they are here.
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I don't recall having huge numbers of wealthy people moving to the US when Reagan cut taxes from ~73% down to the mid 30s
That's because controlling a company from another country was far more difficult in those days, and because they could move to Switzerland and pay a fixed $50,000 or so in tax rather than paying 30% or whatever in America.
How about work camps (Score:2)
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How about we stop paying for deadbeats who refuse to get a job instead? Why should the productive shoulder the burden for the lazy fucks? I say let the welfare leeches work or starve.
How about people who are unable to get work, and have just been kicked aside by people like you, engage in a violent orgy of destruction, and kill all the wealthy people that they can find, and take for themselves the remaining assets, property, factories, etc.? After all, there's a lot more poor people than rich. And whatever you may think of the long term effects of such an uprising, it's probably little comfort to the wealthy who face a guillotine or a firing squad.
The haves can surely afford to give som
Re:Why not just raise taxes on the rich? (Score:5, Informative)
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Here is the actual data (just a few years old though)
http://www.cbo.gov/publications/collections/tax/2010/AvgFedTaxRates_Summary.xlsx [cbo.gov]
If you make only 30K (in pre-tax income) a year, that places you roughly in between the bottom two income quintiles.
You can clearly look that the bottom 40 percent pay no income tax as the numbers for the bottom two quintiles are negative for their share of tax liabilities. This means your refund at the end of the tax year more than offsets the federal income taxes you had to
That's just plain wrong. (Score:5, Informative)
47% of American households do not contribute to the federal budget.
That's just plain false.
40% of the federal budget comes from payroll taxes. That's a 15.3% tax on all wages up to about 90k or so. It's 2.3% after that. It's 0% on rich people income like dividends, capital gains, interest, etc.
The poor may not pay income taxes... but they don't have much income. The rich don't pay payroll taxes, and they have a ton of income.
If you add it all up, the very, very poor come out at about 0 on taxes. Once you get into the lower middle class, federal taxes are pretty much flat-rate from then on - income taxes go up, tax breaks go up (like home mortgage deductions), payroll taxes go down, and more income comes from "favored" means like dividends and capital gains that are taxed at very low rates and interest that doesn't get a payroll tax.
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Minor nitpick. Half of that 15.3% is paid by the employee. The other half is paid by the employer. I never understood the point of doing it this way. It's the same amount of money the employer is paying to hire the employee, whether they give half the payroll taxes to the employee and half to the government, or all to the employee who then gives it all to the government. It's a pointless extra ac
Re:Why not just raise taxes on the rich? (Score:5, Informative)
The really poor actually pay a disproportionately high percentage of their income in taxes because sales, gas etc. taxes are not indexed to income.
After a certain level of income is reached tax rates start going down until you start becoming liable for federal income tax. This group is not necessarily poor, but is certainly not well off.
At this point your rates start going up.
After you reach a certain level of wealth the rate starts going down again on average because more income tends to come from dividends, tax free bonds, and cap gains which are tax advantaged.
This is why Warren Buffet can go around saying he pays a lower tax rate on his income than his secretary.
Very few will leave (Score:2)
What Isn't Unconstitutional? (Score:5, Funny)
I'm just waiting for the Constitution to be declared unconstitutional, at which point a dark vortex will begin swirling underneath Washington D.C. and devour the National Mall...
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What Isn't Unconstitutional?
The document is really quite simple. A good way to think about it is that it's an INCLUSIVE list of governmental powers, rather than an INCLUSIVE list. In other words, if the Constitution doesn't SPECIFICALLY allow it, the Federal government can't do it. (At least that's the theory.)
So it shouldn't be surprising that so many things are unconstitutional-- it's a pretty short document.
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I'm assuming there's supposed to be an "EXCLUSIVE" in one of those two spots, no?
But yes, that just gives more credence to why the term is overused. It's like saying because something isn't in the kernel, it shouldn't be included in any releases of an OS; in theory you could have a micro-government subsisting on just the constitution, but people demand things like police services and Flash 10, so you make room for them at lower levels, where they can do less harm to the overall structure.
Also -- it's kinda
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... the Constitution to be declared unconstitutional...
Isn't it already?
Hmmm... (Score:5, Informative)
A state with no Amazon business would be on dubious interstate-commerce ice(though post Gonzales v. Raich virtually anything is arguably interstate commerce); but saying "businesses wishing to conduct business in this state must abide by state laws" is hardly a bold arrogation of interstate powers. Bezos is, shockingly enough, just protective of his ~5% advantage over the B&Ms...
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"If I've been following the case correctly, the states demanding action are states where Amazon has a business presence and a customer."
RTFA.
FTA: “We’re no different from other big chains of retailers,” Bezos said. “They don’t collect sales taxes in states where they don’t have [employees], either.” ...
First of all, most of where we do business — Europe, Japan, some of the states here in the United States – we collect sales tax.
Re:Hmmm... (Score:4, Informative)
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If I've been following the case correctly, the states demanding action are states where Amazon has a business presence and a customer.
