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The Almighty Buck

EU Web Tax Proposed 211

SomeGirl writes "Well, it's finally happening. The EU is proposing a Web tax." Its only a matter of time I s'pose... but quick! By a bunch of stuff while its still tax free! I recommend Moby's 'Play' and the Tenchi in Tokyo DVDs, but stay away from those VW Bugs that they're selling online (Ooo! Look! A Special Color!)
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EU Web Tax Proposed

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  • Please provide the data that shows the losses incured by "traditional businesses" due to Internet sales.

    Times up. That is the problem. Down here in Texas, the Mayor of Dallas, went on a crusade to tax all Internet sales - It failed. His problem was with the proof; all of his evidence was anecdotal.

    There is no data available yet that shows conclusively that internet sales are hurting government revenues. Only some politicans' fear that they are missing out on another revenue stream.

    Also, please remember, the government seldom imposes taxes and lowers them at a future date. They generally raise them.
  • The local VW dealer has/had 4 of each color setting on his lot a few weeks ago (yes they were the special edition) with used car stickers on them. I was going to call and ask about the yellow but then thought; bet they bought them on the shady side and jacked the price; so I never called back.
  • Although I'm not happy to see the come, I guess that I'm not wholly opposed to online sales taxes. I guess I'm mostly worried about every damn jurisdiction tacking on their own special tax -- you know darn well that states will start trying to levy taxes on any transaction that passes through wires that travel across their jurisdiction. *shudder*

    But, although I can understand sales taxes on physical objects, I am incorrigibly opposed to sales taxes on intangibles.

    I'm not sure why I'm opposed -- it's sort of an instinctive opposition. I guess I feel that if I'm not getting any THING, then I shouldn't be taxed on it -- it wasn't shipped over roads that need repairs, it wasn't handled by people that need health insurance, and the actual transmission was paid for by my monthly telecom bill.

  • Here in the UK, we are already taxed on goods purchased over the internet, if anyone at Mount Pleasant sorting office can be bothered to do the paperwork.

    Typically, if I order two CD's from a USA based warehouse, they arrive without any additional tax, but if I order three or more, they get intercepted, and I have the pleasure of paying:

    1. Import Duty
    2. Value Added Tax @ 17.5%
    3. A 'service charge' to cover the cost of collecting the above

    Because the third item is a service, it is also subject to Value Added Tax, so I'm not only paying Tax on Tax, but I'm paying Tax on Tax on Tax.

    At the moment, it's still economically viable to buy CD's from the USA because of the remarkably high prices that retailers over here charge. Things are changing, but a $7 music CD bought in the states is still less than half the UK14.99 it typically sells for over here.

    Secondly, how exactly are the EU going to enforce a law requiring companies outside the USA to register for tax purposes; the amount of extra work that this would require on behalf of the various revenue services would be collosal, not to mention the cost to the taxpayer (tax^4 ?).

    No wonder Disaster Area's accountant in The hitch-hiker's guide to the galaxy had to invent a whole new branch of integral hypermathematics to deal with the tax returns..

  • this is actually to equalise the market a bit, for e.g. i sell web hosting, if i sell to a client in the eu i have to charge 17.5% extra in vat. if they buy from a us/non eu company there is no vat so the price is a lot cheaper already. not saying it all good though.

    there is an article about it [wired.com] up at wired.

    sure the register had something about it too, but can't find it now

    btw is it just me or does their new format make it really hard to see where one article starts and another ends? still a great site tho.

  • you don't have taxes in the us then?

    funny all these sites that have messages like 'if you are in virgina please note that an that blah % sales tax will be added to your order'

  • This stuff is changing *where* the tax is paid - so on tangibles would have the advantage for EU people that they wouldn't be additionally hit for for the tax collecting charge. However it would mean that software delivered over the internet (look, no customs), would also be taxed.

    This can be very convenient, but it shouldn't be mandatory. Barnes & Noble does this for orders from Canada. They charge you for Canadian federal sales tax (GST), and your book arrives quickly, since it doesn't need to clear customs. Plus, you save the brokerage fee ($5, I think), that you would pay otherwise on top of the sales tax. This is great, and because of this I always prefer Barnes & Noble to Amazon (that doesn't offer such a service).

    Of course, trying to tax imported intangibles sounds absurd to me, and I'd like to see them enforcing it (if this is what they're trying to do).

  • I agree with the AC.

    When you get down to it, one the major responsibilities of the government is to redistribute income. Yeah, the infrastructure involved w/online ecommerce is a bit more ethereal, but the UPS truck still has to get to your house, the cops need to enforce laws so the truck gets there safely, etc...you get the idea. Only 1.5% of commerce is occurring online. What happens when it is 25%(not that I think that is going to happen ANYTIME soon)? We still need schools, law enforcement, etc. How do you think we should do this? Taxation has been a pretty good mechanism up to now....why change? Do you think you are not going to drop $75 bucks on O'reilly books at FatBrain because you have to pony up $3 additional for VAT? Please, grow up, and get informed everybody. Quit trying to repeal the laws of thermodynamics.
  • I bought a sword recently on ebay, for a grand total of $56 US. I estimated this as roughly $82 Cdn. Not bad I think, for what was offered and looked forward to receiving it. I had to pay an additional $15 shipping, plus $12 shipping to get it to Canada (Grand total so far $83 US).

    Then it hit the border. Canada customs examined the package, opened it, and finding neither a receipt for the value, nor a declaration of the value of the item, appraised it at $250 Cdn. They then added duty of $17.50 Cdn, plus GST and PST of $18.73 Cdn each.

    Three weeks after I ordered it, the postman arrived at my door and told me I had to pay $54.96 to receive the item. I had no cash on me, so I had to pick it up the following day from the post office.

    I complained to Canada customs about the misevaluation, and once I send off a letter explaining the actual cost of the item, I (hopefully, this is the Government after all) will receive a reimbursement of some of the money, since the GST and PST charged were excessive.

    My point here is simply that I purchased an item for $56 US, and ended up paying roughly $182 dollars for it (the exchange rate that day was slightly worse that I thought it was). I bow to the power of e-commerce which has apparently let me purchase an item which has more tax and shipping costs associated with it than the actual cost of the item. Needless to say, I don't plan on purchasing ANYTHING over the net in the future. Its just not economically feasible - what looked like a deal ended up being a complete rip-off IMHO, thanks to the Government duty and taxes and the costs charged for shipping.

    There is absolutely NO NEED or justification for adding an additional tax burden onto the poor fucking consumer with a Web Tax. We are already getting reamed if we purchase over the net and have the temerity to buy across a national boundary.

  • aye it's tough up north a'right

    resent that 'undereducated' though

    if i wasn't so bloody educated i'd be way happier

  • There's a very good reason why states and businesses shy away from adding the tax and the product price together. That's because it hides the real cost of the sales tax. Even if current history belies it, Americans are by our history anti-tax people (or at least we try to be.) By not marking the tax, you always know how much of your money is going to the government when you actually pay for the product you buy. You can only have 22% sales tax if you hide the actual amount. I say that because, in comparison to products, the tax levied on gasoline is fairly high, for instance, here in Ohio its 40.6 cents (22 for the state, 18.6 for the Federal government.) If the price on pumps were marked without the sales tax, then everyone would know exactly how much was going for it, and people would be and should be spending more attention to where that money is going.

    The same thing can be said of income tax...what's the best way to lower it...eliminate withholding. Withholding was devised during World War 2, prior to that time, only the rich paid income taxes, and when they did, they had to send it all in at one time. After withholding, you could raise taxes quite a lot and no one would really know except on paper. Let's say someone makes $60,000 per year and they get assessed for federal taxes at about $10,000. Well,now, they only see the money on paper, and it really never touches them. But if you ended withholding, every April they would make a check out to the IRS for $10,000...that would make a huge difference in how people look at taxes and think about the government.

