Evolution Of The Online Tax Debate 211
rhwalker22 writes "Last November, the Streamlined Sales Tax Project drafted a plan to make it easier for states to cooperate in collecting sales taxes on products sold over the Internet. That plan is now headed to governors and state legislatures for debate.
While that debate begins, the sales tax group is moving into new territory, debating how to apply sales taxes to digital services, like music and software downloads, and IP telephony. Most states participating in the sales tax project have sent representatives to Tampa, Fla., this week to take up this subject, according to a report by washingtonpost.com."
Tax and Government Revenue (Score:2, Funny)
cd
less tequila
more beer
dd if=/dev/conciousness of=/dev/null
--g33k
VAT while across the ocean (Score:5, Interesting)
Re:VAT while across the ocean (Score:2)
Re:VAT while across the ocean (Score:5, Insightful)
Re:VAT while across the ocean (Score:5, Insightful)
The state budgets are trashed because they spend too fscking much on prisons. We need to retool our legal system (especially the drug laws) so that we dont fill our prisons with people who got cought with a tiny bag of weed. I'm not suggesting legalization, though that would be nice. I'm suggesting maybe first offenders get community service, a big fine and probation.
Also, toll ways are bad. They were designed to allow the roads to be built, but when the road is paid off they still charge you. They keep charging you because the beurocracy of the toll way doesn't want to lose its' jobs.
Moderators: This is my opinion and I don't care If I get modded down for it; I've hit the Karma cap.
Re:VAT while across the ocean (Score:2)
However, I would think that maintenance of said road would still be expensive. Especially with large semi trucks etc. The roads can't take care of themselves.....
Re:VAT while across the ocean (Score:2)
Re:VAT while across the ocean (Score:2)
Also, cold weather (especially frost) tends to do a number on just about any paved surface.
Re:VAT while across the ocean (Score:2)
Biting this tax troll (Score:2)
What's wrong with private schools? Well, it depends. It can be great to have independently run schools, provided they're publicly funded. But if you have to pay for your private school, then only wealthy (or smart & organised) parents will be able to get their kids into decent schools.
The more education is privatised, the more the population of poorly educated, alienated people grows. The kids who get the dregs of a market-based school system have a hard enough start in life as it is.
Note: the United States has further complications in its school system, if I understand it correctly, because public funding for schools comes from local government, and thus the value of your property determines the quality of your local school...
Re:VAT while across the ocean (Score:2, Insightful)
Re:VAT while across the ocean (Score:2)
As far as the school payments go, I tend to agree with that also. Why should I pay for someone else's kids? It's bad enough they get a tax break, so I'm paying some of their share anyway. My taxes are higher to cover the portion they don't pay, simply because I have no kids.
Why am I being penalized for remembering to wrap my willie?
Re:VAT while across the ocean (Score:3, Interesting)
More to the topic at hand, the issue with interstate taxation is that monies you pay to another state do not grant you any representation, privileges, or benefits. If I, a New York resident, pay sales tax to the state of Maine when I order something from Land's End, what am I getting out of it? Conversely, if Land's End is saddled with collecting taxes for New York State, what's in it for them? All they're doing is shipping a package here, so it amounts to an unconstitutional interstate tariff.
(The way some states have been getting around that problem with things like automobile purchases is by dint of a mutual agreement, a bargain you'd have a hard time striking with any no-sales-tax state.)
Not Quite (Score:2)
Equally it should apply in this case if you're outside the US
Not just overseas! (Score:3, Informative)
Re:Not just overseas! (Score:2)
IIRC (and I'm no expert), VAT is a federal (country-wide) tax as well...
Re:Not just overseas! (Score:2)
I dunno about the PST...someone told me that you can get it back, but I think they're confused by the fact that you can write off 100% of all you pay in PST in Canada on your U.S. federal income tax (which I don't think you can do with the GST, because you're expected to get that back from Canada).
Re:VAT while across the ocean (Score:2)
Actualy most sale/use tax laws are difficult for businesses to completely understand, add in how the courts have interperated many cases, its means a mom and pop operation on the internet, or telephone sales, or mail-order would have to hire 50 laywers in the 50 some States and territories. If they manage to clean up the mess of laws in the various states, and come up with a easy reporting system, it's likely to happen.
Dice Finance (Score:1)
Well with their homes in hock and health insurance premiums soaring, Americans are filing for bankruptcy protection in record numbers.
Personal bankruptcy filings in the third quarter jumped to 391,873, up 12% from a year ago. That puts filings on track to surpass last year's record high of 1.45 million. The surge continues a trend that started in the mid-'90s. But the nature of the debt woes has changed.
"The amount of borrowing has been rising faster than incomes," says Stuart Feldstein, president of SMR Research. In addition to credit card debt and steep medical bills, many consumers now are bingeing on mortgage debt and home equity loans, putting their homes at risk.
They are buying homes with smaller down payments, financing 90% or more of the loan amount. And old rules limiting the amount a home buyer could borrow have largely gone by the wayside.
"Lenders are flush with cash," says Keith Gumbinger, at mortgage tracker HSH Associates. "The debt-to-income ratios used to be cast in iron, but now they're just guidelines."
