Internet Taxation May Be Imminent 859
redfenix writes " Here, there, and everywhere, the words "Internet Tax" are being uttered with intentions of bolstering state budgets. It may be inevitable that products purchased on the net will be taxed someday. The real question is: can the fragile internet economy really help local tax economies now?"
Why not cut spending/waste/fraud? (Score:3, Insightful)
Interstate taxes? (Score:3, Insightful)
Ok, so the net is now the lookup tool.. (Score:3, Insightful)
So.. (Score:4, Insightful)
Why shouldn't they be taxed? (Score:3, Insightful)
Yes (Score:3, Insightful)
how taxes work (Score:4, Insightful)
Perhaps the states should learn how to use their existing funds better, rather than forcing people to give them more money.
Travis
Blame it on the regime (Score:0, Insightful)
So Long, budget surplus! So long, fiscal responsibility!
Bad Idea (Score:2, Insightful)
The cost to buy something "cheaper" online would become a internet myth.
-Scott
Taxation without representation (Score:3, Insightful)
The more taxes we pay, the more Iraqi we can eradicate. Thanks Mr. Bush.
Re:Yes (Score:5, Insightful)
How smart of slashdotters? (Score:2, Insightful)
"Items bought withint the state shall be charged a sales tax of.."
If it snot bought in the state you cannot be charged a sales tax because states cannot charge taxes on intyerstate commerce only feds can..
Now please will someone read something before they post it.. please.. the FUD is getting deep in here and I am drowning in it...
I don't mind paying tax... (Score:2, Insightful)
Why would I buy off the Internet anymore? (Score:1, Insightful)
Convenience? Maybe. Or not. It can be a real pain trying to return something. Or resolving a dispute.
Most of the time, I'll be buying off the internet because of a price discount. But if the prices become equal, I'll just shop locally.
It would be far better if the politicians learned to reduce state spending - starting with their salaries, and cutting their own staffs. Somehow, none of them ever think of that.
Re:Blame it on the regime (Score:3, Insightful)
Um. This is insightful? Somebody doesn't know the difference between state and federal taxes, but that's okay because they made an anti-Bush joke?
Re:Yes (Score:4, Insightful)
Otherwise, states don't pay for the "upkeep and maintenance" of the internet. This is not a gas tax that pays for roads, but a sales tax that goes into the general fund. If it's used for any internet-related purpose at all, it will be very anti-libertarian, like censorship, eavesdropping, etc.
-b
Commerce is taxed (Score:3, Insightful)
So the question to ask is not if Internet transactions will be taxed -- but when and how.
-Thomas
Re:So.. (Score:5, Insightful)
And what's with this whole notion of "the internet economy." There is no internet economy. That's a figment of the late 90's VCs who profited off the public gullability.
A completely seperate issue is taxing internet services, i.e. access charges, etc. And are digital downloads taxed? all these issues fall into the grey area, but there are several distinct shades of grey.
Personally, I'd just pass a constitutional amendment to ban all sales taxes, since 99% of all products cross state lines, the US gov't should be able to regulate it as interstate commerce. Let the states tax in-state produced & consumed good if they want-- but they won't.
Alternatively, everyone collects sales tax depending on the state of the buyer. And yeah, I'd keep the lid on access charge taxes; that's a juridstictional nightmare. Everyone will want to levy a "bit" tax.
Depends (Score:3, Insightful)
Lower taxes or Raise taxes? Make up your mind! (Score:2, Insightful)
What is it?! Should my federal taxes be lowered so that I can pay some new internet sales tax to the state? Why don't they just give money directly to the states and ignore the general populous instead?
It seems that either:
A) state politicians are too chickenshit to cut their budgets and piss off their over-demanding constituency
B) they're greedy for more funds and don't give a hoot about the national economy as a whole
C) a combination of the two.
Either way, I think an internet sales tax would (at least partially) cut any federal tax-cutting stimulus package off at the knees.
"It's the paperwork, stupid" (Score:4, Insightful)
Not wanting to give the money grabbers any ideas, but I have not been directly taxed for viewing a web page, sending an email, etc. Sure, I pay lots of indirect taxes related to connecting to the internet (just try to make sense of all those charges on you phone bill sometime), sales tax on my hardware, utility tax on my power bill, etc.
The so-called internet tax is not a new tax. Most states require the purchaser of out-of-state goods to pay a "use" tax on those items. Of course most people don't. Note, this also means that out-of-state sellers have an unfair advantage over local businesses.
