Follow Slashdot stories on Twitter

 



Forgot your password?
typodupeerror
×
United States

Retailers Want Moratorium On New Internet Taxes Nixed 168

This Associated Press story says (surprise, surprise) that retailers like Wal-Mart, Target and Circuit City don't want a permanent exemption on new Internet taxes, saying that it's unfair to traditional retailers. Congress created the Advisory Commission on Electronic Commerce to consider just such issues. So far their recommendations have been in favor of the wired purchaser, establishing and now continuing the current moratorium on new online taxes. The question doesn't seem to be whether online sales will be taxed -- it's when, and how.
This discussion has been archived. No new comments can be posted.

Retailers Want Moratorium On New Internet Taxes Nixed

Comments Filter:
  • by Anonymous Coward
    What good has that meaningless scrap of paper done us recently? It's getter harder and harder to "keep and bear arms", and free speech and freedom of the press are simply fading memories. Don't believe the latter? Think Ruby Ridge. Think about the unanimous support by the press of Clinton's "lease out the USA at wholesale prices" agenda. And think about the fact that almost every significant critic of the Clinton administration has disappeared or mysteriously died.

    Due process? Ask Kaczinsky. Speedy trial? Ask the thousands of prisoners who can't get one. All powers not explicitly granted by the federal government to be relegated to the states? Just about every single law passed since 1930.

    For a minor issue like this, and for an issue in the main body of the Constitution, not even the Bill of Rights (which is all anybody really knows), don't really expect the Constitution to mean anything. To its opponents - in power for decades - it's nothing but a scrap of paper to be ignored at whim.
  • by Anonymous Coward
    • Your income must be reported to the federal government
    • The size of your family must be reported in order to compute deductions.
    • The amount of interest you pay on your home must be reported
    • The amount you pay anybody in your employ must be reported
    and so on. The number of taxes we pay needs to be decreased, and more of what the federal government does needs to be done either by the state or local goverments, or (hold on to your hat, strange idea coming up) by the people themselves.

    This is one area that Alan Keyes speaks out against all the time. He actually goes as far as referring to income tax as a 'slave tax' since anytime somebody else has complete and total access to your income before you, you are essentially their slave. In this respect, I'm inclined to agree with him. The only real way to reduce the size of an already bloated government is to cut off its 'food supply'.

    For more info on Keyes, check his site [www.keyes2...argetblank].
  • by whoop ( 194 )
    I just ordered one of those Apex DVD's from Circuit City. Since they operate in just about every state, they added sales tax to the transaction. This 6.25% (Illinois) plus the 10% shipping fee definately could curb many people's shopping habits. I know with computer parts the difference between local shops, BestBuy type stores and the Internet shops on PriceWatch isn't often less than 16.25%. So, it would no longer make much sense to get that DIMM off the Internet, except for those times I'm too lazy to go outside.

    What about UPS/FedEx? Suddenly they will be cut out of the equation as masses of people visit WalMarts and Targets all over the US. I shall start a lobby to tax physical stores 10% on all purchases to feed/clothe/house the masses of UPS drivers that will be laid off. It's the only fair thing to do. How can they compete with stores where people do the driving to and from??
  • It's simple math. Say the Internet (in US) had $1 billion in sales (made up, but makes for easy math) last year. Now multiply that by say, 6.25% (Illinois sales tax). Therefore, the government failed to get it's due $62.5 million. The government can't be expected to run without $62.5 million. The birds will not continue to chirp unless they get their due share, and every other outrageous claim of starving kids/elderly/etc.

    It's all simple idiot-economics. "Idiot" for whoever believes it. New laws can easily take care of any discrepencies between this and traditional mail order. Either the mail order industry donates sufficient funds to politicians campaigns, or they will be taxed as well.
  • Heh, I can remember oh, two or three years back the local news doing this story. It was an older woman (say, 60) who ran an antique shop. She was closing the doors to take up shop on the Internet (mainly eBay). They spewed on and on about how there was all this opportunity and stuff. Heh, now hopefully this will do people like her in. Viva la Walmart!
  • In the immortal words of Algore and Democrats everywhere, any decrease people pay in taxes is a "risky tax scheme" and "only for the wealthy." Just a handful of years ago this 4.3 cent added gasoline tax was desperately needed, and Algore broke the tie in the Senate. This week, it was deemed that removing this tax wouldn't do much good to anyone. Only the governement knows how to properly dish out money. People are fools.
  • The states are free to assign any form of tax their legislatures or citizenry desire.

    No, the rule is that anything not spelled out in the Constitution is given to the states, intrastate commerce taxes, what flags a state flies on its capitol, etc. What is exactly spelled out in the Constitution, is the law for every state, no slavery, interstate commerce taxes, free speech, a census to divide up House seats (not to determine the number of toilets in your house, nor an approximate statistical guess) etc.

    Sure the Income taxes are probably the worst. When switching to self-employment, I sat down reading the regs. If you owe more than $1000 at the end of the year, you "may" be subject to fines (they don't say exactly what, if any. I guess it's whatever the IRS agent feels like that day). And if there is one thing this 20th century government has shown us it is that no way in hell will they make substantial changes to it, let alone a minor tax cut like Bush (or what Dole had planned in '96) propose. Not just Income taxes, but any tax, as the Senate demonstrated this week with their failure to remove the 4.3 cent Algore gasoline tax. Sure it doesn't mean much for most Americans, but the motion would take us strides in the right direction. The saddest thing in all this though has got to be the Democrat party's position than any tiny tax cut, giving you a few extra hundred a year, will immediately kill poor/children/elderly and you are pure evil for thinking of it.

    Speaking of state vehicle fees, here in Illinois the Assembly passed increases in many of them 50%-100%. License plate renewals go from $48 to $78, transfer of titles went from like $30 to $65. What's funny though is the Secretary of State (a Democrat of all things) went and plastered signs telling he opposes these increases in all the DMV sites. I see he even added it to his web site [state.il.us]. I wouldn't blame folks living along the border if they go to the neighboring states.

  • Fair competition? I dare you to find in the Constitution where it says things must be "fair?" The problem there is who on earth is going to determine what behavior is "fair?" What it does say though is, "No Tax or Duty shall be laid on Articles exported from any State."

    I just don't understand how everyone claims Internet/Mail Order is at such a huge advantage because of sales tax. Shipping is (and always has been) much more, and it takes a day or two. Wouldn't "fair" be that WalMarts only let me take my merchandise after a 48 hour waiting period, along with an additional 10% shipping/handling fair tax? I mean, why should some web site have to pay UPS 10% when the local Joe's House O' Spatulas doesn't?
  • by whoop ( 194 ) on Saturday April 08, 2000 @03:59AM (#1144370) Homepage
    Also, consider how much money the governments will lose

    Ah yes, the infamous "losing" of money. Just as the MPAA/RIAA claim to "lose" gazillions on every pirated MP3, warez, etc. because those college kids would have paid full price for everything. Name one year the government "lost" money in taxes, where it was less than the previous year. It doesn't happen. The government just wants more and more every year, and then some.

    The brick and mortar business are paying for roads, police and fire departments, local city improvements, etc with their taxes.

    And some yocal selling stuff out of their home doesn't pay property tax? I can't imagine how this country ran before 1995 without an Internet tax. I mean, without roads, police, fire dept, etc, they were crippled! We self employed types get to pay about 30% in taxes to the feds as well. So don't try claiming they're hurting either. Ah to be Amish, they are the last of the truely free.

    This is the same logic as what New York fell into. They are starting to see a decrease in sales of cigarettes because they have so many taxes on them. For some crazy reason beyond any of their lawmaker's grasp, having $4 in taxes per pack isn't enough to fund what they had slated to do with it. Now all these smokers won't get treatment for their decision, schools won't get upgraded, blah, blah, blah. They "expect" a certain level of taxes, and the people go and change their habits. How dare they!! You damn New Yorkers better start buying thousands of packs, or you will kill every poor, innocent smoker because they can't control themselves or pay for what they choose to do.

    If they charge the tax rate of the city the company is in, we end up with the wealthiest cities charging internet companies almost no taxes to lure them there

    Oh dear, we cannot have competition getting in the way of our beloved taxes! That would be so unfair. Boohoo! I also hereby declare that no business engage in the evil practice of "sales." It is unfair to expect a "mom and pop" store to compete with WalMart. Therefore, I will lobby Congress to come out with a nice, fair, balanced list of acceptable prices for cheese, milk, and motherboards. Why should we stop there? Smaller business cannot afford to pay what Microsoft or RedHat can pay their employees. This list shall also contain acceptable price ranges for all employees. Ranges will be used for diversity, but not to exceed more than 3.25%. This way people won't think it's Communism or anything. The federal governement should also curtail the number of people in all forms of jobs via the Census. We cannot have too many lawyers, so starting today, at birth every child will be assigned a job title. They will be expected to study in this field and ready to enter it no latter than their 30th birthday. This gives them plenty of time for "freedom." Well, until a new law is passed shortening this period. Thirty years is a long time, you didn't really expect it to stay at that number, did you?

    Not to mention the burden is already on the companies to actually pay the sales tax to the state. So we already have this evil competition going on. And look what it's doing to the country. Screw fairness, I say!

    Hippies piss me off.
  • I'll gladly pay reasonable net taxes, if they'll be used to fund public net access, net infrastructure, and to help in closing the digital divide. Somehow, I don't think that's the plan though. I think it's more like the plan of a policeman who sets up a speed trap at the bottom of a hill that never has any accidents. No, he's not saving lives or helping people, but he's certainly making quite a bit of money.
    ----------------------------
  • Oh, come on. Dealing with 2700 U.S. tax jurisdictions (or however many there are) would not be a major problem for online retailers. Less than a month after any 'net tax legislation passed, there would be dozens of competing (commercial) tax calculation and check-writing software packages on the market.

    I'm sure Intuit could come up with an e-commerce plugin for QuickBooks and sell it for a low enough price that it wouldn't represent any kind of significant entry barrier for small businesses.

    That said, I must admit that I dislike sales taxes more than other taxes because they throw more administrative load per dollar collected onto the businesses that collect them than any other kind of tax, which makes them the least efficient tax there is. They are also regressive -- poor people pay a higher percentage of their income in sales taxes than rich people almost every time, and I don't personally believe this is fair.

    (Why do I beliee in "soak the rich" taxes? Very simply, because I've been both "poor" and "rich" in my life, and I can assure you that it's a lot easier to pay $100,000 in taxes on a $250,000 income than it is to pay even $1000 when you're only making $20,000.)

    Tax policy is rough to make. No matter what you do, someone is pissed. But we must face the fact that if we're going to have roads, police, fire departments, NASA, libraries, public schools and colleges, publicly-funded scientific research (like the research that created the Internet itself), and all the rest of the *positive* things government provides, we are going to have some sort of taxes.

    We can reasonably argue, however, that Internet businesses should pay fewer taxes than "physical" businesses because they don't require as much physical infrastructure (roads, sewers, etc.) as traditional shopping centers, and that their comparative eco-friendliness (less individual driving) should give them even more of a break. And we can discuss *how* Internet businesses should be taxed. I personally would like to see a (for instance) 2% national (U.S.) sales tax on Internet purchases -- with an additional 1% override going to the jurisdiction in which the seller is physically located so that local governments actively support the growth of 'net businesses.

    Then you get into questions like, "What is an Internet business?" What about my limo business, which gets at least 80% of its new business over the 'net, but does virtually all transactions in person? What about Internet-based support services like LinuxCare, which may have consultants spread out all over the place?

    It goes on and on. These arguments are just beginning, and are likely to be with us for the rest of our lives. We might as well get used to them.

    - Robin

  • First my "humor" tags are missing from your quotation from my posting where I facetiously asked when Congress was going to level this playing field.