Low interest rates also have spurred homeowners to consolidate credit card debt and other bills onto home equity loans and lines of credit. That often provides only a temporary reprieve.
"They have so darn much debt that even at low rates, it's hard to pay," Feldstein says.
Mortgage delinquencies are on the rise, and the number of homes going into foreclosure is at the highest rate in 30 years, according to the Mortgage Bankers Association of America.
Compounding the problem: Stock investments have lost ground. Savings rates are barely keeping pace with inflation. Many workers have been downsized out of jobs and into lower-paying ones.
Medical debt also weighs on consumers, playing a role in about half of all filings. Last year, the number of Americans with no health insurance increased by 1.4 million, to 41.2 million, according to the Census Bureau.
Faced with rising bankruptcies, creditors have pressed Congress to tighten the law. They say many debtors load up on credit card debt and use bankruptcy to escape bills. That legislation has yet to be enacted. "Another national record in personal bankruptcy filings at the end of this year could help fuel renewed calls for changes," says Samuel Gerdano at the American Bankruptcy Institute.
so a bit of online tax is the least of your troubles, there is a queue of people outside USA who want paying back cos you spent it
Re:Dice Finance - Crazy mortgage qualificiations (Score:2)
I think that's the point!
We have a decent chunk to put down ~$45K
That's why you got offered so much. If you default on the payments and the bank takes the house, they also keep your deposit. It makes you a very safe bet either way.
what about overseas tax? (Score:2, Insightful)
Re:what about overseas tax? (Score:2)
Re:what about overseas tax? (Score:2)
Simple. We stop ordering things from the USA. and go elsewhere.
It's your econemy, do what you want! ;-) I suggest you try to explain to your leaders how e-commerce works. It's of no relevance to me where I order things from.
Why tax? (Score:5, Insightful)
It's kind of like two kids. One is very gifted and one is just regular intelligence. If you want to help the regular kid, you should spend extra time with him and help him. You should not try to force the gifted kid to act dumb.
Re:Why tax? (Score:2, Insightful)
Rebirth of digital cash.. (Score:4, Interesting)
Why would a company provide the framework of digital cash without charging any fees? Simple! You get people to pay you in real money and you give them digital money. You don't have to offer to convert digital money back into real money if you have enough customers that it is practical to buy and sell everything in digital money. Other people would step in to convert currencies if there was enough demand. Therefore you suddenly have a money funnel filling your own bank accounts. Invest that money in land, gold, precious gems, or whatever is pretty stable and you have a fortune and your fortune makes your digital money more valuable thus creating a nice cycle. Just issue yourself whatever paychecks you want and live like kings.
Think of the EBay/PayPal marriage. If they moved their operation out of the US and issued their own currency that was easy and cheap for everyone on EBay to use and made it available to other sites to use as easy as they already use PayPal.. well you see where that goes. It's not that far fetched.
Re:Rebirth of digital cash.. (Score:3, Interesting)
first, the governement is taxing too many different things all over the place. most likely so the population doesn't realize the exact amount they're actually paying. don't charge the poor income tax, charge them sales tax. middle income families, they get double wacked. upper income, well, they get a slight hit in the income tax, but they're able to save a lot and can find ways around some taxes. pick one thing uncle sam and tax it all across the board!. i've got 3 different governments wanting sales tax on my income, plus some old-age governement-created-quasi-retirement system that needs to be completely eliminated or at the very least optional.
now, back on the topic of the poster. a company will definately see taxing internet purchases as an opportunity to act as an offshore clearing house for internet sales. the sale will actually occur offshore and no taxes will be incured. or some such. however it's implemented, there's a technical problem that people will be paying internet taxes (the state gov't are in too big a pinch these days and are all looking for revenue from places mostly from overspending during the
during the late 90's most people didn't mind paying their taxes. but now that the gov't can do what most normal people do and live within their means, they're raping people for more and more when people have less and less to give. my governor (OH-Bob Taft) just proposed raising taxes again on cigaretts and alcohol to cover part of their lack of income. i'm sure the legislature will approve what he wants.
Re:Rebirth of digital cash.. (Score:2)
An accountant I know says that most people don't realize it, but they pay about 60% of their income in taxes. Think about all the other taxes, besides the obvious, that you pay for (this varies by locality, of course):
Anyone think of more?
Re:Rebirth of digital cash.. (Score:2)
But you're right, there are a lot of taxes. And another poster mentioned the taxes you don't directly see because your employer pays them for you. So whatever is taken out of your paycheck in taxes, double that is your real income tax burden.
It's amazing that the government is not only able to spend that much money, but is actually able to spend _more_ than what it takes in. Of course, it does do a lot of good things with that money, but it's still amazing. Especially since I still clip coupons to save 25 cents on food (and by that, I mean I'm cheap -- I know there are people who need to just to get by)
Re:Rebirth of digital cash.. (Score:4, Insightful)
Wow! This was tried in many nations--including the United States--in the nineteenth century. Some countries still use a similar system, wherein banks are allowed to issue currency. Very tight regulation is required, or else you end up with problems--similar to those in the United States--where organizations issue currency without assets to back it up, make it difficult to redeem their "cash" for real dollars, or just the money and run, leaving customers with worthless paper.
