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United States

California Considering More Internet Taxes 530

dcg writes "San Francisco Chronicle is reporting on how web taxes could help the states, especially California, with its budget woes. One particularly disconcerting comment is from California's Controller Steve Westly. 'In addition to sales taxes, Westly said he is considering a tax on Internet access like those that appear on telephone bills. He also is looking at a tax on software downloads.' Would this affect only purchased software, or could sourceforge.net become a source of revenue for the state..."
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California Considering More Internet Taxes

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  • by jmuzic1 ( 637784 ) on Saturday February 08, 2003 @07:48PM (#5261086)
    Amazing how quickly they look to tax more instead of looking at their budget and ridding themselves of all the bloat of government.
    • by numbsafari ( 139135 ) <<gro.su4dsb> <ta> <nosliws>> on Saturday February 08, 2003 @07:58PM (#5261151)
      It's not their fault they have no fiscal discipline!

      Get with the friggin' program!

      It's the fault of the evil corporatists who exploit the citizens of california by providing them with high paying jobs and great products and merchandise, forcing them into a culture of consumerism. It's the fault of the wealthy exploiters who evade their tax obligations! It's the fault of McDonald's because they sold hamburgers to people who consumed them and got fat and have health problems! The citizens didn't know that eating 3 fatty burgers a day and a large Chocolate Shake with every meal could kill! They were innocent!

      It's the fault of the gun companies because they sold guns to the criminals--forcing them to commit crimes and thus forcing california to build prisons!

      If only California were more like Europe. Stupid American capitalist bastard! You are so simple! You just don't get it!

      Blame someone else, that way you look really intellectual!
      • I know you think you're being funny, but California's deficit is almost entirely to blame on the price-fixing during the energy shortage which is in fact the fault of, big business.

        It is also GW Bush's fault for not intervening (by ordering FIRC to control prices). He chose not to intervene for two reasons: 1: To try to sink Grey Davis (which didn't work), Republicans argued unsuccesfully that the energy shortage was his fault, even though it was a REPUBLICAN governor that deregulated the industry. 2: Enron and other energy companies in which GW Bush is vested in benefited from the energy crisis. Enron avoided bankruptcy for an extra year with the cash from ripping off California.

        • Why didn't California build more power plants instead of buying their energy?
          • You can't just slap together a power plant in a few months.

            California hadn't built any plants for years before the power crisis, possibly a decade or more. The main reasons are all the environmental studies, regulations, NIMBYism, and protestors.

            Californians are just reaping the fruits of their political choices, plain and simple.

            Bush and his gang might have left California in a lurch just for "payback". As a Republican living in California, I somehow find all of this less than amusing.
            • > California hadn't built any plants for years before the power crisis, possibly a decade or more. The main reasons are all the environmental studies, regulations, NIMBYism, and protestors.

              This is dead wrong. You don't know what you're talking about. There have been zero plants denied for environmental reasons.

              California has more generating capacity than it needs. The "crisis" was created by Enron gaming the markets.
              • by rworne ( 538610 ) on Sunday February 09, 2003 @06:40AM (#5263417) Homepage
                California has a long approval process. If you know what that means, it means "environmental impact study" along with whatever permits are required.

                It's been commonly said that no power plants were built in the 90s, and the environmentalist websites try to debunk that. After reading what they say, it turns out there were some plants built. All small, mostly non-utility plants.

                In this article [sandiegometro.com], near the bottom, it talks about environmental and (mostly) political opposition to natural gas burning power plants that are popular in California.

                But we may be both right, here [216.239.53.100] they talk about this:
                What most likely stopped many power plants from actually being built is a powerful NIMBYism (not in my backyard) mentality in California that is in no way limited to "environmentalists." Almost no one -- neighborhoods, businesses, golf courses, hotels, etc. -- wants a power plant, a landfill, radio tower, etc. in their backyard. The environmental "extremists" that often oppose such projects no matter what, often team up with local citizens and businesses (i.e., non environmental extremists) to stop the project. However, many projects are stopped by NIMBYism alone (i.e., little or no environmental opposition was present). NIMBYism and Environmentalism are not the same entity, although NIMBYists often use environmental arguments and they

                often enlist environmentalists and environmental groups for support. Ask yourself two simple questions: If someone proposed a new powerplant or new landfill near your neighborhood or business, would you try and fight it? Do you consider yourself a
                liberal environmentalist?
        • by Fastball ( 91927 ) on Saturday February 08, 2003 @08:49PM (#5261408) Journal
          I know you think you're being funny, but California's deficit is almost entirely to blame on the price-fixing during the energy shortage which is in fact the fault of, big business.

          This is patently false. The California state legislature voted to cap energy prices for consumers under the guise of deregulation. So you had consumers paying a fixed price for energy despite an energy shortage. And when there's a shortage of anything, prices rise. So there you had Californians paying pennies on every dollar the state of California expended for energy.

          California's energy plan was anything but deregulation. You don't get something for nothing, but that's how the California state legislature saw it, and so you have them to blame, not one man in a marble house thousands of miles away.

          • by forii ( 49445 ) on Saturday February 08, 2003 @09:25PM (#5261550)
            This is patently false.


            Patently False?

            Not [chron.com]

            quite. [miami.com]

            Sure, California's scheme for "deregulation" had some major flaws, but that doesn't excuse Enron, as well as other energy corporations from committing wire fraud, to the point of almost bankrupting the state.

        • Unbelievable (Score:3, Insightful)


          It's unbelievable the amount of ignorance that exists when it comes to the California energy crisis.