    Furthermore, I am against income taxes because it's a subtle form of stealing. If you buy a product or own property, that is putting a strain on public resources...so a tax may be appropriate. But just making money isn't putting a strain on public resources, and there is nothing stopping the state or the feds from increasing your tax rate to 90% and letting you have 10% to live, instead of letting you have 70% of your income to live. Property taxes and sales taxes are most definitely the way to go.
  • "jesus said that those who speak the truth will be attacked. your comment here is just more evidence that our lord was correct."

    he attacked you . . . so he would seem to be in absolute agreement with your comment :)

  • Any we that is enforced sounds scary to me. My guess is they'll require the credit card companies to add to tax on items billed for from outside the US. And they'll probably track what you've bought at the same time. Great so now the EU knows which perversions i've paid to see, and gets a cut of money at the same time.
  • Consider this in light of the EULA agreement, where we're not actually buying a copy of Windoze, we're getting a license to use it for a little while, sort of.

    I'm sure the EU is unfortunately aware of this and the full EU commission proposal allows for this.

    Interesting mental picture: Red ants = EU suprafederal governmental entities, Black ants = Microsoft and associated lawyers, in the same glass jar, shaken.

  • You were just lucky.

    You are required to pay VAT on all imports from outside the Union if the value exceeds something like EUR10.

    But if the customs authorities are busy, you may have a lucky day.

    A few years ago, lots of the stuff I bought from Amazon went through without VAT, but now the customs office has discovered that taxing Amazon deliveries makes a lot of money, so now I normally have to pay 25% extra on everything (including the shipping charges).

    The result? I mostly buy books from other EU countries where the VAT rate is much lower.

  • I actually thought Photon was sort of amusing.
    Nothing serious in the series so far- all silly comedy.
  • > ...taxation without representation. Why should I, a US citizen, have to play tax collector for a government which I have no voice in...

    Wheras those legal immigrants to the US do not have to pay taxes to a government they do have a voice in, and which taxes they can surely reclaim should (medicaid, soc. sec. &c.) they be smote low?? Phah!
  • Where does it get it's revenue from, then?
  • by Phroggy ( 441 ) <{moc.yggorhp} {ta} {3todhsals}> on Thursday June 08, 2000 @08:58AM (#1015598) Homepage
    Being from the state of Oregon [state.or.us] originally, I have a slightly different view on sales tax than most people in the U.S. My view is, sales tax completely sucks, period. Obviously, the government has to get money from somewhere. From what I've seen, though, the best way to do it is with a combination of income and property taxes.

    Sales tax is unnecessarily messy: you tax consumers directly, pennies at a time, for everything they purchase. Very inefficient: for starters it's inconvenient to me to go into a convenience store, grab a bag of Doritos marked $0.99, and have to pay more than a dollar. It's hard to figure out exactly how much your groceries are going to cost, and it varies between states, and sometimes between cities. Also, if the customer can prove out-of-state residency (by showing a driver's license), they're usually exempt from sales taxes. More importantly, though, there's a fair ammount of overhead involved in actually collecting sales tax - both on the part of the retailer and the government.

    Income tax is much easier, because your employer only has to deal with it for each employee, instead of each customer, and you only have to pay it once a year, rather than every time you go to the store. $0.99 Doritos cost $0.99 instead of $1.06. Everything costs what it says it costs. If you're from out of state, there's nothing to worry about; there's no sales tax anyway. This also means that there's no problem with interstate commerce on the Web.

    In areas that attract a lot of tourists, the state generally collects a lot of sales taxes, and this helps the government. Great! Collect the same money from local businesses in the form of income taxes instead. If people are spending money, the businesses must be making money; tax that instead! Much easier.

    Anyway, what I was really trying to get at was, doing away with sales tax completely solves the problem of Internet taxes. You don't need to worry about taxing online transactions if you instead tax the people and businesses in your own state or country regardless of what purchases are being made.

    I apologize for the poor wording and lack of coherency of my rant, and I'd appreciate any feedback. :-)


  • So it isn't only DE.

  • Well that's the theory about VAT, anyway.

    In practice here in the UK, it's just an easy way for the government to increase taxes after having promised not to increase income tax, cos that might annoy rich people.

    Never mind that VAT taxes the poor disproportionately, or that gas (natural, not petrol) and electricity and many other things are plainly not luxury goods, which were what was supposed to be taxed when it was brought in.
  • Well, not just protection.
    Police, roads, utilities (which are gov-funded in part in the US atleast), telephone regulation (keep prices down, keep competition up), the very thing that the DoJ is doing with Microsoft and did with AT&T, these are all provided by the government in the US.

    I assume that there are equivalent services that the governments provide in the EU that need to be funded. A tax is not the only way to make money, but is certainly the least evil way. Can you imagine the goverment getting money solely from running businesses? Conflicts of interest would quickly come about when a commercial competitor gets in trouble.

  • VAT taxes the "value added" at each step of a manufacturing/distribution process

    No, VAT taxes the value added in each transformation process (where you are actually *adding* a value). VAT is paid only once through any chain of distributions.

  • Sounds very ungood. OK, does anyone want to try and get an e-Commerce protocol up and working via FTP? Telnet? Ping..?

    I guess the other thing to be careful there is to find out what this law would consider tax-evasion.
  • Last I checked, New Hampshire had no sales tax on pretty much anything either. Instead they have toll booths, fire works which you can buy but not use (really!), and liquor stores. So they basically try to get most of their money out of people coming north from Massachusetts to get fireworks that are illegal in Massachusetts, buy cheap liquor, and use expensive roads...

    Recently, though, they've been trying to pass a sales tax to pay for of all things public education and have been having one hell of a time getting the voters to accept it. So pretty soon, sales taxes will be pretty much nation-wide here in the USA.

    So why not on the internet too, I guess? But would that be state-level, or national-level? On goods coming into the nation? There are still issues to be resolved.

  • I bet that's what the military said about the Viet Cong

    could we quit with this argument already, ok the mighty us military lost against the viet cong, che guevara took cuba with 800(0) ? soldiers against a much larger (us funded) force.


    you are not vietnamese, you are not cuban, you haven't been fighting against foreign rule for generations, you don't live in a country with a poor infrastructure, you are not fighting a poorly trained, unused to death, avg. 19 year old, unfamilier with the territory, overextended force.

    are you really going to send your kids out to greet the soldiers with a semtex vest?

    id'e recommend investing in some serious NBC type weaponry if you want to stand a chance.

    on the other hand fighting an urban guerilla war might work, lots of places to hide, hard for them to fight back, and easy to cause a lot of damage. either that or anonymous terrori^h^h^h^h^h^h^h freedom fighting a la senor unabomber.

  • I submitted a story on this a week ago, but it was rejected (perhaps the perspective was not American enough).

    I think you should read it if you're interested in this; unfortunately the article is no longer on-line, but I kept a copy:

    EUROPEAN VOICE [european-voice.com]

    Volume 6 Number 22 31 May 2000

    Commission bids to slap VAT on foreign firms' Internet sales

    By Peter Chapman

    FOREIGN firms would face value added tax bills on Internet sales to EU consumers for the first time if Union governments accept radical new proposals drawn up by Single Market Commissioner Frits Bolkestein.

    Under draft laws due to be adopted by the full European Commission next Wednesday (7 June), US companies selling video games or music for downloading over the Web to Europeans would have to charge VAT ranging from 25% in Sweden and Denmark to a mere 15% in Luxembourg or 12% on the Portuguese island of Madeira.