In the United States between 1837 and 1863 roughly five thousand different types of bills were issued by more than a thousand different banks. Counterfeiting, fraud, and just plain bad customer service ran rampant. Of course, none of a bank's holdings were insured by the federal government as they are today (FDIC in the U.S., CDIC in Canada; similar bodies in other developed countries.)
You're asking us to cavalierly give thousands or millions of dollars to essentially anonymous individuals on the internet and endow them with the powers of what amounts to a central bank, while letting unfettered free market forces work things out? Go ahead--Ask Slashdot: Is everyone happy with the PayPal customer service department?* Don't think so.
If it walks like a bank and quacks like a bank, it damn well ought to be regulated and insured like a bank. Until then, credit cards will reign.
*Trick question: it's already been addressed on /. The answer is 'no'.
Re:Rebirth of digital cash.. (Score:2)
Do you actually think the US has their currency fully backed by gold or anything more than paper and a pipe dream? Besides that what is backing up the value of gold other than it's shiny and humans have the intellegence of raccoons (they'll die to hold onto something shiny)? The real value of a currency is in maintaining flow between users of that currency so products and services keep coming. Digital cash has some major benefits in that it flows easier than outdated paper money. The stock market is more similar to digital money than is a national currency.
Also your assuming that because 5% of the population actually thinks that banks and the US government know how to manage money that the rest of the people of the world wouldn't use digital cash. Checks, gift certificates, credit cards, etc are all forms of currency. The only difference between those and full digital cash is that those things aren't easily transferable between individuals (they have a merchant-customer relation).
And yes a good many digital cash companies would probably be swindles and/or bomb but like any merchant those who do the best job at convincing customers in the long term will survive. In this age corporations are often more stable than many nations.
Don't think people would use it? Look at how many people send money (a lot of money) to total strangers on EBay without any proof that they'll get anything back. Look at how many customers do use PayPal and similar services. People will use it if it is easy and free. People don't care about stable, secure, insured, etc. Look how many people use Windows.
I've transfered thousands of dollars back and forth using PayPal since their inception and have had no major problems and they answered my questions far better than most of the banks I've had. Most of the complaints I've seen has been because of PayPal's growing pains or stupid shit like "I used my name for my password and someone stole my money.". They are easier to use, more reliable, and deliver higher interest payments than any of the banks I've used. I've used banks all over this country and for the most part they've all been pains in the ass and all managed to rip me off or lose my money at some point. Something PayPal has yet to do. My ony real complaint with PayPal is that I have to keep another bank account in order to cash my paychecks and transfer the funds to PayPal. Simply because my current employer's accountant didn't feel comfortable sending paychecks with PayPal.
Ridiculous! What about the US Consititution!? (Score:4, Interesting)
When state Governors are sworn in they USUALLY take an oathe to uphold the US Constitution and to defend it.
They are not if they keep trying to fight it with ridiculous crap like this. Some states have no sales tax for example like the wonderful state of Washington.
As everyone knows it is unconstitutional to tax interstate commerce or subject levies and tariffs.
The only exception to taxing telephone purchases or internet prurchases between two states is when the company collecting the sales tax HAS PHYSICAL BUSINESS PRESENCE in both states.
I hope people see this at 4:49am EST and put his thread to rest.
The whole idea is UNCONSTITUTIONAL. And ammednig the constitution is a dangerous action, once it starts the constitution is open for modification until closed and ANYTHING can happen during the debate.
This stuff makes me sick. California and New York should be ashamed for their socialist spending practices.
Re:Ridiculous! What about the US Consititution!? (Score:2)
Re:Ridiculous! What about the US Consititution!? (Score:5, Insightful)
Hmm, good point.
After all, if it were possible to create unconstitutional legislation, we'd have suspects being indefinitely detained without trial, copyrights that last forever... why, it doesn't bear thinking about!
Re:Ridiculous! What about the US Consititution!? (Score:1)
Hmm, do they? I believe they swear to uphold the State Constitution.
Re:Ridiculous! What about the US Consititution!? (Score:2)
*snip*
The whole idea is UNCONSTITUTIONAL. And ammednig the constitution is a dangerous action, once it starts the constitution is open for modification until closed and ANYTHING can happen during the debate.
Right, because it would be inappropriate for a Governor to urge constitutional change if he or she felt it in the best interests of his or her people. If we let that sort of thing happen, Congress could do something really dumb, like abolish slavery, or protect people from self-incrimination, or worse.
Operating within the Constitution includes making suggestions that it be changed--not through violent revolution, but through the mechanisms that were built into the document for that very purpose.
Whether or not the taxation considered is unconstitutional (IANAL), and if it is, whether or not the hassle of an amendment should be pursued (IMHO not), are side issues. Politicians should be free to urge changes that are (on their face) unconstitutional, if they are prepared to follow through with an amendment. If a question falls into a gray area, that is a matter for the courts--that's why the judiciary exists.
It is perfectly constitutional... (Score:2)
Article I, Section 8, Clause 3: "[Congress has the power] To regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes;
Article I, Section 9, Clause 6: "No Preference shall be given by any Regulation of Commerce or Revenue to the Ports of one State over those of another: nor shall Vessels bound to, or from, one State, be obliged to enter, clear, or pay Duties in another."