          First, I would like some sort of explanation and proof that California's deficit is almost entirely to blame on the energy crisis? Is the fact that most states are experiencing deficits also do to the California energy crisis? Or, perhaps, it has something to do with the fact that our economy has slowed down. Or the fact that during the 90's the Californian State Government increased spending way past inflation.

          Second, the "deregulation" scheme enacted by the legislature was hardly a joke. They did not setup anything even remotely recognizable as a free market system.

          Third, GWB and FIRC ended up setting price controls.

          Fourth, GW Bush was not and is no longer vested in energy corporations.

          Do you wish for me to continue? I'm not some huge GWB or Republican drone or fan, I just hate seeing all the FUD that surrounds the entire energy issue.

          • Fourth, GW Bush was not and is no longer vested in energy corporations.

            Nice of you to contradict yourself in a single sentence.

          • Re:Unbelievable (Score:3, Insightful)

            by Brat Food ( 9397 )
            I would like some proof that bush is no longer vested in any way with big enrgy.

            For that matter, lets look in to cheney.

            Not vested means he also has no "good friends" and campaign donators in that bunch. It means he owns no stock or any company that benifits from the companies in question.

            GWB and his posse is also were the ones who said there was no price fixing going on the whole time, even though now execs are coming forward ADMITTING to it.

            You dont need to be a GWB fan to get your facts wrong.
    • an interesting effect would be to see allot of E-Tailers move out of California if this were enacted.

      Maybe say to Oregon or Texas, just somewhere more buisness friendly.

      Then they would be screwed out of alot more than sales tax.
      • by satch89450 ( 186046 ) on Saturday February 08, 2003 @09:31PM (#5261581) Homepage
        an interesting effect would be to see allot of E-Tailers move out of California if this were enacted. Maybe say to Oregon or Texas, just somewhere more buisness friendly. Then they would be screwed out of alot more than sales tax.

        San Francisco considers the Sierras "their" playground, so why not move closer to where you play? Nevada welcomes any and all e-business. Indeed, there is a pool of high-tech workers already in place, sufficient housing that is considerably less expensive for employees that move with the companies, crime rates that compare very favorably when compared with the Bay area (for example, there have been seven murders where I live in the past 11 years), an international airport that is underutilized right now, and Internet bandwidth almost for the asking. South Reno is where many e-tailers have already set up shop...but there is plenty of room for more.

        One reason that some e-tailers came here is that Nevada has no reciprocal arrangement with any other state regarding sales tax. (Don't believe me. Check it out for yourself.) With less than 2 percent of the population of the United States, our sales tax situation is much more friendly. Instead of hundreds or thousands of taxable areas to track, you only have to worry about 17 areas -- the Nevada counties. Out of state taxes? Right now, you don't sweat it if you are completely in Nevada. Let the other states deal with the problem as they see fit. Until the Feds step in, don't expect Nevada to force the burden of collecting other states' taxes on you. (But get rid of all ties to all other states to make this work.)

        The body of Nevada law is MUCH simpler, and the taxes are low. (Governer Quinn is trying to raise business taxes, but the level is nowhere near where California has staked a claim on yourrevenue.) Traffic jams? Where?

        The advantage that Reno/Sparks/Carson has over Las Vegas/Henderson is that we don't have an upcoming water shortage. That makes Reno more attractive to businesses currently in the Southland who want to move east to avoid Sacramento's nose in their tent.

        Think Reno is too expensive? Consider Carson City. Fallon (Amazon.com and the Navy did). And other places in the Silver State.

        If you are worried about the morals of Reno and vicinity, you need not be. During the past decade, the southern part of Reno has become family-friendly. For example, by law there are no brothals in Washoe County, and the "strip joints" are all in the northern, industrial part of the city. There are some parts of Reno where Bay area people would feel right at home, as we have many of the same chain stores and amenities -- but in addition our houses have open space and lawns, instead of the alleys that characterize many of the housing developments in places like Mountain View or the "row houses" of 19th Avenue. You can find schools in which the parents have a lot of say in what is taught in them. Parks? Yes. Ask a Realtor for more information on what Reno and vicinity has for the kids.

        If you are rich and clean, consider coming to my home, Lake Tahoe, to set up shop. Incline Village has many people like me just waiting for you to bring your business and succeed. Or, if you prefer a louder lifestyle, consider coming around Wayne Newton's land on the East side of the lake and give Stateline and Zepher Cove a look-see.

        It's four hours from where you are now (less if you are on the East side of the Bay) so you can still easily go to the places you know and love, and see the friends that decide to stay behind.

        All you have to lose are the individual income tax payments -- Nevada has a personal income tax rate of 0.000%, and even the current Governer isn't asking for a change in that tax rate. Sales taxes are less, at 6.0-7.5% throughout the state. Property taxes are less than those in the Bay area or Los Angeles, according to people who own houses here and "there".

        Check it out. Many ex-SF people live here now.

    • by $$$$$exyGal ( 638164 ) on Saturday February 08, 2003 @08:14PM (#5261236) Homepage Journal
      Wal-Mart, Target and Toys R Us voluntarily began collecting online sales taxes in most states and all three now charge Internet sales tax in California.

      It looks like some big companies decided to voluntarily start collecting taxes, so you can't just blame the government. However, it looks like there is one concrete reason why these companies are starting to tax, and one speculative reason (on my part). First, the article says they are collecting taxes, now, so that the states won't "back-tax" them in the future. Second, I speculate that some of the big companies that are ready to start taxing want to force everyone to start taxing. That way they will have a leg up on the competition. Some companies won't even be able to afford to implement a tax system, they'll just go out of business.