    First point, you are totally overlooking the additional costs an online business faces. High overhead in Oracle (or equivalent) databases, 24x7 servers, programmers and 24x7 technical support not at minimum wage. A real building to house the servers. None of that is cheap.

    Compare the cost of Wal-Mart having the customer come in to pick up their purchase ($0) vs. having to ship each purchase to the buyer. The cost of paying for delivery from the manufacturer or distributor to the point of sale is the same in each case. Can you say "additional expense"?

    Ahem, you cannot pay the taxes with a program on a CDROM. All you can do is calculate them. And guess what? Traditional mail order hasn't done this in the past unless the sale was to someone where they have a presence. Ever notice the fine print that says things like Residents of state X must pay sales tax? That is because people elsewhere are not paying the sales tax. You are supposed to declare and pay any sales tax on such purchases on your state income tax form but nearly nobody does.

    The point is that if a mail order merchant or an online merchant makes one $10 sale to a particular remote (low volume) tax jurisdiction and then has to calculate the tax, cut a check, mail the check to proper authority (paying postage on the way), and retain records there is zero profit left. This is a fact of business, there are not the margins to support these expenses.

    Let's also get into returns and credit card fraud. Online/mailorder merchants pay much higher fees to process credit cards because they never have the card physically. There is more actual fraud which drives up costs on the other side. When a customer wants to return an item there is the additional complication of tracking a return and making certain it actually arrives intact before generating the refund. Compare this to looking in the box, dropping it on the floor behind the counter and returning the cash.

    In closing, anyone who thinks that being an online merchant is the fast track to millions and that online merchants are operating at some sort of advantage to B&M merchants has never done retail on either side. I think they should give it a try and collect those millions they seem to think are hanging from the low branches. I'll listen a lot closer when they've succeeded.


    -- OpenSourcerers [opensourcerers.com]
  • No, you understand me. I am not in favor of taxing online transactions. I was joking though about getting Congress to act to "level" an already pretty level playing field.

    There are really a couple of related points here (to me). The first was "Do online/mailorder stores operate at an unfair advantage to B&M retail?". Having done a bit of both, my conclusion is no. They each face different but relatively equal obstacles. No playing field is perfectly flat and anyone who doesn't like their current position (online/mailorder or B&M) should change strategies.

    I think that Wal-Mart et alia have seen a way that a Mom'n'Pop might someday be a competitor and the retail giants are preparing to squash that tiny probability by lobbying Congress to collect taxes that will hardly affect the giants but will cripple the little guys. Of course, since they are basically waving money right under the noses of politicians, this may not be too tough of a sell.

    The other point has to do with whether or not online (and by obvious extension, mailorder) merchants should now be subjected to sales tax when they have not been before. To me, unless there is some specific need for increasing the revenues collected through taxes, then one cannot even begin to justify increased tax collections.

    Considering that the government (at all levels) currently has more than enough revenue, then I don't see any justification for new or additional taxes of any sort.

    To me, the entire point of taxes is to pay for communal needs that cannot be conveniently paid for by individuals one at a time (such as national defense and emergency services). Once those bills are being paid, then it is wrong (unethical bordering on criminal) for the government to seek additional revenue.

    Note to people at Slashdot: could this window please get a little bigger? It is far too small!


    -- OpenSourcerers [opensourcerers.com]
  • Online businesses already operate under several disadvantages such as [1] shipping costs;[2] a lack of consumer confidence in doing business online vs. a local store where they can deal with a store manager if needed; and [3] credit card processing fees (you can't pay cash online and bad checks fees make them too expensive to consider, even though you can process them completely online). <humor>What is Congress going to do to level that playing field?</humor>

    The purchasing power of companies like Wal-Mart enables them to buy their inventory at prices that are much lower than small local businesses (including those who are pure online businesses). In my own business efforts I have been quoted wholesale prices that are higher than Wal-Mart's retail prices!

    There is another major problem with sales taxes for online transactions: delivering those taxes to the appropriate jurisdiction. There are over 7,000 tax jurisdictions [photo.net] in the U.S. alone. How is a small business that only made one or two sales into a particular tax jurisdiction supposed to [1] calculate those taxes accurately with current tax table information; [2] cut and deliver a check to the appropriate authority; [3] fill out their income tax form listing the 7,000 different sets of sales taxes the paid during the year; [4] maintain several years of tax records; [5] make a profit?

    To those who say that sales taxes online are inevitable and should happen, I just have to ask Why?. Taxes are paid only to provide pubic services. If public services are being provided then there is no need to collect additional tax revenues in any way.


    -- OpenSourcerers [opensourcerers.com]
  • I remember having this great debate in my high school economics class (I'd like to give a shout-out to Mr. Magnon at MacArthur High School: I hated you and you hated me; peace out) about whether or not we should have a sales tax over an income tax.

    Granted, the benefits to have a national sales tax are quite appealing. The amount of commerce every year would provide a huge financial bonus to the country. People will always buy things and if the government gets even a small percentage of this (I think 4% was break even, but I'm not sure), they make a ton of money (e.g gas tax). Furthermore, from a bureaucratic standpoint, you don't have to worry about auditing incomes and worrying about exemptions and tax breaks, etc. etc. It seems like a dream, right? Everyone pays the same percentage on everything.

    And therein lies the problem. Sales taxes, because of their total fairness in percentage are completely unfair to the lower middle class and impoverished. Essentially, those classes end up paying a greater percentage of their income to taxation than do the wealthy, miring them in even more poverty. It would be a government supported step towards the old "the rich get richer and the poor get poorer" adage. A national sales tax would increase the ever growing disparity between the poor and the wealthy in this country, and that's why we don't have it (it's a political hot potato no politician wants to lay their hands on).

    And guess what, an Internet tax (not a sales tax, an Internet sales tax) is not going to adversely affect the poor. Why? Because most poor people aren't on the 'Net, nor do they have the resources to purchase on the 'Net. They won't be taxed, but the wealthier people will, and that's who we want to tax. The goal of the national government (not so much the state governments) is to tax the wealthy more than the poor (that's why Steve Forbes 'flat tax' was such a flop). In doing so, they help to balance some of the disparity that occurs when states, who don't have the means nor the scale for monitoring such disparites, implement simple taxes, like the sales tax.

    So, yes, all taxes are unfair, I agree, but they are necessary, and I would rather have taxes that are 'more fair' than 'more unfair'.
  • Someone else has said that you're proposing, essentially, to treat the Internet as one big state for tax purposes. An interesting idea, but there are severe problems with it.
    • Who do you give the taxes to? The physical state the buyer's in, or the one the seller's in, or perhaps the federal government? You can't give it back to the Net itself; there's no governing body to give it to. Giving it to the states raises unbelieveably complex questions about verification, distribution of the proceeds to the appropriate states, and such.
    • Let's assume you give it to the federal government (which you no doubt want to do). What about sales between people who are outside the U.S. government's borders? If you're treating the Net as one big stste, these people should be taxed. But since neither party is physically located within the US, it's not fair to tax them (I think it might even be construed as demanding tribute in some places; that's an act of war). In other words, you have to discriminate by physical location. That's hardly fair.
    • Let's assume you're lunatic enough to try and tax every single transaction. What currency do you use? The US dollar is certainly fine for US citizens, but what about other places which don't use that currency? You have to start dealing with exchange rates. These fluctuate wildly enough that there's no reasonable way to keep up.
    • Exactly what gets taxed and what doesn't? Different states have different laws about what can and cannot be taxed (many states, for example, do not tax medicines).
    • That last point brings up another problem: do you tax delivery of products? For now it's impossible to e-mail, say, a toaster to someone, so physical delivery is still a necessity. Do you tax this?

    This is a lot of why the Net should not be taxed. One, it's impossible to do in a fair manner. Two, it makes buying and selling products much, much more complex, thereby discouraging its use. Three, Wal-Mat and Target don't give a damn about the taxes; they just want to artificially inflate their e-commerce prices and blame it on taxes. Because e-commerce is so popular, they think people will stand for it (that's why regional encoding on DVD's works, incidentally; people don't realize that it's used to artificially inflate prices so they keep paying more than they have to).

    So in the end, the Net is basically untaxable. Is this good? No. Is it bad? No. It's simply the Net's nature.
  • Why should internet sales be taxed any differently?
  • oh yes they do. you don't get rich by saying 'Okay, I have enough money.'
  • Quite true.

    Here in Seattle, a voter's inititive recently passed (and has since been overturned) which lowered taxes on car registration. However it also contained a requirement that voters approve any increase in taxes. Naturally essential services have been the first thing to go, because the government here is punishing voters.

    This is doubly true because they have decided to keep the lower taxes - it's just the voting requirement that they were concerned about.

    The stupid attitude around these parts by the government re: taxes is clearly seen in the Kingdome fiasco.

    A multipurpose enclosed stadium that isn't even paid for yet was blown up. Replacing it are two single-purpose stadiums that voters have repeatedly turned down in elections.

    Christ. I say we cap new taxes with similar legislation, and if the damn Mariners and Seahawks want stadiums, let them build their own.
  • I think that there is not enough accountability.

    I don't mind paying taxes for road construction. But are lots of toll roads that are poorly maintained because the tolls go into other projects and not into the upkeep of the actual road. How does that make any sense?
  • Walmart does this a lot. I've heard that the joke in the EPA is that they study Walmart placement to locate wetlands in the first place.

    Frankly I can't stand the bastards.

    Btw, Sam Walton is dead.
  • There are lots of limits on what constitutes free speech. In fact, the 'falsely shouting fire in a theater' bit is not exactly the cat's meow anymore.

    Mitnick is doing marginally all right on the 5th amendment (they're stalemated, last I heard) but he was definately abused wrt to the 6th amendment.

    8th gets hit a lot and aside from Supreme Court decisions regarding the draft, I don't recall that the 13th amendment (which is important) has been superceeded anyplace.

    More to the point, do you WANT people to infringe on your rights? Are you aware of the liklihood that you'll give such people (who are simply tyrants, nothing less, no matter what their motivations) an inch and they'll take a mile.
  • by MoNsTeR ( 4403 ) on Saturday April 08, 2000 @06:20AM (#1144384)
    I'm really getting sick and tired of this whole debate about taxing the internet, mostly because both sides of the issue tend to be grievously misinformed. OK, here goes:

    Internet sales ARE TAXED, in exactly the same way as mail order sales, because "E-COMMERCE" IS JUST MAIL-ORDER.

    What's the difference between submitting a form on a website and filling out a paper order form? Between enumerating your purchase on your computer versus doing it over the phone? There IS no fundamental difference, and that's why 'net sales and mail-order are currently the same in the eyes of the law. To wit, if you buy from a vendor that has operations in your state, you pay your state's sales tax; if the vendor is out of state, you pay no tax.
    What all the whiny, inefficient, yesteryear retailers are /really/ saying is not that the 'net should be taxed, since it already is, but that it should bear the burden of an *extra* tax. If you know what sales taxes are supposedly for, you know how ridiculous this is. The point of a sales tax is to fund government actions and policies that benefit local businesses. Tourism boards are a perfect example. This is why resort towns tend to have super-high sales tax, so the gov't can subsidize seasonal businesses and other firms that would not otherwise be able to survive there.

    Anyway, I'm biased by my personal belief in freedom, that being the freedom from the initiation of force. I agree with the words of Frederic Bastiat, when he called a tax that does not benefit all citizens equally, "legalized plunder". So I don't believe in 99% of the taxes levied against the citizens of this country, or most others for that matter.

    More to the point, as another poster pointed out, the federal gov't has no Constitutional authority to tax the internet, so in order to do so legally they would need to amend the Constitution. I must confess that I do not expect the Supreme Court to share that interpretation, nor do I expect Congress to actually even consider whether its legal or not when they sit down to vote away our prosperity.