There are states that don't consider holding facilities to constitute a "substantial business presence." Those that do, Amazon is pulling out of in order to not have a business presence there. It seems pretty clear, at least from the article, that they are attempting to stay very firmly on the right side of tax law. Each state indicated by the article is a state that Amazon h
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I suspect that there is a reason why Bezos sells stuff on the internet, rather than practicing constitutional law.
Me too. Since it appears he's saying he won't do something he considers unconstitutional until the congress tells him to, I'd say he has a pretty poor grasp on the Constitution and the role the congress plays in regard to it.
For the slow ones, Congress cannot (is not supposed to be able to) tell someone to do something that is unconstitutional. Constitution trumps Congress. Unless they change it.
That said, I don't know that a state requiring sales tax collection on a sale made within that state is uncons
Technically incorrect (Score:3)
Congress can pass an unconstitutional law. It remains in force unless and until the judicial branch overturns it. Besos is correct that he would have to follow the law until that happened.
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AIUI, the states demanding action are the ones that think Amazon having affiliates living locally means the same as Amazon having a business presence in that state. Most people (outside of the states' tax offices) think that's something of a stretch.
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Most people (outside of the states' tax offices) think that's something of a stretch.
Most people who don't have a dog in the fight think that justifying every action by congress as part of the interstate commerce clause is something of a stretch, but see how far that's gotten us?
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That's true, but on the other hand, here for once is something which clearly IS interstate commerce.
Re:Hmmm... (Score:5, Insightful)
This affects more than just Amazon. It also affects anybody who sells used goods on Ebay or Craigslist or the newspaper. You would be expected to collect and mail tax to states ~2000 miles away.
That is taxation by a government where you have No voice. It is immoral and unconscionable.
So the question you should be asking: Do I sell across state lines? Am I prepared to file upto 50 different tax returns to 50 different governments? And what if I make a mistake? Will I be extradited hundreds or even thousands of miles from home to stand trial for Sales tax evasion or penalties?
This also seems like a great way for states to abuse foreign citizens. Example: California residents pay 6% sales tax, while non-residents have to pay 16% sales tax. (Or something similar.) And without a voice in their legislature, there's not a darn thing you can do about it.
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Bezos is, shockingly enough, just protective of his ~5% advantage over the B&Ms...
Although that ~5% may be an advantage, it pales compared to the price differences. For example, a 6' HDMI cable:
$2.99 [amazon.com] with $5.14 shipping or free shipping on order totals of $25 or more
vs.
$12.99 [bestbuy.com] plus $5.99 shipping regardless of order total
So, that's at least a 60% discount over the B&M's Internet site if you want the item shipped to your home, so the ~5-10% sales tax break is nice, but not really needed to crush the B&M.
SCOTUS agrees with Bezos (Score:5, Informative)
Bezos is right. Back in the days of catalog sales, the US Supreme Court decided that only those companies with a legal presence in a particular state are required to collect sales tax from the residents of that state. Unless the Federal Government steps in, there's nothing any of the states can do to compel a company to collect sales tax for states where the company has no such presence.
And here is the case in question (Score:5, Informative)
Quill Corp. v. North Dakota [wikipedia.org]
Just move out of the US... (Score:2)
Bezos needs to stop bitching and just realise he's fighting an uphill losing battle he's going to inevitably lose.
Most of what amazon sells is manufactures overseas (read: China) and Amazon is already somewhat international with presences in other countries, he should just move the Amazon warehouses overseas and be done with it.
*Even if it means going to Mexico or something :)
Disclaimer: I'm an Aussie and don't know anything about the rules of shipping and selling items in the US coming from warehouses in M
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That's about as intelligent as saying that you're going to die anyway so why not just lay down and die now?
Every day he can hold off on unfavorable policies is a bit richer he will be. This way of thinking is what helps the rich get richer while attitudes like yours help keep the poor getting poorer.
one federal sales tax to rule them all (Score:2)
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Slavery was banned by the 13th Amendment - i.e. by amending the constitution in the prescribed manner, not by circumventing it.
And slavery was not enshrined in the constitution. It was tacitly condoned, but the document itself does not even have the word "slave" in it.
Really? (Score:3)
Somehow I doubt progressives would object much to, say, Alabama seceding.
The Constitutional Right to Competitive Advantage (Score:2)
Amazon's got a right to get over on taxes, while its competitior must pay?
Doesn't sound like a fair marketplace to me. Looks like Bezos wants all the government infrastructure support for free--He wants his competitors to pay for the infrastructure.
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It's not that Amazon pays the taxes. The customer is supposed to, per each State's law. Purchases you do online from an out-of-state vendor, should be reported on your state tax forms, and you get a tax obligation on them.
Re:The Constitutional Right to Competitive Advanta (Score:4, Informative)
Amazon is in Washington. If it sells something to someone in Washington, it charges sales tax. If it sells something to someone outside Washington but in a state where Amazon has some sort of presence (like a warehouse), they charge sales tax. Any other state, they charge no sales tax.
Their competitor is in some state. if it sells something to someone in that state, it charges sales tax. If it sells something to someone outside that state but in a state where it has some sort of presence (like a warehouse), they charge sales tax. Any other state, they charge no sales tax.
