Comment Re:California's Use Tax (Score 1) 360
Should the government charge you every time you utilize the education system or the police force? Of course not. Therefore, they have to assess taxes on something else, and the general sales tax is the primary source that state governments use. It's the cost of living in a civil society.
What the government spends the money on is precisely not the point of this discussion. Let's try to stay on topic.
California's so called "use tax" is the sales taxes by another name. The primary problem with use taxes is that there are no general, reciprocity agreements between states for the refund of sales/use taxes for out-of-state buyers. For example:
I visit Illinois from California and purchase a television, which I bring back to California. According to the Illinois Department of Revenue's FAQ, I must pay Illinois sales tax at the point of sale, with no provision of getting it refunded once I'm back in California with my purchase. At the same time, as many posters have already pointed out, California expects me to tell it that I've purchased this television, and to pay "use" tax on it.
This is the kind of double-dipping that is not allowed for personal state income tax, and I don't see why it should be allowed for "sales" tax. As I've advocated elsewhere, set the sales tax at the seller's home rate, and apply it to all sales: brick-and-mortar, catalog, internet. Businesses and their customers will only have to deal with one rate, and states can compete on sales tax rates, along with personal income tax, and other measurable differentiators.
Those who suggest that "use" taxes are more fair should consider that any business operating under this tax regimen automatically accounts for "use". E.g., if I sell a million dollars' worth of physical merchandise from my store, that's a million dollars' of inventory that has to be shipped to me, processed, unpacked, stored, packed, and shipped back out. What makes that possible is the infrastructure ostensibly provided/regulated/promoted by the state, which is really what "use" means.
On the other hand, if states really intended the "use" tax to be some sort of tax on spending, then they can simply apply a formula based on the difference between someone's income and savings/investment. Obviously, what you didn't save or invest you must've "spent".