    MoNsTeR


  • And therein lies the problem. Sales taxes, because of their total fairness in percentage are completely unfair to the lower middle class and impoverished. Essentially, those classes end up paying a greater percentage of their income to taxation than do the wealthy, miring them in even more poverty. It would be a government supported step towards the old "the rich get richer and the poor get poorer" adage. A national sales tax would increase the ever growing disparity between the poor and the wealthy in this country, and that's why we don't have it (it's a political hot potato no politician wants to lay their hands on).



    You raise an interesting point. But shouldn't the government seek to REDUCE taxes and the overall size of government than ask even greater demands from the so-called "wealthy". OK, you can stop laughing now.

    I'm nowhere close to wealthy but I paid more in taxes this year than I took home when everything was said and done. Why am I a second class citizen because I applied myself? Perhaps I should get more representation in government since, well, afterall, I paid more into it. How fair is that?

    Or should I be required to live my life according to a government prescribed plan, getting married and having children to lower my tax burden? That hardly seems right. Our current system of taxation encourages the lower middle class and impoverished to reproduce. This can only exacerbate the problem as these lower classes work the system to perpetually receive income from the federal and state governments.

    And you call this system "more fair". The redistribution of wealth in this country will eventually spell it's collapse. Mark my words.
  • Ok, look. I'm paying at least half and probably closer to 70% of my income in taxes already.

    There's the federal income tax, state income tax, state sales tax, and local property tax. There are gasoline taxes (thanks Clinton), sin taxes, water taxes, federal/state telephone excise taxes, car taxes, road taxes, marriage taxes (ok, i'm not married but), death taxes (and I'm not dead yet), and social security (ok, it's a stretch but..).

    Now, I'm probably leaving out a few taxes already. Then we get people who bitch and whine and moan about no Internet taxation being somehow unfair. Well, you know what? I think ALL THE EXISTING TAXES ARE UNFAIR!

    Come on. I'm a single white male. I don't ask much of my government. I don't even mind helping out the less fortunate to a point. But I don't like billions of dollars, some of which I had to contribute, going for handouts or military assistance to foreigners. I don't like the increasing amount of bureaucracy and outright Unamericanism (ok, maybe it's not a word) infesting nearly every level of our local, state, and federal government.

    It seems that the more money we give to these people, the fewer freedoms we have and the more money they want. Don't pay the piper and you go to jail. What kind of land of the free, home of the brave is that?

    So sit back and play armchair treasurer with our nickels and dimes. Soon, there'll be little or nothing left to tax. What then? Pay what you can becomes give us all your money and we'll let you be our slave. Where's the incentive to work and try to get ahead? Hell, our government is spending more per prisoner than I make in a year.

    So, how about a compromise? Repeal the federal income tax and create a national sales tax that also applies to Internet items for transactions within the United States. And use the existing mechanism for mail-order products for state taxes (check here if you are in suchandsuch state to add 3.9% sales tax, whatever).


    The money powers prey upon the nation in times of peace and conspire against it in times of adversity.It is more despotic than a monarchy, more insolent than autocracy, (and) more selfish than bureaucracy. It denounces, as public enemies, all who question its methods or throw light upon its crimes. I have two great enemies, the Southern Army in front of me and the bankers in the rear. Of the two, the one at my rear is my greatest foe...corporations have been enthroned, and an era of corruption in high places will follow, and the money power of the country will endeavor to prolong its reign by working upon the prejudices of the people until the wealth is aggregated in the hands of a few, and the Republic is destroyed.

    Abraham Lincoln
  • Wow, you are just , like, sooo, intligint! D00d!
    So, like, shut up already, yer gonna let the evil powerz dat B know all about how to do it wrong and harshly too us!
  • Maybe not for simple, normal, church-like activities, but definitely for the ones that abuse that status, like all these giant church-owned hospitals/medical groups. They do billions/trillions per year, and overcharge us so bad that even insurance companies have a hard time paying the bill, and it's all tax-free at the top, absolutely disgusting.
  • Fair competition? I dare you to find in the Constitution where it says things must be "fair?"

    The constitution might not dictate that we should have a free market , but that doesn't mean that we shouldn't.

    just don't understand how everyone claims Internet/Mail Order is at such a huge advantage because of sales tax.

    Well you just answered your own question. If one business is taxed and the other isn't, the government are essentially showing favoritism to the form that is not taxed. This puts the untaxed business in a better position than they would be if every was given the same treatment. You talk about how mail order has disadvantages, but those are inherent problems with that business model, not restrictions artificially imposed by the government. Should the government use taxes and/or tax exemptions to protect inefficient businesses ?

    Shipping is (and always has been) much more, and it takes a day or two.

    Shipping costs are actual costs, they are not artificially added by the state. When you buy from Walmart, you also pay transportation costs, namely Walmart's shipping costs and/or your gas costs. If mail order works out to be more expensive, it's because it's less efficient.

    Wouldn't "fair" be that WalMarts only let me take my merchandise after a 48 hour waiting period, along with an additional 10% shipping/handling fair tax?

    Well they could choose to do that, but it would be a downright stupid business strategy. And the fact that mail order takes a long time to get the product to the consumer is an inherent flaw with that business model. BTW, "Shipping and handling" is not a "tax", it is a service charge, and it relates to the weight of the item, not the price.

    I mean, why should some web site have to pay UPS 10% when the local Joe's House O' Spatulas doesn't?

    "Joe's House" has already transported the product(s) in question to their store by the time it's on their shelf. Somewhere, someone needs to transport the item from (a) to (b) -- this is the main service that retailers perform.

  • It's all about choice. Traditional retailers simply can't compete because there are a million and one places to buy from online.

    Let's not use the word "compete" in the absence of fair competition. It's hardly fair to tax one industry and not tax a competing industry -- this is the kind of interventionism that is not supposed to take place in a free market. To not tax e-biz while taxing traditional businesses is inconsistent.

  • It really pisses me off when people call lotteries taxes on the poor. Well, I'm poor, and I don't pay any 'lottery tax'. I don't recall seeing it on my income tax form, or having to buy a lottery ticket when I fill up my car.

    If you want to call lotteries taxes, fine, call them taxes on the stupid. Oh, wait...it's not PC to call someone stupid? Then how about you assume they can make decisions for themself!

    You can't have this bull about calling it 'taxes on the poor'. If you're PC, and can't call people stupid, it's just a choice some people are making, and, if you're like me, it's taxes on stupid people.

    -David T. C.

  • Taxes are not such a bad thing. A 2 or 3 percent tax would give it an advantage over most states (not mine, I dont pay).

    First: as you point out, it's not an advantage over all states.

    Second: shipping ends up being quite a lot - for me, it's almost always at least as much as tax.

    Third: as somebody else pointed out, you don't pay taxes on mail-order goods either (assuming the retailer has no point of presence in your state). Why should catalog retailers have an advantage over Internet ones?

    But instead should be used to build up the internet, that way when broud band becomes the norm we will be able to support it.

    Good ideal. But, first, I seriously doubt that much government support is going into Internet infrastructure these days (Internet2 notwithstanding - but that's not for general use). I'd suspect that most of the money is private. And, quite honestly, if this tax were implemented, I doubt very much of it would go to building Internet infrastructure. The government's decimation of the Social Security fund demonstrates what happens to money earmarked for long-term gain....

    Also, once you institute a tax, it's almost impossible to get rid of it. The income tax was originally very low (read: 10% was seen as impossible) and supposed to be a temporary measure. Guess what? We've still got it, and it's bigger than ever.

    When the there is a significant amount of business on the internet and the states are beginning to feel the loss of taxes it will be time to start shifting the money from developement to the states over a 2 - 5 year prossess.

    Hm. I would say that the taxes should not be established at all (for reasons given above) until the online retailers are firmly entrenched. They're having a hard enough time anyway, and putting taxes into place too early as opposed to too late could end up setting e-commerce back several years. I'd say it's better to err on the side of caution with this (as opposed to get all the money out of it that you can) and go with fewer taxes instead of more.

    In the long run everyone will be happy (we will get our broudband, wallmart will go out of business anyway, and the states will get their money when the loss starts becoming a factor, and the average consumer will still get less taxes on the net.)

    Well, we can dream, can't we? :)

    Seriously, I doubt this scenario would come to pass. I'd say Wal-Mart is here to stay - they're shrewd and powerful, even if we hate them. Broadband will come through private (not government) effort - feel free to correct me if the government is putting actual cash into broadband development. The states will figure out some way to get their money, hopefully in a way that doesn't seriously cripple e-commerce, and the average consumer is still going to have to pay for shipping, which just about kills the tax advantage.

    please do not flame my grammer or spelling, I am only 12 and don't have a dictionary handy.

    The ironic thing is that saying this probably increases your chance of being flamed for it. :)
  • by Detritus ( 11846 ) on Saturday April 08, 2000 @01:17AM (#1144394) Homepage
    Constitution of the United States of America

    Article I, Section 9

    No Tax or Duty shall be laid on Articles exported from any State.

    That should be the end of the discussion, at least concerning the imposition of state sales taxes on out-of-state vendors. A State is free to tax or not tax sales of goods within their borders. They do not have the power to impose their taxes on the citizens of other states.

  • There are really a couple of related points here (to me). The first was "Do online/mailorder stores operate at an unfair advantage to B&M retail?". Having done a bit of both, my conclusion is no. They each face different but relatively equal obstacles. No playing field is perfectly flat and anyone who doesn't like their current position (online/mailorder or B&M) should change strategies.

    The problem is that it is only "level" (not that I necessarily agree with this) because some politicians have decided to give "E-commerce" a handicap. In other words, E-commerce is by nature of its design and/or management is less efficient, and needs an artificial advantage to compete in your opinion. If you are for "changing positions", why not just become a Brick and mortar when your method is inferior?

    I think that Wal-Mart et alia have seen a way that a Mom'n'Pop might someday be a competitor and the retail giants are preparing to squash that tiny probability by lobbying Congress to collect taxes that will hardly affect the giants but will cripple the little guys. Of course, since they are basically waving money right under the noses of politicians, this may not be too tough of a sell.

    Part of your problem is that you see every objection as being Walmart or something similar. Although the current lobbying may be Walmart and company, this is because they are large enough to do so, and stand to lose a great deal. There are some "Mom and Pops" plain old retailers that fear the tax advantage of online retailers too.

    One thing that annoys me with your comments is that you like to vilify chains such as Walmart too much. They do provide a good service to people, whether or not you like it. The combination of their management and scale of their operation allows them to price things lowe, and often provide greater selection than any Mom and Pop does (generally speaking). While I grant you that you do lose some things in the process (e.g., a more personal touch, knowledgable service people, etc.), people consistently find Walmart's (et. al) value proposition greater than the mom and pop(this is why they've "won"). You may not personally like it. Even though may you find other people's preference of Walmart to the Mom and Pop is less advantageous to you, that does not mean society is better off paying more for things...or simply not being able to find what they want. If people, in the long term (as opposed to short term anticompetetive pricing), would rather pay 5 dollars for a given item and get a certain mediocre service than pay 8 dollars and get good service and a "smile" (or whatever you will), who are you to say this is wrong, in and of itself?

    Furthermore, Walmart may be theoretically large enough to sway politicians, but if you look at the empirical evidence, this is simply not the case (atleast not yet). Both the Republicans and the Democrats are against taxing the internet for the most part(much to my dismay.) The Democrats view taxing the internet as regressive, or what have you. While the Republicans see not taxing the internet as a way to reduce taxes in general. This dogma combined with an utter lack of understanding and political aping of the internet puts them both against it. Put simply, the evidence ain't there yet.

    The other point has to do with whether or not online (and by obvious extension, mailorder) merchants should now be subjected to sales tax when they have not been before. To me, unless there is some specific need for increasing the revenues collected through taxes, then one cannot even begin to justify increased tax collections.

