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United States

US Internet Tax Committee Squabbles 118

There's increasing reports coming about the state of US Government's Internet Tax Committee. The committee, which stopped meeting about six months because of squabbling is back talking again about a way to acheive "tax-neutrality", meaning that all those nice tax free sales may be gone in the next few years.
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US Internet Tax Committee Squabbles

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  • Sales taxes are, normally speaking, not Federal ones- sales taxes are State/Local affairs.

    Besides, all the examples you give are not analogous. The federal government doesn't pay for that traffic. The Companies using the air freight DO pay for the use of the system.
  • Well - if you REALLY believe all the medias, you are not out of surprises. They especially like those tax subjects since it is so easy to attract some audience. Of course they could make a subject about lesbian orgies but not during prime time ;-)

    Show me a big organization (governement, company, non profit organization) that doesn't waste money somewhere...
  • Well, obviously it's usually state/local. The only thing the federal government can tax is interstate commerce (and whatever they pass a constitutional amendment for), and they're not doing much of that by ignoring the Internet and mailorder.

    But, as I've said elsewhere, I don't agree with the every-taxation-must-have-a-purpose-that-directly-b enefits-the-taxee theory, so any examples that try to fit that theory that I come up with are going to be lame. I shouldn't have tried to play that game.
  • Posted by FascDot Killed My Previous Use:

    "...you are taking money your state would usually get from sales tax."
    Nonsense. The state collects sales tax because they have sales related costs (zoning, road maintenance, etc). The question is: What Internet sales related costs does the state have? Answering "well, we've always gotten this money therefore we are entitled to it" is not an answer.
    ---
    Put Hemos through English 101!
  • by JatTDB ( 29747 )
    Why does a 19 member committee need $1.9 million to hold 4 meetings? That's just a damn waste and a half if you ask me. And do you really need a damn executive for 4 meetings? I could see hiring someone to take shorthand notes of the meetings, then having a team of people create a report based on the notes afterwards...but this is just damn ridiculous.

    They better have the best damn doughnuts in the world for that kind of money.
  • if both the seller and buyer encrypt, the tranzation, then who would know who they sold to?
    ( yea, it would be more compicated then this but if taxes make it profitable it will, mostlikely happen )

    nmarshall
    #include "standard_disclaimer.h"
    R.U. SIRIUS: THE ONLY POSSIBLE RESPONSE
  • >I mean what sense does it make that the exact same transaction in taxed if you do it
    >in person, as opposed to through the mail or over the internet.Suppose I live in CA and buy from NY over the 'net. I have no voice in the NY state gov't affairs. Why should they tax me?Also, how do 'net purchases differ taxwise from phone orders, mail orders? Why should they? Why are new laws needed? As it is, sales tax is collected if the company resides or has operations in my home state. Otherwise, no tax is collected. Of course I'm still supposed to pay sales tax to my local state on out of state purchases, it's just that that some other state has no authority to collect taxes on bahalf of another state in which it has no business. No one pays this tax, hence the urban legend that mail orders (now extended to the net) from out of state are 'tax free'. They never were. It's just that no one can enforce the rules.
  • yea, i know i shouldnt (cause in the end what, party or who doesnt matter), but i have to say cheak out the-revolution.org, or just read my sig. cause i what to live in a world that doesnt suck... errr something like that...

    nmarshall
    #include "standard_disclaimer.h"
    R.U. SIRIUS: THE ONLY POSSIBLE RESPONSE
  • The trouble is.. the US Constitution does not grant the National government the right to tax interstate commerce... only to regulate it. The whole reason the first US government was scrapped was because the customs tariffs between states were getting unbearable
  • No taxation without representation.

    I'll repeat it because it's one of the reasons Americans fought for independence from the English.

    No taxation without representation.

    This is a very fundamental and core basis of the US constitution.

    If I like in San Francisco, CA and mail order something from Clearwater, Florida. I had better not be charged any sales tax. Why? Because I don't live in Florida. I don't use their state services. I don't drive on their roads. I don't send my kids to their schools. I DON'T VOTE IN THEIR ELECTIONS. In short, I have zero say in Florida's affairs, so there had better be a zero % tax imposed upon me by Florida.

    Get it?

  • Nonsense.

    The problem is that there are so many hands in the cookie jar, and all of them have their own vested interest in keeping (and increasing) their share as much as possible. Just how MUCH do we have to spend on education before we finally realize that we can pay incompetent teachers ANY amount and STILL end up with students who are functionally illiterate? Having attended a private religious high school, it always amazed me how they could accomplish so much more with so much less.

    While CEOs do work for shareholders, at least THEY are accountable to someone. The government has proven, in many instances, that it is accountable to no one. What happens when a program is deemed unprofitable for a private sector company? They scrap the program. The government, on the other hand, often keeps right on throwing money at it. Since every new program creates a new special interest, it behooves every American citizen to see that these programs are kept to a MINIMUM.
  • Sales taxes subsidize the maintenance of the State you live in. IE. I don't use CA's bonehead highway system without any exit numbers. I don't study in their education system. I don't take sadistic pleasure out of the fact that sooner or later CA is going the way of ole Atlantis ('cept in the Pacific) Why the fuck should I pay for the shit going on in other states.

    I thinks it's quite clear that one thing slashdot has done well WITHOUT moderating is DEBUNKING big business plants posting on the site. They still don't get it. Only /.ers respond to each other.

    Thank god^H^H^HRob this isn't like WalMart's suggestion box or USENET's junkyard.
  • The government is currently demanding that ICANN explain how it has the authority to put a $1 tax on all domain names.

    Now weather or not you agree with the ICANN tax, who is there to ask the US Government where it gets its authority to tax the Internet?


    I for one view the Internet as basically a seperate country free of government interfereance AND taxes. It's kind of like a place of refuge from politics in my mind.

  • I don't quite believe in comparing countries vs countries because inheriently they are all messed up. One must look at the structure each is built upon and examine weather or not the ideas/philosophies holding the structures up are the correct ones. We've come a long way in the last millenia, I'd like to see things iterate like good software. The first time is never the right way, but why be like microsoft and keep adding to it? You need to take the good things, and figure out how to make them better, while chopping all the crap that isn't right out.

    Malachi

  • That is a very good point - often it is difficult or impossible to track exactly where your taxes go. I certainly don't think that we should only pay taxes for exactly the roads, colleges, etc. that we use - obviously most people should pay taxes into a common pool at the state and federal levels, and this entire pool of money will be divided between roads, schools, and so on. I have no argument with this.