The real shift of the "internet tax" is to place the burden of collecting the tax on the sellers. This is a real burden as it could dealing with 50 (or more considering local tax districts) rates, returns and such. The overhead of dealing with the government could be far more damaging than the effect of the tax itself.
Of course (as always) someone will build a business around handling the government overhead for you but that'll cost, too.
Final comment on taxes:
"If you could steal all the money you want and print all the money you want, don't you think you could stay out of debt?"
Re:Lets make the internet like every other industr (Score:2, Insightful)
Taxes are already paid... (Score:2, Insightful)
Scary part is, nothing gets taxed without first being regulated to death. I think that's a law of physics....
Re:Blame it on the regime (Score:3, Insightful)
Just admit it. You are so liberal that you just hate anything to come out of a Republican administration.
The federal tax cut does NOT affect state tax revenues. At least this tax cut has a chance of helping the economy. States are experiencing lower tax revenues because the nation's economy as a whole is suffering. The federal tax cut if anything should help the state economy by giving more money back to the people who can then spend it on taxable goods and services.
Re:Blame it on the regime (Score:1, Insightful)
Re:Push a Spm Tax Instead (Score:4, Insightful)
Re:Why not cut spending/waste/fraud? (Score:5, Insightful)
But the real problem is that there is ZERO reward for government spend conservatively, and in fact there are disincentives to do so. Agencies and departments that don't use up their budgets are often penalized by not having that money given to them in the future.
So the first thing we have to do is quit asking the government to wipe our hineys for us, because it takes tax dollars to buy toilet paper and hire certified personnel. Then we have to tell government that spending every dime is not desireable. Then we need to throw out the whole Congress and elect people who understand how money really works, instead of who think that money is in finite supply and that you solve all problems through unfunded mandates and increased taxation.
Beating a Dead Economy? (Score:3, Insightful)
Just a thought.
Re:So.. (Score:4, Insightful)
We probably should be. The taxes are not charged not because someone feels that you should be exempt from taxes, but rather because it is extremely difficult (i.e. impossible) to figure out the taxes. It is unreasonable to require each retaler to file and keep track of all 50 states rules/laws/tax amounts.
Re:Yes (Score:3, Insightful)
I voted against it, did you vote?
Seriously, you need to vote and organize, support your political party with your same views.
-
A citizen of America will cross the ocean to fight for democracy, but won't cross the street to vote in a national election. - Bill Vaughan
Blame it on the lack of education (Score:3, Insightful)
This is also the most anti-coporate corruption idea proposed by a president in recent memory. It's effectively a tax increase for corporations and a tax break for people and investors.
OR maybe... (Score:3, Insightful)
Guess you wern't as informed as you thought.
Where do they get it? They're BORROWING it! (Score:5, Insightful)
"If you let me write $50 billion a year of hot checks, I'll give you the illusion of prosperity too!" - Lloyd Bentsen in a 1984 vice presidential debate against Dan Quayle
Re:Why not cut spending/waste/fraud? (Score:4, Insightful)
Don't be a dork. The post should be more correctly be named "Internet Sales Taxation May Be Imminent", and FWIW, why the fuck not?
Don't get me wrong... I know that mostly, tax money is wasted, and government spending (on all levels) should be reduced, but that's not the point of these articles, or the post. If your state has a sales tax in place, you canRe:Why not cut spending/waste/fraud? (Score:5, Insightful)
To minimize fraud, most money has a lifespan of the next fiscal year. Prominent exceptions are things like procurements of nuclear aircraft carriers, where Newport News shipbuilding shant order the first part unless they know that the money will be there to finish it.
Too, there has been a shift from discretionary (pork barrel) spending towards entitlements (Socialist Security [who better to run a Ponzi scheme than your Uncle Sam, eh?], Medicare, etc).
Good news, bad news, who can say?
An unfortunate side effect of our representative democracy is that the dependant majority can legally pick the pockets of the minority through socialist-flavored approaches.
Reform is unlikely when you've got lobbies like the AARP [aarp.org] on the scene. The rich, of course, need not pool their cash to purchase political decisions.
Waaah, waaah, waaah. I'd argue that our system is muddling along as designed, faithful to its two design requirements: be stable, and preclude tyrrany.
Are we in greater danger now than in any historical period? Probably not.