    Whatever your opinion on aggregate tax revenues may be, there is no good reason to give one party preferential treatment. Furthermore, if you accept that E-commerce is going to grow, and that it is going to grow at the expense of brick and mortars, you pretty much must conclude that tax revenues are going to shrink. In other words, freezing tax percentages does not assure tax revenues when the proportion of sales changes. Do you realize that if the internet were to replace all B&M sales tomorrow, that most states' tax revenues would be reduced by approximately 30%? Although this number is clearly too high, why should society be interested in driving reduced tax revenues while favoring a less than efficient business method? If we accept your conclusion, that the playing field is already "level", every customer is essentially getting the same price (unless you think the internet is so unattractive to the consumer that they need huge discounts), yet the state gets less money on every sale. Every internet sale that replaces a B&M sale, reduces revenues that the state would have otherwise had....

    The only argument I see that stands against taxing the internet fairly is your own personal self-interest. That is to say, you get richer when your online retail operation gets taxed less. I really would love to hear a compelling argument for society!

  • by FallLine ( 12211 ) on Saturday April 08, 2000 @07:57AM (#1144396)
    Online businesses already operate under several disadvantages such as [1] shipping costs;[2] a lack of consumer confidence in doing business online vs. a local store where they can deal with a store manager if needed; and [3] credit card processing fees (you can't pay cash online and bad checks fees make them too expensive to consider, even though you can process them completely online). What is Congress going to do to level that playing field?

    Ok first point, you are totally neglecting the additional costs which almost every retailer faces. High overhead (e.g., the store front, sales personel, training, support, maintance, cleaning, parking, liability on your lots, etc etc etc) I'm sorry to tell you this, but these things do not come cheaply. In fact, they are very expensive.

    Compare this with online retailers, who are almost by definition driven primarily by computers. This reduces the need for hired help substantially. Not only that, but the dotcoms gets the benefit of locating where ever it wants. The DotCom can use affordable quality labor for their shipping operations, yet still target high rent areas. Furthermore, The dotcom can consolidate all of their shipping into one central location. Compare this with the likes of Wallmart, they have to distribute their wares to hundreds of retail locations, keep them in stock (can you say inventory issues?), etc.

    DotComs should, in fact, be able to operate even more efficiently (for those limited services they provide) across the board. Almost all these other issues you and others mention could be addressed by a similarly scaled (a brick and mortar of the same scale has it no better, and many times worse) and well run DotCom. The only real nagging issue online retailers will continue to face is shipping.

    There is another major problem with sales taxes for online transactions: delivering those taxes to the appropriate jurisdiction. There are over 7,000 tax jurisdictions in the U.S. alone. How is a small business that only made one or two sales into a particular tax jurisdiction supposed to [1] calculate those taxes accurately with current tax table information; [2] cut and deliver a check to the appropriate authority; [3] fill out their income tax form listing the 7,000 different sets of sales taxes the paid during the year; [4] maintain several years of tax records; [5] make a profit?

    Ahem. DotComs are not alone with this problem. Many companies which ship have had to contend with this issue before these DotCom were even a twinkle in some VCs eye. There are cdroms these companies buy which keep track of all the tax rates, they cope just fine. It would be a trivial matter to intergrate it within their CGIs and the like--the cost per transaction would be mere fractions of a penny. In addition, if this shipping commerce grows in popularity, there is nothing saying the federal government or some accounting standards board could not compile an official database of tax rates, to which everyone is held strictly accountable to (and nothing else, e.g., if it is out of date)...

    What you are asking for is essentially a subsidy (yes, that's exactly what it is). Because the beloved online retailer can't bring the product to the consumer as cheaply, we're going to even things up with a tax disparity in their favor. In other words, the DotCom can operate 8% (or whatever tax rate) less efficiently so far as the consumer is concerned, and get away with it. On high dollar/low bulk items (e.g., computers, software, clothes, etc.) it is literally impossible for the brick and mortar to compete, because the government artifically boosts the online retailer.

    Since you claim to be interested in "fairness", I ask you this. If I choose to locate my retail operation in say, Manhattan (or any mall in america for that matter), should I be given a tax benefit? If I locate my DotCom in Alaska, should I recieve a great tax benefit? And if to boot, by virtue of my location, I can't provide decent support, or help to the consumer, should I be given a further tax break? Obviously, the answer is no. The government should not try to intervene like this. Businesses should compete based on the efficiencies and services they bring to the table, not on the basis of which form of business the government seems to favor more at any given minute.

    If the internet is the more efficient way to do whatever it does, it will, by definition, overcome those shipping costs, it would compete on price (though not necessarily in other departments). If the DotCom is able to compete based on the price savings they are able to generate for the consumer (not tax rates), I have no problem with that.

    The reality today, however, is not anything resembling this. Most online retailers are illconcieved, operating almost entirely on lower prices (largely benefiting from not having to worry about taxes) and hype [and a few for better apparent selection]. Most online retailers even have sloppy and poorly designed sales websites. Their support is generally laughable. Their financial management is a joke. Their inventory controls are horrible...They are generally not all they are cracked up to be. There is no good reason for society to reward this lack of performance [even if it is inevitable] with an effective subsidy over their "brick and mortar" counterparts.

  • by FallLine ( 12211 ) on Sunday April 09, 2000 @09:13AM (#1144397)
    First point, you are totally overlooking the additional costs an online business faces. High overhead in Oracle (or equivalent) databases, 24x7 servers, programmers and 24x7 technical support not at minimum wage. A real building to house the servers. None of that is cheap.

    Compared to the costs of having clerks handle the equivelent volume it is very cheap. Furthermore, businesses such as Walmart are, in fact, highly automated, with extensive databases, ERP type systems, etc.. Not only do they have to maintain a retail presense, but these kinds of operations have found it benefits them to computerize their business. I would not at all be surprised if Walmart spends more on IT per sale than these DotComs (those with similar volume), because they have to automate and support each and every outlet, not just corporate HQ.

    Compare the cost of Wal-Mart having the customer come in to pick up their purchase ($0) vs. having to ship each purchase to the buyer. The cost of paying for delivery from the manufacturer or distributor to the point of sale is the same in each case. Can you say "additional expense"?

    Ok, so the online retailer has to contend with shipping costs. So what? A retailer such as Walmart must ship to each and every outlet. This may, at first glance, appear necessarily cheaper because it is cheaper to ship 50 units to one location than ship 50 units to 50 different locations. However, it is not so simple in reality. Not only must the retailer contend with the significant overhead at each location, but they must keep inventories in tight check at each location. This is not simple at all. A minor miscalculation in demand can cost a great deal because you must keep stock at each location (these real time computer inventory systems help here...but these cost money as well).

    Ahem, you cannot pay the taxes with a program on a CDROM. All you can do is calculate them. And guess what? Traditional mail order hasn't done this in the past unless the sale was to someone where they have a presence. Ever notice the fine print that says things like Residents of state X must pay sales tax? That is because people elsewhere are not paying the sales tax. You are supposed to declare and pay any sales tax on such purchases on your state income tax form but nearly nobody does.

    First off, these payments are aggregated. It is not as if each individual transaction must have a corresponding tax check cut. Secondly, not all firms which ship are your "traditional mail order" firm. They find they have to have a presence (e.g., a sales force) in each state. These companies cope just fine...the costs to support taxes is less than penny per transaction (averaged) in the companies I know.

    Let's also get into returns and credit card fraud. Online/mailorder merchants pay much higher fees to process credit cards because they never have the card physically. There is more actual fraud which drives up costs on the other side. When a customer wants to return an item there is the additional complication of tracking a return and making certain it actually arrives intact before generating the refund. Compare this to looking in the box, dropping it on the floor behind the counter and returning the cash.

    Likewise, these companies I know have to contend with the same issue, just like every damn mail order in the country. Cry me a river.

    In closing, anyone who thinks that being an online merchant is the fast track to millions and that online merchants are operating at some sort of advantage to B&M merchants has never done retail on either side. I think they should give it a try and collect those millions they seem to think are hanging from the low branches. I'll listen a lot closer when they've succeeded.

    I know people in many different areas on both sides, and done some work in different companies as well. Your problem is that you are comparing apples to oranges. You are comparing your limited experience as a tiny online startup to well established companies such as Walmart, yet lack of experience to know where their costs are. If you want to make a more fair comparison, compare your business to an equally sized brick and mortar of similar age.

    The bottom line is that everything you and I mentioned above is totally irrelevant, none of it justifies government intervention. You wisely chose to avoid attempting to justify why your online retail operation should recieve preferential treatment while the retail operation from my example should not. If you provide an inferior service to the consumer which costs more by nature of your business model, why is it the governments obligation to intervene by artificially making your product more desirable than it would otherwise be? If you really can't provide good service to the consumer, if your costs are that high, then be a brick and mortar for christs' sake. The same goes for any business decision. If you choose to do business in the way you do business, then you should also have to live with the consequences. If, on the other hand, you are providing a significant benefit to the consumer, then your increased prices should be accepted by the consumer.

  • Wal-Mart, Target and Circuit City don't want a permanent exemption on new Internet taxes

    Stores like Wal-Mart, Target and Circuit City don't want to be at a competitive disadvantage, and I don't blame them. It's not fair that they are taxed and out-of-state businesses are not taxed.

    There's a very easy solution: Stop taxing Wal-Mart, Target and Circuit City.


    ---
  • Agent CiXeL: your post violated some of our principle style guidelines for propaganda distribution. Please have future posts cleared through the Propaganda Directorate.

  • The same loophole(s) which allow Internet transactions to go untaxed allow mail-order transactions to go untaxed. Close one and you will almost certainly close the other.

    Traditional retailers aren't hurting from mailorder because hardly anyone uses mailorder (compared to the Internet).

    Actually, most states DO require that you pay taxes on Internet transactions, but they do not have the ability to enforce these taxes. The federal government could require that people pay these taxes to their states, and it would probably not be a Constitutional violation and the federal government would not necessarily be the ones recieving the money.
  • I can't say this enough:

    Imagine there are no taxes at all. Walmart is better of than the online retailers because they consolidate shipping, a real cost. Would you suggest taxing Walmart so that the online merchants could compete better?!

    Shipping is a cost that has a real-world basis; it reflects the labor and capital necessary to move an item from point A to point B. If the online people have to pay more for shipping, that's because their products cost more to deliver to the consumer. But the B&M stores pay more for taxes for the very artificial reason that the laws don't apply well to online or mailorder businesses; this has no basis in reality and is a purely artificial cost, but they're necessary. And if you've got to charge someone to get the tax revenues it's better to charge all companies equally.

    In sum:
    "shipping tax" = an actual cost and therefore fair

    sales tax = an artificial cost which should be spread evenly
  • But mailorder has always been good at lobbying and has been small enough to be under the radar of most policy makers. E-commerce has neither of these advantages, and it will be taxed. If the government starts taxing e-commerce, you can be sure they'll start taxing mail order also.

    It's a complicated problem to deal with (interstate sales taxes and all) and wasn't worth it for mailorder, since they represent a small part of the economy. But it's worth it to the government to figure out a solution for e-commerce, and once they have one it won't be much more effort to apply it to mailorder as well.
  • I believe the Internet should be taxed like mail order is.
    However this IS NOT the kind of sales tax states want to apply to the Internet. Instead they want to tax the busness for the state the user and maybe the state the busness is in and if a diffrent state than the busness then tax the website as well.

    They should retain a ban on sales tax on the Internet for as long as there is no single taxation stratagy.
    With a brick and morter busness that means the tax is at the phisical location of the busness. With mail order the tax is only if the user and busness are within the same state. With the Internet it's any state who wants to lay clame to the cash.

    Normally compeating means they have to compeate with the guy acrost the street with the Internet they have to compeate with the whole world.

    Look at the busness modles for Wal-Mart and Circuit City.
    Wal-Mart is the "Drive em out of busness" style.
    Circuit City is the "Over charg to death" style.