    However, I do have a problem with contributing to a tax pool which is specifically excludes me from benefiting from it - local taxes in another state, in this particular issue. If I buy something online, it will likely be from a store in CA, and I don't live in that state so let's use that as an example. Local sales tax in CA is specifically earmarked for the use of the town and possibly the state government. None of that benefit will return to me back in my state.

    So yes, the government sells services as a package, but under our federal system there are several quasi-self-contained service pools. Tax money directed into one of those areas (like the state of CA, for example) won't provide any benefit to those who aren't a part of the CA benefit pool - people and companies who exist or visit CA. I have no problems paying a federal tax and the benefit going to another state, because all states are in the federal benefits pool. But any taxes I pay to CA won't benefit me at all if I never live in that state and never visit it.

  • 1. They may not be entirely about being fair, but they at least try. If they were just about collecting money, there wouldn't be as many tax credits around.

    2. I know. I thought I mentioned earlier (I may not have) that this should be the federal government, not the state. Of course, everyone has their own opinions on whether or not this is justified too.

    3. But you can look at it from the other side too. Any moron with a few bucks can open up a store and compete with WalMart (poorly, though). It takes some brains and knowhow(not much, I'll admit!) to compete with Amazon and buy.com. The problem is that not only can the little guy sell directly, but the big corporation can do that too. Bye-bye boutiques. Bye-bye independent bookstores.

    And I really think mailorder should be taxed too (subject to previous disclaimer!)
  • Any moron with a few bucks can open up a store and compete with WalMart (poorly, though). It takes some brains and knowhow(not much, I'll admit!) to compete with Amazon and buy.com.

    Actually the reverse is true. You can buy books from wholesalers in quantities of 5 and get the same price that Amazon pays for them. UPS will charge your customers the same amount they charge Amazon's customers. It doesn't take much of an operation to compete with Amazon on price. WalMart gets such huge volume discounts from its suppliers, plus its economies of scale, that no single store is going to be able to break even charging WalMart prices.

    Disclaimer: I work for Target. I do not speak for them.
  • Can I have my taxes back, please?

    I can see why you wouldn't want an Englishman like me voting for your president, or even governor. But it irks me when I can't vote for city council or school board. Why would my vote be different from someone who just moved in from Wisconsin, or who spends 5 months of the year in Florida (and registers their car there).

    There was the Boston Tea Party. And not one decent cup of tea has been made in America since.
  • Actually, all that would have to happen is for the gubmint to (raise the) tax (on) parcel deliveries. Fed-EX, UPS etc would have to charge more for delivery; that cost would get passed to the vendor, who would of course pass it on to Joe Happy-Customer.

    It's unlikely you'd be able to make an order by internet and then drive to potentially another state, or across country, to pick up the goods yourself. Any savings in tax would be more than offset in travel costs.


    Hope I haven't given anyone an idea here.

  • One thing I never clarified was that I am not arguing this point to prove you wrong or to express utter disagreement. You are presenting very valid points and I mean just to present the other side. I find your Internet example to be very relevant and was something I had not thought of.

    Basically the core of our argument is whether online commerce should be taxed. I feel that it shouldn't; as long as the only way people are looking at this issue is the same way they look at Joe going to Mike's store and buying something. I would reconsider if it meant repaying for the Internet I have so been addicted to for years. You see online-purchasing as something that should not be treated differently simply because of how it is done, making it taxable like the rest of purchases.

    As to UPS, I couldn't tell you the specifics, but I know they get no preferential treatment (i hope), therefore they pay taxes like the rest of us. Moving a package to them is moving a package. The government sees it the same way.
    -Clump
  • Re: UPS paying transactional taxes...

    Soem states have warehousing taxes. Do UPS distribution centers count as warehouses?

    Some states have tighter rules on commercial fuel usage than others. While not exactly a transactional tax, it does affect interstate trucking. And each state a truck regularly goes through generally needs a "license" from that state, lots of state-specific paperwork, etc., and they do have to stop at the commercial truck scales and sometimes pay weight taxes there.
    Then there are people from states w/o sales taxes, who don't pay sales taxes in neighboring states w/ sales taxes, etc. (used to see this a lot in Washington, Oregon people buying in WA and not paying sales tax. Of course, we saved enough to justify going to Portland for a weekend to not pay sales tax on our toys, also...)

    Commercial truck taxes are generally higher because one loaded semi does some insane amount of road wear compared to cars per mile. So there is that sense of a "pay for what you get (or use)" tax for commercial trucks.
  • No, the companies did this to make it harder for consumers to figure out how much profits the gas cos are making on the gas (if you've followed the "San Diego Gas Price" huff of late).

    What consumers tend to not know, consumers tend to not think about...

    Uppity consumers are bad for business.
  • Hmm... does any bitware distributed internationally get held up at customs?

    This isn't a big market now, but it could be real soon now. how does one then distinguish between bitware and data (you can't tell by looking at the bits). If the tax was levied by each router, should I have to pay one tax one night because of one route, and a different one the other, because of some other, over which I had no control over?

    that's why I think the "micropayment" stuff is bogus. There is nothing to stop a company from routing data in a way that most increases their transaction revenue, and it leaves the users with no way to choose, ultimately.

    Would long distance be very useful if instead of end-to-end taxes & fees, it was per-switch/node?
    No.

  • That's exactly my point. UPS can pay its own vehicle and fuel taxes, and I'll be happy to pay for them in my shipping fees. If someone finds a way to deliver goods with less road wear or vehicle costs (such as by bicycle courier) the taxes should be lower, and the shipping charge reduced. Putting a broad tax on internet sales doesn't allow me that economic choice, it's a blank check to politicians to find as many ways as possible to waste the money.

  • For most people, HALF of the money they make ALREADY goes to government in the form of taxes. The govt then takes these taxes and (amoungst other things) pays people to find out more ways to get our money (like licensing costs, parking tickets, misc fees, etc) Why in the HELL would you want more taxes?

    This is one issue that gets to me. Why do people LIKE to pay taxes to a government that is so OBVIOUSLY corrupt and wasteful?

    Wouldn't it make much more sense for us to choose where we use our own money?
  • Please don't think I am nitpicking but you conjured up some interest when you said "every-taxation-must-have-a-purpose-that-directly- benefits-the-taxee theory"

    People, Americans especially, _loathe_ taxes. We usually hate anything where we can't see an immediate effect. Small wonder why welfare is such a big issue--on a side note, the welfare issue is retarded as welfare accounts for about 1% of the budget while medical costs account for much more and are skyrocketing.