1) The obvious: Of course the federal government is the only power that can regulate commerce "among the several states". Duh. That means that State C cannot do anything out of the ordinary (i.e. charge special tolls) for vessels going between States A and B that happen to pass through State C.
2) Amendment X states that any powers neither reserved by the federal government, nor prohibited to the states, the states are allowed to have. That means that unless it says "No state", or Congress retains the power for itself, then the state may do it. That means the feds can pass no law giving preference to the "ports" of one state over another, but that does not limit what the states may do in any way. When the founding fathers meant to restrict states, it was explicitly called out. (i.e. Art. I, Sec. 10)
3) State A cannot compel State B to collect tax for State A. However, State B is perfectly allowed to voluntarily do so, and pass the revenue along. They can do this because Art I, Sec. 9, Cls. 6 does not limit states, only the federal government. That means that Amd. X lets that power default to the states.
4) But that is regulating Interstate Commerce, you say! A power explicitly reserved for Congress! Nope. State A may tax businesses within State A more or less however it pleases. Just because the money comes from out of state matters not. Right now, it is perfecly constitutional for State B to make residents pay tax on goods purchased from State A. (This is the case in most states, actually.) This is becasuse State B has the power to tax it's own residents.
SirWired
So much for online sales (Score:3, Insightful)
In the UK (Score:3, Informative)
Didn't stop it taking off.
Duh (Score:2)
Question: National import taxes? (Score:2)
Because if not, it seems that all this does is put US e-retailers at a disadvantage to sell to the best market (US consumers) in the world in an increasingly competitive time.
I mean, why not sell to the US from Toronto, and to Canada from New York?
Re:Question: National import taxes? (Score:3, Informative)
Because of the import tax? The one you should technically have been paying already, but which isn't normally levied on small packages -- yet? I imagine they'll start enforcing it if and when they implement a domestic sales tax.
Incidentally, here in lovely socialist England I am likely to pay 20% tax plus another 15% or so in tax-like handling charges on every single thing I mail order from the US -- which is a lot, since you can't buy clothes here unless you're a dwarf who loves terrible clothes. Luckily, the money is spent on a worthwhile cause, i.e. huge subsidies to companies that spend it on executive pay, share dividends, and disastrous foreign speculation. The locals love this state of affairs because hey, that's socialism!
(Prepares to lose all his karma to righteously indignant English people who think giving away your economy is morally virtuous and that the world is grateful to them, but heroically does not click the 'anonymous' button!)
Re:Question: National import taxes? (Score:2)
Re:Question: National import taxes? (Score:2)
That's pretty unlucky. I've been importing DVDs etc for years, and I've only be taxed once or twice. Some things to know:
Keep your packages small, and take by-land delivery, and you will mostly be tax free.
you can't buy clothes here unless you're a dwarf who loves terrible clothes
Your placing US clothing above European? Wow. Never seen that done before. What on Earth do you like wearing? ;-)
Let states compete on low cost of doing business! (Score:5, Insightful)
Taxing across state borders is unjust and just plain stupid. We have enough barriers to trade around the world. Let's not start *within* our own country.
Re:Let states compete on low cost of doing busines (Score:2)
If, however, the tax is to be collected by the State local to the purchaser, you have the opportunity to vote your representatives out of office if you don't like their taxation policies. If your fellow electorate disagree with you and keep them in office, you have the right to move to a different state.
Re: need to pay more TAX (Score:2, Insightful)
i Agree, at some point we need to pay more TAX because of this financial wizard problem [google.com] when we start to pay it back is anyones guess, but im worried about the kids now,turning them into wage slaves (working for big corp) to pay our previous excessive dues doesnt seem to be fair somehow
Taxation w/o representation (Score:3, Informative)
Cry me a river... (Score:2)
Re:Taxation w/o representation (Score:2)
I'm sure that this is wrong, not you but it's a missintreperatation of CA's law. California's and New York's laws cover their states not soldiers and sailors stationed physicaly in foriegn countries, just because the APO or NPO, Army Post Office or Navy Post Offices zip code is in CA or NY doesn't mean that those states have jurisdiction over people serviced by those zip codes. For those
Of course IANAL or CPA so check with your own pro's about this.
downloads? (Score:1)
Kinda defensible - why should the internet be used as a sales tax shelter, particularly when people pay sales tax for fax, snail-mail and phone orders.
But don't let them get any ideas about taxing downloads in cases where there is no money paid. Fucked if I want to go to bed after typing 'apt-get dist-upgrade' and wake up to find $25 added to my tax bill.
Re:downloads? (Score:2)
If I order via internet/fax/phone/mail from Smarthome (in CA, no Nexus in VA - where I live) I don't pay tax. If I order anything via any means from Crutchfield, I pay tax (Nexus in VA).
Internet companies currently have the same interstate-commerce protections as mail-order houses. But the states, after binging on taxes generated by the stock market bubble of the nineties, need sustainable dollars to run their services. As internet commerce gets larger, a N% tax starts looking like real money - real money that State Legislatures are afraid to ask their populations for directly.
what really irritates me... (Score:5, Interesting)
For the last 10 years in Oklahoma the population grew at about 6%, government spending grew at about 70%, now there is a budget shortfall and the want to raise taxes!