    Nither have a really strong sence of what is fair.

    What they do have is busnesses that can not handle compeating with a global market.
    Instead they are strictly local economy busnesses.
    E-Commerce changes things. Wal-Mart can push the local Mon and Pop out of busness but Mom and Pop dot com isn't going away any time soon.

    You can shop around and get pritty close to what you want on-line. This means you won't be going to Circuit City where you pay a bit over the line and get less that top line support.
    If you want/need topline support you can get it on-line. If you want cut throat prices you can get it on-line. If you want top line support at cut throat prices dream on buddy it's not gona happen.
    Circuit City trys to provide a decent ballence between the two while making a healthy markup. Having to compeate with the whole planet at once dose not make that very easy.

    In the mean time I still do most of my shopping in the phisical world.
  • Why, what did they do to you?

    All kidding aside, it seems the issue is "new" internet taxes, of which there should be NONE. I don't even live in the U.S. anymore, but it's stunts like this that give Canadian Premiers the wrong ideas.
    Though I can see in the banner at the top of the screen that Canada has decalared war on somebody, so you may not see me posting for a while. Bloody draft...

    Pope
  • The way interstate sales tax is interpreted is that if the consumer is with in the borders of a state when he orders goods or services then he must pay the sales tax of the state that he is within.

    Nope.

    IANAL, and I can't quote the law to you, but here's how mail-order (and the e-sales) works, I think:

    1. In state transactions are taxed as per normal.
    2. Between state transactions are taxed in the buyers state, if the seller has a physical presence in that state. (Thus, if I mail order from Barnes & Noble, I pay tax since there's a Barnes and Noble just down the street). The seller collects the tax.
    3. If the seller has no physical presence in the buyers state, no tax is collected by anyone.

    There are exceptions to this. Some states have no sales tax on certain items, and people from neighboring states will go there to buy those items. In that case, the state where the buyer lives sometimes imposes taxes on the buyer.. I have not encountered this, but I have heard of it happening in Washington State, I think.

    In any case, e-tailing should be treated as fundamentally identical to mail-order. F*ck WalMart.

    ---
  • This really isn't new for us, either. Several states (including Michigan, where I live) have what's called a use tax. You are obligated to pay tax on anything that is shipped to you, whether you order it from a catalog, from your friend or online. You can read all about the Michigan Use Tax in the FAQ [state.mi.us]

  • It is funny that Wal-mart and Target want to tax internet sales locally. It is funny because when they built in my town they sought and got tax exempt bonds to fund the building of the buildings. They sought and got an exemption for most of their property taxes. So they made sure that they avoided any tax on themselves and forced the rest of the citizens of my area to pick up the freight for the local schools.

    Wal-Mart has formed Wal-Mart.com I have a feeling that their heart isn't in the argument. It is more than likely public relations. They want to be friendly to the local pols as they really destroy the local tax base. If the internet is taxed it will not hurt them anymore than the rest of the dot coms and may help the local stores. If the internet is not taxed and the local stores are not profitable they will be gone in a heartbeat to be replaced by a web page.

  • Wal Mart has a lot of room to talk about unfair business practices. They're the ones putting the local mom and pop stores out of business by undercutting prices, then once the competition is gone, raising prices back up to a normal level. I remember a certain school supply scandalwhere Wal Mart was selling school supplies for less than what they purchased them for, putting several 5 and 10 stores out of business.
  • <i>Well, first of all, it's incredibly tacky to be talking about raising taxes in the midst of a surplus.<p>
    I agree, there is no justification for raising the overall tax burden, especially now. But the issue of a net sales tax does not have to be about a tax raise.</I><p>

    IANAFC (I am not a financial consultant), but actually, ideally the tax rate would follow the economy - as the economy booms, taxes go up, and the economy falls into recession, taxes go *down*. Traditionally, it's been the other way around (for some backassward reason), but raising money during good times (and saving it away -- a vital necessity for it to work, but try convincing your government of <b>that.<b>) helps pay for the bad times (the economy cannot keep booming endlessly - there will be periods of slow growth/negative growth). <p>

    Too bad we can't get government to stop increasing spending during these good times to save away some money for the bad.
  • A noble goal. Society will achieve this as soon as we all become Vulcans like you.
  • The Constitution limits the powers of the federal government. Individual states have the power to tax goods produced locally.
  • The 1st Admenment prohibits laws "abridging the freedom of speech", How many censorship laws do we have?
    The 2nd Admenment protects "the right of the people to keep and bear Arms", How many gun control laws do we have?
    The 4th Admenment which bans "unreasonable searches and seizures", is ignored for the war on drugs.
    The 5th Admenment says that nobody can be "compelled in any criminal case to be a witness against himself", Ask Mitnek about that one.
    The 6th Admenment protects "the right to a speedy and public trial", Ask Mitnek about that one too.
    The 8th Admenment states "Excessive bail shall not be required", How often have you heard of bail being set so high the defendant has no chance of raising it?
    The 13th Admenment prohobits "involuntary servitude", How many /. readers have a draft card?
    The 16th Admenment is really the only one the goverment dosen't ignore. It's the one that legalized the Income Tax.
  • "Yet an internet business in the same area uses all of these things, yet doesn't have to pay for any of it?"
    Do you have any idea of what you are talking about? A Web business pays the same properity, and school taxes as the nearby local merchant, and also collects the same sales taxes on his local sales as the brick and morter merchant.
    A great many of the Web stores are in fact the small stores you mentioned. Any local merchant can set up a web site and expand his sales beyond the area his store is located in. For every Amazon.com there are dozens of small buisnessmen who are offering web sales in addition to the sales out of the store, and unlike Amazon making a profit.
    The local buisness that has good service is in no danger from the web. You can't provide the same level of service over the internet that you can in a face to face buisness deal. The Wal-marts are the one who are threatened by the web. The stores that provide no service. Wal-mart drove many small buisnesses under, Now the web has given the small buisnessman the weapon to fight back.
  • "They described it as a potential threat to billions of dollars in state and local sales tax collections that pay for schools, roads, police and fire protection."

    Why are essential services allways threatened? Maybe it's to shift attention away from the Billions of dollars in state and local taxes that pay for pork barrell projects, Sweet-heart deals for big campaign contribuitors, and bloated goverment.
    The problem isn't the goverment getting too little money, It's the goverment wasting too much money.
  • "unfair to traditional retailers"

    ROTFLMAO!
    WAL-MART says what??? Really?

    It was interesting in the *70s & *80s to watch WAL-MART concentrate their store openings in smaller markets. WAL-MART has probably driven more MOM & POP type stores out of business than anybody else, including the US Govt.

    When a WAL-MART opens a store in a new market, be sure and shop there. You'll never see those prices again...

    This is just another case of large corporations using the government to enhance their competitive position.

    Most retail on the web is just like mail order with a different way of delivering the catalog info. There's not much difference between dialing into the internet and dialing (voice) into a call center to place my order.

    None, in fact, if they would use internet phone. ;-)

    And Wal-Mart? They're beginning to look like a bully...
    -R
  • Well, from my point of view, the problem isn't the added cost of taxes, it's the principle of letting the government take way too much of my hard-earned money.
  • "All things being equal, if more people buy goods through non-taxed transactions, there will be less tax revenue."

    And I will have more of MY money. What exactly is the problem here? The government is just trying to take more of what it doesn't deserve in the first place!
  • Just because it's in the constition, doesn't mean it should be. The constition is not gospel, it's a document written by men and designed to be updated over time.

    Amendment XVIII, Section 1:
    After one year from the ratification of this article the manufacture, sale, or transportation of intoxicating liquors within, the importation thereof into, or the exportation thereof from the United States and all territory subject to the jurisdiction thereof for beverage purposes is hereby prohibited.

    Yikes! What if we were stuck with that one? Worse than that of course is Article IV, Section 2 which effectively allows slavery, but was overridden by the 13th amendment.

    -Bruce

  • The question doesn't seem to be whether online sales will be taxed -- it's when, and how.

    Which was my point exactly in reply to a number of prior posts, but noone wanted to hear the truth, just what worked for their own individual concepts.

    My points were that it will happen, but that we can shape the debate if we get our act together early.

    I personally would like to see (as a compromise), a lower tax rate for Net and Catalog business done outside the states where they have physical plants, with a $50,000 deduction from sales nationwide before the taxes are imposed. So that people can start up small Net stores and not pay taxes until they get off the ground.

    Any other ideas for a workable compromise on taxing the Net?

  • ... the only ones really being hurt by the moratorium are the small retailers w/ web stores who ship items within the same state they have a physical presence. Statistically, 80% of transactions occur within 50 miles of the home ...

    I think we need some kind of basic exemption for Net retailers, so that any taxes are exempt up to say $50,000 nationwide on gross sales. The idea being to let mom and pops have a physical store, build an embryonic web presence, and once it's a going concern, they pay the Net tax like everyone else.

    But, this also should be a lower tax, like half the physical plant tax.

  • There's a very easy solution: Stop taxing Wal-Mart, Target and Circuit City.

    Sure, we'll stop taxing any sales anyplace other than where I live. Then I'll get roads, bridges, rail lines, ports, schools, universities and so on, and you can live with a degraded physical infrastructure.

    Which is what you're proposing in terms of real impacts.

  • Again, what this stuff is about is the various states wanting me to do their "dirty work" and collect their sales taxes for them and not compensate me for the effort.

    When you sell at a store you pay for collecting the sales tax too. Why should the physical stores subsidize you selling on the Net?

  • Couldn't all the states simply reduce state sales tax to 0% and bump up other taxes to cover that loss of income (business and income).

    There are six states, such as Washington state, which have only a sales tax. If you live here, you can propose we change our state constitutions, but the day that happens I'll fall over in surprise!


  • Things I have bought and will continue to buy on the Internet:

    Things not specific to me. eg: DVDs, CDs, from anyplace with free shipping and no tax.

    Things I will never buy on the Internet:
    Clothing, shoes, things I need to see in order for me to like.

    I definitely would not shop from a website if PRICE+SHIPPING > PRICE+LOCAL_TAX. I go for the "overall spending of less money" than not paying tax.

    What the stores need to do is compete price-wise with the Internet stores (Reel.Com, DVDwave.com, CDnow.com, take your pick). If I can pick up a movie for $12.99 with even $1 shippping from Reel.com, why on EARTH would I go to Wal-Mart, BestBuy, CircuitShitty, etc and buy it for $20 plus tax?

    But instead, the American Way is Whine, Bitch and Complain and keep funding your cause until You get your way.

    Unfortunately the consumer gets raped in the ass in the end.

    -m
  • the problem here is that the only ones really being hurt by the moratorium are the small retailers w/ web stores

    Nonsense; the ones who would be hurt most by imposing local taxes on Web commerce are small merchants who can't afford to hire a staff to check 57,491 different state and local rules and can't risk being held responsible for software bugs if they let the computer do it for them.

    That's why big business is often pro-regulation -- it hurts them a bit but outright kills any up-and-coming competition.
    /.

  • It's not fair that they are taxed and out-of-state businesses are not taxed.

    Sure it is. The taxes pay for a police, fire, sewer, etc services which are used by the local Wal-Mart, Target, and Circuit City, but are not used by an out-of-state business.
    /.

  • The brick and mortar business are paying for roads, police and fire departments, local city improvements, etc with their taxes. Yet an internet business in the same area uses all of these things, yet doesn't have to pay for any of it?

    Internet businesses pay real estate taxes to the jurisdiction where the use the police, fire, etc services, unless they've figured out how to store their physical inventory in cyberspace.
    /.

  • Everytime this topic comes up, I go off on the same rant! :-)

    Some states don't charge a sales tax. If states attempt to try to enforce reciprocal sales tax agreements on internet sales, states like my home state (Delaware) that are already ruthless in stealing business from other states due to more favorable tax laws, will jump at the opportunity.