    So in order to get Joe American to agree to pay something, it has to be proved that what he is paying is valid. I tend to see that as good. If people are concerned where their money goes it creates a good system of checks and balances.
    -Clump
  • Sales taxes are NOT progressive. If you went to the store and the cashier calculated your sales tax based on your current income level, that would have the effect you claim.

    Instead, poorer people spend a greater percentage of their income at retail, and end up putting a larger portion of their income into sales taxes.

    That's the hazard of having a broad-based, untargeted tax like this panel is contemplating.
  • Anything that points the finger at someone is a rating. We talk to much and believe what we want to believe to frequently. People need to take responsibility for themselves and those who are dependents to them.

    Malachi

  • I like in San Francisco, CA and mail order something from Clearwater, Florida. I had better not be charged any sales tax

    And you live in what parallel-universe San Francisco in which the California state and San Francisco city sales taxes don't apply?

    This has nothing to do with living in California and paying a bunch of schmoes in Florida for your purchases -- and everything to do with living in California and paying California regardless of where your purchase is made. This is something you are obligated to do in any case, even on snail-mail or telephone based transactions, even though you don't do it now. Nobody does. It's a law just about everyone breaks because it's utterly unenforcable.

    Unfortunately, more legislation doesn't solve the problem. One of the greatest attractions to retail interstate commerce is the unenforcability of that extra 8.75% (or what have you) state sales tax. Take that incentive away and you are simply left paying extra for shipping, in which case you might as well just drive on down to WidgetCo and get your greasy paws on your purchase with instant gratification.

    Additional taxation on interstate commerce is not necessary. Existing laws and taxes suffice.
  • Internet taxes -

    Subsidising all of The Malls that no one is going to because they buy stuff online.
  • Build an online school with the same scheduling and guess what parents are going to be forced to participate or pay up.

    Internet tax, Sounds like a poll fucking tax to me.
  • What's the evil in sales taxes anyway? Everybody pays taxes, the power of internet sales lies in the broader competition (IMO). If I go to country X, and buy, say, a TV there, I'll get the sales tax back at the customs. Then I pay the local tax at my home country's customs (If I decide to declare it }8-] ). If my 500 Buckazoids(TM) total for the TV will get a kid a free schoolbook and some treatment for a hurt man in a hospital, then why not (it might be you). Taxes have their purpose.
    In my (H) opinion, there should be no difference if you by a product from another country by phone, fax, by visiting that country, or by filling a HTML Form. In the US of A, there would (as it appears to me) be use of a national systems, that contols some state-wide systems, which in urn contol the taxation in the individual cities/municipalities.

    My 20 mEuro.
  • Indiana residents are already required to report sales tax on any out-of-state purchases when filing their state income tax returns. You mean, the rest of you have been getting a free ride?
  • License plates are state/county. That doesn't pay for the interstate highway system. But nevermind
  • >(Visa converts currencies at whatever the
    >exchange rate is with no surcharge, so no loss
    >here)

    You might want to check your Visa card agreement. Most credit card companies *do* impose a surcharge over the then-current conversion rate. Generally it's only about 1%, but if you're making a large purchase that can get to be alotta bucks.
  • In case anyone is still reading this and is about ready to flame me, let me clarify. Taxes are not my friend. I would rather not have a higher tax rate. That's not what I meant. My point was that there needs to be some parity between brick-and-mortar and online retailers with regards to tax. If that can somehow be magically accomplished by eliminating all taxes, that would be better, but that isn't going to happen. Personally, I think we would all be better off if they taxed them all at the same rate. Some people don't agree with that. It seems that should be the point of disagreement, not whether taxes are in and of themselves evil.
  • Unfortunately, the Federal Government does have legal authority to tax the internet: this authority derives from its power to regulate interstate commerce.

    Absent the rest of the world, rationalization of
    sales tax as applied to the internet would most
    likely be a good thing --- one standard rule
    would make it much easier for vendors who
    right now are legally required to provide
    sales tax when purchases are made by residents
    of certain states, and not others. And it will
    prevent the day when some local bookstore, say,
    decides to sue the _state_ government on the
    grounds that it's a deprivation of equal
    protection under the fourteenth amendment
    for sales in retail stores to be taxed
    while sales online are not taxed.

    That said, this misses the fundamental problem:
    if I buy $500 a month in books from amazon.com,
    and am not now paying sales tax, and the
    US government adopts rules that would require me
    to, what keeps me from transferring my $500/month
    to amazon.uk, in which case I wouldn't have to
    pay sales tax (again)?

    I think probably in 4-5 years we'll see a massive
    movement among the governments of the industrialized world to bring their policies
    regarding on-line commerce into synch --- which
    will just mean that people who don't want to
    follow those rules move to places like
    Tonga. Still, since shipping from Tonga is
    expensive ...
  • Would you be paying sales tax to Florida, or would you be paying sales tax to California?

    A workable scheme would be this: each vendor
    collects sales tax and keeps a record of what
    percentage goes to which state. They pay the
    taxes to their local state, and pass along
    the information about how its supposed to be
    distributed, and then once a year or so
    there are massive interstate transfers to make
    sure the money ends up in the hands of the
    right state government.

    [This is essentially what happens now,
    as residents of certain states have to
    pay sales tax on things purchased from
    catalogs, etc, from outside of their states ---
    it would just get standardized across the
    entire country, which would reduce the
    costs to businesses.]
  • So you're saying the system doesn't work. I would humbly suggest that one symptom of a system that doesn't work is a rapacious appetite for tax money, particularly from people who don't use or underutilize the system.

    A symptom of systems which do work is direct payments for services rendered, in which case taxes are unnecessary.
  • The difference is with a private company, if their service is lousy I can switch to a different company.

    Not always... look Microsoft. You can't push Bill Gates out... but you can change your president every 4 year if you don't like it. You can switch AS LONG AS a governement is there to stop big monopolies.

    When you get government involved in things like schools where the budget has tripled in the past 20 years (so it's getting more money, not less) and the service is getting worse, what do you do?

    Sounds more like a cultural problem to me... people want their diploma without studying, they want to go to school and HAVE FUN instead of learning something.

    The purpose of government is to protect it's people from other governments.

    Sounds like a paranoid definition to me... a governement would rather be an organisation whole goal is to manage common properties and services for a whole nation.

    If you reduce competition (like government does) you reduce quality (see Microsoft)

    The DOJ vs Microsoft trial sounds like a good counter-example. There is no competition between Bill Gates and somebody who grew in LA South Central, because they are born in different famillies. Education and welfare are here to level the competition by giving a chance to the poor to compete with the rich. If you think putting a lion and a deer in a cage is "competition", then yes, governement is against competetion. Justice is about giving everyone a chance, and that mean giving everyone education and healthcare. It is helping REAL competition.
  • But that's a as healthy a quandary as a quandary can be - the district feels the effect of its decisions, and isn't preventing other districts from their choices.