Seems perfectly fair to me. The disparity arises when you're comparing a mail-order/internet business to a brick and mortar business. The brick and mortar business sells primarily to people who live in the state, the mail-order and internet businesses sell primarily to people who live outside the state. Fundamentally, the problem in that case is that the state's sales tax is too high, and thus puts the brick and mortar business at a competitive disadvantage. But for some reason it always seems to get portrayed as Amazon having some sort of unfair advantage. If the state is unhappy that its businesses are at a disadvantage due to high sales tax, the direct solution within their power is to simply lower their sales tax.
If the states want their cake and to eat it too - keep their high sales tax but level the playing field - it's going to take an act of Congress to do it. Bezos is correct that the Constitution explicitly prohibits state taxation of interstate commerce. Only the Federal government has that power.
Re:The Constitutional Right to Competitive Advanta (Score:5, Insightful)
Well then the competitor has a worse business model.
Yesterday was a perfect example of this. I am buying landscaping right now, and was pricing out bushes. The same bush that sold for $35 per bush at Home Depot, was selling online for $25 FOR TEN.
I am looking to do my job with the lowest cost to me, for the best quality. I am not looking to pay my money to subsidize a giant brick building being used to hold outdoor plants indoors.
It's that whole 'vote with your wallet' thing that people keep complaining that they are unable to do with the local phone/internet companies. Yet when they can do it, its suddenly unfair to the business that doesn't get chosen?
I don't understand (Score:2)
' “We’re no different from other big chains of retailers,” Bezos said. “They don’t collect sales taxes in states where they don’t have [employees], either.” '
They also don't sell merchandise in those states to consumers.
I do sympathize somewhat -- it seems like a bit of a burden to any online retailer to have to log and track sales tax for every single state in the United States in order to do business online. However, simply selling your product directly to consume
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Mail order sellers have NEVER collected out of state sales taxes. North Dakota tried an end run by claiming computers and floppy disks were somehow different from catalogs and U.S. mail, but the Supreme Court disagreed.
That's why you see on some of those mail order offers a thing that says residents of xyz states must pay sales tax. The business has a physical presence in those states.
Part of the problem is the logistical nightmare. 50 different states with 50 different forms, deadlines, 50 different rates
Bezos needs to grow up (Score:2)
How about an internet surtax of, say, 5% on top of any state tax? Or a flat internet tax of 15%?
It's past time that internet businesses need government handouts to survive, especially Amazon. And we who are watching teachers, nurses, fire and police - or other vital local services - being laid off or threatening to stop pensions because tax revenues are falling are demanding that businesses who don't need subsidies not get subsidies.
Congress can slap on whatever taxes it feels is appropriate.
And internet bu
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what an odd sense of morals you have.
Amazon is a business which gets all its money voluntarily providing a useful service for everyone.
Meanwhile the police departments profits by sending young people to jail for smoking a plant. Public sector workers are a monopoly operation and have the state back pensions the rest of the workers in the state don't get access to.
I'm sorry, Amazon is 100% more moral than any board of education, police department of fire fighting service.
I honestly don't know many people wh
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Well put.
Interpretation (Score:2)
http://en.wikipedia.org/wiki/Complete_Auto_Transit,_Inc._v._Brady [wikipedia.org]
Two questions:
1) Does the use of outside businesses for shipping constitute nexus on the part of Amazon? Probably not.
2) Although Amazon forwards packages to these states, are they using any public services in said states outside of the shipping company? Not really.
Truth be told, I think he's got a point under the current law. Simply sending a lot of packages to a place doesn't constitute owing that place a tax, at least on the part of Amazon.
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You don't think states should have the right to collect sales tax? I'd suggest that there simply be no sales tax on internet sales, that Amazon pay whatever tax rate applies in the state that Amazon ships the books from.
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States do have the right to collect that tax, that's what this whole discussion is about. It's about whether amazon is required to collect it for them. Pretty much every state has a use tax that people should be paying for all their untaxed items purchased from out of state. If that's not happening, you can hardly blame amazon that a whole bunch of whiners who are demanding government services aren't paying they legally required taxes that fund those services.
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The issue has been litigated to death by the catalog industry, and guess what, it's completely constitutional. This is a states' rights issue, and in this case, the states have a clear right to tax their residence with a sales tax, no matter how stupid I think that type of a tax is, they do have the right to levy it.
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On Tuesday May 17, @11:06AM, by DiSKiLLeR vomited:
>>>The way the US does everything at the state level... truly results in anarchy...
State-level organizations equals anarchy? No actually it results in Federalism. Ya know..... like how the European Union is setup. The US is a union of multiple governments. (Next I suppose you'll criticize the EU's multiple sales tax system?)
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They get sales because people say, hey I can save 10 bucks on this just from lack of sales taxes alone!
No, Amazon gets sales because their prices are lower.
Just today, my wife bought something for our dogs from Amazon that she had been ordering from a different place on the Internet. Amazon wanted $2/unit less, and this is a consumable that we go through about 5/month. Both sites have no sales tax in our state and free shipping for the order size we would buy.