    The regulations would apply to 'services' which can be delivered electronically, such as software, music and commercial broadcasting services including satellite television. Physical goods ordered electronically would not be affected by the changes.

    The multi-billion-euro market for services is set to rocket as more business goes online, exemplified by the pop star Prince's decision to turn his back on record sales and release all future tracks on the Net.

    The proposals to be unveiled next week are part of Bolkestein's plan to plug glaring loopholes in the Union's value added tax regime which, among other things, allows foreign firms to escape levies on Internet sales to EU customers. "We want to create a level playing field for European industry. The current tax rules are a disincentive for e-commerce. We want to make things as simple as possible for companies," said a Commission source.

    The initiative is also designed to ensure that Union-based firms are not penalised when they sell to customers outside the EU. These companies - which currently often face being taxed twice, both in the Union and abroad - would escape any EU VAT charges on their sales. The only taxes payable would be those levied by the countries where the final consumer was based.

    However, some industry experts warn that the disparity in Union VAT rates will open a political Pandora's Box.

    They are already predicting that the proposal, which will directly target the US' dynamic e-economy, will be rejected by those member states which impose high rates of VAT and would therefore gain little from the scheme.

    This is because firms would register with the tax authorities in only one member state and pay VAT on all their sales to private customers in the Union from there; although in the case of business-to-business sales, the tax would be paid by VAT-registered EU customers directly to their local tax authorities.

    Tax attorney Guido De Wit of Brussels-based law firm De Bandt, Van Hecke, Lagae and Loesch - who advises the American Chamber of Commerce (Amcham) in Brussels - said the planned single place of 'establishment' would be far less complicated for firms than the likely alternative: forcing them to register for VAT separately in every country where their customers are located.

    But he warned that it could lead to many foreign companies opting to establish themselves in Luxembourg, the EU member state with the lowest rates of VAT. This would mean non-Union companies would still have an advantage over EU firms based in other member states with higher VAT rates.

    It would also result in the Grand Duchy gaining a huge cash windfall in VAT receipts from foreign companies selling over the Web. This would raise hackles in Denmark, Sweden and the Netherlands, which have fought to prevent Luxembourg bagging the lion's share of an estimated 100-billion euro windfall from a planned tax on cross-border savings.

    Amcham believes that these problems would be better addressed globally through the Organisation for Economic Cooperation and Development, a view shared by Washington.

  • Furthermore, I am against income taxes because it's a subtle form of stealing. If you buy a product or own property, that is putting a strain on public resources...so a tax may be appropriate. But just making money isn't putting a strain on public resources, and there is nothing stopping the state or the feds from increasing your tax rate to 90% and letting you have 10% to live, tead of letting you have 70% of your income to live. Property taxes and sales taxes are most definitely the way to go.

    With income tax, the government makes exceptions if you spend money on worthy causes - donating to non-profit organizations, for example. I agree that income tax shouldn't be a ridiculously high percentage just because you make a lot of money, but it probably should be lower for poor people because they really can't afford it (trust me).

    Income tax may be stealing, but so is property tax. If you make improvements to my house that increase its value, your property taxes go up.

    Income tax and sales tax do pretty much the same thing, it's just that income tax is a lot less messy and annoying.


  • And it's buy not by. -Chris
  • Ok so the US VAT is about 6% (higher in CA, lower other places) but thats only on goods. Europe, NZ and as of next month Australia will have VAT on services too. That means things like consulting services are taxed at rates of 10 to 17% (the lowest VAT that I know of is the one in Oz at 10%)

    If you look at the exchange rates of all the major currencys you see a trend, the higher the tax rate, the lower the relative growth. Since the US figured this out, why don't other countries?
  • somebody maintains those routers.

    Not at our place, they don't. :-)


  • A better solution would be to get rid of all the tolls and instead get the money they usually get from tolls in an increased gas tax. If your vehicle is a heavy one that destroys more roads than a lighter vehicle, then you should have to pay more to repair the damage. Tolling a specific road is just ridiculous, IMO.
  • It just depends. You should pay customs, but to be frank I ordered also several books from Amazon and some CDs from CDNOW. I never had to pay any taxes. All of these were delivered btw by UPS or FedEx.

    Some relative of me once orderred something that was delivered by the regular ptt and was immediatly hit with a VAT charge.

  • Duh, sorry. I meant to say from outside the EU, not from outside the US.
  • Yeah, web businesses don't want to have a web tax. But yet, when they are DoS'ed or whatever, who does eBay and Yahoo and Amazon and all those turn to to investigate?

    But corporations already pay a federal income tax. A web tax would go to the municipalities and states to make up for the (supposed) decrease in
    revenue from out-of-state sales tax purchases. It isn't as if the corporations are getting anything for free, instead it is the local governments getting annoyed because they get less money. Of course, out-of-state companies consume no local resources (they don't need the services of the local police force, for example), so this shouldn't be a problem. But governments of any sort are always going to complain about not getting their hands on revenue, whether they
    deserve it or not. That's what governments do.p

  • What the EU actually proposed was a value-added tax on goods and services, sold over the Internet by non-EU businesses, to customers inside the EU in order to level the playing field for EU-based companies that already have to charge a value-added tax.

    Ha! "Level the playing field" I love it. Why don't they just call it what it is: a tariff. Gosh, if Pat Buchanan were European he'd love it, too! This is the same thing the US gov't did in the 80's to "level the playing field" because we made inferior cars. (I still won't drive an American car, except maybe a Mexican made PT Cruiser!)

    Anyways, on a more serious note, American business could see this as a problem. It seems like there are alot of wedges being thrown up between the US and the EU. As far as American business is concerned, this is a big deal. I imagine alot of companies were targeting the EU as a possible market and this tax will throw up another barrier to their entry.

    These days, the EU is the biggest economic and political competitor to the US. I fear that if both parties don't get over the nationalistic/insular feelings toward each other the world could be heading toward a polarized situation not unlike the situation between the US and the USSR 20 years ago.

  • Well, if this sort of tax were enacted in the US, I suppose it would go something like this: The tax is there to recoup the lost sales tax when people purchase things online. This valuable cash goes to repair our roads, keep the infrastructure okay and gets the schools working. Right now as things stand (no internet tax) the internet serves as a sales tax shield for the upper class (traditionally those spending $ on the web) and the average non-netted Joe spends the extra to not buy online. Basically a net-tax would benefit the states and return the consumers to equality...but I'm still against it :)
  • Moby's Play is definitely in. I agree about those VW New Bugs - what is that, Acid Reflux Yellow?
  • well to be frank the EU is the worst thing that ever happened to the world outside europe, cept maybe the two world wars they have so many taxes and tarrifs on good and services that i am surprised they are not planning to tax web traffic that comes in to sites in the EU from outside. It is the last bastion of the protectionist economy, or are they? =/ this is hardly surprising at all from a group of people who are hardly interesting in their choice of economic measures, ie "tax it, no wait... tarriff the local product and tax the forign product as it come in" (to fund our own inefficiency through the taxes of third world countries) this is not necessarily a net tax rant more an anti-EU rant...
  • Bomb them into submission!

    no, just kidding.

    If this goes into effect, I recommend a boycott of all EU goods sold online. Embargos are nonfun, but really one of very few good ways to get a point across economically.

  • Oh man, I could go on for days on this topic - suffice it to say that anyone who would buy a car online, without ever test-driving it or even seeing it in person, deserves to own a new 'Beetle'.