Re:what really irritates me... (Score:4, Insightful)
You have to view government as the business it really is, driven by profit and market share like any other business. Those in power are not there to benefit you -- they are there precisely to benefit themselves.
Incidentally, this is the most important flaw in the concept of "government by the people". How can government be both "by those who wish to control others" AND "by those who wish to control themselves" at the same time? It is logically impossible.
Re:what really irritates me... (Score:2)
FALSE. In the US, people run as Democrats to try to *prevent* Republicans from controlling others (Ideologically, Republicans want to do this by reducing the size of government through tax cuts even at the risk of damaging social programs that form the safety net of a moral, democratic society are undermined)
People run as Republicans to *prevent* Democrats from controlling others (Ideologically, Democrats want to do this by regulating industries, opposing tort reform, and creating new social programs to benefit even the poorest citizen, even at the risk of stifling economic growth that can eventually raise the living standards of all.)
At one point, Rand's objectivism had its appeal to me, but at some point you have to realize that real life is about respecting the philosophical arguments behind individualism and collectivism and then finding the right balance and working to achieve it.
Taxing items sold online within Canada? (Score:2)
Said it before, I'll say it again (Score:5, Interesting)
Back when government did as little as possible the harm taxes caused were less than the good they did. That is no longer the case, as government grows larger and starts doing things that are not in the common interest.
It is therefor the duty of every citizen to see to it that the government gets as little tax money as legally possible.
Giving more money to the government because they are having a budget shortfall is like buying an achoholic a drink because his glass is empty - it might seem like a charitable thing to do, but it really is harmful.
NOTA BENE - I am not a "Business is Good/Goverment is Stupid" sort of person. I don't like big business any more than I like big government - I like small businesses and local government, because they tend to be more responsive to the individual. That is why taxing interstate commerce, be it done via the Internet, via the mail, via the telephone, or via carrier pideons is a BAD THING - it discourages local government and benefits larger governmental bodies.
Productivity (Score:4, Interesting)
Our tax code is fscking horrific. Let's just have a flat sales tax or a flat income tax, and quit the bullshit. Our country would return to incredible prosperity if we could just do that.
Re:Productivity (Score:2)
As the saying goes, you can't rule a nation of innocents. The more complex and ambiguous the tax code, the more "responsibility" -- hence profit and control -- for those in power. A textbook example of this would be drug prohibition. Any rational, educated individual realizes that drug prohibition creates violent crime (from the resulting black market), requires insane tax rates and police effort, paves the way for corruption in government, destroys civil rights, and in the end, creates more problems than it solves. But again, you can't rule a nation of innocents. Imagine if drug prohibition was abolished -- business-wise, it would be the equivalant of dropping out of a profitable market. Entire government agencies (and the controlling elite) would have to be eliminated. And what business person wants to do that?
Re:Productivity (Score:2)
Your friend needs the advice of a tax attorney, or even the basest of tax books.
A higher tax bracket only applies to that marginal income.
If your friend worked all year, his income taxes of the first 10.5 months would stay the same, and the rate of the higher bracket would only apply to the money IN THAT BRACKET, i.e. the money he earned from months 10.5 - 12.
Remember: tax rates apply to marginal income.
Re:Productivity (Score:2)
then he is a complete dolt.
When you enter a new bracket,you only get tax on the money you earn IN THAT BRACKET.
I would be nice if people who said are tax system is bad, and/or propose new system, would take the time to learn the most ELEMENTARY aspect of the tax system.
Re:Flat Taxes penalize the poor (Score:2)
It's amazing to me that the person making $500,000 deserves to keep less of his money than the person making $10,000 simply because he is more financially successful.
If I take $100,000 from the second person, they can still survive and have all the necessities.
You think so? Let me give you a counterexample. My wife is a doctor just a few years out of med school, and I'm a recent college graduate. Our gross income is enough that class-envyists probably hate us and think of us as capitalist scum. What they don't see, however, is the numbing amount of debt we had to assume in the form of student loans to get where we are. When the day comes that we've paid off our loans (which are more than our home mortgage), and assuming that her malpractice insurance doesn't continue to skyrocket due to the liability thieves^Wlawyers, then we'll have a nice income. Until then, we probably don't net a whole hell of a lot more than the person making $10,000.
So, tell me again why the goverment should tax us much more than people making less than us? Aren't we (my wife in particular) providing a valuable community service?
P.S. In the old days "HOARD"ing money was known as saving. Yes, I'd probably agree that a lot of rich people (especially those who started off as poor people) tend to do it more than others.
Re:Flat Taxes penalize the poor (Score:2)
Then you may appreciate this quote:
Re:Flat Taxes penalize the poor (Score:2)
Re:Flat Taxes penalize the poor (Score:2)
The wealthy benefit far more from the protection of the state than the poor, which is why it is understandable that they pay more.
The flat tax is a fine idea if you can figure out a way to make it fair rather than a regressive tax.
Re:Flat Taxes penalize the poor (Score:2)
However, you have more to lose from the crumbling of modern society. You were able to secure loans to finance your education. You were able to attend schools that prepared you for college. Heck, you *own your home* (albeit with a big mortgage). Does this make you or any other successful person necessarily evil? Of course not!