    With Internet and catalog sales untaxed, towns have a different quandary, that they can't afford the infrastructure that makes people happy and safe while people buy from whatever source is cheap this year (greenfield big-box stores, catalogs, the Internet...).

    Taxing all *atoms* equally removes a big free-rider problem while leaving decisions about the right rate of taxation local.

    Not taxing *bits* rewards people who sensibly desire the only luxury there's always enough of.
  • "1] 'crap' not including funding for schools, medicare/aid, sceience grants, NASA, etc.,"

    Lets see...

    1) Federal funding for schools? There's a nice graph showing standardized scores decreasing the moment that federal funding was introduced. The National Education Association has 2 main interests: 1) Being in bed with all the teachers Unions, who obviously have no interest in increasing the quality of education, and 2) advancing Outcome Based Education programs as a natural outgrowth of its liberal and big government ideology.

    Hmm..sounds like Federal Funding for schools is Crap.

    2) Medicare/aid? The same program that 1) makes it affordable for 14 yr olds to have children that they would have aborted/put up for adoption before? 2) A program that gives MORE benefits then a normal entry level job, giving people no incentive to get off it? 3) A program which has taken over 51% of the healthcare system, increasing health care costs to everyone based on the time that doctors have to fill out federal healthcare forms? 4) A program that totally demoralizes and dehumanizes everybody who is on it, telling them that they can't survive without the government?

    Sounds like crap to me as well.

    3) Science grants? Run by the government, they tend to be given to the people running the most politically popular experiments, not necessarly the people who are running the most beneficial experiments. Grants are good, run by the government is bad, therefore crap.

    4) NASA has been productive because they have worked with many members of the private sector and are much more public minded then other government agencies. Why not spin them off into the private sector, where the gifted people who are responsible for their success can work even more productively and make their own decisions?

    and finally,
    5) If you want a more reasonable military budget, then we need to change our foreign policy, which currently consists of "Lets stick our nose into every other countries affairs." Of COURSE our military budget is outragious! We're trying to fight wars for 20 different countries! And in the meantime, we're pissing everybody off because we DON'T MIND OUR OWN BUSINESS! All our military needs to do is make sure that WE don't get invaded and that WE can't get nuked. All we need are troops that will fight in case of invasion and a ballistic missile defense so we don't have to worry about every damn dictator that gets a nuclear missile.

    MOST of the current budget is crap. All we need is a government that protects our life, liberty, and property. If we want the government to do anything else, it will eventually enslave us.
  • I mean what sense does it make that the exact same transaction in taxed if you do it in person, as opposed to through the mail or over the internet.

    Of course, the rational thing to do would be to have flat taxes for everything and abolish all sales taxes. Then its just a matter of some simple payroll deducations. No tax forms, etc...
  • If taxation were so simple, we would know exactly how much money is being robbed from us and we might actually be able to determine where it's all going. You know the government doesn't want that. :P

    logan

  • A long time ago, in a far away place (called New Jersey), I called up Quantex computer systems and was ready to place an order. Upon completion, I was told the final price was roughly $180 more due to state sales tax (Quantex is based in NJ). This bothered me, so I didn't order from Quantex, but called Dell instead... no sales tax (and a better computer :). For large purchases, sales tax makes a significant dent in your wallet.


    The tax issue back then (1994ish) was a big enough issue for me to change my intended purchase. If all future purchases are going to be taxed, will it have any effect on e-commerce? Will e-comm lose its glamour? Can I order from Dell Germany without paying taxes? I suppose not :(


    If I suddenly have to pay sales tax on my purchases from Amazon, the prices are no longer competitve (especially when shipping charges are added in).

  • by Signal 11 ( 7608 ) on Thursday June 24, 1999 @09:52AM (#1834462)
    There's two things the government hasn't figured out, apparently. Let me summarize for them then:

    1. Tracking things on the internet can be a pain in the arse. Just ask the NSA - even echelon can't keep up (and that's only searching for *very* specific things).

    2. The US cannot dictate international law. The internet is a *global communications network*. Almost a billion people world-wide have access to it. Unless you can convince every country that uses the internet to follow your law, you're leaving a gaping-huge-i-can-drive-a-mac-truck-through-this hole in any legislation on the subject.

    3. Two words: Tax Evasion.

    4.

    --
  • Sorry I didn't get a chance to finish this. I had somebody portscan my system, so I had to finger his system, get a name, goto his school's homepage, lookup his phone number, and ring him.

    I know it's more than 2 things listed up there, so don't flame me about it. I was kinda rushed.

    4. Enforceability. There aren't any technical ways to track usage across the entire internet. The only way this would be feasible would be by forcing ISPs to disclose personal information, and/or taxing them directly with their monthly bill. You can't do it individually, there's just too much overhead.



    --
  • I've made more than my fair share of Internet purchases, and I don't live in California, so I don't have to pay sales tax on any of it. Despite this, we really do need to tax Internet transactions.

    A lot of people say "But you have to pay shipping! That makes it even!" and they'll probably say it now, so I'll dispell that right now. It's not the same thing. Suppose there were no taxes on anything. In this case, online shopping would not have this advantage. Then say a government comes along and decides they want to tax stuff. A brand new tax. Should they not tax online and mailorder retailers because they have to pay shipping? No, that would be stupid, because you'd essentially be subsidizing retailers who ship out of state and hurting brick-and-mortar stores. Shipping represents a real cost--the amount of effort and resources that go into producing and procuring whatever thingie you bought from buy.com is higher because they have to ship it. That's not true of the sales tax you pay at WalMart. That's an external cost. But I expect we'll see lots of this argument anyway.

    That's not to say it's easy to have a tax or that we should have one right now. There is still some truth to the argument that it's a fledgling industry and might need protection till it gets on its feet (though this sort of protection tends to go on way longer than it's usually needed). Also, it would be pretty difficult to implement this kind of tax. It's only interstate commerce that we're concerned with, so Congress could do it, but that's a really big deal. It would take time. What rate do you charge? What counts as a taxable product? (the distinction between product and service is very fuzzy on the Internet).