Do this:
Go to this URL [capwiz.com] and set a bookmark to your elected folks and keep their inboxes stuffed with your
bad idea (Score:1, Insightful)
Re:Blame it on the regime (Score:3, Insightful)
Okay, let's point out a few interesting things about this fruitless debate:
1.) Brought to you by the gubner of Missouri. Incidentally, the dude's talking strictly about Missouri, not the rest of the country. Gee, MO's in the shits. What about the rest of the country?
2.) We are left with the choice of cutting programs that help citizens."
So what's the solution here? Give them the bill they need? Okay. How does that help them balance their budget? It doesn't. It buys them a year. Their budget problems are their problems. I don't mean to be insensitive to the issues here, but the problem is they need more people making more money paying more taxes. His shortfalls will always be a problem until that happens.
So yes, the Gov. of MO has no idea what he's talking about.
I wonder what this would do to amazon.com (Score:3, Insightful)
Sure, we can say "fuck 'em" but usually crushing a fledgeling industry (especially after the backlash of the Dot-bomb and now this Recession) isn't in our best interests.
And I especially like how they say this will solve the States' budget woes. Heh, Michigan alone has a $500 million dollar deficit. Do they really think that much internet merchandise is heading out of state to make up for that (roughly $10 billion in sales would be needed if a 5% internet sales tax was enforced)? Hell, even a fraction of that would still require a ridiculous amount of sales anyway.
And even then, who the hell is going to enforce it? What about ebay? Are they going to raid Paypal.com and demand that they turn over their records so the member states can bill people accordingly? How much bureacracy is that going to cost? I think they might be playing around with 1998 numbers here. Pfff. Try again.
Re:Blame it on the regime (Score:3, Insightful)
You know, I hear lots of criticisms of Bush's plan, but I'm not hearing a lot of people with alternative and potentially better plans.
Anybody can whine. They can point out problems with internet taxation, for example. But they can't say "Here's a better idea, chew no this."
Funny thing is that both of you don't seem to understand the idea that the money isn't disappearing, it's just being redistributed. America will cope. Just chill.
Besides, it's painfully obvious that the main reason everybody's critical of it is that they're being critical of the President. All I can say to that is: Grow up.
Re:Why not cut spending/waste/fraud? (Score:5, Insightful)
A very good question. Let me endeavor to give you a good answer.
The purpose of state sales taxes is to provide services to the people and businesses of your state. If I own a business outside of that state, it's not really fair to ask me to pay for services that I am not able to utilize, even if I am selling an item to somebody who lives in your state.
Now, you could point out that a sales tax almost always is passed directly to the consumer, so it's really my customers who are paying the tax, but it's still being collected from my business, which means it's my accounting headache.
Furthermore, as a consumer, I don't mind paying state and local sales taxes on items I buy in brick-and-mortar stores. It's logical... that money goes to pave the road so I can get to the store, and to pay the cops to keep the store from being ripped off, and to pay the fire department to keep it from burning to the ground, it even pays for public education so they can hire minimum-wage 20 year-olds who have an outside chance of getting my change correct. Since state and local infrastructure makes our transaction possible, it seems reasonable to me that we, as buyer and seller, help fund that infrastructure. In the case of something I buy from Amazon.com or EBay, how does the state justify its claim to a slice of the pie? It didn't do anything to facillitate the trade. [Flamebait Warning] Collecting a compulsory percentage without offering anything in return is called racketeering. [Flame off]
Re:reason why this is now in vogue (Score:2, Insightful)
Comment removed (Score:2, Insightful)
Re:how taxes work (Score:5, Insightful)
If the goverment takes more of our money, that doesn't help the economy recover -- it hurts it. When taxes are lower people have more money to put back into the companies that power the economy.
Classic statement of supply-side economics. The classic criticism described it as voodoo economics: there is never enough money in the economy for the money saved from tax rates to be made up by increased taxable economic activity (think about it: if you're making 100K a year, and you're taxed at 15%, you're paying 15K a year in taxes. Now your tax rate drops to 10%. You're paying 10K a year in taxes. That puts 5K a year into the economy that wasn't there before. So whoever you give that money to instead pays 10% taxes on it, resulting in -- low and behold! -- an additional 500 in tax income, for a total difference in tax revenue of -4500.