      --naked [slashdot.org]

    • by Dr.Evil ( 47264 ) on Saturday February 08, 2003 @08:24PM (#5261293) Homepage

      Spoken like a true Libertarian (or a demagoguing Republican). There are budget cuts happening all over California. They're coming in public schools [nctimes.net], rural healthcare [ojaivalleynews.com], state parks [sfgate.com], higher education [stateline.org], and more. Those are services that most Americans, and especially Californians, think are important. In fact, in order to cover the necessary gap, Gov. Davis has proposed more cuts than new taxes [ocregister.com].


      Incidentally, I decided to reply instead of modding you down, even though zapping your "insightful" bonus was very tempting.

      • There are budget cuts happening all over California. They're coming in public schools

        Good. There is olny a faint coralation between spending and quality of education.

        Germany and Japan spend less, per child, on education and they both kick our asses.

        Short answer: fire half of the school administrators, get rid of the retarded children, raise teacher saleries, get rid of the 'team sports', and ban disruptive children permently.

        That would solve most of our problems in our education system and we'd end up spending less.

      • by Shivetya ( 243324 ) on Saturday February 08, 2003 @08:54PM (#5261427) Homepage Journal
        There are literally hunderds of programs that they should cut but they don't. However being the typical politician Gray has decided to piss people off into allowing him to tax ANYONE and EVERYONE by raising the spectre of nuking those prized programs.

        In other words, Gray is doing what he has always done. There are two kinds of government employees. Essential and non-essential.

        That should be an indicator of who needs cut.

        For comparison, a local county is 67 million in the hole. They refused to cut their arts budget of 6 million, now tell me, whats more important? Buying art from people who can't sell it otherwise, or paying teachers?

        That is the biggest difference between libertarians and those other two. Governments currently spend money on stuff they have no business doing so. But they have the guns to back them up, the idiocy of the general public to hide behind, and many cohorts in the press and special interest groups to run cover for them.
      • Makes no sense, especially when the jobs can be filled by part time high school kids. When it comes to budgeting state jobs, they really have NO IDEA how to go about it. I think they look at what other companies are paying employees and tripple it! WHY?
  • Beauracracy... (Score:4, Insightful)

    by Kipper the Llama ( 454021 ) on Saturday February 08, 2003 @07:49PM (#5261090)
    This proves the first law of beauracracy, a government organization would rather increase it's power than die. Rather than take the obvious course of slashing budgets, the state governors are raising taxes- which is going to deepen our recession.
    • Re:Beauracracy... (Score:3, Insightful)

      by localman ( 111171 )
      Right you are - and hardly surprising. As far as I can tell any organization (government, corporation, church, etc) is basically a living thing made up of humans. Of course it would rather grow than die.

      I think at some point it will become fundamental to treat people and groups of people as two distinct lifeforms competing in the same arena, but with vastly different motivations and values. I think mankind's success depends on understanding and controling this balance.

      Right now most still believe that groups should have the same values as individuals because they are made of individuals - but just look at the cell/human relationship to see how much a group cares for the units of it's makeup.

      Both are necessary, but I hope we learn to reign this stuff in before it's _way_ out of control. Or is that already the case?

      Cheers.
      • Re:Beauracracy... (Score:3, Insightful)

        by mc6809e ( 214243 )
        Right you are - and hardly surprising. As far as I can tell any organization (government, corporation, church, etc) is basically a living thing made up of humans. Of course it would rather grow than die.

        Of course, corporations and churches depend on their customers to willingly give them the money they need to continue living. Governments on the other hand take the money by force, upfront. The consumers of government services just have to hope to get their money's worth.

        Corporations aren't allowed to break down your door and arrest you because you didn't pay them for a service they provided.

        A government can. They'll even force you to pay for their services whether you asked them to provide them or not.

        The relationship is fundamentally different. People who know they can MAKE people pay them for whatever crappy service they provide are going to take it easy. Tell me, what would you do if you could MAKE people give you their money? Would you work real, real hard so they'd feel a little better about it? Or would you take it easy?

        Governments know they can mostly "take it easy." Thats why they are less efficient.

    • Re:Beauracracy... (Score:2, Insightful)

      by jfern ( 115937 )
      Umm, they are slashing budgets too. Problem is they have this tiny $35 billion deficit they're trying to close.
  • Solution! (Score:5, Funny)

    by swordboy ( 472941 ) on Saturday February 08, 2003 @07:50PM (#5261100) Journal
    Why don't they just tax the tax revenue? There'd be a recursive loop and money FOREVER!
    • Uh... it'd get to zero eventually if they were rounding. =)
    • Re:Solution! (Score:2, Informative)

      by jmuzic1 ( 637784 )
      They usually do. The lottery is a voluntary tax of which winnings are taxed. The only problem is that the recursive loop is that the contents is a decimal lower than one raised exponentially.
    • Why don't they just tax the tax revenue? There'd be a recursive loop and money FOREVER!

      New York already does this on certain kinds of car lease payments... No joke.
    • Re:Solution! (Score:5, Informative)

      by baywulf ( 214371 ) on Saturday February 08, 2003 @08:08PM (#5261204)
      You do get taxes recursively. You pay income tax on your salary. Then when you buy something, there is a sales tax. Then the company which got your money pays taxes on it. Then they pay their employees and that gets taxes. And it repeats on an on.
    • Unfortunately, if it is a percentage below 100 it is asymptotic :).
  • Tax on Downloads (Score:5, Informative)

    by cgori ( 11130 ) on Saturday February 08, 2003 @07:51PM (#5261107) Homepage Journal
    They are simply closing a (well-known) loophole.