    Ok, just my musings. Feel free to shoot me down.
  • Depends on the circumstances, actually.... If you are bying things for final use (i.e. computers for most companies), purchases are generally subject to sales tax (unless you buy them mail order, etc...). If a company buys something to use in a product it sells (computer for a company that sells video editing systems or such) then that purchase is not subject to sales tax.
  • As long as mail and phone order sales are not taxed then internet order sales should not be taxed either. As of this year only states only lose about $200M in revenue on internet sales, as opposed to about $4B through phone orders. That is because many items sold over the web, like transportation tickets, are not subject to tax. Other sales, like Dell sales to businesses, are also subject to sales tax.

    First let them collect sales taxes from LL Bean phone orders, and then I will gladly pay sales taxes on Amazon.
  • I meant to say that business-to-business sales such as Dell computer sales to other business's are NOT subject to state sales taxes.
  • 1. Tracking things on the internet can be a pain in the arse. Just ask the NSA - even echelon can't keep up (and that's only searching for *very* specific things).

    Well, it's not like it's some big mystery who the internet retailers are. If you want to keep your business a great big secret, you aren't going to owe much in taxes anyway, because your sales will be minimal.

    2. The US cannot dictate international law. The internet is a *global communications network*. Almost a billion people world-wide have access to it. Unless you can convince every country that uses the internet to follow your law, you're leaving a gaping-huge-i-can-drive-a-mac-truck-through-this hole in any legislation on the subject.

    Irrelevant. If you buy an item from overseas, it has to come in through Customs, at which point the government can hold it up at will.

    3. Two words: Tax Evasion.

    Jeff Bezos, call your office. We may have a winner here. You'll be able to completely avoid paying sales taxes despite [whatever the forthcoming legislation ends up being called], and all you'll need to do is to enmesh your company in a massive criminal conspiracy.

  • In the perfect parallel universe, hundreds of billions of light years away from us, a parallel United States Government is being heartily encouraged to institute an Internet Sales Tax on all U.S. to U.S. tcp/ip-based transactions, since they PROMISE to use every last penny collected to build a completely free public network with a direct digital line to every home, garden and rectal cavity across the nation.

    But in the version we live in, sadly, this Tax is frowned upon because it would inevitably be used to fund more great things like a War on Everything, programs to support One-Legged Women With Attention-Deficit-Disorder Who Fear Elevators and therefore cannot ever be expected to work, etc etc.

    Bottom line: broken, grossly bloated governments will never convince reasonable people to accept a new tax voluntarily regardless of its potential.

  • by K-Man ( 4117 ) on Thursday June 24, 1999 @09:59AM (#1834470)
    So far no one on this panel has given any justification for why these taxes are needed, or what they will be used for.

    Here's a breakdown of what taxes are used for currently in the US:

    Sales taxes - supplying motorists with roads, parking lots, and ambulance service so they can get to The Mall.

    Property taxes - supplying homeowners with police and fire protection, so no one will steal the cars that people need to get to The Mall.

    Income taxes - paying for a huge army to keep gas cheap so people can get to The Mall

    Internet taxes - ?

    As far as I can tell from reading articles on this panel, the main impetus seems to be to raise taxes so that internet shopping will not be cheaper than going to The Mall.
  • This all seems very presumptious of the panel to be deciding. "localities say sales taxes are a life and death issue for them, since they rely on the revenues to build schools, repair roads, and provide other essential municipal services."

    Fine, but what the government fails to realize is that "in person" transactions are exactly that. You appear in person and pay for the item as well as the tax _in person_. Therefore, you drive on roads, walk through cities, and send your kids to school--All things legitimate for taxes. When you buy online, you are not there. You may be buying from "Littletown" California, but you are not there. You are not using that place's resources, and most of all, not using anything that requires tax dollars.

    Keeping this in mind, it is arrogant and greedy for people to feel entitled to tax those transactions. For what reasons? Because localities need the revenue? A fine and legitimate argument formulated during a time when the only way to buy was in person. Therefore, taxing a budding industry with no just cause is outlandish. What is funding this panel? Tax Dollars. Has the panel been able to accomplish anything other than squabbling? No. How about giving the wasted "tax committee" money to some localities that say they are starving for it?
    -Clump
  • I agree that paying shipping in no way justifies not having to pay tax. However, I didn't find any places in your message that explained why we should have to pay them and what good they would do.

    As I stated before, this matter is being looked at by the same standards an "in person" transaction is looked at. The two are not the same, one requires tax dollars to work and the other does not, and no good justification for online taxes has yet been presented.
    -Clump
    1. They would require compliance from the merchants, like the sales tax system used in states today. A few sales record audit and heavy fines for violators will keep businesses (mostly) honest.
    2. This would obviously only apply to US sales.
    3. Quite probably. But the compliance rate will probably be quite high, and evaders will get reamed when caught.

    Of course, this only makes sense (as pointed out elsewhere on this thread) if they can define product vs. service and the associated tax rates AND make the code consistent across the telephone and mail-order industries as well.

  • Just a guess... part will go to the states to compensate for lost sales tax revenue and the rest goes into the federal coffers as an exise tax.

    Remember that in most states, you're supposed to pay a "usage tax" on items ordered via mail or phone from another state equal to the sales tax you would have paid in your home state. Not that anyone ever does this, but that's the way the laws are written.

    Why? Because it would be a heavy burden on the merchant to collect taxes at 50+ different rates and then send timely payments and proper forms to all of the states (and in some cases, counties or cities) that want the tax revenue. Hence, the merchant is only required to collect taxes in states where they have a physical presence.

  • Because when you buy things on the Internet, you are taking money your state would usually get from sales tax.

    Mail order wasn't taxed this way because it simply didn't generate enough business and current Internet sales still aren't very big, but it's growing by leaps and bounds.

    --
  • Tax debate is always the same : people want everything for free. I got a bad news for you all : there's nothing free. Someone has to pay for education, roads, police, etc... Since most citizen use those services they pay for it, in the form of tax. Asking for no tax is like asking for free stuff in a store : it cost, so someone must pay.

    Now the common answer is "but state services are loosy, and cost so much". That's wrong : they are loosy because you don't pay enough tax. You get what you pay for. The loosiest the service is, the more people whine at tax and the lower the tax are, and the loosier the service becomes because of budget shortage, and so on... up to the point where the US are : low tax (yes people : look in Europe before complaining), loosy state service, private company payed by citizen to do the governement job (private school, militia, etc...). Instead of tax, you receive bills - but in the end you end up paying for the sames services again. You still loose something : democracy. CEOs are NOT elected, they don't work for the customers, they work for the shareholders.
  • by Fizgig ( 16368 ) on Thursday June 24, 1999 @10:23AM (#1834478)
    Well, it's not as if UPS doesn't use Federal interstates and air traffic control systems and fossil fuels made cheap by the US military and buy.com doesn't use big chunks of Internet funded by the government. The main advantage is that you could lower taxes on other things (not that this would necessarily happen). Sales taxes also promote economic growth better than income taxes (at the expense of being more "unfair"; they're progressive), so maybe they could have more of one and less of the other to reach a nicer balance.