There are only two ways to create genuine wealth: value-added work, and the exploitation (to use the word in a morally neutral sense) of natural resources. All other activities that "create" money actually are either redistributive (don't create, but merely redistribute, wealth; for instance, interest on a loan redistributes the wealth created by the value-added work of the borrower to the lender) or inflationary (don't create wealth, but simply change the value of the markers used to count wealth; commodoties speculation is an example of this). While lowering taxation might have some effect on wealth creation, allowing marginally more people to be employed and thus allowing more people to add value to the economy, it is merely a second-order effect (if I'm using this mathematical term correctly; IANAM nor an economist): that trickle never can grow bigger than the flood it replaced!
In the end, the economy changes not because of changes in tax structure or monetary policy, but because of changes in the business cycle and in consumer confidence. Sometimes people are afraid and hoard money, other times they are confident and spend it. Sometimes businessness make good investments in people and resources, other times they don't.
All that said, it is true that lower taxes are better if one can get the same quality of services for them. So don't imagine that I'm saying that there's no such thing as too much taxes. Only that the notion that lowering taxes always improves the economy is - as the President's father knew so well before the Dark Times, before he joined the Emperor, Darth Reagan - nothing but voodoo.
While it is true that the government is the biggest "company" in the country, it is also one of the most inefficient and wasteful.
Another classic misunderstanding on the part of conservatives. The purpose of a business is to maximize investor value. The purpose of a government is to maximize consumer value. When looking at a government as a company, one should not see the voters as stockholders, but as customers; the stockholders are - surprise, surprise - the politicians. Understanding this might help to explain why politicians are so willing to take major cuts in salary and spend millions of dollars to do an annoying job. The dividends - we call them campaign contributions at best - are worth it.
Perhaps the states should learn how to use their existing funds better, rather than forcing people to give them more money.
It is the nature of taxes that there will always be calls for reduction. Let me ask those of you who agree with Travis - a bright, if misguided (imho) fellow, what you would consider to be the right tax rate? At what tax rate would you promise never to complain?
Can't think of one, can you? The fact of the matter is, even a perfectly efficient government would still have to tax its citizen. And there would still be a large percentage of people who would complain about those taxes. Look at Massachusetts: a large minority of voters indicated that they favored eliminating the income tax. What would this have done? Pretty much wiped out the state government. Not cut, eliminate.
Take the pledge: whenever you argue against taxes, include your estimate of how much you would consider to be a reasonable tax rate.
Re:It'll Hurt if they Tax (Score:5, Insightful)
This is a collection of preconceived misconceptions. First, let's discuss "unnecessary government programs." Typically, these don't exist. If something is not necessary, it gets cut. Most of the things you think are unnecessary are really very necessary, though perhaps not for you. For example, you may not be in a public school or have children that go to a public school, but I don't think you would consider public school unnecessary. The same applies to many other programs -- senior benefits, medical programs, education, parks and conservation, whatever. If you still don't agree, please name a specific government program which you consider unnecessary.
Now let's address the other issue - the mistaken belief that a private company can save money and provide better services than a government agency. You are 100% mistaken on this count. Private companies are inherently more costly than government agencies. They not only need to provide the same service, but they also need to make a healthy profit - often to the tune of 30-60%. Thus, a well-managed company would have to charge 30-60% more than a well-managed government agency.
Now enter the reality. Most companies are fairly poorly managed. Companies that deal with the government are particularly notorious in that regard. Thus, they would be less efficient, and would have to charge much more in order to make a profit. Furthermore, profit-boosting initiatives in such companies would most likely focus on cutting costs and reducing services as much as possible while still charging the taxpayers or its clients a hefty fee.
To sum up: with a private company, you typically get a poorly-managed, government-sponsored monopoly that provides fewer services of inferior quality to taxpayers while charging more than the equivalent government agency and, many times, still having problems with making money.
For example, if the US Postal Service (one of the more efficient government agencies -- how many times have they lost or stolen one of your letters? How does their price compare with Fedex?) was suddenly replaced by a private company, you would have an unreliable mail system with 75-cent postage that would lose your mail at least once a week and constantly beg for more government subsidies. It would also need constant government intervention and regulation to keep it from acting completely unreasonably.
These types of things have happened many times, both in and out of the US. Just read about Edison Schools [corpwatch.org] to get an idea of what this would be like. And next time, I would suggest advocating laws that would make government agencies more efficient rather than replacing them with poorly-managed, profit-driven corporations.
I doubt this will ever happen. (Score:2, Insightful)
Sorry guys, that isn't why I'm not shopping as much at B&Ms... Chances are, the cheapest you'll find the product you're looking for is on the internet. If B&Ms had prices like I find on the internet, I'd buy there.