    If you buy expensive software (i.e. chip-design tools at >$100k per user) and you take delivery via FTP instead of physical media (CD/tape), you do not owe sales tax. On a big purchase (multi-million $$) the 8% is a BIG deal. It happens a lot in the Valley.

    I'm surprised that it took the bureaucrats in Sacramento this long to find a revenue "source" this big.
    • by ewhac ( 5844 ) on Saturday February 08, 2003 @07:56PM (#5261130) Homepage Journal

      "This software is
      licensed, not sold..."

      A popular quote from most end-user license "agreements" (which are all unethical, anyway). Different tax rules apply for license transactions than sales transactions.

      Schwab

    • by cervo ( 626632 )
      The article did not mention if the tax is on commercial software, in which case a sales tax would take care of that. Ie if a company buys a license/something normal taxes should take care of that ftp transfer. If the whining government gets their way with internet sales taxes anyway. Or even a tax on license transfers based on money, if the reply about different taxes for license transfers is true. But the article made a specific point of mentioning download tax. Does this mean that even free software, shareware software, GPLed software, etc. is going to be charged?

      The article mentions "In addition to sales taxes, Westly said he is considering a tax on Internet access like those that appear on telephone bills. He also is looking at a tax on software downloads."

      What does this mean? Especially with regard to "software downloads". At first I was thinking that commercial software ie you buy windows or something and in the future Microsoft offers a cheaper version for delivery by download and here they have it. Naturally you pay a tax on the commercial price was my thought, but this expression is too vague. It does not limit it to commercial. The tax could be $.50 per software download of any type. Also keep in mind that the country is controlled by big business. Someone like Microsoft could easily pay off the government to make it a reality. A tax on any transfer could easily hurt free software. I download tons of free programs that end up crap and I delete. But occasionally I find that one gem that makes it all worth while. This would definitely encourage people to experiment less and then the company with the best advertising budget would probably win your business, instead of Joe Blow out in the middle of the desert who writes a freeware version of the same program.
  • I can't wait... (Score:5, Informative)

    by swordboy ( 472941 ) on Saturday February 08, 2003 @07:53PM (#5261117) Journal
    With all this taxing crap, I can't wait until the US realizes that they are shooting themselves in the foot [startupjournal.com]!
  • Overheard (Score:5, Interesting)

    by Anonymous Coward on Saturday February 08, 2003 @07:53PM (#5261118)
    "I know as well as anyone how much we owe the tech industry, but what are the geeks going to do if we piss them off with Internet taxes? Leave?"
    -- California governor Gray Davis at a private dinner
  • How?! (Score:5, Funny)

    by Velocity4 ( 183357 ) <felixsargentNO@SPAMattbi.com> on Saturday February 08, 2003 @07:53PM (#5261120)
    Ok, I'd like to ask how the heck you're going to do this without a massive invasion of Privacy?


    I can imagine my statement:
    You have downloaded: SupAR WArEZ!!! $0.50c
    You have downloaded warez, and and broken copyright laws: $5000


    Also, doesn't it defy the entire point of the internet? (apart from nuclear safty) a free database of information for the education of the people?


    Why doesn't the federal government help CA out, we 'were' a major source of taxes, all we need is a break. Sigh...

    • Re:How?! (Score:2, Interesting)

      Yes, it IS an insane invasion of privacy. But, on the other hand...

      Why doesn't the federal government help CA out, we 'were' a major source of taxes, all we need is a break. Sigh...

      You're also (and have been) quite a sinkhole too. The only thing that's kept you afloat so long is your insane amount of Congressmen (and thus, Electoral College votes).
      • Excellent point about California's # of U.S. Representatives. It will be interesting now to see if California can siphon off more pork from the federal budget than Massachusetts.
    • Re:How?! (Score:2, Funny)

      by Sheetrock ( 152993 )
      You have downloaded: SupAR WArEZ!!! $0.50c
      You have downloaded warez, and and broken copyright laws: $5000
      You have downloaded warez, and and broken copyright laws, and then found out the software was the wrong version to partition your 120GB drive: priceless
    • "Why doesn't the federal government help CA out, we 'were' a major source of taxes, all we need is a break. Sigh..."

      Sorry, the federal goverment is too busy spending the 2.23 TRILLION budget to help.

      Sure am glad the small goverment GOPers are running things...

    • "Why doesn't the federal government help CA out, we 'were' a major source of taxes, all we need is a break. Sigh..."

      Why would a Reblican federal govt. help out an incompetent Democratic CA govt. that can't manage their spending and think regulation and higher taxes are the answer to solve all their money problems. How Davis got re-elected after the CA power fiasco just goes to show how out of touch with reality the ave CA voter is.
  • welcome to Nevada (Score:5, Insightful)

    by technoCon ( 18339 ) on Saturday February 08, 2003 @07:54PM (#5261124) Homepage Journal
    how long would it take for every server with any kinda taxable activity to relocate to Nevada? or Vanatu? You can bet that after any government starts taxing something, it'll never be free again. The power to tax is the power to destroy. This is an opening move in the destruction of high tech in California.

    My dad worried about out-sourcing union jobs to Mexico. I worry about out-sourcing programming jobs to India. What's to stop the out-sourcing of all the other high-paying professions to low-tax areas?
    • My dad worried about out-sourcing union jobs to Mexico. I worry about out-sourcing programming jobs to India. What's to stop the out-sourcing of all the other high-paying professions to low-tax areas?

      You know, your first two sentences make sense.