    I have no doubt I'll get trolled for pushing this link - but it's my website devoted to what's wrong with the new 'Beetle' and the people who love them: the Society for the Preservation of Aircooled Machinery [home.net]


  • C'mon man, buy some real anime. Like, get as much of Neon Genesis: Evangelion as it comes out on DVD, or better yet, Vampire Hunter D.

    But...Tenchi...at least get something equally silly like Slayers.
    If there is a God, you are an authorized representative. - Kurt Vonnegut Jr.
  • Well, this seems an excellent way for Europe to wall itself off from the rest of the world. Don't they get it *yet*?

    What's with charging VAT on electronically delivered software, anyway? As I understand it, VAT taxes the "value added" at each step of a manufacturing/distribution process; exactly how many production steps does a piece of software go through? I would imagine just one, writing, especially if it isn't put into a box.

    ------------------------------------------------ -------------------

  • "...a value-added tax on goods and services, sold over the Internet by non-EU businesses, to customers inside the EU in order to level the playing field for EU-based companies that already have to charge a value-added tax.It is not, in the usual meaning of the word, a "web tax." Now you know."

    So it is:

    1) Money
    2) Given to the gov't
    3) By the citizens (either directly or indirectly)
    4) For purchases on the web
    5) Called a tax

    But it's not a web tax. That's pretty damn amazing all right.

    As for your "level playing field" phrasing--so what? ALL taxes are for the good of SOMEBODY.
    Wanna hook MAPI clients to your Tru64/AIX/Linux server?
  • I can't wait for the day that e-commerce gets taxed here in the US. Can you imagine the amount of audits that will occur because of all the online stores run by teenagers with no real business experience? It'll be like a sea of headaches across the Internet. Sharkey
    www.badassmofo.com [badassmofo.com]
  • Hrm? No, it's just that when somebody says "web tax," that's generally taken to mean "a tax on using the web." Which this clearly isn't. I'm just saying that the headline (which comes to Slashdot via CNN) is bad for that reason.

    (Now, why that's +5 informative is beyond me, but hey, I didn't do it.)
  • by GrayMouser_the_MCSE ( 192605 ) on Thursday June 08, 2000 @07:00AM (#1015626)
    This sounds similar to the mail order tax tried here in the U.S where states may require out of state businesses to collect sales tax, but where there is little means of enforcement.

    And as this crosses national lines, not just state/province lines, how can the EU hope to enforce this. Will they block sites which offer items for sale? Restrict deliveries?

    It seems like an idea that's bad on paper and could only get worse in its implementation.

  • the other reason not to get one of thier special edition bugs, is that they won't make them with a TDI [tdiclub.com] engine in them.

  • by Betcour ( 50623 ) on Thursday June 08, 2000 @07:18AM (#1015629)
    They want to tax services sold over the Web from outside EU. For products (ie DVD and books) there's allready a tax paid at the customs.
  • And, FWIW, Delaware is getting along just fine, thank you.

    As is Oregon. The only economic problems lately have been the closing of timber and pulp mills....

    Only partly true. Oregon is doing OK now, largely because of corporate income tax from companies like Intel, but 10 years ago, when measure 5 first passed (measure 5 was Oregon's property tax ceiling) Oregon was in a world of hurt. And they still have one of the most confiscatory income taxes in the country.

    Personally, I prefer sales tax to state income tax for several reasons. First, it's a tax on consumption, so everyone -- tourists or residents, rich or poor, pay it in the same fashion. Secondly, it incentivizes not spending your money (investing, savings, etc.) -- whereas if you go to invest money that's had income tax taken out, there goes a chunk of your principal off the top. And third, collecting sales taxes is a lot less expensive from an operational perspective -- compare the outlays vs. dollars returned of the revenue departments of the four states (New Hampshire doesn't count, it has neither) that have no sales tax but do have income tax with those of the nine states which have sales tax but no income tax.

    My opinion only, IANAL.

  • I think it's the US that doesn't get it. Charging taxes on locally produced products but giving imports a tax break is irrational and harmful tax policy. The fact that this policy exists among US states is some political and legal idiosyncracy of the US federal system. European nations hopefully are above that kind of nonsense.
  • Slightly Informative:

    There is no VAT on books in the UK, dunno aout the rest of Europe though. That's why importing DVDs from the States via Amazon is often the best way as customs often let Amazon stuff through thinking it'll be a book.

    Not that I've personally had any problems importing goods that exceed the value of the 'personal import' allowance (touch wood).

    There's also no VAT on second hand (used) stuff, so some companies open the box before sending it to make it no longer new.... I guess this is a bit dodgy :)


  • If you do business with EU citizens on-line, those customers are subject to EU jurisdiction. The EU can certainly prohibit them from doing business with you unless you collect sales tax, and they can enforce that with penalties on the customers.

    The EU could also seize your European assets. If you don't have any, you are at least still relying on EU law to protect your copyrights, patents, and contractual enforcement.

  • I had a similar thing happen to me: I bought some used Laserdiscs, and the guy sending them to me over-estimtated the worth on the Customs form by 2x! Result: I was charged GST + $5 'handling' by the Post Office. The guy sending it to you fucked up.

    OTOH, I have bought a bunch of used and new Lasers from a little company in Texas and their order guy always puts $10 or $15 for the value on my Lasers when he sends them up here, so I never pay anything on them. That includes the brand new Phantom Menace laser, which retails for around US$100. Thanks, Randy!


    Freedom is Slavery! Ignorance is Strength! Monopolies offer Choice!
  • In the old days (1980's ;-) of shipping physical goods there was a concept known a Free On Board (FOB). The FOB point was where the good changed hands. If I sold somebody a product FOB my loading dock they paid freight and were responsible for any import duty. If on the other had it was FOB their loading dock then I paid freight and dealt with the duty (gross simplification but you get the idea).

    It seems to me that with the net the FOB point is at one of the NAPs. If this is the case then the old rules should apply and the importer should deal with the tax. There is lots of international law on this stuff already.

    Where the EU is having a problem is not that the law does not allow them to charge vat, it does, it's that they can't detect the imports and regulate them. The real thrust of this proposal is to move the responsibility for collecting existing taxes onto corporations because they are a lot less hassle to persue than consumers.

    John (who in another life started a company selling software over the net and so thinks he knows about this stuff :-)

  • Just because the US has so far managed to remain tax-free on e-commerce doesn't imply that the world will. Or that the US will continue to be so. Since ecommerce in the US does not pay sales taxes it is equivalent to a subsidy. As long as it doesn't threaten the conventional commerce methods it will remain so, but in Europe where VAT is often 25% it knocks a big hole in the tax gathering budget. Eventually, ecommerce will be taxed worldwide. It behooves the ecommunity to propose a reasonable and fair method of imposing this taxation. Although "no taxation without representation" is grounds for revolution, the obverse is not a meta-stable state and will not last. Either ecommerce needs to align with one political party (and I don't mean libertarians) or expect taxes to appear in the future.
  • If the governments of the world deign to charge us all a tax on goods purchased over the internet, then the least they could do in recompense is regulate shipping charges down to compensate for tax increase. Less gouging on shipping, more money for the government and prices that aren't any higher than they are now (if they manage the shift properly).

    Sound like a decent idea?

    -"I'm not evil. Evil is too subjective."
  • The point is not so much weither or not the Government should or should not tax the internet. The problem is that our Representatives have little or no idea what the Internet entails. This latest is just a further symptom of that. It's time for us to get out there and demand adequate representation in government. If we don't we are going to continue to have all kinds of laws and taxes passed. We need to get some geeks into office.
  • But a tax on purchases from the U.S. won't go back to the USDA, the U.S. FTC, or any other U.S. regulatory agency which can protect you from that sort of thing. You can bet once the EU gets their hands on the money, they aren't going to ship it back across the Atlantic.

