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Slate: Amazon's Tax Stance Unfair and Unethical 949

Posted by Soulskill
from the pretend-it-was-an-oil-company dept.
theodp writes "We've talked before about Amazon's reluctance to collect sales tax, with Jeff Bezos going so far as to say it's unconstitutional. So it's not too surprising to see Amazon support a California referendum to repeal sales tax for online retailers. Slate's Farhad Manjoo loves buying from Amazon and would hate to pay higher prices, but says the e-tailer 'has no intellectually sound arguments against collecting taxes from residents — by all ethical and civic standards, its position is unsound.'"
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Slate: Amazon's Tax Stance Unfair and Unethical

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  • by Anonymous Coward on Wednesday July 13, 2011 @11:14AM (#36748846)

    Damn those federal rights over interstate commerce.

    • by Seumas (6865)

      Don't worry. There is a clearly movement growing to "redo the constitution". Look at the recent Time article and that CNN douchebag Fareed Zakaria's comments about how it's "time to update the constitution". After all, Iceland is writing a new constitution for the second time in the past sixty years or so using the comments of citizens via Facebook and Twitter and Youtube. Why shouldn't we? After all, our founding fathers had no idea when they wrote the constitution that freedom of speech would hurt so many

      • There are many aspects of the Constitution that need updating. I mean, this bears repeating however obnoxious, but some of the Founding Fathers were slave owners. They were not necessarily the most in tune with human rights.

        Perhaps we want to clarify gun rights. Perhaps we should put in a very clear right to privacy (such as the right to contraception, to interracial marriage, and to abortion, perhaps) instead of having a non-elected Supreme Court cobble that together.

        I don't know if it's a good idea. I would reject it because we'll end up banning free speech given the current political climate. But it's not stupid enough to dismiss out of hand. If we had another shot at drafting a Constitution, we might be able to do a better job than the Founding Fathers did.

        • by Seumas (6865) on Wednesday July 13, 2011 @11:52AM (#36749452)

          We've amended the constitution, where necessary. You know, for things like eradicating slavery and allowing women to vote. I don't really see where confusion is over the constitution. People always talk about how it is the job of the SCOTUS to "interpret the constitution", but last time I read the document, it began with "WE HOLD THESE TRUTHS TO BE SELF-EVIDENT". *Self-evident*...

          The document seems pretty clear on things like free speech, the right to bear arms, the right to due process, and the right to be protected against unlawful search and seizure. The only reason to "go back and clarify" these things if if people actually mean "re-write to fit my political viewpoint which contradicts what the constitution says" instead of "clarify".

          Yes, the constitution was written by imperfect men, but it's disingenuous for us to say things like "they were just farmers and slave-owners and have no relevance to today's society". The document aims to protect us against many things that went wrong in other societies. Things that *WE* seem to often fail to comprehend, today. Things that may seem irrelevant to us *because* of the protections the document has laid out for so long that we might be all too willing to fuck up, under the premise that "life is really different today".

          I don't see a single thing in the constitution which does not belong there, for all of time and we're always free to add amendments if we agree that they are absolutely vital and valuable.

          • > last time I read the document, it began with "WE HOLD THESE TRUTHS TO BE SELF-EVIDENT". *Self-evident*...

            Read it again. That line is not in the US constitution, it's in the declaration of independence. The sentiment definitely informs all of the founding documents, but it's far from a legally-binding portion of the highest law of the US.

          • by sorak (246725) on Wednesday July 13, 2011 @12:11PM (#36749778)

            The document seems pretty clear on things like free speech, the right to bear arms

            The right to bear arms shall not be infringed. Does that literally mean no weapons regulation period? So can you sell hand grenades to children? Or by "arms", do they only mean firearms? And does it matter that they had no standing military and that the need for a well-regulated militia was part of their rationale? Also, doesn't "well regulated militia" imply the government's authority to regulate militias? I think there are a few legitimate questions to ask. Even if you know your answer to every one of them, I don't think they are all clearly written in the second amendment.

            • by spire3661 (1038968) on Wednesday July 13, 2011 @12:23PM (#36750054) Journal
              You get the true context of the 2nd by reading the founders' papers.