      But that lest sentence is HORRIBLY misguided. If you honestly believe taxes are at all related to businesses moving jobs oversees, you really need to catch up on modern times. India is practically a communist country, and let me tell you their taxes and government restrictions are far more oppressive than in the US. But they have lots of people. People are just like any other resource, thus the term human resource. When the supply far exceeds the demand, prices drop.

      Even Adam Smith realizes this one and advocates tariffs as a result.

      FYI, Nevada has in the worst fiscal shape in the whole of the US, even worse than California. And besides, jobs will never move too much to that state because its a hell hole. They would never be able to attract the talent they are looking for. Some REALLY want to eat at other restaurants besides casinos and Applebees.
      • FYI, Nevada has in the worst fiscal shape in the whole of the US, even worse than California. And besides, jobs will never move too much to that state because its a hell hole. They would never be able to attract the talent they are looking for. Some REALLY want to eat at other restaurants besides casinos and Applebees.

        Well, the restaurants arguement is right. I'll give you that. Fine dining outside of a casino is hard to find...

        But NV does have no corporate or personal income taxes. Thats its strongest point. One of the things that made me proud was that Vegas was home to Westwood Studios. At least until a few weeks ago when EA decided to close down their center here in vegas.

        Its weakest point is public education. Parents who treat schools like daycare centers, give teachers no respect, and then complain about their kid not learning.
    • Re:welcome to Nevada (Score:2, Interesting)

      by spartan ( 30665 )
      WRONG! I live in NV and have a purely online sales business (except for about 5-10% mail order) and I'm looking at alternatives. Sure, Nevada has low corporate filing rates and no state income tax. But when the issue is attracting, and maintaining the attraction for customers, having no sales tax is a larger advantage. I think the more avantageuous thing is to offer sales without the burden of sales tax. Therefore Oregon makes great sense to me. And, I'm looking at moving from NV to OR. As our server is colo in NV, I don't know how that will all work - the sale is executed on the server inside NV, but shipped from OR (possibly in the future anyway).

      And no jackass, not everyone who lives in NV eats at either McDonalds or a Casino. There are just as many selections of great eating establishments here as anywhere else.
  • They'll also be implementing a double-vision tax for people with more than one eye, who could potentially view internet content up to double the amount of times and still only get taxed for it once.

    GMFTaxsujin
  • by fobside ( 140397 ) on Saturday February 08, 2003 @07:55PM (#5261127) Homepage
    I still see the Internet retail stores as a flawed design. Yes, buyers should be paying taxes based on where the product ends up, like any other company that ships products. Though, even without taxes, why would a consumer pay $10 shipping for something he can get a 10-mile drive away? I fail to see how Internet retail really makes it, except in a few rare cases where products are rare.
    • Though, even without taxes, why would a consumer pay $10 shipping for something he can get a 10-mile drive away? I fail to see how Internet retail really makes it, except in a few rare cases where products are rare.

      Easy! In response to your question, because people are lazy. I'm going to be ordering a $7 part for my Nokia cell phone (for which shipping will probably be more than $5) because finding a local place that sells that piece of circuitery is too freaking hard!

      Another reason Internet retail works because the operating costs are so low - all you need is a good web designer to make the business you run out of my kitchen look like a Fortune 500.

      Most consumers won't care that the cost of $100+shipping DVD player is now $106+shipping.

    • The main incentive to buy online is that the prices are so much better, even after adding shipping/handling. Even though we have no sales tax here. Plus, the retard local business owners here, generally speaking, are lazy, and not at all clued-in to the customer service idea.

      The 1 thing that makes me buy locally vs internet is speed. If I need something right away, I'll drive to the store and get it. If it can wait, I'll get it online.
    • As an employee of a profitable online retailer (admittedly a rare beast) I would say that convenience and selection play a large role. The product doesn't even have to be that rare (my company [zappos.com] sells shoes). It can be a pain to find a specific thing out in the world if you know exactly what you want - online it can be a breeze. In the real world, even if you know where it is, a 10 mile drive and purchase can take 30 minutes of your time, wheras an online purchase can take under 10 minutes - although you do have to wait for delivery... but it's still a net gain in many circumstances.

      All I can say is that a lot of people find value in online retail. If the retailer is smart at keeping their operational costs low, they can be quite successful.
    • Though, even without taxes, why would a consumer pay $10 shipping for something he can get a 10-mile drive away?

      You would if you're like me and don't have a car. It's usually a lot easier to find something online and have it shipped to your door than harass someone else to drive you to the store.
  • by gmuslera ( 3436 ) on Saturday February 08, 2003 @07:56PM (#5261133) Homepage Journal
    This could be very unfair, how that be controlled? By monitoring access to software vendor's ftp servers? sourceforge? This will mean once and for all the rise of p2p protocols, for a good reason now.

    Or counting bandwidth used? This will cause problem with any piece of software that check for updates (antivirus, "smart" operating systems, advertising software/spyware, etc).

    At least if they return taxes on received spam some people will not be so angry, in fact, could mean finally that "get rich fast" schemes work at last.

    • This could be very unfair, how that be controlled?

      Enforcing a download tax would be much like enforcing things like a liquor tax or an income tax. There IS something of an honor system in the tax code. You can choose not to pay, and they probably won't find you, but if they do you are fucked. Thats why only small businessmen and drug dealers take the risk. Someone with a large business or a visible business has too much to lose.

      There are ways to indirectly find out this sort of information, but it can be done. Look at gangsters getting busted for not reporting income realized from the drug trade.
  • Revenue booster? (Score:5, Insightful)

    by Sheetrock ( 152993 ) on Saturday February 08, 2003 @07:56PM (#5261136) Homepage Journal
    Like most people, I enjoy using the Internet on a daily basis but consider it a luxury I could live without. Taxing Internet access makes more sense than taxing phones or food or other staples of life because it is generally the well-off that can afford access to it.