    Since there isn't an international regulatory body with authority at both ends of the transaction, there's nothing that the EU can do if you get cheated out of your software or music purchase on the web. The EU is just trying to add income which isn't matched by their expenditures (since presumably the U.S. is already watching for fraudulent merchants in the U.S.), and the result is pure profit for them.

    Not that the U.S. wouldn't try to do the same thing, of course, and probably will. The situation with state taxes within the U.S. is a little better, since there are federal agencies that can regulate both ends of an interstate transaction. However, even in that case I would rather see the states raise taxes on those who use state resources (UPS/Fedex, and the merchant) rather than taxing purchasers from another state directly. The merchants and UPS/Fedex can just up their prices a little, and everybody can be happy without adding torturous (sp?) new tax laws.

  • by Anonymous Coward
    No taxation without representation.

    Repeat as needed until it sticks.

    I, as resident of state X, do not have a voice in the governmental affairs of state Y. Nor am I using any of state Y's gov't provided services (roads, etc.). Therefore, state Y has no right to tax me.

    If ***I*** go physically to state Y and buy something, I pay sales tax because I am using their roads, adding to their gridlock, consuming local resources, etc.

    If I ***mail order something***, their local shippers use the roads and add to the local gridlock (not me). The web store uses local resources (not me) ,etc. Get it? I'm not in your state or consuming its resources. Now the web store or the shipper might try to pass that cost on to me as higher prices and shipping fees (which may make me choose to shop remotely in another state), but their **gov't** has no right to tax me. I'm not there. The local businesses shoose to operate there and pay the local taxes. It was **their** choice.

  • by Thag ( 8436 ) on Thursday June 08, 2000 @07:35AM (#1015677) Homepage
    New Hampshire, Oregon, Montana, Alaska, Delaware (N.O.M.A.D.)

    And, FWIW, Delaware is getting along just fine, thank you. They are snagging huge amounts of sales away from the states around them, because people will drive over the border to pick up those big-ticket items w/o sales tax. They also sell lots of liquor to PA residents who are sick of the lousy state liquor store sytem back home (socialism, anyone?)

    As someone above mentioned, the income tax in Delaware is VERY high (about twice the Pennsylvania rate, from personal experience :(). Supposedly you make it up if you own a home though. They also tax businesses more, so prices may be slightly higher.

    Added benefit of Delware: they make it damn hard to become a lawyer there. Keeps the population down!

  • Since the VAT there is "only" 15% guess what country everyone will register in.

    So if they really do it like this it'll benefit nearly no-one. They should at least make it so that the country where the customer lives gets the money.

    Not that that'd help either, the entire system would be horribly complex, cost fortunes and be completely unenforceable.
  • The proposal would require the companies to register at any EU country and pay tax at that country rate

    You have to pay the VAT rate of the country you live in. For example, if you live in France and buy somehting online, you'll have to pay the 20-something % VAT the French Government steals from everything. As a customer, you have better time living where the VAT rate is the lowest.

    Now, since I live in Switzerland, I have to pay the VAT (7.5%) when receiving the goods wether they're from the US or the EU, straight to the postie. It's the same thing here than in the EU, I suppose.

    If a US company wants to sell goods in the EU, they don't necessarily have to pay any VAT themselves, but the customer in the EU does.

    Of course, I could be wrong all the way...

  • by Max von H. ( 19283 ) on Friday June 09, 2000 @12:08AM (#1015684)
    "When Switzerland will be finally forced to join the rest of Europe, all mail-order companies will move there"

    Switzerland won't join the EU before at least another 10-15 years. We just voted a big YES (76%) in favor of bilateral agreements between our venerable country and the EU. Now (well, when the agreements are totally implemented), it's *almost* like being in the EU without having to give up our strong currency in favor of the Euro, which isn't worth jackshit. Hundreds of companies chose Switzerland for their European HQ's (less tax, central location, etc.). Sci/Tech companies already take many pages in the phone book here.

    I dunno about mail-order companies, but my newest "neighbour" is Handspring, maker of the Visor PDA. There's also HP, Compaq, IBM, etc... Not talking about all the international organisations.

    The French usually don't like Switzerland (jealous?), and tend to treat us like the black sheeps of Europe for being "that little rich country". So far, we have a stronger currency, the lowest unemployment rate (1.9% only) and *very* attractive wages (at least twice higher than in France) and some of the lowest VAT rate (7.5%). And pot is to be legalized at the end of the year, too! Beer is cheap as well...

    Really, I don't see why we should join the EU... To get our tax levels doubled, have our currency basically cancelled and inherit an average 15% unemployment rate? No thanks...

    And, IIRC, as of next year EU citizens will be able to live and work freely in Switzerland.

    Come and have fun in Geneva, man!

  • Go ahead if you don't want any government arranged stuff. You get robbed? don't go to the police. don't use roads and pavements. pay your own medical bill. And your really shit out of luck should you ever get your legs lobbed off by a playful grizzly.

  • This is a web tax. The tax is often higher due to the VAT computation for ecommerce than for brick and mortar.

    Not only will this put many small companies (with razor-thin profit margins) out of business, it is also taxation without representation. Why should I, a US citizen, have to play tax collector for a government which I have no voice in and whose territory I don't even live in.

    Taxes often do more harm (in productivity, lost income, higher prices, weakened economy, or business decisions) than good (increased revenue for a government agency). Look right now. Our great economy has changed our budget deficit in America into a surplus.

    Anyway, I hope that US ecommerce companies boycott the EU should this happen.

  • it is also taxation without representation.

    What do you mean ? Under this law, European citizens are taxed by their own governments.

    Why should I, a US citizen, have to play tax collector for a government which I have no voice in and whose territory I don't even live in.

    You, as a US citizen don't have to do anything of the sort. US ecommerce companies have to play tax-collector just like (for example) US car companies that sell cars in Europe. I reckon though that it would be more difficult for ecommerce startups than for established names with offices in Europe

    Anyway, I hope that US ecommerce companies boycott the EU should this happen.

    Boy, that would really hurt Europe, European businesses and European consumers. I mean, imagine the US ecommerce companies deciding not to sell to the European market. Wow, what a disaster :-).

    You have to see this as another strike in the undeclared trade war between the US and Europe. The European rationale is : we are lagging behind the US in ecommerce companies and American companies are getting a large piece of the pie in the European market. So what do we do: impose a tax in ecommerce transactions (which actually is the same VAT tax for normal transactions and for Europe 2 Europe ecommerce transactions that is in effect now). This will level the field with american e-tailers (actually it will be more difficult for smaller ones as the big guys like amazon.com allready have European subsidiaries) and maybe give European companies a small advantage over Americans, since in the US it is unlikely that the administration/congress will pass taxation in ecommerce anytime soon

    However still it's not that bad for American companies. They can choose to be taxed, say in Ireland or Luxembourg where the VAT rate is significantly lower than in Germany. European countries don't have that option (I repeat that European ecommerce companies are already subect to this law for Europe2Europe transactions).

  • The tax will be on goods and services. a license is a service. in a brick shop you pay tax on software too.

  • I guess my last post was pretty far OT, but this is a fun discussion.

    "Why, the government can just garnish the wages of the top 1% of wage-earners and use it to buy everybody sports cars! That is your socialist paradise, isn't it?"

    Kinda, except part of the idea is to get people away from the capitalist idea of identity through consumerism. You are defined by your actions, not your posessions.

    " Everybody's equal?"