              "No freeman shall ever be debarred the use of arms. " ---Thomas Jefferson: Draft Virginia Constitution, 1776.

              "One loves to possess arms, though they hope never to have occasion for them. " --- Thomas Jefferson to George Washington, 1796. The Writings of Thomas Jefferson, (Memorial Edition) Lipscomb and Bergh, editors.

              "[The Constitution preserves] the advantage of being armed which Americans possess over the people of almost every other nation...(where) the governments are afraid to trust the people with arms." ---James Madison,The Federalist Papers, No. 46.

              "Who are the militia? Are they not ourselves? Is it feared, then, that we shall turn our arms each man gainst his own bosom. Congress have no power to disarm the militia. Their swords, and every other terrible implement of the soldier, are the birthright of an American...[T]he unlimited power of the sword is not in the hands of either the federal or state governments, but, where I trust in God it will ever remain, in the hands of the people. " ---Tenche Coxe, The Pennsylvania Gazette, Feb. 20, 1788.

              After reading these comments from the men that founded our nation, it never even OCCURRED to them that we might want to lessen weapons in society. They deem the right to bear arms INALIENABLE. It doesnt get much fucking clearer then that.
              • You've quoted three men, two of whom were not even Convention Delegates (though they were important political figures of the time). There were 55 Delegates to the Convention, and more still member of the first Congress that ratified the Bill of Rights. The Coxe quote, particularly, strikes me as a response to the suggestion by another party that the right to bear arms was linked to the existence of and need for militias rather than an individual mandate. Indicating that the argument presented by many now

              • You get the true context of the 2nd by reading the founders' papers.

                Cool, but you shouldn't have to. Ideally, the constitution should say, in no unambiguous language (meaning that it should be impossible to misinterpret even if you try real hard, short of rewriting the dictionary), what exactly it means. For basic law that is expected to stand for decades and even centuries, the threshold shouldn't be any less than that.

        • by JDAustin (468180)

          Yes, lets have a right to privacy so that anything with anyone (age/sex/species) is legal as long as it happens in your bedroom. Lets have a right to kill baby that would have been born naturally in another week (and then killing it would be murder, not "a choice").

          Your right, I don't think its a good idea to change the constitution either. In fact how about we go backwards and get the federal government out of most matters. Let states decide on when/if abortion is legal. Let the states decide on their

          • I know this is going ot be extremely unpopular, but who gave you the right to decide what to do with my offspring??? In a natural world its none of your damn business, and only becomes so through might, not right. I really hate how society takes ownership of every human being. (please save the 'if you dont like society, leave it'.) It is impossible to escape the prison society enforces. Not saying society doesnt have it advantages, merely that there is no choice, you are owned by the your 'brothers'
        • by jcr (53032)

          There are many aspects of the Constitution that need updating. I mean, this bears repeating however obnoxious, but some of the Founding Fathers were slave owners.

          Thirteenth amendment.

          Perhaps we want to clarify gun rights

          What's to clarify? We have the right to defend ourselves, even though the government frequently violates that right.

          -jcr

      • Don't worry. There is a clearly movement growing to "redo the constitution". Look at the recent Time article and that CNN douchebag Fareed Zakaria's comments about how it's "time to update the constitution". After all, Iceland is writing a new constitution for the second time in the past sixty years or so using the comments of citizens via Facebook and Twitter and Youtube. Why shouldn't we? ...

        I am suddenly reminded of the Despair poster: None of us is as dumb as all of us.

        Hopefully our corrupt politicians will never let that happen. And based on Obama's recent press conference (something about us regular people shouldn't have to know the minutiae of complex economic vehicles and we should leave it up to our masters [OK, the "master" thing is my word]), you can rest assured it won't happen while he is in office.

      • by Moryath (553296)

        Updating the constitution already has a procedure. It's called amending.

        It can be done by Congress passing an Amendment by supermajority (2/3) and then sending it to the states for ratification (3/4 of states need to ratify for amendment to truly pass) or by enough of the States calling for a constitutional convention, which will then propose amendments to be sent through the same ratification process.