    So many Libertarians on Slashdot! (you are a libertarian, right?) Sometimes they tax things just so that they can increase the big-pile-of-money-that-disappears-every-year.
  • How about the roads for the UPS truck to drive on?


    -Bruce

  • Luckily, their reach is limited by their political jurisdiction....and internet sites can move in the twinkling of an eye.

    Can't you see it ?

    "Gee , we have to move to Aruba, they're going to start taxing us here."

  • I think you are in a small minority in your method of using the internet to purchase things. While many people still don't order things directly through the web, that is changing. And most people who mailorder stuff use a credit card, if only because it's simpler and faster. Many places now are starting to have online ordering be the *only* method of ordering they accept.

    However, I do agree with your final statement regarding taxing interstate transactions. The states clearly can't tax this type of thing (constitution explicitly prohibits states taxing trade across their borders). As you said, .gov will have to tax all or no interstate transactions. And how much do you want to bet that if they tax all interstate transactions, then they have to tax all intrastate transactions too, or go back to none at all?

    The very nature of the internet resists regulation, restriction, and censorship. Any attempt at any of these will have to fight a very up hill battle. If a government is going to operate at all, it does have to collect some taxes and tariffs, but taxing everything is not the right thing. Other ahenglanderhem countries have gone down the road of taxing anything and everything to the point of ridiculousness ahemciderahem before, and shit came down. Any person who has some common sense and does not have a vested interest in government getting bigger can tell you that it is better and more reasonable to work on cutting crap out of the current budget[1] than it is to just keep on taxing things more and more. If you think about it a bit, taxes are probably (I am in no way an economist...) a significant cost of inflation. Tax goods, their price goes up, so people need to be paid more so that they can afford things. Tax incomes more, same result. Tax businesses more and they need to raise the price of their goods to maintain their profit margin. Tax property, and people need more income to pay for it. Etc. ad nauseam.

    [1] 'crap' not including funding for schools, medicare/aid, sceience grants, NASA, etc., but most definitely including making the military budget more reasonable. While multi-billion dollar NASA projects are a bit excessive, NASA has shown that it can make things more economical wit ha smaller budget. Now give them their money back and watch them flourish! I would wager that the vast majority of technological advancements in the last 30 years or so have been greatly affected (positively) by NASA, if not driven entirely by them.

    Wow, that rant diverged from where it started a long ways!
  • UPS makes money by being cheaper than going to get the goods yourself, i.e. by using tax-funded resources such as roads and oil at a far lower rate than other methods. What would be a good way to tax UPS:

    1. a tax on all internet purchases, at the same rate, regardless of weight, distance, size, or speed of delivery?

    2. A tax on brown uniform shirts

    3. A tax on fuel, or a road toll that charges for each mile that UPS drives, adjusted for vehicle size. Taxes on aviation fuel, and landing fees to pay for airports if overnight shipping is used. Taxes on property where goods are stored, going to local police forces and fire protection.

    (hint: if in doubt, choose the longest answer)

  • I guess it is time to incoporate my company as an off-shore entity on a tax-free island. I will just have distribution in the states ;)
  • Why not merely go the european route and employ a value added tax (VAT) to every step of the product creation process and stop trying to figure the taxation out at the consumer level.
  • Major support for the Internet Tax Panel is from Mall owners.
  • Now the common answer is "but state services are loosy, and cost so much". That's wrong : they are loosy because you don't pay enough tax. You get what you pay for. The loosiest the service is, the more people whine at tax and the lower the tax are, and the loosier the service becomes because of budget shortage, and so on... up to the point where the US are : low tax (yes people : look in Europe before complaining), loosy state service, private company payed by citizen to do the governement job (private school, militia, etc...). Instead of tax, you receive bills - but in the end you end up paying for the sames services again. You still loose something : democracy. CEOs are NOT elected, they don't work for the customers, they work for the shareholders


    The difference is with a private company, if their service is lousy I can switch to a different company. When you get government involved in things like schools where the budget has tripled in the past 20 years (so it's getting more money, not less) and the service is getting worse, what do you do? Pay your tax on a school you won't use and have to pay for a private school or should we have a choice to pay for one or the other? The purpose of government is to protect it's people from other governments. Therefore, we should support things like the military but not things like welfare, schooling, etc. If you reduce competition (like government does) you reduce quality (see Microsoft)
  • Taxes are just plain bad anyway. Centralized economies have a tendancy not to work very well (see Communist Russia), and all taxation does is put money (the base economic unit) into the hands of a central authority. The reason that capitalism, and the internet itself, both work so well is that they are decentralized. The rules of supply and demand, followed by those motivated by greed, ensure a fair and balanced distribution of resources. The more you tax, the more you muck with the only economic system that has proven to be stable in the long run.

    So even if a 1/3 tax is low, it is still *way* too high of a tax. You want money to build roads, charge a toll. Don't go taxing something else for it. You want money to improve the internet, then tax the internet. But if you're not buying routers and pipelines, leave the system alone.

    --TANSTAAFL
  • I personally tend to the libertarian side of things... but here's a reply that's not a flame.

    1) taxes aren't supposed to be about equality, nor about fairness per se.. They're supposed to be about funding the government's actions. Now, taxes should be levied fairly, naturally...

    2) Current taxes *are* levied fairly... it's just that a state has questionable authority to levy sales tax on a transaction that doesn't clearly occur between two people/bodies within the state. After all.. it's not a business that's being taxed, it's a transaction. The state just collects from the business when the time comes...

    3) Consumers are better off, at least for now, with mail/phone/internet orders being free of sales tax. This is because these kinds of transactions give much less of a competitive advantage to large corporations. The little guy can make a buck selling directly... but that might not be the case if additional taxes are levied, making internet orders more expensive than buying from the local mall. This hurts consumers because they lose choice, in two ways:
    a) fewer retailers mean less competition (and more government yoke when the hounds of DOJ harass the remaining retailers. see WalMart, Barnes&Noble)
    b) fewer small retailers mean less choice of product, because small retailers are more likely to have a diverse selection, especially of specialty items that big stores refuse to touch.
  • Yeah.. would communities rather collect sales tax on some adult book store.. or would they rather the book store close down, because the business went over to internet porn?

    zoning vs budget.. what a quandry for the cities!
  • Why should there be parity between "brick-and-mortar" and online resellers when there is no existing parity between b-and-m and catalog/phone sales?
    The catalog sales approach seems to be much closer to the flavor of e-commerce, and seems to be a far more suitable model of how e-commerce should be treated.
  • On the flipside... when a guy in San Francisco buys from Clearwater... the Clearwater guy has no representation in CA's legislature, so the California sales tax shouldn't apply.

