And it’s one
two
three
what are we taxing for?
Don’t matter
we don’t give a damn
we prop up
Uncle Sam…
Yesterday, the Senate voted overwhelmingly to allow a vote on The Marketplace Fairness Act, which would allow states to start forcing online retailers with no physical presence in their states to collect sales tax. The vote will happen this week and the bill will likely pass the upper chamber. Estimates suggest some $11 billion is currently escaping the clutches of state and local tax collectors, so we’re talking about real cash here.
As the indispensable Declan McCullagh of CNET reports, this effort caps
years of lobbying by the National Retail Federation and the Retail Industry Leaders Association, which represent big box stores including including Walmart, Target, AutoZone, Best Buy, Home Depot, OfficeMax, Macy’s, and the Container Store. President Obama also supports the bill, his spokesman said Monday.
As telling, McCullagh notes that the current legislation – which would force all online retailers to comply with variations among the nearly 10,000 tax jurisdictions in the country – is totally different from earlier attempts to apply simplified taxes to online sales.
Eight years ago, Sens. Mike Enzi, R-Wyo., and Byron Dorgan, D-N.D., introduced legislation that would have allowed Internet sales taxes to be collected — but only after states simplified and standardized their tax systems through a process created in 2000. Enzi said at the time that it was necessary to require “dramatic simplification in almost every aspect of sales and use tax collection and administration” including “a reduced number of sales tax rates” and “reduced audit burdens for sellers.”
The current version of S.743, however, lacks those protections. Small sellers with no profits could be subject to audits in dozens of states. Each of the nearly 10,000 local tax jurisdictions could specify a different tax rate. Businesses would also have to figure out how to handle the complexity of integrating as many as 46 state government-supplied software packages into Web ordering systems.
[…]
[…] beyond the superficial case for “equal” treatment, there are real questions about fairness. Back in 2009, Overstock CEO Patrick Byrne talked about this with Reason TV. Internet retailers, he argued, “put a lot lesser load on a local infrastructure than it does to build a Target.” That includes not only roads and sewers, but also schools and other buildings that serve employees’ kids and the like. And we might add that just as online retailers gain an edge by not charging sales tax, bricks-and-mortars retailers have the edge in immediacy, display space, and other things customers like. Best Buy and Borders (which screwed up its web store for years) didn’t come close to going belly up simply because everybody started buying shit online (though such competition was a factor).
Reason columnist Veronique de Rugy and her Mercatus Center colleague Adam Thierer have also noted that The Marketplace Fairness Act is premised on the idea that “the the government should be able to collect the maximum amount of tax revenue from citizens, and that consumers should not be able to decide where to shop based on tax levels.” They actually present a different way of thinking about the sales tax issue that deserves more attention.
Tax competition is a good and healthy thing, as it helps to spur innovation in both the public and private sectors and enhances various “experiments in living” different jurisdictions and communities want to pursue. Residents benefit from being able to choose among different attitudes toward the level of taxation and (one presumes) the level of public services they pay for.
De Rugy and Thierer suggest that taxing goods and services at the point of origin rather than the point of definition is an easy way to keep tax competition thriving. Instead of taxing online sales based on where the customer lives, tax the purchase where the vendor is. That would not only simplify the vendor’s calculations (he/she would only need to know one tax code), it would allow for exactly the sort of competition that helped create differential jurisdictions in the past that helped nurture catalog sales and online retail.
The good news for those opposed to the Senate plan? The House is unlikely to pass similar legislation.
Yeah, forgive me for saying this, but any time we have to rely on John Boehner, Eric Cantor, or the House GOP, with its repudiation of the “Hastert Rule,” to save us, I get kinda squirrely.
And not a little queasy.
The truth is, politicians love them some crony capitalism, and with Amazon on board (having cut deals with the states in which they have a physical presence, and being big enough now to handle administrative costs that smaller competitors cannot), I fear that if Boehner doesn’t push hard to keep many GOP statists from splitting off, the title of the legislation and the support of Amazon is all the cover they’ll need to justify sucking even more money out of consumers in the midst of a moribund economy.
There’s a reason that the DC corridor is doing just fine even as the rest of the country suffers, after all. And I can assure you it has nothing to do with innovation, save for the new ways these parasites find to create and justify taxes and fees from the citizens they increasingly refuse to represent.
(h/t JHo,and Radley Balko and Nick Gillespie via Twitter)
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update: Good news! “Internet sales taxes can be pro-economic growth, not just a state money grab”
one and two are the same
[fixed-jg]
Liz Cheney should run against this Enzi whore I think
Glad this post is here.
I’ve been fuming about this all day.
Good news!
Since taxing causes economic growth, lets tax everyone at 100%.
The economy will be booming in no time!
AKA the “Stop All Amazon Competition” act.
Isn’t this the internet version of Wal-mart coming to town and driving all the mom-n-pop businesses that we love (except for their higher prices) out of business? At least in a manner of speaking?
Each night I ask the stars from above
why must I be a teenager in love?