    " Hard work means nothing? "
    The idea is that 40 hours of work as a VP is not more vaulable than 40 hours of work flipping burgers. News flash, AC: people are POOR, and our capitalist system does everything it can to keep them that way. If we can help them and all it means is that Bill G. gets to buy one less porsche for his fleet, it think it's insane to do anything else. The wealthy generally aren't wealthy for being better people, and the poor generally aren't poor for being worse.

    "If those in the working class were as "competent" as you claim, it's a wonder that they're still in the working class. Our society gives people the tools that they need to advance themselves, if they are talented enough."

    Like a great, low- or no-cost eduacation, right? Like low- or no-cost health care so they can overcome physical disabilities or diseases without having to lower their standard of living? Bull shit. You're living in a rich suburban fantsy world. The simple fact is that racism, sexism, homophobia and burning arrogance blind the "upper class." They see what they want to see; people are happy, things are great, America is the land of opportunity, and we're rich becuase we're smart.

    That's a fat load, and you know it. The rich are so because of the work other people do, not because they have some kind of fucking divine right to wealth. The assertion that "anyone can make it" has been an illusion from the very start. Wealth begets wealth; when was the last time you heard about a young black kid from a poor family making millions on a NASDAQ IPO? Never. They're always from families that were relatively well off to begin with.

    "There is NO EXCUSE for not having enough retirement money to live on. If you didn't save, it's your fault."

    Problem is, people used to have pensions to retire on. What do we have? IRAs, 401K's, which require you to set aside money from your paycheck. People who live hand-to-mouth can't afford that, so they have to live on SS. Not to mention the people with disabilities, and people who are widowed who can't support themselves or their families.

    [ snip a lot of hysterical liberal gun-grabber crap ]
    Sorry, I just have an aversion to being shot.

    "Jesus said that those who speak the truth will be attacked. Your comment here is just more evidence that our Lord was correct. "

    Jesus also said that it is eaiser for a camel to pass through the eye of a needle than for a rich man to go to heaven. Enjoy your Boxster.

  • yup, electronic stuff should cost less. but I see no reason to tax it less. the company producing it should sell it for less, because of lower production costs. Taxes are used for more than just infrastructure. education, medical care, social security etc. Essentially there is no difference between say.. CD-ripping software and a tapedeck, so they should fall in the same tax-group.

  • Put simply, VAT (in the UK, and I presume the rest of Europe) is added to the sale price of goods and services by any VAT-registered business at the time of sale. These businesses can reclaim the VAT on purchases they made for business purposes (raw materials, etc). So, essentially, the difference between the purchase price and the sales price of the materials, etc used to make the product - the added value - is taxed. Put simply - the business acts as an unpaid tax-collector for HM Customs and Excise.

    All businesses with a turnover of more than £51,000 in a 12-month period (last time I looked - it may have gone up) are required to register. Others do it voluntarily; it makes a small-turnover business look bigger and more professional. Only VAT-registered businesses may reclaim VAT on purchases ('input tax') and add it to sales ('output tax').

    Just to make it more complicated, there is more than one rate in the UK (17.5% for most things, 8% for domestic fuel, 0% for a whole list of things, like books, groceries, childrens clothes), plus exemtions (funerals, for example). Zero-rate VAT is different from VAT exemption (businesses which make exempt goods/services can't reclaim the input tax on purchases).

  • You make the article sound like this is the first time it's happened anywhere. Look north of you. *Hi!" us Canadians have been duped by this stupidity for 7 years now.

    When the GST came in, charging an extra 7% on goods and services, it was supposed to go towards the national dept. The only thing it's done is ruin us more and go to the pockets of our idiot politicians.

    Anyway, when I buy something online from a US company, I still get charged the friggen GST even though I didn't buy the item in Canada. Equality? HA! Money grabbing beurocrats? YES!

    I don't believe I should have to pay GST (the EU VAT equiv) on items that I don't buy in Canada. Canada saw that all the buying would be across the boarders and overseas so they didn't want to loose their precious money. What BS!
  • It seems that they're trying to define "point of sale" as the buyer's computer, rather than the server which operates the website. Yet they then turn around and require the selling company to apply the VAT of the one country in which it registers; implying that the "point of sale" is now potentially a third country which contains neither the buyer nor the seller.

    Anyone have a link to a more in-depth story that explains the enforcement of this? The EU can easilly identify violators (just try to buy something and see if a VAT is added); but how do they plan to attempt enforceing the VAT on a company if that company has no physical presence in the EU?
  • As everyone knows the purpose of taxes is to help provide services for everybody. US Fed taxes provide for our military, federal highways, and other useful things. States tax us for state level services, unemployment, state highways, blah blah. Counties and cities tax us for schools, county/city roads, cops, firefighetrs, water and sewer services.

    I have no problem paying these taxes for these useful services. Its the useless BS that I hate paying for. Subsidies to farmers to NOT grow things? Foriegn aid to countries that take our money and then spit in out face? Welfare for people who dont want to work? Blah blah the list goes on.

    The concept of taxing internet sales to "level" the playing field is crap. Alot of people still use and will continue to use meatspace shopping. I for one like to look at something with my own eyes before I buy it. I only buy things online if I already know exactly what I want, and I can find it cheaper. So what if meatspace stores have to pay more taxes? They have some value that online shopping cant necessarily compete with. Let the consumer choose, and if the store front goes the way of the dinosaur, so be it. Dont try to kill the online shopping idea so its "fair".

    Also, the concept of taxing retail stores to help provide for the infrastructure somewhat makes sense. But in a way it doesnot. The 60% Tax I pay for my gas pays for roads. My local taxes already pay for the cops. What infrastructure is the govt providing that they need my money for, that they dont already get from somewhere else?
    They didnot build the mall, the retailers/land owners did. They pay local property taxes for cops etc too.

    This concept goes even further with the internet.
    What infrastructure do I need to pay for again?
    The internet is mostly owned by big ISP's, and I pay for that infrastructure by my ISP fees.

    This is just another way to get more blood from the people.

    Anarchy Burger! Hold the Government!

    - Steel
  • EU consumers already pay VAT and/or import duties on incoming goods from outside the EU (often along with a charge for collecting the taxes which seems particularly nasty.

    This stuff is changing *where* the tax is paid - so on tangibles would have the advantage for EU people that they wouldn't be additionally hit for for the tax collecting charge. However it would mean that software delivered over the internet (look, no customs), would also be taxed.

    Can it be implemented, can it hell.

  • by Anonymous Coward
    The socialist members of the European Union have a long history of taxing their citizens into the ground, and so it comes as no surprise (to this reader, anyway) that they would be proposing something like this. No doubt when a wealthy Londoner is purchasing a canoe online, a significant portion of his transaction will be paid directly into the pocket of some drug addict in Amsterdam in the interest of "social promotion." Scary how these people think, isn't it?

    This is the style of wealth-redistribution that many want to introduce into the United States. They've already got their foot in their door with socialist entitlement programs such as Social Security and Medicare. After they nationalize the health care system and shut down private, religious schools, you can bet they'll be coming after our guns. They'll be up against a firefight if they knock on my door, by God.
  • by Anonymous Coward on Thursday June 08, 2000 @07:02AM (#1015721)
    Let's face it. Governments get most of their money through sales taxes. It's no wonder why the only state in the Union (Delaware) is in such poor shape - there's no sales tax on any items in the state.

    With the Internet economy increasing at an exponential rate, many people are going to turn away from the conventional means of shopping. Grocery stores will be phazed out by online Grocery stores, as will the common Electronics Store, the common Book and Movie Store, and the common Clothing Store. All of their online counterparts are now available in abundance on the Internet, and most shoppers that peruse their wares are exemt from paying any taxes, through a signifigant loophole - they are not making the purchase in the state the product itself is located. As such, they pay no taxes, and the Government loses money from the sale.