    Likewise, Internet sales taxes are desperately needed. Not only are the well-off more likely to purchase things online, but the fact that they can dodge sales tax by doing so while the poor must pay when they go to the local stores is nearly an insult: this is one of those 'rich getting richer' schemes that doesn't get much airplay, but it should.

    I'll agree that it's been a pretty fun ride, but we've already discovered that the Internet isn't free. Now it's time for the tax collectors to catch up.

    • Taxing Internet access makes more sense than taxing phones or food or other staples of life because it is generally the well-off that can afford access to it.
      Last I checked, I dont pay sales tax for my groceries..at least in my state.
    • by apweiler ( 300457 )
      I have to disagree on some of this. You're right, stuff bought on the net should be taxed the same way anything bought the usual way is.

      But I think that the internet as such - not to be confused specifically with e-commerce - will become more and more (and to some extent, is already) of a 'staple of life', like the phone system already is.

      Just one example - I'm in the process of applying to and entering UK university. Right now I'm organizing a trip there to visit some of them before I make the choice. I'm arranging the visits by e-mail - sure, it would be possible by phone, but I wouldn't say this is a luxury, it is a real practical improvement.

      I think the net will become much more important, and certainly is not a luxury for many people even now. "The internet isn't free" - well, a lot of stuff is. In cases where money does change hands, taxes should be paid as in regular offline business.
  • Please don't be suprised to see the same thing
    happen, or at least, proposed here.

    Measure 28, a temporary income tax hike,was
    defeated during a special election in January.

    The state is looking at some very serious cuts,
    including literaly putting some mental patients
    out onto the streets.

    Things are getting so desparate here that I
    would not be suprised that something like this
    does not happen.

    In fact, I think that I should be suprised that
    it has not been at least proposed by now.

    Mark
  • by Anonymous Coward on Saturday February 08, 2003 @07:58PM (#5261147)
    I have a better idea for getting California out of its budget problems. Shake Gray Davis upside-down until his campaign donations fall out.
  • If I pay an internet access tax like I do the 911 tax, does that mean that I will no longer have to pay for internet to some ISP, instead I will just get it?
  • I can understand why a California resident should pay sales tax for goods they buy from a California company on the Internet. The thing that wasn't clear to me from the article is: Is California going to ask that residents of other states pay CA sales tax on goods the buy from a CA company on the internet? The article seemed to hint at that possibility.

    If it comes to pass, I predict the rise of an Online-only retailer in Oregon. The ads will say "Come shop in Oregon, where we don't have any sales tax." Powell's will get a leg up on Amazon, who will complain mightily.
  • by Silvers ( 196372 ) on Saturday February 08, 2003 @08:01PM (#5261171)
    I would like to know what exactly he considers an internet download. Because technically, almost everything that flows through the Rx pair on your NIC is a download. So, taxing slashdot index.pl for every view? Or maybe only 'programs', but then are java applets and client side web code considered programs? Or how about online games, would those be taxed per connection, per hour?

    I can only see that part failing miserably, or if it doesn't, that man is going to lose his office quickly.
  • by jsimon12 ( 207119 ) <.tzzhc4. .at. .yahoo.com.> on Saturday February 08, 2003 @08:03PM (#5261180) Homepage
    All this will do is accelerate the exodus of high tech firms from California. Many companies are already moving operations to cheaper states, Sun for example is moving a lot of its operations to Colorado. All this taxing is going to do is accelerate that process and leave California with a smaller tax base in the future. Few politicians seem to think more then 2 or 4 years down the road, basically what they need to do to get reelected.
  • Is it flat? Is it per unit? What are the units, minutes or megabytes? Et cetera.

    What the fuck is going on with the American economy anyway? We should have been able to recover from the dot-bomb by now, what the fuck is Bush up to in his ivory tower anyway? The national standard of living is steadily declining...

  • by t0qer ( 230538 ) on Saturday February 08, 2003 @08:09PM (#5261208) Homepage Journal
    Dear sirs,

    I know you are looking for an alternative source of revenue for the state. However I feel that an internet tax will only stifle a already hurt sector of the economy.

    Driving up the 101 by where I live, I see thousands, if not millions of square feet of office space empty. If you had not worked here during the boom you would not know that at one time these offices were filled with people paying income tax to the state.

    Which brings to mind a question for me, what happened to the 100k in taxes you took from me over a 3 year period between 1997-2000? I know I was not the only person who contributed that much in taxes, yet I only got 6 months unemployment and still can't find a job in IT. Why should I try and go into another career? I'm 30 years old, this is what I trained for, and right now my skills are being severly underused.

    So again, please don't add more gas to this fire by taxing an already hurting economic sector. We're suffering out here in Silicon valley living month to month on the small consulting jobs which are nothing more than a handout compared to a real paycheck.

    And yes John Katz, i'm still eating ramen.
    • Ditto. My unemployment benefits are gone. Nobody is hiring. I'm 43 and can't easily retrain (especially since I have no money to pay for retraining).

      California is already one of the highest taxed states in the country. We have sales tax, income tax, employment taxes, and anything else you can think of. We also have idiots like Davis and his cronies sucking money into their personal black holes.