But if you think it sucks getting taxed at a higher rate for making more money, try being poor *without* access to the opportunities that your hard work took advantage of.
Re:Flat Taxes penalize the poor (Score:2)
I strongly believe that the interest on loans used to finance an education to make you a more productive member of society should be a fully deductible expense.
That would be nice, and it's true unless you have a household income of more than $50,000 (which is not significantly more than the national average).
But if you think it sucks getting taxed at a higher rate for making more money, try being poor *without* access to the opportunities that your hard work took advantage of.
I'm trying to understand what opportunities those are, though. My wife and I are both products of decidedly working-class households. We didn't grow up in rich neighborhoods with terrific schools. In fact, from a financial perspective, it was probably a poor choice to go to college, as we'll only see a payout from the loan investment in 15-20 years, and that's assuming that the financial climate doesn't change dramatically so that we can't make as much or have to pay radically higher expenses (see again: malpractice insurance).
Basically, we rolled the dice. I'm not complaining, mind you; we have a nice home, plenty of food, and reliable heat (which is important when the outside temperature is -15F, as it was yesterday). It's just that when people complain that us "rich people" (ha!) should be paying more, I want to slap them.
Re:Flat Taxes penalize the poor (Score:2)
No one forced you to go to college or your wife to go to medical school. By your logic, you would have been better off financially just getting a job and not racking up such massive loans.
You're right; we would've been. Still, my point was that we both made decisions that benefit us personally and are good for society (the modern would would sucketh most heinously without an information infrastructure and people to cure you). I can't think of one reason why we should be forced to give more of our money to the government than people who made other, easier choices.
I certainly agree that the gov't really needs to learn the meaning of "budget". There are a lot of areas in my life that would be more enjoyable with a shot of cash, but you and I have to live within our means, and don't get to say "Hey! I need more money for the stuff I want to do, so cough it up!"
Re:Productivity (Score:2)
I'm not American so the US won't tax me, but... (Score:2, Interesting)
Re:I'm not American so the US won't tax me, but... (Score:2)
BTW, people are allready obligated to report sales to there state franchise boards, and pay tax on them.
They tried this with catalog sales too... (Score:2)
Why is this? Simple, if ten states enact Internet sales taxes and agree to cross-enforce then a company selling out of one of those states may be prosecuted by another state party to the agreement if they don't collect sales taxes for that state. But a company in a state not party to the agreement can thumb their nose at them!
IANAL, but my understanding of the Interstate Commerce clause of the US Constitution is that a state cannot enforce laws restricting commerce between states and this applies. Only when you can get the government of the other state to act as your enforcer can you accomplish anything.
All well and good, and perhaps lots of states will sign up to act as enforcers for each other. But all it takes is one state to hold out. Say Oregon, which has no sales tax and could use the extra business and employee income taxes if Amazon relocated south to Portland. Suddenly the states with the reciprocal agreement are not only *not* collecting sales taxes, they are also losing jobs as Internet companies move where they don't have to pay the tax. It is a loose/loose proposition and fundementally regressive.
And, unless the consititution is changed, the US congress critters can't do anything about it either. That is, with one exception; they can enact a nationwide VAT and enforce that. But who gets those tax revenues?
Once again, IANAL and might be blowing smoke. If Glenn Reynolds is reading this perhaps he can give us the real skinny...
Re:They tried this with catalog sales too... (Score:2)
This would kill ecommerce... (Score:2)
The reason why most people buy online is convenience. When shipping charges are added in, the total cost of most online products is around the same that a person would pay by visiting a brick and mortar store. But with online buying, a person doesn't have to deal with the inconvience and time involved with actually going to the store to make a purchase.
So now the state governments want to start taxing internet sales. Problem is, in doing so, they are negating the price advantage for online retailers - consumers would pay both shipping charges and taxes, and online goods would cost substantially more than their brick and mortar counterparts. In tight economies, consumers are willing to forego convenience for the sake of getting a better deal.
IMHO, the states aren't going to generate any substantial revenue from online taxation. In fact, what this will do is shake out the less profitable online companies from the business altogether, leaving a few powerful conglomerates with all control of online sales. And I think that the states will make much less money on this than they envision - online sales will shift back to the brick and mortar stores. The desired effect of this tax is to help brick and mortar stores by killing off online competition.
Re:This would kill ecommerce... (Score:2)
Two notions... (Score:3, Informative)
2. FairTax [fairtax.org]. Flat tax rate. Let the social programs take care of people where they need to, and even keep those below the defined poverty line off of income tax rolls. Fine. But otherwise, despite that it seems like it should be okay to tax the wealthy at a higher tax rate, it violates the American principle of "equal treatment under the laws" that we fight so hard to attain. Do you ever wonder why it's so hard to get that in other aspects of the law? I don't. It's because of all the double standards. If the law isn't absolute, then where's the "law" in it, or isn't it just a theory?
Fairness to Mail-Order/Catalog Merchants (Score:2, Insightful)
Maybe I'm missing something... (Score:2)
Why is this an "E-Commerce Tax" and not an "Interstate Commerce" tax?