    (though I wouldn't mind a few of Jeb Bush's supporters replacing the voters of San Francisco :-) Then maybe California wouldn't have the big lie in sales tax -- a "temporary" 0.5% increase in tax rate due to the San Francisco earthquake... for roughly 10 years now.)
  • "You may be buying from "Littletown" California, but you are not there. You are not using that place's resources, and most of all, not using anything that requires tax dollars."

    What? Do you think the product you've ordered from location X just vaporizes and appears on your doorstep?

    Even at the most basic level - someone has to bring you your precious little gadget - probably on a truck over public roads. The police/fire/health professionals in location X still need to do their job, protecting your precious little gadget both before and after you buy it, and be compensated accordingly.

  • If I buy a material object and have it delivered to my material person, I'm using local resources - both for the delivery (roads and workers) and to support my person. These deliveries should be taxed, maybe by ZIP code, which is in all delivery records anyway.

    Some people will live in wellfurbished communities, buy a lot of stuff, and pay for it. Some will live in poor or privatized communities; their taxes will be low. (Some people will set up delivery sites in low-tax neighborhoods; this happens with bricks-and-mortar stores too, but is usually less important than convenience.)

    Some people will live in nice places but have lower loads on services. If I buy an immaterial object and have it sent over the wire, I'm making so much less load on local services that it's fair not to tax me - it would, in general, be good for many places if luxury spending weren't on physical objects. (Besides, these would be incredibly hard to track, so let's not.)

  • Well, it's not as if UPS doesn't use Federal interstates and air traffic control systems and fossil fuels made cheap by the US military

    And it's not as if UPS doesn't pay taxes for these services (airport fees, fuel taxes) and doesn't pass them along to the shipper (who in turn passes them along to guess who).

    buy.com doesn't use big chunks of Internet funded by the government

    Ancient history -- the bulk of Internet bandwidth is commercial these days.

    The main advantage is that you could lower taxes on other things (not that this would necessarily happen).

    That's an understatement! "Raise tax X so that the government can lower tax Y" has so little credibility that it makes "The check's in the mail", "I gave at the office", and "I'll still respect you in the morning" look like eternal verities.
    /.

  • So many Libertarians on Slashdot! (you are a libertarian, right?) Sometimes they tax things just so that they can increase the big-pile-of-money-that-disappears-every-year.

    That pile of money is going to keep disappearing, year after year, as long as it keeps getting replenished by taxation. Please do not feed the bears.

  • Of course, the rational thing to do would be to have flat taxes for everything and abolish all sales taxes.

    Certainly, expecting small-scale Internet retailers to keep track of every state and local tax system is preposterous on its face.

    Prediction: If you dig, you'll find that much of the support for this notion comes from established Big Business interests, up to the old trick of using government regulations to squash competition. (Regulations favor large businesses because the relative cost of compliance is smaller for them -- and the more complex the regulations the bigger the advantage for someone who can afford to hire specialists to wade through the red tape.)
    /.

  • "Well, it's not as if UPS doesn't use Federal interstates and air traffic control systems and fossil fuels made cheap by the US military and buy.com doesn't use big chunks of Internet funded by the government."

    To that I will say very good point. I somewhat disagree about the UPS, as they pay taxes on the resources they consume regardless of how the transaction was conceived. Using the Internet that was funded by the government is a very valid point. However, it was not stated that such funding would be reimbursed through an "Internet Tax". If any political body should have a say in whether there should be a tax or not it should be the organizations that funded the Internet, not something newly-formed and unrelated to the subject.

    As to me being a Libertarian or not--I am not. I have not even purchased a single thing online and not once benefited from not paying a tax. I do, however, value my rights and the rights of others. I have no problem paying taxes, however this tax is rediculous and I can see the negative implications if this were to come to fruition.

    -Clump
  • Well, I'm the kind of person who thinks that federal funding for idealistic projects is a good thing. I'm not against welfare or funding the NEA or NASA or federal parks with federal money (though these agencies, like all others, could use a little bit of pruning). I suspect you would disagree with that, and if so I doubt we'd come to any agreement on this anyway, though I do respect your opinion. I've got my one vote!
  • How about the taxes UPS pays for gas, weigh stations, licenses, etc.?

    --Corey
  • And then there's the Trekkie's "Taste of Armegeddon" logic: If we made tax painless, people wouldn't gripe about it enough, and there would never be any hope of it ever stopping (unless Captain Kirk beamed down and refused to pay his taxes).

  • You got to be kiddin me..They make enough money on us every year.
  • by Malachi ( 5716 )
    I'm not going to waste much time on this post but I give you something to think on.. We are taxed too damn much in this country as it is. Gas, Food, Home, Auto, Income, Tariffs, and the list goes on. You think we are going to break a state because we are doing E-commerce? Bah. You need to read up on what Libertarians believe, the governments hosing you every day and you're making up excuses so they can. -Malachi-
  • From the NY Times, 6/13/99:

    "The lost revenue is going to be made up by the consumer at some point," said William McCabe Jr., chairman of the International Council of Shopping Centers, a trade organization for the shopping center industry.



  • I suppose all the 60 minutes or Datelines that have been on taxation application issues were all bunk made at a media attempt to disuade people and government. The government is notorius for handling funds like a sive. Can we remember how much the toilet seats and staplers were that were talked about? Or how about th 50c per page copies they were doing. And don't tell me to look to europe, thats crap too, you need to look to notions which are being avoided because the change is too great for commoners to handle, or the well informed become self dilluded.
    -Malachi-
  • I'll agree with you - normally taxes serve a useful purpose by funding services that the community needs. I think what confuses people in the debate over sales tax on Internet purchases is that there isn't a specific service that would be funded by the tax that isn't already funded by another tax. If you look at the components of a purchase over the Internet, amazon.com pays local taxes and UPS pays local taxes as well as transport taxes (gas tax, weight penalties, etc). Your connection to amazon.com is paid for in the Internet connection fees that you and amazon.com pay. These fees are loosely related to the amount of traffic the two of you generate. If any of these components don't generate enough revenue to pay for what they use ('net backbone, local law enforcement, interstate highways) then those taxes should be increased, or the level of service lowered.