        Oddly enough, there are a number of amendments that passed Congress but have never been ratified by enough [wikipedia.org]

    • by EraserMouseMan (847479) on Wednesday July 13, 2011 @11:36AM (#36749164)
      Which have been abused and used nothing today like what the framers had in mind.
      • by Scareduck (177470) on Wednesday July 13, 2011 @11:54AM (#36749484) Homepage Journal

        Oh, nonsense. Article I, Section 10:

        No State shall, without the Consent of the Congress, lay any Imposts or Duties on Imports or Exports, except what may be absolutely necessary for executing it's inspection Laws: and the net Produce of all Duties and Imposts, laid by any State on Imports or Exports, shall be for the Use of the Treasury of the United States; and all such Laws shall be subject to the Revision and Controul of the Congress.

        In other words, what California and New York and all the whiners who are trying to install sales taxes on material from other states is a straightforward violation of the Constitution.

  • by jaymz666 (34050) on Wednesday July 13, 2011 @11:17AM (#36748866)

    He should pay the use tax and be done with it, like a law abiding citizen

    • Re: (Score:2, Insightful)

      by Wonko the Sane (25252) *
      He really shouldn't throw terms like "intellectually sound" around if he's in favor of taxes because the idea that's it's ethical and moral to use the threat of violence to force people to purchase services that they are not willing to purchase voluntarily rests on pretty shaky ground itself.
      • by geekoid (135745) <dadinportland @ y a hoo.com> on Wednesday July 13, 2011 @11:28AM (#36749038) Homepage Journal

        Actually it creates a firm ground in which we can build a thriving, prosperous, and advancing civilization.

        • Re: (Score:2, Insightful)

          by Anonymous Coward

          our civilization is none of those things

        • You haven't addressed why it's moral and ethical for one group of people to use violence to enforce their will on another group of people regardless of any prosperity that may or may not result.
    • Re: (Score:3, Insightful)

      by causality (777677)

      He should pay the use tax and be done with it, like a law abiding citizen

      Yeah, no kidding. Also I love the completely unbalanced perspective from the summary:

      Slate's Farhad Manjoo loves buying from Amazon and would hate to pay higher prices, but says the e-tailer 'has no intellectually sound arguments against collecting taxes from residents — by all ethical and civic standards, its position is unsound.

      "Civic standards" I can buy, but ethics? We're talking about government here: the only entity legally authorized to use lethal force in order to achieve its goals. Govern

      • Government is force. For wise laws and unwise laws alike, they are all enforced by an implementation of "might makes right". ... This is carried out by men with guns and other weapons, typically known as either police or agents.

        The government is an establishment of the will of the people. Police and agents are people entrusted with enforcing the established will of the people. As Locke talked about in the social contract, we surrender certain rights in the creation of a government in order for the governm

        • by shmlco (594907)

          You say that Amazon should pay for the maintenance of the roads, airports, ports and railways they use to deliver their product to consumers?

          They do. The local FedEx and UPS delivery services which actually deliver the goods do in fact pay local payroll taxes, taxes on property and warehousing and hubs, and pay airport and transit fees. They also pay local gasoline taxes, delivery vehicle excise taxes, and so on.

          In short, all of the services and taxes that Amazon "uses" and for which Amazon should pay... ar

    • by cforciea (1926392) on Wednesday July 13, 2011 @11:35AM (#36749150)
      I always hate when people say things like that. The whole reason we have a government from a economic game theory perspective is to act as a mutually accepted arbiter to enforce cooperation to avoid a Tragedy of the Commons [wikipedia.org] scenario for shared resources. The economically rational choice is always to not take the cooperative action unless you can ensure everybody else is going to.

      Donating to charities might still make sense because you aren't doing it necessarily in the context of rational self-interest, but the government is specifically a mechanism to leverage people's rational self-interest. There's no way to get away from that context. It therefore never makes sense to tell people to donate tax money except in the childish "if you love the government so much why don't you marry it" sense.
      • by jaymz666 (34050)

        It's not a donation if you are required to pay it. If the tax code requires you to pay it, then pay it.