To keep track of it all you'd need a... (Score:2)
Seriously, this can be done. I'm not sure if it's a good thing or not, but there's no technical hurdle to having an online database coupled with mapping software that will allow a retailer to get easy confirmation of the proper amount of tax for any given transaction.
Will this kill internet commerce? No. It'll just cost more. I don't really believe that people will give up amazon.com and bn.com, etc. if their customers have to pay tax the way everyone else does.
Its flat out unconstitutional. (Score:2)
It is against the US constitution for any state member to place tax that in any way that restricts interstate commerce. Period. End of discussion.
Guys, this has been around for two hundred years. It would require a Constitutional Convention to change that. That sure ain't gonna happen in this day and age. If a Constitutional Convention is suggested at this political climate, the public will suggest right back radical legistlator removal from Congress come next elections. And there is only one legislator fear in the world, that is losing their incumbancy.
This concept has been in the US Constitution since probably before the first Constitutional Convention, and was probably one of the first major reasons for the Constitutional Conventions. Colonial States were using tariffs as a source of funding for their states... screwing one over the other, and screwing overall revenues of the colonies. States can act like they can do what they want. They need to shut up. It will never happen because it screws with revenues at the federal level.
Besides, that kind of law would allow states to fix tax rates that would effect the ENTIRE NATION. That cannot occur. That would mean that the heavy populated states would get more freeways and the ones that don't have a lot of industry would get the shaft. THINK HOW FAST THE "SMALL STATE" AND "LOW COMMERCE" MEMBERS OF THE US SENATE WOULD GO AFTER THAT PLAN. Keep in mind how the Senate works.
Well, let them have their meetings. This is a pipe dream that will never work.
Re:Its flat out unconstitutional. (Score:2)
Besides, If your state has a state tax, you are legally obligate to pay the state tax on item you buy from out of state, right now.
If you don't you are commeting tax fraud.
Re:What to tax (Score:4, Informative)
Re:What to tax (Score:2)
That's only if you've held the stocks for 2 years or more... otherwise it's regular income, taxed at the full (roughly) 50%.
One of the things that was common during the boom is that people were drawing their profits not by selling, but by taking out cash on margin. You're taking a risk to avoid paying tax on your gains. However, if the stocks go down, you can sell without making any money, so you don't pay any tax. Just pay back the margin debt and you're back where you started. I think that might be what the parent was referring to.
Re:What to tax (Score:2)
Re:What to tax (Score:2)
All of the brokers severely tightened their margin allowances during those last few months when the market was getting out of hand. The bubble could burst, and they had to mitigate the potential damage.... then investors had to sell their stocks to get in line with the new margin rules, and thus began the dot-bomb.
Fun times...
Re:What to tax (Score:2)
However, as I feel your pain, I would recommend an alternative tax. Instead of income, how about net revenue? No deductions, no alterations. You sell something, you pay tax on the income. You pay a percenteage to your brokerage house for executing the trade, why not to the government for ensuring that the rules governing the safe trading of stocks is conceived, written, dissemenated, and policed?
"How Much?" I hear you ask. Well, GDP for the US is roughly $40 trillion dollars. The federal government spends $2 trillion. That means roughly 5%. Of course that estimate is high. To tax all (gross) income would be a larger number, so we could probably get away with about 2-3%. That's less than some brokerages and mutual funds. Of course, this would require that corporations start pulling their weight and be subject to this as well.
Yes, this means people earning less than $25,000 a year would pay more taxes. For those getting the EIC (a negative tax bracket), it could be as much as $400-600 plus their EIC (in excess of $1000). If every entity with a federal tax number got a $250 credit (i.e. - you make minimum wage or less, you pay no taxes) we could throw 'em a bone, and allow for a small break for those with children. It also means that small businesses with low incomes would realize that break, or could use it in place of a tax deduction for up to $12,500 in equipment each year.
Re:What to tax (Score:1, Insightful)
However, any gains by the government are mitigated by the fact that anyone LOSING money on the stock market gets a tax CREDIT.
At any rate, the standard argument would be: it's in the country's best interest to stimulate the economy in times like these. If people invest in companies, new ideas, etc., that stimulates the economy, and we should be providing an incentive for people to do that. (not a DISincentive, which is what an increased capital gains tax would be.)
From the economists' perspective, anyone making thousands off the stock market is actually HELPING the rest of us, because it means they invested in successful companies, and that by giving them what they need to be more successful, they make it possible for more jobs to exist etc.
Not saying I buy this argument entirely, but it is the standard response to your position, and you'll have to come up with some compelling reasoning to talk anyone out of it.
Re:What to tax (Score:2, Informative)
That's simply not true. You can use capital losses to offset your own capital gains. However you never get a credit.
Two examples:
buy 100 shares of Stock A for $10 sell for $8
buy 100 shares of Stock B for $10 sell for $13
(assume all done in the same year)
you pay capital gains tax on $100
buy 100 shares of Stock A for $10 sell for $7
buy 100 shares of Stock B for $10 sell for $12
(assume all done in the same year)
you pay no capital gain tax (you get no credit)
Re:I once watched.... (Score:1)
I can however understand people who download movies that aren't available where they live, like not-so-famous anime-movies and such.