    "Come locate your net-only retail business here. We don't have a sales tax and we therefore won't respect any other state's agreements to collect sales tax for them."

    If that happens, watch the other states start to whine up a storm about net businesses fleeing to Delaware, Oregon, New Hampshire, Alaska, and other tax-free states.

    Our tourism office already pushes the "Tax Free" status of Delaware. Bus loads of out-of-state tourists come into the big malls just to shop here. Don't even think Delaware won't take advantage of the greed of other in order to boost business here.

    We already have a big Amazon warehouse here too! :)

  • Besides- if I don't have to pay sales tax for mail-order/1-800 orders for goods - why should I pay taxes for goods ordered by email or web-page? I'm still ordering over state boundaries either way.

    You just mentioned what a lot of people are missing around here. In the good 'ol state of Wisconsin (And I'd imagine in all 50 states), you *DO* have to pay a tax on *ANYTHING* you mail order. What you have to do is, is when you buy whatever from the catalog you have to report it to the state and pay the taxes on it (I think you do this when you do your state income tax).

    Now, this worked really well for a long time, just one problem with it. The problem with it is, since the government can't tell what you bought when you mail order it you don't have to pay taxes on it. :) Now, this is illegal and you probably would go to jail if they ever found out. That's the WHOLE problem, they can't find out. The only way they can find out is if you report it, and are any of you that stupid to report what you bought by mail order?

    Ok, now for those of you who are that stupid(Those people who belive in an "Internet Tax"). What you do is this:

    1) Total up everything you've bought on the Internet this past year

    2) Multiply that total by your state income tax

    3) Write a check out to to your State Goverment

    4) Multiply the total from Line 1) by the percentage of your city tax, then do the same for your county tax(if you have any these).

    5) Write a check out to your City and/or County

    See, now wasn't this whole Internet tax a simple and easy way of doing this? I, some little lamer in Wisconsin figured out how to tax all purchases on the Internet!!!!!!!! Can you belive it? holy shit!!! Isn't that awsome??!?! I mean, all I did was treat it like a mail order purchase!! Whooa neat idea! I wish someone would have thought of this earlier.

    Now, those of you who belive in the sales tax for the Internet purchases can do those steps I mentioned above(treat it like you mail ordered something, which you pretty much did), then those of us who think taxes are bunk, will continue to not pay sales tax for anything we buy on the Internet or mail order, because the goverment can't catch you if you don't(Which is the *WHOLE* point of this I might add). :->

    Oh, I forgot to mention, every time you have a rumage sale, or you sell a book to a friend, or you pretty sell anything to anyone, you *DO* have to pay sales on that too. It is after a tax on anything you SELL. Since were going after those Internet sales tax everyone is avoiding which is putting Wal-Mart out of business, we should also go after those little 'ol ladies not charging sales tax when they have rumage sales too.

    My whole point, having laws for sales tax for sales on the Internet is easy(We already have them), the problem is getting people to PAY the tax. No one wants to pay the tax unless they're faced with going to jail, since the goverment can't catch you currently, no one does. It's not really an issue about about Wal-Mart or whom ever loseing money, if you feel that bad about not paying your taxes for items you bought on the Internet, just write a check out to your State and local goverment like you do for a mail order, then you can feel better by improving your State Highways or something. :)

  • You're using a false analogy here. Taxes is something that existed beyond the dawn of time, and would continue to exist whether you and I like it or not.

    HOWEVER, that doesn't mean that the internet should be taxed. If anything, taxes would only mean the begining of more regulation. If we have a whole new economy, why don't we find whole new ways to pay for it? Freedom is more desirable than regulation, at least in many minds.

    Also consider the fact, as you said, that the internet spans many states (nation-states I presume, not the ones in the US). How would a netwide taxation scheme be standardized and ratified by hundreds of nations, all realizing how powerful the net is, and all wanting a bigger piece of it. Would hard line tactics coming out from the US and it's allies make every nation conform, and if so at what price?

    You have to understand that taxation is in a game of it's own. It's called (domestic and international) politics and it's about power, control and authority above anything. The reason the net is thriving today is that it makes political boundaries largely irrelevant, empowering the individual by freedom of information.

    If we take any of that away, we would be one-step close closer to destroying the only way of uniting mankind.
  • Agreed. Let me know when you're going - I'll head over with you :P

    Seriously though, I hope that if any form of taxation is imposed by the US, that the UK (and everyone else) will be excempt from it if, say, we buy from Amazon.com.

    My 0.02<insert Name Of currency here>.
  • This may be a bit offtopic but what did they do when russian satellites fell out of the sky and they wanted to cover the whole thing up so they could confiscate and analyze the technology? They sent out lots of government employed crazy UFO people to just generally screw up communication and make the people with a legitimate argument look crazy themselves so the whole thing would disappear and they could get back to work. I think this same sorta thing is beginning to happen on slashdot.We're all sure the government knows that geeks are typically a rebellious bunch saying the government should go fuck itself at every possible opportunity. So as ridiculous as it sounds could some of these trolls or flamebait be government hired to discredit us? You have to expect this sort of thing from any mass meeting of like minded people after seeing those fbi files of pollitical groups theyve released more recently. At DEFCON its called 'spot the fed', there are definately feds amongst us, im not sure i can trust slashdot even anymore with the fact that some of the headlines now seem almost as though 'giving in' to the governments bullshit. ie. its not a matter of if taxes, just when taxes,etc. next itll be inevitable censorship. All these demotivational statements and people start to believe its inevitable and stop fighting the cause. We need to learn to dodge and jump around anything they can throw at us regarding taxes legislation, we need to pinch off the tendrils (in the form of taxes) feeding this parasite on our backs called the government. Starve this leach. Call me a freedom fighter sarcastically or whatever, but i believe in my rights and I will *DIE* for my rights, so government go fuck yourself and die.
  • see what you say doesnt matter because there isnt anything id like to see more than the government starve, die and be replaced by something smaller.
  • I totally agree with you. It seems slashdot is for advocating taxing the net apparently because someone against internet taxes is getting moderated down while anyone for internet taxes is getting moderated up. Maybe robs in bed with the gov't now.
  • I'm suprised ISPs there havent begun advertizing that fact, something in the direction of protection from future net sales taxes, i bet you could make a mint if someone came out with an isp located there and put ads in papers across america.
  • However much I would like to agree with you, I have to ask this question: doesn't that apply to the implementation of such taxes by the Federal, rather than State, Government? The states are free to assign any form of tax their legislatures or citizenry desire.

    I don't believe any state can create a law which superceedes the constitution.

    There is a reason that this particular ammendment was included in the first place -- free trade between states was deemed essential for a united country. The framers were worried about one state putting a 500% tarrif on goods imported from another state. I think you can see where that would have led, very quickly.

    I distrust, and am dissatisfied with, our government and am convinced that the implementation of the Income Tax in the early part of this century was actually the beginning of the end of our Country. Uncle Sam has access to the
    ...


    I find it interesting that there was a constitutional challenge to the federal income tax when it came about (WWII or WWI, can't remember which). The judgement basically was "Yeah, it's unconstitutional, but it is essential to the survival of this country, so it should be allowed for a brief period of time." Of course, at the time, I believe the government was also saying that it would end the federal income tax after the war was over -- but we all know how that turned out ;).

  • I beg to differ. Everyone alive to day has the ability to change the constitution.

    You just have to get 66% of the people in 66% of the states to agree with you.

    By not trying to change it, you've said your bit. By trying to change it and failing, you've demonstrated that there is a significant enough percentage of people in this country who think it's a bad idea.
  • Then ammend the constitution -- don't ignore it.
  • The constitution may not be perfect, but you have to admit -- it's a rather impressive feat that it's taken over 200 years for the political system to become corrupt. And if you look at the system, the curruption is due to the judicial system ignoring the constitution instead of protecting it, like they're supposed to.

    If you look at most other countries which have tried to "follow" "our example", you'll notice that even the best don't last more than 50 years without a rewrite, revolution, coup, etc.
  • I'm sick of hearing the issue framed in these slanted terms, and I would have hoped that at least slashdot would know better.

    The fact is that internet sales are taxed in the US, just like any other sales. That means that within a state sales tax apply, and between states, it doesn't. Just like for any other sales channel.

    What is being discussed (if this word can even be used to refer to the confused grunting sounds surrounding this issue) is taxing sales between states. Rarely is it taxing internet sales as such. Should such a tax ever be enacted, we will see online order form disappear change shape, so that you fill out your online order up until the last step, then phone in the CC# making it a regular mail order instead of an "internet order".

    You know... It could happen.

  • First, l complement you for going to the source, our Constitution, to look for an answer before going anywhere else.

    However much I would like to agree with you, I have to ask this question: doesn't that apply to the implementation of such taxes by the Federal, rather than State, Government? The states are free to assign any form of tax their legislatures or citizenry desire.

    I find it interesting that a fundamental issue is often ignored in arguments concerning taxation. The fact that the Federal government, and many, if not most, state governments are already scooping huge, and ever increasing, portions of dollars from our back pockets. Although the most substantial of these taxes, the Federal Income Tax, and the various State income taxes, are cleverly designed to be 'masked' from the citizens (it's paid bit by bit, throughout the year, rather than all at once and employers, rather than the 'taxpayer' actually pay it) we're still aware of the fact that an enormous amount of our income is taken by government. We naturally resist the idea of ANY sort of new taxation because we recognize that taxes are to governments what rock-cocaine is to a crackhead: their craving is essentially a bottomless pit.

    So, as you say, fair or unfair is not the question. Rather, it's 'Why in hell are we paying so much in taxes in the first place?' 'Walk-in' retailers should be confronting governments with that question rather than demanding that all retailers be forced to pay equally exorbitant sales taxes.

    Reminds me of a similar situation here in Oklahoma: Oklahoma has some of the worst roads I've ever seen yet it's vehicle registration fees are some of the highest in the country. Of course, the State claims that the fees are used for Highway Improvement! The citizenry has become so disgusted with the hypocrisy they've begun to register their vehicles in neighboring states, where the fees are much cheaper.

    What was the States response? The imposition of stiff fines for those that register their vehicles in other states.

    It never occurred to the legislature that the disconnect between expensive fees and road quality motivated citizens to circumvent state policy and that, perhaps, fees should be reduced in response to the discontent of the citizenry.

    So, on the one hand the people react to unfair taxation or fees be seeking alternatives (On-Line retailers or vehicle registration in neighboring states) yet on the other hand governments ignore the deeper questions posed by the actions of its citizens and merely force all retailers, On-Line or Walk-In, to pay the same taxes or it fines those that register out of state.

    I distrust, and am dissatisfied with, our government and am convinced that the implementation of the Income Tax in the early part of this century was actually the beginning of the end of our Country. Uncle Sam has access to the bottomless pit of it's citizen's income and, government being what it is, he'll not be satisfied until he wrings every spare dollar from us. Some might think that extreme, but I challenge those that do: While doing your taxes this year compare the amount you pay in Federal income tax with your overall salary and ask yourself this question: how many months did I spend working for Uncle Sam and NONONE else? I believe I worked from January through March merely to pay Federal income tax. Now add Social Security, medicare, state income tax, etc, etc....

    And yet many politicians can't seem to understand the hostility of the average citizen to new forms of taxation....

    The senior Bush said it best (if only he'd been able to stick to it): "NO NEW TAXES!"
  • by wowbagger ( 69688 ) on Saturday April 08, 2000 @04:02AM (#1144447) Homepage Journal
    Since source code has been judged a form of free speech....