    If I actually went to the amazon.com warehouse (wherever it is) to get my book I would expect roads, law enforcement, and emergency 911 services over the course of my trip. Theoretically that's what local sales tax pays for, right? So far I haven't read a better explanation. If I'm buying over the Internet, I don't need these services, so charging me a separate local sales tax doesn't make sense. Increasing the taxes on the components of my online purchase (warehousing, shipping, and 'net connection) does make sense, because even an online purchase does use resources and must be paid for. I think more people here would support the idea if it were explained that way. As it is, it seems like states are trying to replace the exact amount of money they are losing in local sales, rather than looking more closely at what happens during an online purchase.

  • I used to agree with you that it would take a horrible revolution before we could set things right. Too many stupid people in place, right? Well.. Over the past 3 or so years I've been watching the political clime in my area. I started following the Libertarian's points of views and the polls were horrendous, the first year there were only a smattering of 50-150 votes per candidate within our local primarys. Now though we are in the thousands. This year I think Libertarians will actually get some recognition in the Presidential. No, I don't think we will win, but I do think more people will become attracted.. a lot like open source. One thing you also might not be thinking of is how stupid people really are. Those people who grumble about paying uncle sam, don't go and vote. How ludicrus is that? If the people who voted was pitted against the people who didn't vote, there would be more non voters.. People need to speak up. People live like this because they're not paying attention to the power they really have.

    -Malachi-

  • It's not really the exact same transaction, though, because you didn't actually visit amazon.com (or wherever). If you had been there in person, you would have expected roads, law enforcement, etc. and you would have paid local sales tax for them. But if you aren't there, you don't need those things. So why should you pay for them?

    On the other hand, you did use more bandwidth than you would have if you had gone in person. So you can eventually expect to pay more for your 'net connection, as can your online retailer. There's also shipping costs and amazon.com's local costs, which are taxed and may increase the sale price of your book. But if the 'net is the only infrastructure that you personally are using, then that is the only thing you should be taxed for.

    There are costs to a transaction either way, but it would be better to slightly increase existing taxes which already pay for services, than create a new tax which isn't directly linked to a service provided to the community.

  • The problem is - the governement sell services as a package. There is no tax for a specific service anymore. People would like to know that tax X is for service Y, but it doesn't work that way (whatever some politicians say). You might not go to college or drive but your tax will pay for teachers and roads anyway. In this aspect the governement is managed as a (very big) company. It takes taxes where it cans to fund its activities. I don't see what's wrong with that, it's part of the idea of "public service" : providing a group of services for everybody, no matter rich or poor you are, or if you personnaly need it or not.
  • Well, it's not as if UPS doesn't use Federal interstates and air traffic control systems and fossil fuels made cheap by the US military...

    Already paid for by taxes on fuel, airplane tickets and income, respectively.

    ...and buy.com doesn't use big chunks of Internet funded by the government.

    The part of the Internet actually funded by the government is a small fraction of what's in use today. Not to mention that Uncle Sam got out of the Internet business a few years back, so they're not putting any more cash into it.

    There is simply no good reason that Internet commerce should be taxed any differently than any other commerce.
    --

  • "Even at the most basic level - someone has to bring you your precious little gadget - probably on a truck over public roads."

    There already exists a tax system that pays for all of what you mentioned. The people who bring me my gadget pay taxes regardless of the medium, and we all pay taxes for the roads.

    My problem with this is there has been no good justification. The tax system is already in place and further taxation would be charging two times on the same product. Further, this matter is being decided by everyone but the correct authorities.
    -Clump
  • As far as the local taxes... they also pay to build/repair roads the employees and shipping companies use.

    Then what are gas taxes for? Recently, local gas stations stopped posting the amount of tax that made up the price per gallon of gas. This is worrisome, since raising this tax would be almost invisible to the average consumer - most people would assume that it's just a sporadic increase in the price of gas.
  • There is simply no good reason that Internet commerce should be taxed any differently than any other commerce.

    Um, that's the point. It's not taxed like any other form of commerce.
  • Amazing! Someone on slashdot who's never bought anything online!

    As I said earlier, our disagreement is probably more fundamental than can be argued out. I don't think taxes need to have a specific justification (though I certainly see the problems this creates!)

    And you're probably right about those examples; they (especially the internet one) weren't that great.

    But I have a question: Does UPS have to pay any kind of transactional tax that would justify it's use of the Interstates in the hypothetical pay-for-what-you-get taxation system? (i.e. something besides a corporate income tax) I can't really remember.
  • Exactly how does one make the distinction? I have made numerous purchases involving the Internet, but in most case, the actual transaction involves the telephone or snail-mail.

    Examples:

    • I find a for-pay web site that looks interesting, and in order to subscribe, there is an option to dial a 900 number which will give me an access code and charge my phone bill.
    • I've been known to order from amazon.com. While I place my order through their web interface, I still mail them payment via check or money order.
    • I use www.pricewatch.com to find the web page of a reseller who has good prices on hard drives. They have a great posted price, but I telephone to confirm they have the item in stock, and then snail-mail them my actual order along with a money order for payment.
    • #4 Widgets are notoriously difficult to find. I visit the Widget World web site, and email them for them to snail-mail me a printed catalog, from which I make my purchase via check/money order.

    In each of these cases, the sale certainly involves the Internet, if only to make me aware of the existence of the company I'm doing business with. But in each case, the distinction becomes blurred as to whether it was really an "Internet sale", or merely standard mail order that took advantage of the net as an advertising medium.

    Unless .gov is willing to tax all interstate transactions - period - there are simply too many exceptions and borderline cases to make this a sensible law.

  • Hmm... No, as much as I'm not an anti-tax nut, that the politicos realize there is a transaction stream out there that they don't have their fingers in they get all hot under the collar.

    It would be far easier to just wrap a tax onto the Shipping side of things, but then UPS, FedEx et al will get all hot and bothered.

    Taxing the shipping of real goods makes sense (in the historical model). Taxing the trade of bits? The sales tax I pay at my local Wal-Mart is ostensibly to pay back the municipality for the services provided to that Wal-Mart. Perhaps it needs to be done that way.

    Besides, even with our funky cable modems and xDSL, our bits are already being taxed. So we, the end-user, don't see the line-item on our bill, but it's figured into our cost...

    Also, shipping is where the on-line co's wrap some of their profit margin, too. Not everyone will live at the distance from the retailer where it actually does cost $5.00 to send a memory SIMM. So they charge a flat price for shipping...

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