      Special note to Governor Davis:

      Here's a simple lesson in economics. When there is less money to go around, you must spend less! Even my 12 year old daughter can understand this basic concept. Stop trying to figure out how to squeeze more money out of me, I don't have any. Stop driving business out of the state and you might be able to collect some income taxes from a few hundred thousand currently unemployed tech workers. Then you can piss it away with more of your pork-barrel projects that you use to pay off your political pals, you criminal piece of shit.
  • I think he might be making noises about adding an internet access and download tax in order to appear more fiscally conservative than Gray Davis. If he actually implements such a tax, it would probably sink his chance at winning the election.
  • and I get taxed for using the line?
  • All I want to know is how NH managing to survive? The have 0% tax... (I am sure there is some catch, but I don't live in it, so I don't know).
    • Simple -- high property taxes. It's the way all low/no-sales-tax states make money.
    • I don't live there either, but I'm guessing it has something to do with getting used to a situation. For instance, a smart person on a low income adjusts to this income level, making smart purchases, only buying what they need, not wasting money on stupid things they don't, etc.

      But a rich person who's never had to worry about money (or someone who's become accustomed to being rich) won't be like that: they'll waste money on all kinds of stupid things they don't need, like a Lexus SUV instead of a Civic, $30 soap bars from the department store instead of Ivory or a generic brand, $50 hair-salon shampoos instead of Head and Shoulders, an expensive house that was the maximum amount they could get a mortgage for, etc.

      Cut the poor person's income a little, and they won't complain much because they already had put themselves in a state where it wouldn't hurt them: their house/shack is paid off, they bought their car with cash, etc. Cut the rich person's income a little, and suddenly they can't make the house payment or the SUV payment. But they're so used to the $30 soap bars and dinners at expensive restaurants that they can't cut most of these frivolous items in order to balance their budget, and they're up to their eyeballs in debt anyway so it probably wouldn't be enough.

      Everyone knows that governments are amazingly gifted at wasting money; I think NH just never had much money to begin with, so they never got in the habit of wasting so much.

      Besides, I'm sure they have some taxes, such as gasoline and property taxes. These aren't affected by the economy, unless people suddenly stop driving or move out of the state.
  • Why is the solution to all Governmental budget crisises is to find new and creative ways of nickle and dimeing citizens no matter what they do? Gov. Davis has sunk California into a massive deficit that its is larger than the rest of the US states, combined! Socking the California citizen in the pocketbook because of his poor management.

    If my family has a budget crisis, we cut expenses. You can't always get more money but you can always find places to not to spend it. When Government says its cutting spending, it generally means they are cutting the rate of growth not its actual size.

    Too bad this will never happen. Too many people are interested in taking other people's money for their own causes and politicians are more than happy to assist -- both parties.

  • Enron et al. (Score:3, Interesting)

    by wytcld ( 179112 ) on Saturday February 08, 2003 @08:22PM (#5261278) Homepage
    California is in the hole because they allowed themselves (with the insistance of the Bush government) to be ripped off for billions by the Texas energy firms. Trying to recover the losses to the mostly-criminal energy sector by going after the mostly-ethical tech sector is really, really wrong. California has to go after the thieves that done it to 'em, not round up the innocent and good-willed in order to make up for what they lost to the thieves.
    • Re:Enron et al. (Score:3, Insightful)

      by mako ( 30489 )
      First let me say nice troll.

      This is of course patently untrue. California is in this position due to mismanagement. Gray Davis is a moron. California wanted to purposefully make deregulation look like a failure so they passed laws doomed to fail. Combined with the inability of utilities to build power plants due to the Green i.e. Communist (all environmentalists hate private property rights but this is another topic) policies in place.

      So the people of California got a wonderful lesson in supply and demand. Unfortunately instead of learning their lesson they whine and cry like the children they are.

    • Yes, Enron and the whole power debacle had its role, but only a minor one. The real root of the problem is quite simple. While the Internet bubble was pushing California state income tax revenue to unsustainable levels the state government grew to consume every penny of revenue that came in. Now that the bubble burst the state is starved for revenue. Last year Gov. Davis signed a $75B budget. This year the proposed budget is $62B including $4B increase in income taxes and other fees. Roughly a 22% year to year decrease in revenue, but back to roughly what the budget was in 1999.

      Virtually every tax paying citizen and business in California is seeing their incomes and revenues reduced in a similar manner. In many cases the reduction is MUCH greater than just 22%, but we are all dealing within it our own manner. It's time that both the federal and state governments learn to have the same basic fiscal responsibility asked of citizens and business in boom and bust cycles.

      During the boom there were proposals to actually give tax rebates back to the taxpayers because we were simply paying more than the state government needed to run operations. In retrospect, this would have been the wise thing to do because it would have put some brakes on the state government growing to an unsustainable level. Instead, we are now seeing the politicians scramble to protect their favorite pork projects while funding for basic services such as schools, public safety and other public infrastructure are reduced to level less than they would have been had the boom never happened.

      Too often it seems people are quick to criticize those who want to see smaller government or at least put severe limits on its growth. Often there are good reasons for doing so other than the accusation such people are stingy, selfish or worse.

      Any one actually interested in seeing the numbers may be interested in this link [ca.gov]. Check out the Chart A, Historical Data, General Fund Balance [ca.gov] document.

    • Personally, I think California should secede from the union. They're already the world's six-largest economy, if I recall correctly. The other western states, like AZ, NV, CO, NM, OR, WY, ID, and MT could join them. People and attitudes between the east coast and the western states are so different, it'd be better if they were separate.