  • by Eggplant62 (120514) on Wednesday July 13, 2011 @11:18AM (#36748886)

    Someone please tell me how a corporation based in Washington State and legally incorporated in Delaware suddenly becomes a tax collector for states in which it does not have a physical presence? I can see being held liable for Delaware and Washington State, but until someone amends the tax codes of the remaining 48 states and other U.S. territories, I think it should remain that we don't pay sales tax on out-of-state purchases. I don't live in Ohio and I don't expect to pay Ohio state sales tax on a purchase I made over the Internet, nor do I expect the state of Michigan to tax my purchase from a company outside of Michigan.

    • by Osgeld (1900440) on Wednesday July 13, 2011 @11:24AM (#36748978)

      you know they have warehouses scattered about the entire country right? So how is it any different than other e stores, for example if I buy from newegg I pay sales tax, its not a company based in my state, but they do have a warehouse located 3 hours southwest from me

    • by Bill_the_Engineer (772575) on Wednesday July 13, 2011 @11:25AM (#36748992)

      Someone please tell me how a corporation based in Washington State and legally incorporated in Delaware suddenly becomes a tax collector for states in which it does not have a physical presence?

      I think the problem Amazon is having is that they had associates that were based in California. These associates have a physical presence in California and forces Amazon to abide by state law. Amazon wants to continue to have an associate program, yet not have to keep track of sales tax for each state that an associate exists. This is why Amazon is lobbying for this referendum in California.

      • by LWATCDR (28044)

        That is a very fuzzy presence. The associates put links on their sites which are just advertisements for items in Amazons store. That would be like saying that a company has a presence in a state because they bought an add on a local TV show.

        • by Kenja (541830)
          If I live in California, then buy something from an Amazon Associate in California and my product is shipped from California to me, how is that "fuzzy"?
    • by OverlordQ (264228) on Wednesday July 13, 2011 @11:36AM (#36749168) Journal

      Someone please tell me how a corporation based in Washington State and legally incorporated in Delaware suddenly becomes a tax collector for states in which it does not have a physical presence?

      Because it's easier trying to get the corporation to pay a sales tax then going after their own citizens for not paying the use tax.

      • Because it's easier trying to get the corporation to pay a sales tax then going after their own citizens for not paying the use tax.

        Define "easier". I'd be more sympathetic to CA (although utterly still against their unconstitutional plan) if part of their plan 1) budgeted for a network service that reported how much to tax a given purchase delivered to a given address, and 2) provided free access to the service. Even if their fundraising scheme was legal, it's insanity to require every individual retailer to calculate this information separately and be on the hook for getting the numbers right. Want to rake in that unearned tax money?

    • by im_thatoneguy (819432) on Wednesday July 13, 2011 @11:42AM (#36749286)

      I think it should remain that we don't pay sales tax on out-of-state purchases. I don't live in Ohio and I don't expect to pay Ohio state sales tax on a purchase I made over the Internet, nor do I expect the state of Michigan to tax my purchase from a company outside of Michigan.

      Except that you're missing the entire point of the law. You *already have to pay sales tax* on out of state purchases in pretty much every state with a sales tax.

      The only change is that California in this instance wants to put the collection process in Amazon's hands.

      This isn't requiring Amazon to pay California taxes for all of their sales. This is requiring Californian citizens, who already are required to pay taxes an easier and more straight forward system of paying at the point of purchase as if it was a physical store instead of filling out a form and keeping receipts.

  • Unless you disagree in which case it is intellectually sound (from the standpoint of the person disagreeing)

  • Amazon won't pay taxes, they'll just collect them from you and me. WE will be the ones paying those taxes...
    • by ScentCone (795499)

      Amazon won't pay taxes, they'll just collect them from you and me. WE will be the ones paying those taxes.

      And then Amazon has to raise their prices to cover the huge administrative costs of policing all of that, debiting/crediting for returned items, complying with what different counties in some states consider to be taxable items (real food vs. snack food? medicine vs. cosmetics?) while other counties within the same state do not, at different times of the year, and on and on. What happens when a particular municipality in a state decides to have a pre-school-season sales tax "holliday" on specific classes o

  • Sponsors (Score:5, Insightful)

    by crow_t_robot (528562) on Wednesday July 13, 2011 @11:22AM (#36748932)
    This Slate article has been brought to you by Best Buy, Target, Walmart, etc.
  • by whoda (569082) on Wednesday July 13, 2011 @11:22AM (#36748936) Homepage

    So Sears Roebuck owes the states 70 years or so of back taxes?

