Internet sales Tax

[oman]

Looks like congress is at it again, there making an internet sales tax!

http://www.cnn.com/2013/05/06/tech/web/internet-sales-tax/index.html

 

[desk]

Another tax scam to support the welfare state.

 

[Rox_My_Sox1]

Another tax scam to support the welfare state.

I'll respond to that with two youtube videos that I believe will accurately make my argument for me. Please view them if you want to:

http://www.youtube.com/watch?v=QPKKQnijnsM

http://www.youtube.com/watch?v=uWSxzjyMNpU

 

[Lee47]

One the one hand, but then on the other-

1) The state has its hands in my pocket enough as it is, and businesses have enough paperwork to fill out already. This is just a move to stifle small business, to benefit huge big-box retailers like Wal-Mart.

2) The biggest online retailer, I believe, is Amazon.com, which is already as big as any store-front retailer and at the same time, doesn't have to charge or pay sales tax except in the few states where it actually has a warehouse operation. Why should they enjoy that advantage, along with the advantages of not having to maintain a customer store facility with all the hassle of parking lot, bathroom, pretty displays, etc.? This is the reason traditional retail is going the way of the dinosaur.

So, as you can see, I am torn. There are points on both sides.

In addition, states and retailers vary wildly. Some retailers charge sales tax no matter where you are- others don't. Most states charge a "use tax," but rely on the honor system to get residents to declare that they owe taxes. I don't know anyone who has declared that in my state.

State revenues nationwide have mostly been going down since 2001, and there is not a good way to boost funding- which, may I remind Desk, pays for highway construction and maintenance, schools, law enforcement, and state parks among other things. I don't think you could call these part of the 'welfare state'.

I, of course, pay tax on all my out-of-state purchases, and never buy anything online.

Of course. 😉

It seems to me that with current technology, it ought to be easy enough to automatically calculate and charge sales tax at destination, then direct deposit it in that particular state's treasury- no questions asked, and without forcing the retailer to file 50 separate tax returns. There is absolutely nothing I buy online that I need, it all falls under the heading of "luxuries". And, while it keeps the economy pumping, if I can blow $50 on a new holster or a replica of the "Enterprise-E" (and I could, and I did- they are both beautiful), I could afford to blow $3 extra in sales tax.

In my opinion, this bill could pass- and if it did, there would be a protest for about 3 months, and then it will become "normal" and everyone will move on to the next issue.

If I'm wrong, you can upbraid me publicly in August and I will bow my head in shame.

 

[boomsmee]

I believe that this would be hard on small- medium sized retailers. While I think something similar to this law should be made, I think they are setting the cutoff way too low. If you are in a low margin business making $1,000,000 in sales, you may only be making around $10-30k a year in profit, but still have to deal with sales taxes from 50 states. I did sales taxes for a small business, dealing with just 1 state and that was complicated with different products being subject to different taxes (Clothing had 1 tax that varied depending on the month it was sold in and the amount of the sale, cold food had another, hot food and other products another etc,) doing it for 50 states and you would be doing nothing but paperwork, even with simplified tax laws. The limit should be more like 10 million or 50 million, Though they should really get rid of sales taxes altogether, as it is a regressive tax and if just increase the income tax by a flat amount similar to the sales tax They will get more of the income that the people with higher incomes weren't spending and reducing the budget shortfall at the same time while completely eliminating a class of taxes simplifying things immensely.

 

[Rox_My_Sox1]

I believe that this would be hard on small- medium sized retailers. While I think something similar to this law should be made, I think they are setting the cutoff way too low. If you are in a low margin business making $1,000,000 in sales, you may only be making around $10-30k a year in profit, but still have to deal with sales taxes from 50 states. I did sales taxes for a small business, dealing with just 1 state and that was complicated with different products being subject to different taxes (Clothing had 1 tax that varied depending on the month it was sold in and the amount of the sale, cold food had another, hot food and other products another etc,) doing it for 50 states and you would be doing nothing but paperwork, even with simplified tax laws. The limit should be more like 10 million or 50 million, Though they should really get rid of sales taxes altogether, as it is a regressive tax and if just increase the income tax by a flat amount similar to the sales tax They will get more of the income that the people with higher incomes weren't spending and reducing the budget shortfall at the same time while completely eliminating a class of taxes simplifying things immensely.

...o_0...huh...good point...but is this a state tax or a federal tax? You'll have to forgive my lack of knowledge when it comes to taxes as I don't own a business and only know how to file state and federal taxes as myself as an individual. I don't think it should be a state tax though myself personally.

 

[boomsmee]

It is 46 different state taxes, with the federal government allowing states to collect it from online merchants who have no presence in their states, which means the merchants will have to pay taxes to 46 different states. instead of just the one they are located in.