    I believe that it would be best for the economy if all e-Commerce sites were taxed. Now, I am not in favor of taxing internet access itself -- that needs to be as cheap as possible to allow the most people access. However a 10% Internet Sales tax would quickly help governments recoup losses to date from previous online sales, then in a few years, lower it down to a more managable 5-6%.
  • by nstrug ( 1741 ) on Thursday June 08, 2000 @10:52AM (#1015722) Homepage
    Why should I, a US citizen, have to play tax collector for a government which I have no voice in and whose territory I don't even live in.

    You won't you twat, if you bothered to read the article before spouting off you would realise that this is a tax on goods shipped from outside the EU into the EU ordered over the web. It's just like the import duty that you as a US citizen pay on French wine or Italian salami.

    So read before opening your mouth.


  • by Protocull ( 187587 ) on Thursday June 08, 2000 @07:02AM (#1015723)
    Yeah, and it's not just the EU. Check out this from the Grok at Industry Standard:
    "But it was Andy Grove who made the most unexpected news, though few outlets emphasized it. In testimony before the Joint Economic Committee, the Intel chairman lent his support to taxes on Net-purchased goods and to stronger privacy legislation. The Wall Street Journal led with Grove in its piece about the hearings, and the Washington Post noted his remarks at the end of its piece. "

    Taxes are on their way. Buy now while the web is still unregulated.
  • That is within the US - try mail ordering something from outside of the US and the carrier (FedEx or whoever) will charge you US import duty on it (which can be up to 100% on some goods). This is exactly the same.


  • by jacobm ( 68967 ) on Thursday June 08, 2000 @07:03AM (#1015729) Homepage
    What do you know- the first thing I see after returning from the article submission screen is the exact article I submitted, posted with exactly the spin I feared it would get posted with.

    The CNNfn article is misleading- they shouldn't have called it a "web tax," which to most of us means "tax on using the web." What the EU actually proposed was a value-added tax on goods and services, sold over the Internet by non-EU businesses, to customers inside the EU in order to level the playing field for EU-based companies that already have to charge a value-added tax. It is not, in the usual meaning of the word, a "web tax." Now you know.
  • Direct taxation (such as the IRS in the US) is a very bad thing. Governments need money to run. We need governments to protect us. (Assuming they are doing their job.)

    If all of the sales are being made online, the government(s) need to do something to get revenue. Lack of tax is NOT why I buy things online, I look for the selection, ability to price things (and get price quotes from more than one place), and the large inventory (inherent for a company that sells online-they keep all the stock in one "place").

    Even going to the local supply house (Graybar, for instance), they don't have half of the stuff I need and they have it shipped from other locations. I generally have it the next day.

    My conclusion: Taxes are necessary, and will not harm the online economy.

  • by Devil Ducky ( 48672 ) <slashdot@devilducky.org> on Thursday June 08, 2000 @07:44AM (#1015735) Homepage
    I personally don't see a real problem in paying sales taxes (as long as they are relatively fair). I do see where the money *should* go.

    On the web, it's harder to see the infrastructure. The server (equivalent of the mall) is owned by the Ebiz or is paid for by the Ebiz. The phonelines (equivalent of the roads) is owned by a telecomm company and is paid for by the Ebiz.

    Then you may be asking yourself:
    1. What is his point?
    2. Fair Taxes?
    3. What was that I just drank?
    5. Did he just skip 4?
    6. Where would this tax money supposedly go?
    7. Is that how you spell equivalent?

    So the answers:
    I don't know.
    Just Imagine it.
    You don't want to know.
    To the implementation of laws and such.
    I'm not a dictionary, Go Away.

    Now I know other people are ranting and flaming about the police are already paid and they should enforce laws on the web with the money they already have. But that would just make other taxes go above the "fair" line.

    The reason I personally don't think this should be done is the cost of implementation. It will cost more to force people to pay the taxes then you will actually recieve. How do you stop a sale going through from a company in Germany that has a server in Canada (hypothetically)? Do you track the traffic on the Canadian server? I don't think they will like that.

    I lost my train of thought, so I hope someone gets my point and then tells everyone else what it is.

    Devil Ducky
  • The EU is trying to ensure that the proper taxes are being paid for. With online commerce the EU is simply protecting itself.

    What expenditures does the EU have that require this tax income? You can say "proper taxes" all that you want, but if I am in the EU and buy software from the U.S., what services has the EU provided for me that they must be reimbursed for it with a tax? The U.S. government (read: U.S. taxpayers) has already paid (through supporting regulatory agencies, the courts, and the police) for the production of that good. The only costs to the EU for me to download that good from the US are the communications lines and the electricity, which I'm sure are already taxed in the EU.

    So by letting the U.S. do all of the work, and collecting the taxes anyway, the EU is making a pure profit off of its member countries' citizens (or are you EU citizens now?). I don't agree that the government is entitled to a particular income, especially when it hasn't done any work to deserve it.

  • I don't want to seem like a troll. But Tenchi in Tokyo was a disapointing end to a long running series. It's pure shlock.

    You're not a troll. It was utter dreck in comparison with the other two Tenchi series. At least if they had used the same art crew it wouldn't have been so bad. But they were working on something called Photon of which what little I've seen doesn't look like it was worth the trade-off. What the fans (at least in .us) wanted was a third OVA series, not yet another parallel universe. That would have rocked immensely (and still would).

    I had already decided not to buy this series on domestic LD, should Pioneer still have been producing LD at that time. But I didn't feel so bad about getting it on DVD because it didn't cost as much as LD would have.

    (Confession: I got one of the import LDs because it came in a box with cool cover art of Ryoko, and last weekend I got two others because they were half price closeouts. And the import LDs have a really bizarre omake show that didn't make it onto the US DVDs. Bizarre as in a naked crucified Tenchi with a distressed looking Ryo-Ohki trying to block the view of his private parts kind of bizarre. Okay, so that was only the most bizarre scene.)
  • I live in IL but use the toll roads maybe twice a year. As far as I'm concerned, they should be paid for entirely by usage taxes. I'd rather my taxes fund some sort of mass transit around the NW suburbs, for example.

    Of course, you probably couldn't get the toll roads passed by the legislature in the first place with that platform, but I think it makes sense now. Tolls combine a usage tax with a gentle encouragement to use a more efficient means of transportation, like the train.

  • Slightly off topic, but in reference to the Canadian tax...

    Yes, taxes are higher in Canada, but the services provided by the government are more, as well.

    Now, I'm not a Canadian, and I may have this wrong - if so, please correct me, I'd rather know the truth than a pleasant fiction. :) However, from my understanding, Canada has a better welfare system, state provided health coverage, state funded college, and various other services (this is really vague - if you have more detail, please let me know).

    In the US, we have a fairly pathetic welfare system (in more ways that one, but that's a differant ball of wax altogether), rather limited need-based aid for college tuition (primarily loans), and no state provided health coverage aside from medicare/medicade (very difficult for most people to get, unless you are past retirement age), and a mish-mash of programs provided on the State and local level.

    In other words, Canadians pay more, and get more, from their government than US citizens.

    Some people consider this a good thing (the people who see welfare as creeping socialism or worse) and some people think this is a bad thing (people who believe that the care of the citizens should go beyond terms such as "socialist").

    Personally, I'd like see something that is a little more of a compromise. But regardless, I for one wouldn't mind seeing my taxes increase dramatically, provided that the money was actually going to help people in the US, and potentially myself.