    • by SvnLyrBrto (62138)

      Sears actually took this very issue all the way to the supreme court and WON. That's how we have the "physical nexus" rule, any why Amazon's Fernley, NV distribution center handles most orders in California, in the first place. The ironic thing is that now Sears has done a 180 and wants Amazon to have to pay the tax that Sears does not. Fortunately, the ruling protects everyone, not just Sears.

      How the state legislature thinks they can override the SCOTUS though, I don't know.

    • by LWATCDR (28044)

      Actually it could be well over hundred years.

    • by ScentCone (795499)
      No. Sears has been collecting and remitting sales taxes all along, because it has stores physically in those states. That's the difference.
    • by geekoid (135745)

      No. People who bought goods from them and didn't pay their local sales tax owe the state taxes.

  • Nobody admits... (Score:2, Insightful)

    by GooberToo (74388)

    ...but states are already collecting taxes on etailer sales. They pay those taxes on transportation costs. These places also generate jobs. Those people buy things which also allow for taxation.

    States are just pissed that their double dipping means they might actually have to be good at their job to remain in office because balancing a budget becomes more important. Whereas the traditional school of thought is you're elected to funnel state and federal dollars to your buddies - or to declare eminent domain

    • by Kenja (541830)
      So normal retail sources dont have transportation costs or generate jobs?

      Again. If I live in a state, order something from someone in the state and the goods are shipped within the state to me, why should I not pay taxes just because I used the internet to place the order?

      If you are against sales tax in general, fine. But thats a whole other conversation. I can think of no logical reason to exclude internet orders from existing tax laws just because the order was placed on the internet. What if I have
  • by localroger (258128) on Wednesday July 13, 2011 @11:24AM (#36748970) Homepage
    The problem is that sales taxes are a patchwork nightmare. Not only do different states have different rates, different collection mechanisms, and different auditing requirements, so do counties and municipalities. Just doing sales taxes for a small company that does business in 3 or 4 states is a nightmare; for a national company, it would be almost impossible. Then if you don't collect the right amount of tax, when the offended entity gets around to auditing you they hand you a bill for the tax on every transaction you've ever done since their last audit. I can understand why Bezos is so adamant about this; it's not about civic duty, but about practical possibility. If the tax was flat across the country and there was a single unified mechanism for remitting it, I doubt he would care so much.
    • by I'm not really here (1304615) on Wednesday July 13, 2011 @11:47AM (#36749380)

      I'm a small business owner. I sell to the 48 contiguous states and D.C. Right now, I have to be aware of any sales that occur in PA, and also have to be aware of any sales to people in Philadelphia specifically, because I must collect different taxes for each case. This is enough of a headache for a one person operation, but I make enough from the side business to make it worth the effort. I expect there are tens of thousands more like me, if not hundreds of thousands. We all are making an extra % of income from side businesses, collecting the tax for our state, and allowing other states to require their citizens to pay a Use tax on products they order across state lines. This is logical, and fair to businesses, as the burden to a business with one or two employees of having to keep track of the taxes in each county, borough, municipality, city, town, hamlet, and commonwealth in each state would be so extreme as to make nearly all small businesses either close shop or stop selling across state lines (and to cut one's audience to 1/50th the size almost guarantees going out of business in this day and age).

      Now from my limited understanding of the economy, it would seem that a sudden disappearance of say 5-10% of income on hundreds of thousands of people in the 50 states could negatively impact our economy. Suddenly, I'd not have extra money to spend on entertainment and services (the only things our economy really produces much of at this point), and therefore those services would no longer be collecting taxes from me, and therefore the government would lose money. Seems pretty straightforward to me that to force the business to handle all of the tax legwork for all states in which they sell a product would kill any and all small businesses from selling anything on the internet, and would cripple the larger online businesses, eliminating the grease that makes the wheels of our economy turn.