Shipping and handling doesn't really make up for the sales tax... S&H on a $50 game could be anywhere from free to $2 (overnight) and sales tax would be ~$3.50 depending on your state.
The only reason to shop at B&M stores for the most part is the convenience. Try the product, hold the product, go home with it THAT VERY day. No need to wait around for product shipments.
Shopping at B&M and on internet sites have advantages and disadvantages that pretty much cancel out. Don't destroy internet shopping with a sales tax!
Re:how taxes work (Score:2, Insightful)
The business cycle is a short run effect, it doesnt determine long run demand, the money supply does, thats why monetary policy is good at fighting inflation, but its not so easy to prime the economy using monetary policy.
Consumer confidence is a product of many things, but i think having more cash in the pocket would make most ppl more optimistic.
Now technically, you are cutting the tax rate, not taxes. A change in tax rates is only part of what determines the total amount of taxes collected, the other is economic activity. Because tax revenue is proportional to income/GDP and the tax rate, the effect on tax revenue is partially offsetting, the degree of which may be hotly debated, but it is established. It is true that increased growth wont, in the short run, entirely offset lost tax revenue. But over the long run, lower taxes are a net benefit, presuming we dont run in the red permanently, because crowding out does become an issue at some point, but it isnt right now, just look at interest rates. (Of course i could also argue that reduced unemployment will reduce demand for social services too, but ill kindly leave that out of the "tax cut cost" debate)
To be fair, supply-side isnt just about taxes, its about things like tort reform (which is a big reason that government provided healthcare is touted as being so much cheeper) and regulation and other barriers to doing business. The idea is to reduce costs and increase supply, not just stimulate demand and create inflation. Yes, large changes in marginal tax rates to have an effect on the economy, its not voodoo. Obviously you can't just elmininate all taxes, and i dont think anyone is suggesting that, but Bushes tax cut is hardly that big, especially considering that it is spread out over ten years and amounts to about 2% of the federal budget IIRC.
Re:Why not cut spending/waste/fraud? (Score:5, Insightful)
Sales tax is wrong idea (Score:5, Insightful)
Secondly, sales tax is a horrible way to raise money anyway. Of the three forms of taxation (income, property, sales aka "outgo"), it is the most regressive (meaning impacts the middle class more than the upper class and the lower class more than the middle class). A sales tax discourages purchasing. Sales tax HURTS the economy more than any other form of taxation.
If the states wanted to raise taxes to get more money, they should be looking at the income tax, specifically at the upper-end. Income tax may reduce spending (since people have less to spend), but unlike sales tax it does not also discourage spending as well. If taxation is the only answer, then at least tax the right thing! Sales tax only hurts the economy more.
"But my income tax is too high already!" Only because the current federal income tax system (state income tax is typically around 2-3% compared to the up to 33% federal) is effectively regressive. If we didn't give upper-class income brackets all sorts of effective loopholes to reduce their income (eg, Congress just declared the capital gains tax to be zero, eliminating BILLIONS of dollars of federal income, and returning money to the people in the country who are in the least need of additional cash), because, and this is the important part, different income levels tend to get their income from different sources, and those sources are taxed differently.
You want to raise more money through taxes? Fine. All income from any source whatsoever is treated the same. Wage, stock options, capital gains, everything. Then impose a staggered, progressive income tax on it, without any loopholes or exemptions or "business deductables". Then drop the percentage rate from where it is now by, say, 25%.
Then eliminate all sales tax, Internet or otherwise.
Not only will 90% of the population have MORE money to spend (stimulating the economy), it will reduce the cost of operations for the IRS and for state tax agencies (reducing the budget), and still give the government (at various levels) more money to play with to fund social programs or invasions of other countries (whichever they're in the mood for this week).
Internet Sales Tax? No. Let's not have an Internet sales tax. Let's not have a sales tax at all. There are far less damaging ways for governments to raise money, and they involve smaller (and cheaper) armies of accountants to do it.
Re:Why not cut spending/waste/fraud? (Score:3, Insightful)
Hey, and what better way to make the internet more accessible to those in lower-income brackets than to make it more expensive to do the things that drive people to the internet, like getting items for less?
I guess next you'll propose to decrease crime rates by letting convicts out of jail?