Re:I once watched.... (Score:1)
Re:I once watched.... (Score:5, Funny)
Run that one by me again, will you?
You SAW Episode 1 for free. Having found this a displeasing experience (didn't we all) you then went and PAID to see it AGAIN? What kind of masochist are you?
What the? (Score:1)
No-one's talking about taxing pirate movies on the net, it wouldn't work!
Now tax on legitimate movie downloads could happen, despite probably being a bad idea, but I'm sure the quality of legitimate downloads is much better.......
Is the parent poster an employee of the MPAA just using any story they feel like to post pro-hollywood propaganda?
I once watched a pirated copy of a movie. The movie was Star Wars Episode I. I thought it was pretty good quality and never went to watch it on the big screen. That's 'cos the movie sucked though
Re:I once watched.... (Score:2)
Myself, if it's a good movie, I go see it half a dozen times at the theature and either buy or download a good pirate copy to pacify me while waiting for the DVD. Once the DVD is out depending on how much I liked the movie and the extras involved I either rent or buy a copy of the movie and just rip it myself.
Moral of the story: If movie studios don't want me to make pirate copies then should release the DVD as soon as the movie is in the theature (most people don't go to the theature just to see the movie) and release a collectors edition later that includes cool stuff I'd like to have (a nice box, dvd extras, a poster, etc). I will still rip the movie but the movie studio will have more of my $$$ in their pocket too.
Re:Why fight "Internet" sale tax ? (Score:5, Interesting)
Sales tax, on the other hand, just happens when the end-consumer purchases the product. So the product on the shelf for 99 cents ends up costing like $1.07 when you checkout.
Sales taxes vary by state too. Like, Pennsylvania doesn't tax clothing, but some other places do. Delaware charges NO sales tax. Arizona charges a sales tax, but some cities tack on a percent or two so you have differing sales taxes just by driving around in one metro area like Phoenix.
It's a complicated mess, so the real problem is, how does a net business know what tax to charge each user. It's not just a simple case of doing a table lookup of 50 elements and multiplying the sale value by it. There are thousands of different rates, and just as many rules about certain products which are exempt. Then you have the hassle of knowing what locality to remit the revenue to. Whereas a physical store just has one sales tax rate to worry about and one place to submit their receipts.
The answer being floated about is to have online tax clearing houses for the states so when you make an e-commerce purchase, the site connects to the tax site, gets the amount to charge, then submits that value to the tax site. That site (a private company) would keep a portion, and remit the rest each month to all appropriate localities.
A complicated mess, and some companies have noticed the huge potential to score a percent or two off of every net sale, and are eager to provide the service. The states and localities will accept a lower rate after fees because it's better than nothing.
Meanwhile, ailing dot-com online companies will suffer even more. You already have to pay shipping (usually). If you tack on sales tax and the hassle of waiting for the goods to arrive, most people will just as soon run down the street to buy the stuff where it will end up cheaper.
And that is why bricks-and-mortar stores are all for this idea...
Re:Why fight "Internet" sale tax ? (Score:2)
If you are talking about the UK (the only place I know of that calls it VAT), you are wrong. Only the final sale of the goods has VAT added. That's why if you get a supply catalogue aimed at business, or go to a cash and carry like Macro, you don't see VAT on the prices automatically.
Sales taxes vary by state too.
That explains the problem in the States for this kind of thing. The UK has a VAT rate of 17.5%, which is the same across all of the countries that make up the UK. Makes the taxing of internet goods pretty simple.
It also makes me import a lot. My hope is that the global free market will finally stop things like this, and put an end to Rip Off Britain [rip-off.co.uk]
Re:Why fight "Internet" sale tax ? (Score:2)
Sigh, thanks for the correction. I believe I heard that described in a seminar I went on how to tax internet sales about two or three years ago (and basis for my parent post about the clearing house). It was explained that way with respect to how the U.S. could do a federal goods tax. Leave it to the U.S. to take a simple tax idea and complicate the hell out of it. (ps, this was just some flunkies talking out their bums, I hope. I haven't ever read any serious consideration for a national VAT here...)
Re:Why fight "Internet" sale tax ? (Score:2)
Simply because the state I'm selling remotly to can't force me to collect the tax from the customer, so I don't. The customer is still liable for paying the tax to his home state it just that I'm not collecting it from the customer, telling his home state he made the purchase and didn't pay the tax and neither is he.
Re:Why fight "Internet" sale tax ? (Score:2)
In many (all?) states, you are actually legally required to pay sales tax to your state for such purchases, so I should remit California sales tax to the California authorities for my tires. (Disclaimer: I don't know for sure that California has such a law.)
Of course, nobody does that, because the law is not enforced.
It's really the same as when I travel in Europe and can have the tax refunded when I leave; I am not liable for the tax because I don't live in the place funded by the tax.
Re:Taxation Without Representation (Score:2)
If you use city water, you get socked for a plethora of taxes on your water bill.
Re:Why is there sales tax anyway? (Score:2)
Without all that, a merchant could sell you a poisonous, falsely-labeled product in exchange for a hard-to-quantify barter item, and once you discovered you'd been taken there'd be no police to chase him, no Better Business Bureau to report him to, no EPA to clean up the poison, etc. etc.