      Am I wrong here? I know I'd have to simply close up shop if a law required me to keep track of all 48 states' tax laws and all the tax intricacies of the various towns and sections of those states. I can't imagine I'm in the minority here.

      • by Solandri (704621) on Wednesday July 13, 2011 @02:58PM (#36752610)
        The government really needs to set up an official central database for this. e.g. Set up a Federal website which any individual or business can visit and download a guaranteed up-to-date version of the latest tax table for the entire country. States and local governments should be required to update their tax rate on this site before the tax can officially be collected.

        The current method of requiring businesses to collate this information themselves is too fraught with errors (it's really easy to miss a tax increase passed by a city one night), and gives an unfair advantage to bigger companies. Hiring a private company to compile the tax tables for you doesn't quite work because they don't indemnify you against their errors. If they screw up and you failed to collect $5000 in sales taxes because of it, you have to pay the $5000, not them. Having it be a single government site is the most efficient solution to the problem, and places the consequence for errors squarely upon the party making the error (whether it be the business getting a tax table entry wrong, or the state/local government failing to update the table).
    • by hibiki_r (649814) on Wednesday July 13, 2011 @11:56AM (#36749516)

      But there's plenty of companies that have very little trouble doing this: I currently work for one. We sell online, but we have presence in every state, so we collect taxes in every state. Not only that, but we have retail stores, which deal with specific local taxes built on top.

      As it happens, there are databases that you can purchase that have all the tax information you could possibly want, and all you have to do is import their updates when they happen: You can call a method that hands you the right tax rate based on the merchandise type and location to ship it to. The right accounts in the general ledger are updated so that we know how much we owe to each state/municipality, and then AP cuts the states the necessary checks.

      Yes, it'd me madness to have to track of it all by yourself, but at that size, you don't have to. And Amazon is definitely large enough to handle that complexity without ruining them: The only question is whether they are legally obligated to collect the taxes or not.

      • The difference is that they only have to do that with the products that they inventory and sell. Amazon, if it had to collect sales tax on all purchases, would have to do this for the thousands of companies selling through it (as it is the one placing the order and collecting the money). The liability of ensuring that the proper sales tax was specified by all of their sellers is likely a significant consideration. Of course, the biggest reason is they want to keep their price advantage, but don't discount
  • Talk to the manager of a grocery store to see what they think about sales tax rules. It is a heinous burden to force that on a single store located in a single locale. Now multiply that by the number of cities and counties in the US. There is no way any company could ever comply with that in any reasonable manner.

  • by Kohath (38547) on Wednesday July 13, 2011 @11:29AM (#36749050)

    It is the eternal struggle between these two principles -- right and wrong -- throughout the world. They are the two principles that have stood face to face from the beginning of time, and will ever continue to struggle. The one is the common right of humanity and the other the divine right of kings. It is the same principle in whatever shape it develops itself. It is the same spirit that says, 'You work and toil and earn bread, and I'll eat it.' No matter in what shape it comes, whether from the mouth of a king who seeks to bestride the people of his own nation and live by the fruit of their labor, or from one race of men as an apology for enslaving another race, it is the same tyrannical principle.

    -- Abraham Lincoln, October 15, 1858 Debate at Alton

  • by salesgeek (263995) on Wednesday July 13, 2011 @11:29AM (#36749058) Homepage

    Here's what California has done:

    They changed the definition of having a location in California such that if you have a 1099 contractor doing advertising for you, you have a location in California, and therefore have to collect sales tax.

    This is unconstitutional and irrational at the same time. If I hire an ad agency in your state, that does not mean I have moved there. It's no different than hiring an accountant, lawyer, or for that matter, a shipping company with a location in your state to define location (nexus). There's a reason why our constitution gives sole power to regulate and levy duties (tax) interstate commerce in a *uniform way*. This prohibition is to prevent trade wars between the states and to prevent large states from using taxation to force businesses to relocate there.

    OK, so what about the poor, local businesses being put under by ______________.com?

    Well, if you are a small local business, and sell mail order, you don't have to collect sales tax for shipments to anywhere other than your home state. That gives you an advantage in 49 states.