      Besides, if the government in DC tried to stop us, we've got the UFOs in Nevada and Arizona, so they'd be no match for us!
  • When you're taxing "software downloads", where do you make the distinction between non-executable data, and executable software? Does a document containing a macro count? If I sell you a .pdf file, doesn't it "program" your computer to show you the document? The distinction between data & software is a hazy one.
  • by ShatteredDream ( 636520 ) on Saturday February 08, 2003 @08:32PM (#5261336) Homepage
    Instead of scaling back its operations and looking for useless projects that could be eliminated to fund core services, the state blithely adds new taxes. Why not just do something really progressive like *gasp* privatize the public healthcare and housing services. Let poor citizens in good standing keep their houses, apartments, etc that they get from public housing. You want to give them a sense of pride? Do that or give them a really really small 0% interest mortage on it to the tune of say.... $50-$100 a month. That way they're paying their way like everyone else and surprise, surprise the rest of California isn't paying for them anymore, and is now getting money back!

    California is what Socialism on a greater scale in the US would be like. Non-essential public services such as free healthcare for the indigent, public housing and welfare services aren't here to actually fix a problem, they're here to punish the middle and upper classes. Don't give me that bullshit about "that's not really Socialism." No shit sherlock, Socialism exists only on paper and in the head of utopian hippies who are pathologically incapable of dealing with reality. The reality is that big government destroys civil rights and encourages violence. You want to make a difference? Vote for a Libertarian and take that percentage of your income that would have gone to welfare and give it to a homeless shelter or a free medical clinic. Those people genuinely care. The money won't get lost in a bureacracy and will actually help the poor.

    I live in Virginia so I can only watch CA's problems from afar. CA's problems are of their own making. The people of california deserve this problem. I have no respect for a group of people that have police departments as institutionally corrupt as the LAPD yet have enough faith in the government that they think gun control will protect them. You can't trust your own fucking cops and yet you give up more rights to big brother. What will it take Californians? Bin Laden getting ahold of a stolen nuclear weaponing and vaporizing LA for the majority of you to realize the government can't provide for and can rarely pre-emptively protect you?
  • In Australia at least, we have tax collected on all purchases from Australian companies distributing goods and services to people located in Australia.

    Ie. the GST (Goods and Servicecs Tax), similar to VAT in England, and other systems around the world.

    The Americans really need to implement a flat tax rate across the country at a federal level for this kind of thing.
    Having lots of different tax rates is fine if you are only selling your goods in one area, or you are big and can afford the complex tax software.

    An internet tax system will hurt small businesses unless it is a simple flat rate everywhere, or tax is played from the purchase point.
    ie. Order from New York pay New York tax, although this system would be rorted as well as companies move to areas with the lowest tax rates.

    • The problem with some sort of VAT or GST is that local govts often use sales tax to fund local projects. Where I live, in the past few years sales tax has gone from 7.0% and will soon be at 7.5% because we need the money to build new water intake lines from the lake and more higways. If we couldn't adjust the local sales tax, we'd be screwed.

      Its a degree of flexability our county most definately needs.
  • then they can just go right ahead.
  • by Billy the Mountain ( 225541 ) on Saturday February 08, 2003 @08:46PM (#5261398) Journal
    In addition to sales taxes, Westly said he is considering a tax on Internet access like those that appear on telephone bills. He also is looking at a tax on software downloads.

    Heh, software downloads would undoubtedly apply to JavaScript, since JavaScript is software. I can see it now, Granny blunders into a porno site and after experiencing a JavaScript blitzkrieg winds up owing the state of California $47.86.

    BTM
  • Let's tax all political contributions!

    Bribes must be doubly taxed!
  • Oracle (Score:4, Funny)

    by SashaM ( 520334 ) <msasha@@@gmail...com> on Saturday February 08, 2003 @09:00PM (#5261452) Homepage
    Well, they have to get the money to pay for all those Oracle licenses somewhere...
  • Collecting Ahead of Time
    Wal-Mart, Target and Toys R Us voluntarily began collecting online sales taxes in most states and all three now charge Internet sales tax in California.

    So if the government doesn't come after them for back taxes, then they get to keep the current sales tax. That means more money for the online entities that start charging tax sooner.

    Charging for downloads? I usually don't complain, but that sucks. There's one good drawback I can now quote for living in a capitalistic society.

  • by mikeboone ( 163222 ) on Saturday February 08, 2003 @10:03PM (#5261752) Homepage Journal
    California will now be able to buy more copies of Oracle.
  • The root... (Score:3, Insightful)

    by Brat Food ( 9397 ) on Saturday February 08, 2003 @11:54PM (#5262180) Homepage
    enron fun [sfgate.com]
    Califronia got hit in 2 huge ways at te same time. The above is just further proof of what people already knew: Enron and other energy companies bilked california out of millions? billions? This, at a time when californians were in a slide due to the .com crash. California may have made some mistakes in its deregulation, but this was blatent abuse of the system, which was allowed by the president to go on WAY too long. You dont drain that much money out of an already faltering economy and expect it to do well, and its people to be prosperous. This brings us to internet taxes: just a bad idea. Eventually, every state is going to want a pice of the action, and in the end, its the consumer who gets dicked once again, and it will be the end of online shopping as we know it. I already find it hard to order items from in state, as shipping and tax together mean i can get a better deal locally a lot of the time. Maybe thats what they want, but I feel regualtiong this will be stupid, and it will do nothing to help the economy in the long run.
  • Wait a minute! (Score:4, Insightful)

    by stinky wizzleteats ( 552063 ) on Sunday February 09, 2003 @03:20AM (#5262826) Homepage Journal

    States are having budget crises for the same reason we are - there's a RECESSION. I therefore don't subscribe to the idea that the people, suffering under the same fucking recession, should somehow be expected to foot the bill to maintain the pre-recession budget levels of state governments.

    If tightening our belts is good enough for us, why is it not good enough for them?

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