Connecticut Considers Digital Download Tax 244
SonicSpike writes in with a story about the latest state contemplating raising revenues by taxing the net. "Downloading music, movies, e-books and Apps could soon cost Connecticut residents more as lawmakers consider a tax on digital downloads. The bill, proposed by the General Assembly's Finance, Review and Bonding Committee, would have consumers pay the 6.35% sales tax on any electronic transfer. Supporters say the bill would level the playing field for brick-and-mortar retailers in the state who are already required to charge Connecticut sales tax to consumers who purchase these products in their stores. About 25 states around the country have already begun taxing digital downloads."
Re:So what? (Score:2, Insightful)
Re:Nahh (Score:5, Insightful)
Couldn't you just use an access point across the street ( and likely in another state) and bypass the whole problem?
How (Score:4, Insightful)
How do they actually make these online taxes work? force every single online payment gateway to tax every transaction from your state and send you the money?
"Levelling the playing field" (Score:4, Insightful)
"We steal from these guys over here. So we should steal from you, too."
Naturally the brick-and-mortar stores are going to favor fairness in the application of the tax laws. But why do we never see them saying, "You don't tax all these business, so stop taxing us?" Or, "Taxing these businesses is going to double your tax base, so how about cutting the tax rate in half?"
No, instead, the government wants more money and more control over a greater number of people and businesses. So they sell it to local businesses as "levelling the playing field" and these businesses eat it right up and support the ever-increasing growth of government.
Empty Rhetoric (Score:5, Insightful)
"Supporters say the bill would level the playing field for brick-and-mortar retailers in the state who are already required to charge Connecticut sales tax to consumers who purchase these products in their stores."
An argument could easily be made that the playing field is already level. The advantage of ordering online is one of cost, with typically lower prices and less of a drain on local infrastructure (it costs the state / local government more to provide fire / police protection / emergency medical services / roads / etc. to a few dozen brick-and-mortar stores than to a single warehouse), and possibly hard to get items (ones which cannot be carried locally, for lack of space in a store; commercial space being at a premium). The advantage to brick-and-mortar stores is time, with the more popular items you are typically looking for already in stock, hence the price premium ("I need this item today").
As such, the advantages on both sides balance each other out fairly well.
This tax, of course, is then a simple cash grab. Going off a stereotype of legislatures, we will assume that the state coffers are beginning to, if not already are, empty. As such, someone took a look at things that are considered popular enough to tax (demand is unlikely to change, so it's *free* money they can skim off the top, without impacting the industry; this is also an economics-FAIL, but the people in charge love to hear things that confirm their bias), and barfed up a semi-palatable reason for this new tax.
Sales tax... (Score:5, Insightful)
I realize the world doesn't work like this. But in my opinion if they're going to tax the purchase it should then fall under all the rules of buying from a Brick and Mortar store too, such as the First-sale doctrine. After all, if I buy a book from a brick and mortar I'm legally allowed to sell that book to someone else. On the other hand, when I download from iTunes I have no way to sell that item, because I didn't purchase it, I "licensed" it. Which the businesses love to remind us. If I'm then being taxed as if I'd purchased it, then the states should require the companies by law to treat it like any physical purchase and allow me to transfer the ownership of it.
Re:I am not surpised (Score:1, Insightful)
"let corps like GE pay ZERO taxes on billions in profits"
You still think corporations whom taxes are levied upon actually pay taxes? No,sir. YOU pay the "corporate tax" everytime you purchase anything made and sold by a corporation. Corporate taxes are merely another vehicle your beloved federal government has come up with to fleece the citizen at the end of the purchase. Since you apparently understand nothing about how corporations operate, you'll not understand that profits are required to reinvest, and keep the company running, right? Without these evil profits, the corporation goes out of business and you can no longer buy your beloved iPad 8. When the government sphons your profits away via taxation, for your "social programs" (read: Programs that rob Peter to pay Paul, and secure Paul's vote), the resulting American made good cost more, which inhibits competition with similar foreign made goods.
Don't get me wrong - there's plenty wrong with publicly held corporations (disproportionate executive pay, etc...), but the government interference just makes things all that much worse, and costs money and jobs in the end.
Re:I am not surpised (Score:3, Insightful)
Do you think prices would decrease if corporate taxes were abolished? No. Corporations would just pocket the money and invest it in more bonuses.
Meanwhile, income taxes would increase to make up for the reduced tax income.
Also, people pass on their taxes to their customers and employers too. So why not have identical taxes for corporations and individuals? Why not tax people on profit instead of income? Why should a person that spends all of his income on basic needs like food and shelter pay taxes, while a corporation that spends it's entire earning on production costs pay nothing?
You might argue that the corporation employs people - but then so does the individual. He keeps farmers and his landlord employed at the least.
Re:Empty Rhetoric (Score:2, Insightful)
We need to fund the government somehow.
Yeah, but how much government do we really need?
So much government that it's costs cripple people & business while killing our competitiveness in a world economy? Enough government to track everyone & everything?
If all we paid for with our taxes was "civilization", we could do away with the Federal income tax and cut most state taxes to nearly zero.
I think we're well past the point of "paying for civilization", and we are and have been, especially in the last several decades, paying for our own enslavement. Paying to pass and enforce so many laws and regulations that no person is innocent, as there is no way to live without breaking some obscure law or regulation, so therefor the government can "crack down" on practically anyone it cares to for whatever reason it desires.
You'll excuse me if I don't share your enthusiasm for paying the costs for my own enslavement. If I can find a way to avoid having the fruits of my labor stolen to pay for the police state, I'm all for it. If the Federal Government wants to pay to put shrimp on treadmills, they can do without a domestic surveillance drone or two instead of raping the public...again.
Strat
Re:Nahh (Score:4, Insightful)
Re:Empty Rhetoric (Score:4, Insightful)
Now what happens when other states implement the same thing? Is every vendor expected to have a sales tax permit for every state in the country that collects sales tax? There are quite a few states that have different tax rates depending on where you live (or rather based on where the vendor is located). So, once you alter the methodology from vendor location to consumer location the whole concept breaks down pretty quickly.
But, what really bothers me is that the state of CT ALREADY has a system in place to collect sales tax for citizens of CT. The CT sales and use tax includes a use section, which means that if you buy something and the cost did not include CT sales tax then you are responsible for paying the use tax (which is identical to the sales tax percentage) when you file your state tax return. Wouldn't it be easier to enforce this than to try to go after venders located in states that CT could have ZERO jurisdiction over?
Re:I am not surpised (Score:4, Insightful)
Re:I am not surpised (Score:2, Insightful)
That works when you aren't in a monopoly or cartel-controlled market, which all of ours are now.
Re:I am not surpised (Score:5, Insightful)
That works when you aren't in a monopoly or cartel-controlled market, which all of ours are now.
Thanks to the polices of the State that encourage this behavior.
Re:I am not surpised (Score:4, Insightful)
And this theory has shown itself to work in the digital marketplace? Products are 50% cheaper when downloaded compared to the retail version right?
Re:Nahh (Score:5, Insightful)
That would never work. After all, people never regularly cross the border into Pennsylvania or Delaware to buy fireworks or fill their trunk with tax-free cigarettes. Nope, never happens.
Re:Nahh (Score:4, Insightful)
A better way to "level the playing field" would be to eliminate the sales tax for the brick and mortar stores. That would also increase the chances of those living in border states coming to the brick and mortar stores to avoid the taxes in their states.
But no, they won't even consider that because it just may lower their revenue in the short term and we all know no politician thinks beyond the next election.