  • by spiffmastercow (1001386) on Wednesday July 13, 2011 @11:32AM (#36749098)
    Sales tax is a regressive tax -- it hurts the poor the most, and is barely a burden on anyone beyond middle class. In addition, sales tax hurts local businesses, who have to compete not only on direct prices with the likes of Amazon, but then have to charge you an extra 5-10% as well. Instead, states should make up for lost sales tax with increased income tax. You'll get more consistent tax revenue, a healthier business community, and the added bonus of being able to know exactly how much you have to pay for stuff at the store before checkout without using a calculator.
    • by FooAtWFU (699187) on Wednesday July 13, 2011 @11:45AM (#36749356) Homepage
      California has a big state income tax, and look at the volatility of their budget! Just as a practical matter: when you tax incomes, especially rich peoples' incomes, your tax revenues begin mimic the performance of the stock market to an uncomfortable degree.

      A sound property tax system (unlike California under Prop 13) is probably a much better idea for most state governments, housing bubbles notwithstanding.

      • by Snarfangel (203258) on Wednesday July 13, 2011 @12:50PM (#36750642) Homepage

        A sound property tax system (unlike California under Prop 13) is probably a much better idea for most state governments, housing bubbles notwithstanding.

        Actually, a sound property tax system would not only provide a much more stable source of funding than income and sales taxes, it would eliminate housing bubbles (which are really land value bubbles). See Land Value Tax: http://en.wikipedia.org/wiki/Land_value_tax [wikipedia.org]

        For fans of progressivity, land value is even more concentrated than income, plus it is much harder to hide in Swiss bank accounts or buy on the black market.

  • Why don't we just replace all state sales taxes with one federal sales tax?
  • First, I'd define where an e-retailer was located. This could be where their web server is located, where their goods are shipped from, where their CEO has his office or most probably the state where they are incorporated in. They would be responsible for the collection of sales tax to THAT location for certain as part of their business license under their incorportation papers. Any state that wants to collect sales taxes from this e-retailer for sales made in their state would have to sign a contract

  • by MikeRT (947531) on Wednesday July 13, 2011 @11:33AM (#36749120) Homepage

    If anyone in the state legislatures or Congress wanted to do it the right way. What you'd do is set up a system with these features:

    1. Each state would be allowed to set one rate for the entire state.
    2. Each state would publish its rate with the IRS.
    3. The IRS would provide a simple web service for looking up compliance information, including rate and mailing addresses for each state's tax office.
    4. The federal government would indemnify all businesses who comply with the IRS's published information from any civil or criminal charges in the event a state failed to keep its IRS records accurate.
    5. Any state fails to keep its compliance records accurate with the IRS would be barred for 90 days from compliance coverage (the federal government would effectively declare that businesses could legally commit tax evasion if they are not based in the state).

  • by couchslug (175151) on Wednesday July 13, 2011 @11:33AM (#36749126)

    Bring legal standards or STFU. "Ethical" and "civic" standards are subjective. That's one reason LAWS were written.

    All the Slate statement boils down to is "we haet Amazon, herp derp".

  • by bagorange (1531625) on Wednesday July 13, 2011 @11:34AM (#36749142)

    Amazon "imports" DVDs from the tax haven island of Jersey to its UK customers so it can dodge VAT and be cheaper than bricks and mortar shops in Britain.

    It didn't occur to me until I read about this ongoing saga that this is a worldwide policy.
    They see sales tax as a rule that does not apply to them. Anywhere

  • by quietwalker (969769) <pdughi@gmail.com> on Wednesday July 13, 2011 @11:43AM (#36749304)

    ... it's one of convenience.

    When you, as a consumer, buy an item out of state, receive a gift, or win money from gambling - or a slew of other sources - you're expected to report your winnings to the state so they can tax it. The problem is that people don't. They either don't know, don't care, or don't worry about residental-level tax evasion being enforced. So technically the mechanisms for taxes already covers this, but it would take each state a lot of effort to track down each evader and retrieve their monies due (though one could argue that, along with fines and the jobs this would create, it could be a good thing for the state). So, basically it's really tough for them, since they wrote laws which are hard to enforce.