Re:Why not cut spending/waste/fraud? (Score:5, Insightful)
Hmmm, riiiight. The point was news articles quoted are all about the buyer paying the sales tax to the state he lives in. Michigan already has such a "use tax": you are supposed to pay a tax on the goods you use in that state, regardless of what state (or country, as Canada is mere minutes away from the South East corner) (<Eminem>Detroit! What?!?</Eminem>) you live in. New York will often has "tax inspector" coming New Jersey shopping malls looking for New York license plates on cars. Changes are, you owe your home state sales tax no matter where you buy your shit, this is just about collecting it.
So? "p2p hurts the RIAA", but we tell them to adopt or die. If you don't have a working/profitable business model, get out of your chosen business. We can't all make money being net geeks.
As I wrote above, you probably already owe the sales tax, even if it isn't automatically collected. I buy form the internet 'cause I of the selection and convenience: if I want a specific main board or book, I don't have to go to all of the local CompUSA/Frye's/Barnes and Nobel/B. Dalton/etc. to see who may have it in stock. Playing "best price" is a loosing game, markets win on selection and service.
See above re: find a profitable business model or get a new job. Also on this point... why should "online" stores have an advantage over brick-and-mortar stores?
You think so? How many people are employed in a MeatSpace mom-and-pop shop vs. an internet mom-and-pop shop? How many small business employ really employ more than the owners?
Welcome to Civics 101: bureaucracies are seldom efficient or logical. And again, government misspending is not the point of the articles quoted in the original post.
Ditto.
Re:Why not cut spending/waste/fraud? (Score:5, Insightful)
Frankly the person who griped about how the state did not provide anything to deserve the tax seems to think that the package somehow myseriously appears on his doorstep and did not have to travel on roads and infrastructure that his city and state provides.
There is a knotty problem of rights. (Score:4, Insightful)
Who has "the right" to tax that? You could make a legitimate argument that every city, county, state and country involved in that transaction can claim a peice of the pie. In that case either I or Amazon would be responsible for tracking all of those different agencies and laws and ensuring that everyone gets their share. The case gets even more complex if you start factoring in the fact that both servers and stock are colocated. For all I know the "Amazon.com" that I contacted may be served from somewhere in the midwest, and the CD may have been shipped from some Amazon warehouse in France.
Obviously that would stifle any and all internet commerce. One alternative is a moratorium on all taxation. I disagree with this because it gives Amazon and other online outlets an unfair advantage over their "bricks and mortar" competitors. It also exempts them from paying for the infrastructure that sales taxes are (or should be) spent on, infrastructure that they depend upon.
The problem with the middle ground where some people can tax but not others is that you have to make a convincing argument (or carry a big stick) to explain it. In the past I know that the U.S. Federal government has used its power to regulate interstate commerce as a means to control or "simplify" interstate taxes. I suppose that could be one with internet purhases in the U.S. but when it comes to international purchases thewre's only groups like the World Trade Organization (*Shudder*) or local elements such as NAFTA.
"Imminent"? Right now would be the worst time. (Score:2, Insightful)
It would hurt an already depressed market.
Re:reason why this is now in vogue (Score:3, Insightful)
Re:It'll Hurt if they Tax (Score:2, Insightful)
The Depression didn't end because of government investment in the populace. FDR's programs were beginning to fail. After an initial increase in jobs and employment, the weight of the system and inability to pay for it started dragging it back under. What really brought the US out of the Great Depression was war spending. That's one of the reasons why it was so darned important for the US to really want to go to war. FDR's programs were stopgap measure. Ramping every factory in the country up to three shifts per day is what really got things going.
Healthcare. The problem with this is what the government will cover. Unfortunately, the government pays to cover a great deal of unneccessary services and self-inflicted diseases. Were we to eliminate treatment for smokers and those with cirhotic livers, there would be more money to pay for various medications. There's not a slippery slope here. I could go into far more detail, but smoking is clearly a detriment to health. To get liver disease requires you to have done some really heavy drinking (and/or had hepatitis. There would naturally be exceptions for this.) But heart disease and diabetes are not 100% self inflicted in most cases.
I'd love to stay up all night, but this, for me, is just an argument for argument's sake:)
Re:Why not cut spending/waste/fraud? (Score:3, Insightful)
Double taxing (Score:3, Insightful)
1) The company that sells the goods has to pay taxes on their annual profits.
2) The person buying the goods had to pay tax on their income.