    #include <government.hpp>
    void example(void)
    {
    Government us;
    ++us;
    --us;
    # ERROR - operator -- not defined for class Government

    bash>

    In other words, governments, once enacted, do not shrink. Just as a cancerous tumor secretes substances to increase its blood supply, governments seek to increase their money supply via taxes. Just as the best way to keep a cancer from growing is to prevent angiogenesis, the best way to keep a government small is to limit its budget by limiting taxes. In fact, this was one of the very reasons that the Founding Fathers of the US prohibited the federal government from imposing an income tax (then along came the 16th amendment, which made it legal). Consider all the intrusions into your life that come about as a result of income tax:
    • Your income must be reported to the federal government
    • The size of your family must be reported in order to compute deductions.
    • The amount of interest you pay on your home must be reported
    • The amount you pay anybody in your employ must be reported

    and so on. The number of taxes we pay needs to be decreased, and more of what the federal government does needs to be done either by the state or local goverments, or (hold on to your hat, strange idea coming up) by the people themselves.


    However, since the actions to make this happen must be taken by the government, who will not benefit from them, they are about as likely as the source code for Windows 2000 quantum tunneling out of Redmond into Sunsite.

  • B.S. Someone please whip out a can of M2 whupass. That post is not insightful, because it is completely incorrect. There is no "double standard". The post lumps together two completely different uses(ordering vs. creating) for a given infrastructure (internet). The same logic would label as double standard the fact that pedestrians can walk on the sidewalk and cross the street, but cars can only drive on the street, and not cross the sidewalk. In other words, bullshit and poppycock.

    Yes, the net is driving new forms of commerce... No, it isn't. "eCommerce" is eOrder. it is an improved version of mail-order, that reduces the overhead of marketing and order entry. In-state sales are taxed according to the local/state sales-tax laws, and out of state sales do not apply. Period

    When I order pizza from the Papa John's website, I pay local and state(GA) sales tax BECAUSE THE PIZZA IS CONSTRUCTED AND SOLD FROM THE LOCAL STORE.

    When I ordered my laptop from a website of a shop in Michigan, I paid no local and no state sales tax BECAUSE THE SHOP IS IN MICHIGAN, and MICHIGAN != GEORGIA.

  • Let there be no doubt as to the true nature of the issue.
    • eOrder, as a business concept, provides drastically reduced RFI and order times. eOrder is a network-independent concept.
    • Internet, as infrastructure, provides mail service with the speed and reliability approaching that of the phone network.
    • Items 1 and 2, in combination, provide to end-consumers a speedier alternative to paper catalog mail-order.
    • Consumers' costs of shipping, in some cases, have shrunk enough to undercut sales tax costs, which have risen enough, in some cases, to exceed shipping costs.
    • There are numerous regions of the country where local governments are agents of local business, and rely on physical and monetary trade barriers to maintain economic control, and therefore political control, of their region. Think of it as the federal model, scaled down.
    • Another function of the combination of items 1 and 2 is to allow producers of most goods direct market access, which removes the need for separate distribution, and the price markups involved.
    In short: eOrder, with the advent of the Internet, poses a direct threat to the gravy train that channel dwellers and local governments have been riding. Particularly threatened, are retailers, who tend to represent two or three levels of markup on goods (as measured from production costs), not including sales taxes.

    Local governments that have subsisting on leeching from retail sales are going to feel the most pain, if any, from the dreaded Internet. It's the same pain that any landed noble would feel if all of their serfs just dropped what they were doing and became nomads.

    Storefront retailers are in support of "ecommerce tax", because it narrows the potential price gap between mail-order retailers, direct-to-market producers, and storefront retailers. Wal-Mart surprises me, though. I thought they'd use that awesome distribution system of theirs to offer direct shipment. I guess that's a sign that Sam Walton is not only gone, but forgotten.

  • but they don't actually enforce the tax. If I, a Florida resident, buy a $2000 computer from out of state, whether I buy it via mail order, a long-distance telephone call, or from a web page, by law, I am supposed to send the sales tax in to the Department of Revenue.

    Not one private individual in a hundred does this of course, but it is the law. In fact, when I ask around, it turns out that practically no one even knows that such a law exists. However, many businesses do pay the sales tax on interstate purchases, because they might get audited.

    The Federal Constitution may prohibit taxing a seller in another state, but in Florida the legal reasoning is that sales tax is levied against the buyer; the seller merely collects the sales tax from the buyer to forward to the state.

    I think this is merely a fairness issue; why should our local businesses, in effect, subsidize big interstate operations like amazon.com? And why should businesses which are fixed in place, due to the nature of their merchandise - I'm thinking of, for example, hardware stores, automobile dealerships, pool supply stores, nurseries - subsidize stores which happen to sell products better adapted to interstate transportation? If taxpayers are really concerned about this being a stealthy method to increase taxes, which is not a completely unreasonable consideration, then states could tax interstate and in-state sales alike at a slightly lower rate, so that the total revenue stays the same.

    I'll admit that I would like to see the internet/stockmarket bubble pop sooner rather than later, as the resulting damage to the overall economy would probably be less; and eliminating the effective subsidy of these absurd internet companies with their P/E ratios of 1500 to 1 might, I hope, help kill off this twenty-first century tulipm ania [bibliomania.com] faster.

    Keep in mind that when this bubble does pop, it won't be the high-flyers who will get stuck with the bill. It will be just like with the 1989 savings-and-loan bailout (which was President Bush's very first act in office). When the boom goes bust the guilty rich will keep all their illicit profits; to relieve the inflationary pressure upon holders of securities, more-god-than-man Alan Greenspan will promptly engineer massive unemployment; and those of us in the working classes who still have jobs will cover, out of our taxes, all the losses.

    Yours WDK - WKiernan@concentric.net

  • How much does the average American spend on cable TV? And what does he get out of it? Let's see; he gets so-called news, that's so befouled with propaganda and advertising that he'd be better off without it, total value zero or less, and besides and beyond that, he gets entertainment, he gets fantasy.

    Let me bypass for now any critique of the goodness or lousiness of the mass-entertainment media. When that TV watcher, or movie-goer, or novel-reader is taking in that entertainment, what's going on in his head? Well, it's a fair guess that when a guy in a theatre watches James Bond driving the exotic sports car with the amazingly beautiful babe in the short skirt next to him, he, the watcher, projects his fantasy-self into that driver's seat. It ain't real, everybody knows that, but that diverting fantasy is worth the cost of the movie ticket.

    In order to enjoy a similarly unrealistic fantasy, one that I compose in my own head out of an odd lot of various old acquisitive dreams, I buy a lottery ticket every couple of weeks. I have been able to calculate the likelihood of winning a lottery since I was about twelve; I'm perfectly aware that for all practical purposes, it is equal to zero.

    Yours WDK - WKiernan@concentric.net

  • Why is there an issue with taxing Internet commerce in the first place? That is, in what way is taxing Internet orders different then taxing mail catalog orders?

    The ordering method is the same: I pick up the phone - literaly - and contact a seller in another city, state or country, placing some order.

    Delivery method is the same: mail, FedEx, UPS, etc.

    Payment method is the same: credit card, money transfer, etc.

    Location issues are the same: the seller's phone number (or web site) is just a contact point; the actual warehouse might be elsewhere, the ultimate source of the goods in a third place, and of course the client can be anywhere.

    IANAL, but it seems to me that "Internet order == mail order" for any tax purpose. Isn't this what happens already?

    I have both catalog-ordered and Internet-ordered things from the USA to Israel and didn't percieve any difference... And I don't see how one could enforce any such difference, anyway.

    It is trivial to convert one form to another. Specify significantly different taxing rules and you'll end up with people paying the lesser tax for each individual case.

    I can smell a multi-million startup opportunity here: "convert your Internet order to a catalog order by using LessTax.com services!" :-) Actually, the fact that there's no such reverse service - "convert your catalog order to an Internet one" is a good indication that the Internet is not given significant tax breaks over mail catalogs.

    In short, the whole thing seems silly. Don't all these legislators have something better to do with their time? Say, trying to figure out how to say one is allowed to write software VCRs but not software DVD players, or something? :-)

  • by dirk ( 87083 ) <dirk@one.net> on Saturday April 08, 2000 @02:52AM (#1144462) Homepage
    Internet purchases will eventually be taxed, and they should be taxed, the only question is what tax will be used.


    First, internet purchases should be taxed. Everyone is up in arms about Wal-Mart, etc, but the real people who will lose are the small local businesses. You run a small store, you pay taxes, and fight the big corporations. Suddenly, not only are you losing to the corporations, you are losing to the tax-free internet business. You go out of business quickly, because the online merchants have a clear advantage. Also, consider how much money the governments will lose (I'm not saying we need more or less taxes, but unless taxes are lowered overall, we need the same amount of money). The brick and mortar business are paying for roads, police and fire departments, local city improvements, etc with their taxes. Yet an internet business in the same area uses all of these things, yet doesn't have to pay for any of it? That doesn't make any sense at all. If they use all of the local amenities, they should pay the same local taxes as everyone else.


    The big question is how to set up the tax system. It seems charging the tax rate of the customer's local communities put a large burden on the company to keep track of every tax rate in the country. If they charge the tax rate of the city the company is in, we end up with the wealthiest cities charging internet companies almost no taxes to lure them there, which puts us in the same boat. About the only thing I can figure is to make a nationwide "internet sales tax" rate, which would then be charged on all internet purchases. This rate could be the average of all the sales tax rates nationwide, and would go to whoever normally gets the local sales tax of the customer. That way, it's fair to all involved. But we can't just say at least 50% of sales will be over the internet, and expect things to keep working normally if there's no tax on these purchases.

  • Is this a good time to remind you how well that promise was kept?
  • by JamesSharman ( 91225 ) on Saturday April 08, 2000 @12:53AM (#1144465)
    This is not really anything new to us in the UK, we pay VAT (value added tax or sales tax to you yanks) on most good bought from UK sites over the internet. As long as the US doesn't do anything silly like impose extra taxation for online transactions or attempt to tax goods or service that are leaving the US as exports then this is to be expected. Effectively all that has happened is a taxation 'holiday' to help things along has been in place, there is no special reason why the internet should remain tax exempt.
  • When I was living in Moline, IL, there was a section of wetlands near the Rock River that was "protected". Around 1988 (I'm not too sure about that), a man wanted to build a dirt-track auto racing area in that protected wetland. Naturally, the city's government denied him, saying that the wetland was protected. Then, in 1991, Wal-Mart comes around, and all of a sudden, those wetlands are open. Wal-Mart put up thier superstore and had a couple other stores there, too. (Kohl's (I think), Lowe's and a couple of smaller-name stores.)

    When the flood of '93 hit, Wal-Mart was just fine, because they put up retaining walls and the such around their place, but the homes around there and further down the river were TSOL. I'm not saying that having the wetlands there would have nullified the flood (it was, as you remember, one *hell* of a flood), but it sure would have eased the flood effects in the area somewhat.

    Wal-Mart, even though they may appear to be a benign, for-the-normal-people store, are actually just like any other megacorporation. Greedy, arrogant, uncaring leeches. That, and they have *loads* of money to spend on lobbying. I've written my letter to Sam Walton, I just hope others do the same.

  • First, internet purchases should be taxed. Everyone is up in arms about Wal-Mart, etc, but the real people who will lose are the small local businesses. You run a small store, you pay taxes, and fight the big corporations. Suddenly, not only are you losing to the corporations, you are losing to the tax-free internet business. You go out of business quickly, because the online merchants have a clear advantage. Also, consider how much money the governments will lose (I'm not saying we need more or less taxes, but unless taxes are lowered overall, we need the same amount of money). The brick and mortar business are paying for roads, police and fire departments, local city improvements, etc with their taxes. Yet an internet business in the same area uses all of these things, yet doesn't have to pay for any of it? That doesn't make any sense at all. If they use all of the local amenities, they should pay the same local taxes as everyone else.

    First of all internet retailers do pay taxes. They pay property taxes for their warehouses, any other taxes on companies, etc. However these taxes don't go to the local goverment where ever the product is being shipped, they go to where the retailer has it's warehouses, computer rooms and other staff.