 

[desk]

"The problem with socialism, eventually you run out of other people's money"____M. Thatcher

 

[Rox_My_Sox1]

It is 46 different state taxes, with the federal government allowing states to collect it from online merchants who have no presence in their states, which means the merchants will have to pay taxes to 46 different states. instead of just the one they are located in.

That's just plain stupid and completely impractical. It would be far easier to just have to pay a single federal tax.

 

[Lee47]

The basic problem with all sales tax is; it is a regressive tax. Meaning, the less you can afford to pay it, the more you have to pay.

Example- almost every state has a sales tax on gasoline. Let's assume there are two people, one earning $500 a month, the other earning $50,000 a month. They both have to drive the same distance every month to get to work, buy groceries, etc., both live in areas (like mine) with no reliable public transportation system, so both have to spend $200 a month on gasoline. A 50% total sales tax on gasoline costs each one an added $100 a month. (This may even be pretty close to real life, since federal, state and local sales taxes are already figured in to the price at the pump, by law, and it takes research to figure out what the rate is in your vicinity.)

For the guy who's bringing in $50K a month, $100 isn't a big deal; it works out to 1/500 of his income. But the guy making only $500 is going to be hurting. He will have to choose between gas or groceries, rent or clothing.

Now let's go from this somewhat extreme specific example to the general point that it illustrated- the more income you have, the less you actually have to spend as a proportion of that income to get by, and so the less a sales tax affects you. Let's assume for the sake of argument that the minimum it costs to live is $50,000, and you make exactly $50,000. If the sales tax goes up, you now can't afford to live! You have to start cutting back, working more, or some combination of the above. But if you make $500,000, an increase in the sales tax is going to be barely noticeable to you. That's what makes the sales tax "regressive"; whereas a graduated income tax is "progressive", because the more you make above that 'living wage' the higher percentage of your income is taxed, up to the top rate, which is currently very low compared to our historical rates. In 1965 it was 70% and our economy was booming. In 1944 the top marginal rate was 91%. Ninety-one percent. That's how we won the war. 🙂 Imagine the kind of public schools, highways, and military we could have if Mitt Romney, Ron Paul, G. W. Bush, Dick Cheney, and the Koch Brothers paid 70% of their income in taxes. We probably could have killed Bin Laden on 9/12/01, along with fully funding Social Security and Medicare 'til the year 2200.

And yet the regressive sales tax is easiest to raise, because low- and middle-income workers can't afford lobbiests to work against raising sales taxes, but the people that make $500,000+ have lobbiests who are pushing your legislators to keep income taxes for the rich low- because they supposedly create the jobs.

(Between 2001 and 2009 income taxes for the rich went down 3 times, by five times more than everyone else in the country's combined; and we had the longest sustained net job loss in American history. Well done, job creators!)

 

[desk]

Socialism values equality more then liberty______D.Prager

 

[idiot756]

In a brick-and-mortar store, you have to pay for the item and tax.

With online shopping, you have to pay for the item and shipping. (which is usually more expensive than tax... at least here in VA)

As you can see, adding sales tax can only hurt the online retailers and customers. I guarantee you that this tax was proposed by greedy corporate lobbyists.

 

[Mash]

I am a firm believer that the internet is a legal sanctuary - to an extent, of course.

That said, I am firmly against government interference in most internet activities that aren't strictly criminal. Bills like SOPA and CISPA are prime examples of the government sticking its nose where it doesn't belong, and this tax is no exception.

 

[Lee47]

In a brick-and-mortar store, you have to pay for the item and tax.

With online shopping, you have to pay for the item and shipping. (which is usually more expensive than tax... at least here in VA)

As you can see, adding sales tax can only hurt the online retailers and customers. I guarantee you that this tax was proposed by greedy corporate lobbyists.

But the brick & mortar store paid for the shipping THEMSELVES to get the item there in the first place- and the supposedly lower prices you pay online are in fact often higher once you add in shipping. Compare apples to apples.

As far as "hurting" customers- when did you or I acquire the right to avoid paying sales tax? I'll admit it, I break the law by not declaring my internet purchases- although it is my firm belief that the sellers I deal with are paying sales tax on my behalf in the state where they are... for the record.

The states, collectively, are now trying to play catch-up on the millions if not billions of dollars in lost sales tax revenues which, I reiterate (and I apologize, Oman, it was Desk in fact who made the "welfare state" reference and I will amend the original post as well) used to pay for schools, police, prisons, highways, parks, and yes, public assistance, which given the economy between 2003 and 2011 we have needed more than ever. I personally don't have a problem with it; and I expect it will be a boon to some software companies who will come up with programs that automatically do the accounting and sales taxes for online companies.

 

[desk]

Despite a voluminous and often fervent literature on "income distribution", the cold fact is that most income in not distributed: it is earned._____T.Sowell

 

[Lee47]

Despite a voluminous and often fervent literature on "income distribution", the cold fact is that most income in not distributed: it is earned._____T.Sowell

Which has what exactly to do with the sales tax?......