    That's the issue. It's not convenient for the state to collect tax money.

    So now they're attempting to change the laws so it's easy - they make the online retailers responsible for collecting money on their behalf and it's fine. Then they have one place to go to collect, instead of hundreds of thousands that have to be litigated. They're attempting to make online retailers - like Amazon - bear the burden that they themselves do not wish to shoulder (granted, it's easier for Amazon, but by no mean effortless). They're stretching the interpretation of existing laws to claim that in-state third parties Amazon has a business relationship represent a direct presence by Amazon, and thus they must follow the state laws for brick and mortar vendors.

    If you ~had~ to bring up ethics, you should probably look at the state lawmakers. They're acting like the stereotypical royal taxmen: they see you have money, and they will make up any excuse they can to liberate it from you. Moreso now, due to budget/economy constraints they have to work under.

    • by pruss (246395)

      Talking of convenience, it's also not convenient for individual buyers to have to keep track of their purchases for use tax purposes. One could argue that it's not nice for Amazon to off-load the record-keeping burden onto their purchasers. All other things being equal, I'd prefer to buy from an online retailer that charges tax: I wouldn't have to log the purchase in our use tax notebook and eventually add them all up, and month-to-month family budgeting would be a bit more accurate.

  • by transami (202700) on Wednesday July 13, 2011 @11:44AM (#36749318) Homepage

    I only repeat this every single time the subject comes up, but no one ever seems catch on. I repeat...

    Since online retailers must SHIP product they are at a disadvantage with brick-and-mortar shops. Moreover, requiring sales tax collection for every state of every online retailer would create undue burden on MANY THOUSANDS of small business sellers and drive them out of business.

    If taxes must be collected on online retail, there is only one sensible place to lay the burden -- on shipping. The shipping companies are already well equipped to handle per-state pricing structures and already have the computer infrastructure to easily add to a new line item.

  • by Okian Warrior (537106) on Wednesday July 13, 2011 @11:49AM (#36749408) Homepage Journal

    One thing I've always wondered is why California needs so much money to operate.

    Here in NH, we've got no sales tax and no income tax. Our overall tax burden is among the lowest in the US (sometimes *the* lowest, depending on the year), so yeah - our property taxes are high but not high enough to make up the difference.

    Despite this dearth of income, we manage to keep the roads plowed, the schools funded, and the streetlights burning.

    So what part of the economic model is different for California? Do they have more road per person to maintain? Are there more criminals per person so that they need more jails? Do they have social services we're missing (universal healthcare)?

    Are coastlines more expensive than inland borders?

    There's a lot of economists (student and hobby) here on Slashdot. I just don't see the difference in models.

    What am I missing?

    • by BCoates (512464) on Wednesday July 13, 2011 @12:36PM (#36750354)

      NH is mostly a mixture of exurbs and retirement/vacation homes for Boston, so it's economic model is "leech of the city" and it's social safety net is "move to Massachusetts". California has nowhere to beggar-thy-neighbor to.

      New Hampshire has the lowest birth rate in the nation, California's is above-average. Children are expensive but necessary.

      Small states tend to do a better job getting their money's worth from the federal government. California is a massive wealth exporter to the rest of the country. The California federal tax/spending shortfall is about the same size as the California budget shortfall.

    • "What am I missing"

      How about the fact that many many residents of Southern NH travel to Massachusetts to earn their living because of the lack of JOBS in New Hampshire.

      You would be singing a decidedly different tune about NH if it did not have the rich and prosperous state of Massachusetts as its best neighbor.

      Why not look at other states that have policies like NH but DON'T live next to a rich neighbor?

    • by l0ungeb0y (442022)

      When I want to compare California to another State, New Hampshire immediately coms to mind -- what with it's vast industrial and agricultural base, it's teaming coast line with international shipping, it's influx of international tourism, it's ongoing immigration crises and gang activity. Aise from the fact that California has 36x the population of New hampshire, these two states are almost exactly alike in every way.

    • They build a $600 million K-12 school and pay prison guards more than your doctor.

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