Those taxes more than cover the buying chain. Why should everyone be doubled taxed for things? They were already taxed on their income, so why tax them AGAIN on purchases?
I can two viable solutions. 1) Raise income tax and ditch sales tax. 2) Ditch income tax and have a federal flat rate sales tax.
I'd prefer the 2nd option myself.
Re:Why not cut spending/waste/fraud? (Score:3, Insightful)
Yes, but we aren't there yet.
I think the issue is a definition of What is Fat. Consider the Welfare programs. During the Stock Bubble they managed to chop a lot of money out of the Welfare programs. Some argue this was muscle, others fat. Which was it?
A lot of money could be saved if governments simply limited their expansion into areas of interest thereby cutting not only fat, but some muscle and tentacles at the same time
There was a tremendous amount of expansion by the governments during the Stock Bubble. This was countered by a lot of pragmatists who argued with two questions:
Now that they have expanded all their programs and gotten their votes, it's time to pay for it without the Stock Bubble to carry them. What's there two possible choices:
The Roman Empire did the same thing, as a predecessor to their collapse.
Re:No New Taxes! (Score:3, Insightful)
Said ranters manage to argue both that Libertarians are laughably few in number and that we're a deadly danger because we deny victory to their preferred candidate. It's not clear how these can both be true.
Re:Why not cut spending/waste/fraud? (Score:3, Insightful)
Sales tax is quite regressive because lower income families spend most, if not all, of thier earnings. Some states exempt some items such as food and clothing, but for the most part sales taxes hit the lower-income folks pretty hard.
Consider the sales taxes on gasoline, something like $.50 a gallon. If you buy 40 gallons a month, that's $240 in taxes a year. If you're earning 30K, that's around 1% of your income.
While I'm at it: all taxes are paid by the consumer. A "business tax" is a cost like any other that's passed along in the form of higher prices.
Re:Sales tax is wrong idea (Score:1, Insightful)
flat tax. Lets assume 20k.
30k-20k=10k 15% is 1500 1500/12000=12.5%
500k-20k=480k 15% is 72k 72/482=14.9%
If we assumed the nondisposable income=deduction
then they will come out the same. Making the
deductible slightly higher, makes the tax
slightly progressive.
Re:Why not cut spending/waste/fraud? (Score:3, Insightful)
No, it's not. But I bet it's more complex than you imagined. First off, figuring out $destinationTaxRate can be a bit tricky. It's not just a 50 row table. "Sales Tax" or "Use Tax" is assessed not only by the State, but also by the county and locality. NY State is a really good example of this complexity. That's why sales tax in NYC is higher than elsewhere in NY.
Now, let's assume that you can use zip code to get the correct tax rate (and that there's no locality ambiguity within a zip code). So, you manage to collect the right amount of taxes from each purchaser. Now what do you do with it? You have to figure out which portion of that tax belongs to which government agency. You probably have to fill out a different form for each agency that requires you to collect taxes. Although you can probably send off your collected taxes periodically, you probably have to account for each purchase in detail. No matter how you slice it, you'll have to report the taxes on hundreds of different forms.
Sure, you can obtain software to do this, but what's that going to cost? If you can afford the software, how often will you have to update? Quarterly? What will the maintenance fees on that be?
If each State could agree on a single rate for that one state, it would make things much simpler, but would require that each and every state pass legislation forbidding the collection of local and county use/sales taxes for internet purchases. I think the snowball has already melted.
Re:Sales tax is wrong idea (Score:3, Insightful)
I'm so sorry to hear that they're being taxed at a rate of 90% or so, so that even with that much income they end up below the poverty line.
What? They're not below the poverty line? They live very comfortably on their post-tax income? Fuck 'em then, I have no sympathy.
Graduated taxes do not discriminate against the rich, they provide relief for the poor. Someone who makes $20K a year NEEDS a greater percentage of that amount just to get by than someone who makes $100K a year.
Even the exemptions are wrong (Score:3, Insightful)
For this to work they are going to have to co-ordinate definitions to classify goods so that taxability can be defined, and as the above example shows it could very well be a double edged sword for the states involved.
Sales tax is a bit more honest because its added to the price for the customer to see. I wonder which state gets the tax when sombody orders with a billing info a Michigan address for his credit card, and ships to his second home in Florida? Or Even more common I buy a gift online, from Michigan and have it shipped to my son in Hawaii.
This will get even more interesting when Cities start complaining, some cities charge sales tax too.