    So instead of leveling the playing field by introducing hard to implement sales taxes on the internet retailers why not abolish the sales taxes on the stone and morter retailers?

    Then the only advantage left will be the fact that it's always cheaper to maintain a warehouse etc. then it is to maintain a big store in the middle of the downtown core. But that's always been true. Where I live there are tonnes of computer stores that try to escape property taxes and rent by setting up shop at the outer limits of the city. That isn't new...

  • I find it somewhat humorous that the 'conventional retailers' are finding fault with the lack of internet taxes- that supposedly the lower price would draw more customers to web sites vs. the conventional retailers.

    Pure poppycock. Every e-tailer would have even more trouble than the 'conventional' retailers - why? One word: Shipping. The Webtailers still have to ship to their various warehouses - but not the individual stores, as a conventional retailer does. However, a conventional retailer ships either on its own shipping fleet, or in huge bulk.

    This is far less expensive than shipping thousands of individual packages to each consumer. And, as one could expect - the cost is in one way or another moved to the consumer.

    So, we end up with either the conventional retailer having the sales-tax - which is proportional to the cost - and the item has to cost at least $50 (most states) for the sales tax to be about $3. -Whereas web-tailers have the 'Shipping' tax- usually a minimum of $3, moving upwards of $10-$15.

    So- more is paid for shipping than for sales tax in nearly every case. So, to remain competitive with the conventional retailers, webtailers MUST price their goods such that there is a more level playing field for the consumer (ie. the consumer pays $15 for a particular good whether by web, or in the store. The difference is the store costs $14.00 with $1 sales tax, and the webtailer has a price of $11.00 with a $4 shipping charge.

    So- the consumer would pay the same either way in this case.

    The retailers want to have sales-tax on the web to make buying on the web even more uneven (Remember- the webtailer has to sell it for less due to shipping charges - and therefore gets less profit).

    So, in this case, it's a case of the more profitable conventional retailers wanting to fatten their pocketbooks even more by removing the competition that online retailers offer.

    On a side note: The fact that even after the 'shipping tax' I can buy many goods for anywhere from $3 less for a CD to $100 less for an APC Back-UPS. What does this say? Maybe that the 'conventional retailers' are ripping the consumer off, and they want to keep it that way. The online retailers save us money- by pulling a smaller profit margin than the big retailers.

    So, to say the least, Online retailers ARE cheaper, and more convenient than a conventional retailer. And considering the shipping charges involved - and that the online retailer is STILL cheaper - the online retailer makes a lot less money than the conventional retailer - sales tax or not. The online would make even LESS profit with sales tax. Of course, this is good for the conventional retailer - the online places go out of business, and they can raise their prices again.

    Besides- if I don't have to pay sales tax for mail-order/1-800 orders for goods - why should I pay taxes for goods ordered by email or web-page? I'm still ordering over state boundaries either way.

    Sigh. I don't have a problem with lawmakers not understanding technology as well as us techies do. I do wish they would pay more attention to their own rules- which they made up for themselves. (Like, The Constitution of the United States of America, maybe?) Sure wish I could just break programming rules, get the computer to read my mind and do my bidding.

    Of course, isn't that a new feature that Micro$oft is touting for their next OS?
  • Actually, WalMart may have the money to make the noise, but its fair to say that the small guys are hurt even more by tax exempt web buying.

    And what is this BS about fair competition? Fair competition is everyone facing the same taxes, not the opposite.

    -Kahuna Burger

  • Actually interstate sales tax is a loop hole in that law. The way interstate sales tax is interpreted is that if the consumer is with in the borders of a state when he orders goods or services then he must pay the sales tax of the state that he is within. It is not an "official" tax or duty on exported goods from another state it is a means for the state to gather revenue from the gross product of its citizens. It sucks but its legal right now. Now company's like Wal-Mart and Target are all in a huff about this because it unfairly penalizes their attempts to destroy local small business. Yep, thats right their pissed because they can't get into the market and competition that they would have crushed at its onset is instead equal rivals like they have to deal with now.
  • by Colonel Hacker ( 155276 ) on Saturday April 08, 2000 @01:01AM (#1144506)
    When I purchase something online, its usually more for the extra choices available to me. I wouldn't even consider buying computer hardware, for example, at a traditional retailer simply because you are often quite limited by the selections they carry. I don't think I've ever bought something online to avoid the tax. Normally the shipping costs are way higher than any tax would be anyway (often 10% of the item's price, if not more).

    It's all about choice. Traditional retailers simply can't compete because there are a million and one places to buy from online.

  • Who do you give the taxes to? The physical state the buyer's in, or the one the seller's in, or perhaps the federal government? You can't give it back to the Net itself; there's no governing body to give it to. Giving it to the states raises unbelieveably complex questions about verification, distribution of the proceeds to the appropriate states, and such.

    Let's assume you give it to the federal government (which you no doubt want to do). What about sales between people who are outside the U.S. government's borders? If you're treating the Net as one big stste, these people should be taxed. But since neither party is physically located within the US, it's not fair to tax them (I think it might even be construed as demanding tribute in some places; that's an act of war). In other words, you have to discriminate by physical location. That's hardly fair.

    Yes, I agree that a uniform net sales tax couldn't be distributed back to individual states. Pure eCommerce companies don't really exist in individual States anyway, so it wouldn't make any sense to do that. So, yes, I would advocate these going back to the Federal government.

    You're point about international tax isn't new. This already applies in the mail order world. We have international tax laws to deal with this. if I mail order goods from France, I don't pay sales tax in France. The same system could be applied to Internet sales.

    This is imperfect, but in practice its probably the best (only?) solution while we still maintain soveriegn countries as a concept.

    Let's assume you're lunatic enough to try and tax every single transaction. What currency do you use? The US dollar is certainly fine for US citizens, but what about other places which don't use that currency? You have to start dealing with exchange rates. These fluctuate wildly enough that there's no reasonable way to keep up.

    No, there are already well-defined international laws that deal with this. The US doesn't have a right to tax transactions outside its borders, and nor should it. The only problem is cross-border transactions. There are ways of dealing with this, but the net is going to bring a lot of attention to this issue because it will make international business much more common. I don't know what a good long term solution here is, but I suspect this will be one impetus to the continuing dissolution of the idea of the nation state.

    Exactly what gets taxed and what doesn't? Different states have different laws about what can and cannot be taxed (many states, for example, do not tax medicines).

    If its a federal tax, then the federal government would have to decide what gets taxed and at what rate. No problem there.

    That last point brings up another problem: do you tax delivery of products? For now it's impossible to e-mail, say, a toaster to someone, so physical delivery is still a necessity. Do you tax this?

    No, its a sales tax, you tax the sale of products.

    This is a lot of why the Net should not be taxed. One, it's impossible to do in a fair manner.

    I don't see you've made this point at all. The only problematic case is commerce crossing international boundaries. But that is exactly analogous to the current State-based sales tax laws. By your argument, if international sales taxes are unfair, then inter-state sales taxes are doubly so. At least my proposal takes care of the majority of the problematic cases...

    There are never perfectly fair laws. All law is a generalization and will have exception. This is the real world. While we must strive for better laws, if you want to avoid all unfairness in every law the only option is completely unregulated anarchy. Humanity progressed beyonf that concept several thousand years ago.

    Two, it makes buying and selling products much, much more complex, thereby discouraging its use.

    I don't see this at all. If there is a uniform sales tax, it is easy to calculate the cost of goods. At present, I have to figure out if the seller is in the same state as me, and only if they are, ad the particular state's sales tax. This is a much bigger effort to track than simply in the US or out of the US. I would suggest my flat tax proposal would be much simpler for both buyer and sller.

    Three, Wal-Mat and Target don't give a damn about the taxes; they just want to artificially inflate their e-commerce prices and blame it on taxes.

    Well, I can't pretend to know the intentions of those two corporations, and I suspect you can't either. Do Target or Wal-Mart even have asignificant online presence yet? Are they planning to? This seems like a bogus argument. Even assuming their intentions are ill-concieved, it doesn't mean what they are proposing is wrong. Just because Hitler made the trains run on time, doesn't make punctuality a bad thing.

    Because e-commerce is so popular, they think people will stand for it (that's why regional encoding on DVD's works, incidentally; people don't realize that it's used to artificially inflate prices so they keep paying more than they have to).

    Oh, I agree the DVD regional encoding is pernicious. I just don't think this is a comparable case at all.

  • by gwernol ( 167574 ) on Saturday April 08, 2000 @02:12AM (#1144516)

    There are sales taxes already in place... there should be no new taxes, to borrow the phrase from the former Prez.

    Its amazing. When issues like deCSS or Napster come up, Slashdot is filled with posts saying: "you can't stop the net, its different from the old economy. We deserve new rules to deal with the net. Stop applying your old rules to us". As soon as the possibility of net taxes come up, we're suddenly unable to imagine new taxes? Do I smell a double standard around here somewhere?

    Yes, the net is driving new forms of commerce, and we need to think about new ways for society to deal with it. The net isn't a geographical entity, so it makes no sense to impose state-based taxation on it. Why should it matter where an eCommerce store is physically based when taxation is considered?

    If you have taxation, then apply it in a fair and uniform manner. An across-the-board net sales tax makes sense. If the net is such an efficient mechanism, why does it need the extra unfair advantage over bricks and mortar stores of being tax exempt?

  • by gwernol ( 167574 ) on Saturday April 08, 2000 @02:40AM (#1144517)
    The true old economy view would be: "The Internet is all one state -- let's tax it!"

    ... which is exactly what you're saying.

    Pretty much.

    The new economy view would be to not strangle it in its crib, like you propose to do.

    I love rhetoric like this. All those poor struggling eCommerce companies who would go out of business if we imposed a sales tax. When we're talking about anything else on Slashdot, the the net is the unstoppable revolution that is going to blow away all that terrible old economy thinking. As soon as someone suggests a sales tax, its unthinkable because eCommerce is so vunerable.

    People are welcome to take this point of view, but it is so laughably weak an argument that it will render anything else you say moot in the eyes of legislators. Unless we get some realism in here our voices will not be heard.

    I agree that giving net companies a tax free breathing space in the first few years is/was a good idea. At some point we have to accept that the new economy is so strong that it is going to be the dominant force in the future. At that time, it shouldn't be exempt from taxation.

    We aren't at that point yet, but its coming Real Soon Now. Starting to work out how to deal with this now will help eCommerce companies plan for the future and allow the net community to have a voice in how the taxes are established.

  • Well, first of all, it's incredibly tacky to be talking about raising taxes in the midst of a surplus. But to use an excuse like protecting Wal-Mart? Washington is really scraping the bottom of the barrel for justifications. CompUSA set up a separate company, CoZone, so they could compete on the 'net without the sales tax disadvantage. Guess what? It didn't help, and they're closing it.
  • by ProfBooty ( 172603 ) on Saturday April 08, 2000 @03:59AM (#1144526)
    Anyone else ever come to the conclusion that "E-Commerce" is just a dressed up version of mail oder catalogs. I for one have ordered from mail order catalogs in the past(and still do today), in addition to getting information off the web. If taxes are imposed just upon net transactions, wouldn't that boost mail order sales which would not have additional sales taxes placed upon them? As it stands in the U.S. there is no "National" sales tax. It is up to each individual state to set up the taxes. As a result, wouldn't new taxes on the internet have to be placed by the federal government due because these are interstate transactions? Also wouldn't the federal government be the recepient of these funds? I don't think traditional retailers are hurting too much by mail order orders. I still prefer to go to a real store and see and feel the object I wish to buy. For items like movies and computer hardware ordering from the internet is fine, but you won't catch me ordering an automobile online without a test drive.

He has not acquired a fortune; the fortune has acquired him. -- Bion

Working...