    But one way or the other, Canadians pay more tax because they get more services.
  • The article says that the EU will "force companies based outside the region to charge value-added (VAT) tax." How exactly can a foreign jurisdiction force me, in the US, to do anything? Besides, every web site that sells something can't be expected to know and enforce the tax laws of every country in the world. I don't see how anyone outside the EU will take this seriously.
  • I like to draw 'physical' world parallels to what goes on over the 'net, and in this case, I don't understand what the big hub-bub is. For YEARS, there has been no sales tax on Catalog (a/k/a telephone) sales when they are out of state. Why, all of a sudden, is the Internet to be subject to such a tax?

    (and yes, I realizes that by putting a tax on out-of-state purchases, it resolves the inconsistancy. It still doesn't answer why it wasn't important until the Internet came about... Surely catalog sales are still higher than internet sales....!)

    I wish governments were more driven by logic... rather than by hype and opportunity..
  • by rgmoore ( 133276 ) <glandauer@charter.net> on Thursday June 08, 2000 @07:05AM (#1015754) Homepage

    If you actually read the article instead of just the headline, it turns out that this is much less sinister than it sounds. The proposal is actually that goods manufactured outside the EU that are ordered over the web should be charged VAT, which is perfectly reasonable. Otherwise, non-EU manufacturers selling over the web would have a substantial advantage over all EU manufacturers and non-EU people selling through every other channel. This is not some special tax that applies only to web users; it's applying a tax that everyone else already has to pay to web users, who weren't paying it already. IOW it's just leveling the playing field.

  • Well, the administrative cost of collecting the tax exists no matter how you enforce it. You could also put the responsibility on the customer in the EU, but that would effectively mean a much higher price for the customer (because he has to take into account the paperwork whenever buying from the US). In fact, if collected from the EU buyer rather than the US seller, the effective per buyer costs are likely to be much higher, so that seems like a poor option. Since the law applies to electronic transactions, most likely you are going to see very simple electronic clearinghouses for this kind of thing that makes it easy for any US company to administer these taxes.

    I think the EU might have given US businesses a choice: collect the tax yourself or let your customers pay them. Note, however, that small businesses (less than $100k in EU sales) seem to be exempt from the law altogether.

    As for enforceability, a US company doing business with someone in the EU does fall under EU jurisdiction, and the EU certainly has lots of means at their disposal for enforcement. Taxation of on-line software sales may not be feasible at all, but to the degree that it is feasible, it can be applied uniformly to EU and non-EU purchases.

  • "And as this crosses national lines, not just state/province lines, how can the EU hope to enforce this."

    For items, like software, directly sent over the net I'm not sure how they could do this, but for physical items shipped to the EU its easy to enforce. Everything sent into the country must pass through customs (at least in Canada it does) so they can verify items at that point. You won't catch it all but you should be able to catch a lot.

  • Yeah, web businesses don't want to have a web tax. But yet, when they are DoS'ed or whatever, who does eBay and Yahoo and Amazon and all those turn to to investigate?

    Yeah, they don't want to pay taxes, but they still want the government's services.

    Hey, I don't want to pay taxes, but I still want paved roads to drive on and fire fighters and cops, so I deal. It should be no different with these corps.

    -JimTheta, jimtheta@beer.com
  • I think all forms of income/capital gains tax should be removed. Instead, heavily tax all "non-essential" goods: everything except food, clothing, and housing below a certain value. This way, the poor pay _no_ taxes whatsoever because ostensibly they can't afford anything anyway; but, investors don't get hit with tax on the sale of securities until they actually try to buy something expensive (Jaguar XKR convertible, $40 million house, Faberge eggs) with the proceeds. Right now, the capital gains tax system really screws people who want to sell stock and reinvest, but can't because they would lose 20%-39% of their capital.

    Kyle R. Rose, MIT LCS
  • I don't like sales tax either but consider as an example Finland. Sales tax is 22%!!! This is added to just about everything. I think that bookstores, barber-shops, etc. get slightly lower tax rates but, for instance, for computers you are going to pay that 22% extra.

    But the way this is implemented is definetly better than in US. All stores are required by law to mark the full price(including vat, that is) on everything. So when you look at the prices you know exactly how much you're paying. Stores fix the prices to nice even amounts and you don't have to play with pennies at all. Although looking at the receipt you can afterwards curse the government for taking over 20cents for your dollar(different units of course for Finland).

    Then again.. I currently live in Delaware and enjoy the benefits of tax-free shopping all the time(except for some special items.. might be tobacco, alcohol and medication.. not too sure). Final sale price is as marked but 5 minutes down the road in Maryland everything changes.. If they have to have sales tax why not implement it properly. Do it like they do in Finland(except for that insane rate) and take the burden of dealing with prices like 11.67 away from consumer and to the store..

    Btw, I laughed my ass of about the abolishment of tax free shopping while traveling inside europe with everyone complaining and prices going up and jobs being lost and... whatever..

  • Five Seven Five! Whence came
    your inspiration? Perhaps

    Torrey Hoffman (Azog)
  • by 575 ( 195442 )
    European Tax?
    Perhaps it will be alright
    Shout "Don't tread on me!"
  • by JamesSharman ( 91225 ) on Thursday June 08, 2000 @07:12AM (#1015788)
    The EU has already ruled that a purchasing services such as web hosting inside the EU should be subject to sales tax since the service technically takes place within the EU. Surely this produces the possibility of a single service being subject to the sales tax of multiple countries (especially if other countries follow suit). The fact that the Us have already raised objection, in reality means it is likely this will never become law, the suggestion that the EU can force US (and other nations) companies to register as collectors of EU VAT is preposterous at best, idiotic at worst. The proposal would require the companies to register at any EU country and pay tax at that country rate. As the news item states, different countries within the EU have different rates of sales tax, isn't it obvious that if this happened all the companies would register in the state with the lowest level of tax? If I was a gambling man I would be willing to bet $50 that this was proposed by someone representing a low sales tax state, any takers? On a side note, proposals like this further heighten my concern that the WU is attempting to shoot itself in the foot with regard to the E-Commerce revolution. How can we (inside the EU) possibly expect to compete with US businesses online if the regulators fail to understand the intricacies of what makes the internet great? Companies within the EU are already crippled by having to charge sales tax on e-commerce transactions, if the governments really want to address the balance they should lift sales tax on e-commerce entirely (at least as long E-transactions in the US are not subject from any kind of sales tax)
  • by c-mass12 ( 197383 ) on Thursday June 08, 2000 @07:12AM (#1015789) Homepage
    Yet again people see the word 'tax' and immediately jump to to the conclusion that everything for them (especially Americans) will suddenly cost more. In Canada our taxs are 45%, what do you guys have to complain about? Anyway, in conjuction with the first comment the EU is simply enforcing an already existing VAT tax standard. This is similar to the GST (Goods and Services Tax) we have here in Canada running at about 7%. The EU is trying to ensure that the proper taxes are being paid for. With online commerce the EU is simply protecting itself. My only big problem is the actual tax rate itself. The taxes on buying something online should not be greater than the taxes on buying it at a physical location. Perhaps even less due to the lessened value-added effects that are involed in electronic media. That is, we don't pay the value-added amounts as much, because there is less being using in their creation. Like, the value-added'ness' of CDs, or paper/covers on books and all those 'hidden' costs.
  • by gatekeep ( 122108 ) on Thursday June 08, 2000 @07:12AM (#1015790)
    > This sounds like the argument they used when establishing toll roads in Illinois. Of course, it's been long since paid for and we're still paying tolls.

In less than a century, computers will be making substantial progress on ... the overriding problem of war and peace. -- James Slagle