 

[Rox_My_Sox1]

Despite a voluminous and often fervent literature on "income distribution", the cold fact is that most income in not distributed: it is earned._____T.Sowell

Desk, that is the single most stinking pile of bullshit you've ever posted. Do you honestly expect ANY OF US to BELIEVE a CEO works HARDER than a single mother who works 3 jobs?

 

[Mash]

Desk, that is the single most stinking pile of bullshit you've ever posted. Do you honestly expect ANY OF US to BELIEVE a CEO works HARDER than a single mother who works 3 jobs?

A 1% CEO would actually have to work approximately 380 times harder than said mother, since he makes in one hour what a middle class worker makes in a month.

That's middle class. Not poverty.

 

[Lee47]

A 1% CEO would actually have to work approximately 380 times harder than said mother, since he makes in one hour what a middle class worker makes in a month.

That's middle class. Not poverty.

OK, it's statistics time again. This data comes from the Economic Policy Institute's "CEO Pay and the Top 1%" (link to the full study here- http://www.epi.org/publication/ib331-ceo-pay-top-1-percent/);

■From 1978 to 2011, CEO compensation increased more than 725 percent, a rise substantially greater than stock market growth and the painfully slow 5.7 percent growth in worker compensation over the same period.
■Using a measure of CEO compensation that includes the value of stock options granted to an executive, the CEO-to-worker compensation ratio was 18.3-to-1 in 1965, peaked at 411.3-to-1 in 2000, and sits at 209.4-to-1 in 2011.
■Using an alternative measure of CEO compensation that includes the value of stock options exercised in a given year, CEOs earned 20.1 times more than typical workers in 1965, 383.4 times more in 2000, and 231.0 times more in 2011.

(emphasis mine)

So it's not just work- it's the stock options granted in addition to salary, which the CEO might hold or might cash in. And if you see that the CEO is cashing in his options, it's a pretty good sign that the company is getting ready to tank and he knows it. (I say "he" because a remarkably tiny percentage of CEOs are women.)

But to imagine that CEOs work 725 percent harder now than they did in 1978, while their employees only work 5.7% harder, I think is to deny reality. The truth is that the employee is putting in more hours than ever, is compensated less in real dollars for it, receives far fewer fringe benefits, and is at a constant risk of losing his/her job- while the CEO enjoys all the things the worker is denied, and is very rarely the first one shown the door when it comes time for layoffs.

And at the same time, the CEO class has done a wonderful job of bamboozling the public into thinking it is the worker's fault for not being a CEO himself; and they have a host of conservative hack columnists working this angle for them as well. Thomas Sowell, whom Desk quoted, has a weekly column in which he consoles the wealthy with the sure and certain knowledge that they succeeded all by themselves, and that they have no obligation whatsoever to those less fortunate. In fact, if you help them, you're really hurting them! "The welfare state promoted by those who insist that it is society that is keeping some people down makes it unnecessary for many low-income people to exert themselves — and therefore makes it unnecessary for them to develop their own potential to the fullest." (3/6/2013 column)

Gosh, I know that I chose not to go to college or grad school, nor then to pursue a post-grad course, because I knew that the welfare state would be there to take care of me. (Nah, just kidding. I did all those things. Sowell is a moron.)

Sowell also has a really annoying habit of asking rhetorical questions, like this, from his May 8 column; "How does a racially homogeneous country like Japan manage to have high quality education, without the essential ingredient of diversity, for which there is supposedly a 'compelling' need? Conversely, why does India, one of the most diverse nations on Earth, have a record of intergroup intolerance and lethal violence today that is worse than that in the days of our Jim Crow South?"; without actually then telling the reader what he thinks the answer is. (Notice that he also seems to convey a longing for the good old Jim Crow days, which I find wierd as hell for a black man.)

But where he really hates liberals is when we're right, like Obama's widely hated and widely taken-out-of-context line, "You didn't build that!" Which is true. The factory you may have built next to a rail hub or freeway interchange or international airport- that, you built. But the whole society built the transportation system that your business is taking advantage of. And if you don't pay your fair share of taxes- guess what? You're not entitled to bitch when that system starts falling apart. The police that protect your business? You don't own them. Everybody pays for them, with tax dollars; and if you want more criminals behind bars, it costs more money to keep them there.

So I'm willing to pay sales tax on all my purchases, not just the face-to-face ones.

And if you're an internet business? You didn't build the Internet.

That was Al Gore. 😀

 

[Lee47]

[URL=http://s1343.photobucket.com/user/darthpaul23/media/tumblr_m3ctl432lJ1rs8qdwo1_500_zps6a33b06b.jpg.html][/URL]

 

[Beckers1]

I don't buy things all that much online, but super sad to hear they are taxing that.