I guess if the Federal gov’t can tax you for not buying something, the States might as well be able to tax you for buying something somewhere else.
Motherfucking idiots.
Good news! Now mom ‘n’ pop Internet storefronts will have to hire some people just to take care of their additional tax-reporting responsibilities!
It’s just regulation, and regulation is free!
you know, taxation with representation isn’t all that hot either.
If something like this passes, they need to keep the burden off the retailer. Make the buyer pay the tax to the government. Writing quarterly checks to the state government and/or risking audits of your purchases might finally help wake people up.
You are already supposed to be reporting internet purchases and paying tax on them. Nobody does it.
can we now start talking about greedy gov’t?
We’re the greedy ones, newrouter. It’s not our money, it’s the government’s money. They just let us keep a little bit of it. Sometimes.
Here in Michigan they have simply put a “use tax” calculation on the State income tax form with the amount pegged to your income. Pay or be prepared to prove you bought nothing online.
BTW, lots of those “mom ‘n pop” stores operate through Amazon.
Liz Cheney should run against this Enzi whore I think
You leave Liz alone. I need her on John Bolton’s ticket.
Oh, I know that is true here in CA, was not sure about rest of country. I know I never paid them.
I guess I hold out hope that if more people were forced (somehow) to write checks to the government, they might finally wake up. It is too easy to pretend it is not coming out of your pocket.
If your state or city is financially sound, or if it’s not and you want it to get its house in order, you should be opposed to internet sales taxes. States and cities don’t have a revenue problem, they have a wasteful spending problem. Giving them more revenue is like giving more crank to a heroin addict, or giving car keys and whiskey to teenagers.
Forcing local stores to compete with a tax free internet will have two salutary effects. First, it will make them better at what they do albeit they will have to be dragged kicking and screaming to it. Second, it will make them put pressure on states and cities to keep sales taxes low. In some places in the country the combined state and local sales tax rate is as high as 11% [Prescott, Arizona for example]
It is immoral to make anyone pay more than 5% sales tax on any purchase. Today most consumers are forced to pay quite a bit more than that and this is precisely what has stimulated the growth of internet shopping.
No better prescription for fiscal responsibility in local and state government can be found than a tax-free internet and a cap on combined sales taxes at 5% in brick and mortar stores. The brick and mortar stores could easily compete with internet competition under that sort of regime.
My info about taxes is from my sister, who does seasonal work for H&R Block in CA, so I could be wrong about the rest of the country.
I would pay it, if it was simple, I wouldn’t like it but, I’d pay it.
agree with, TeeJaw, we need to starve the beast. You got to be cruel to be kind.
I’d argue that the “Marketplace Fairness Act” is based on a flawed idea, * that the brick-and-mortar stores are suffering because of ‘unfair’ tax-free competition from online stores.
Mostly the physical stores are suffering because they suck. Most of them seem to have this idea in their heads (I blame MBAs at Corporate HQ) that the way to stay in business is to add ever more types of products to their inventory, wandering ever further away from their core competencies. Which wouldn’t be a huge problem, except now they can’t afford to stock an decent amount of inventory (styles, sizes, colors, etc.) of the products they used to be known for selling.
I buy everything except groceries online, and would do so even if the online stuff cost considerably more (which it often does, what with shipping and now sales tax). It’s the selection and availability and user-reviews and such that are enabling online stores to crush the competition, not the prices.
—
* But every word out of their mouths is a lie, and this is just a shameless money-grab, so arguing against their stated ‘reasoning’ is pointless.
how are they going to force the vendor, say in china, to collect a state sales tax?
They’ll be happy with collecting taxes from North American based internet vendors. That covers the vast majority of online transactions.
“North American based internet vendors”
how can the gov’t enforce this law in canada?
Threaten to blow them up?
If anyone needs me to order stuff over the innertubes from tax-free New Hampshire, I’ll be glad to do so.
For a small fee.
Are they adding a 3-day waiting period to pick up items from local stores to make things “fair” for online retailers?
I mean, because, this is about “fairness,” right?
Well, we certainly can’t just let the consumers decide these matters by voting with the wallets. They might vote ‘wrong’.
Stupid consumers.
NPR propaganda slut Scott Neuman thinks you are a Dianne Feinstein level retard
yes, you
after you ponder his inane math-ignant drivel for a minute or two here is the part what explains how dumb him and his Pew fag friends think you are
god bless fucking america they’re not even trying anymore
proggtards pay to be bombed
Tamerlan Tsarnaev got Mass. welfare benefits
BTW, lots of those “mom ‘n pop” stores operate through Amazon.
Roger that. A lot of them. Especially when you get into specialty items.
It’s going to be a PITFA rather than a showstopper for the Amazons, eBays, etc. (and likely those who sell through them), ’cause those guys are big enough to absorb the overhead of keeping track of 10,000 friggin’ tax codes. They won’t like it, and the customers will pay the price for it, but it won’t wreck them.
It’s going to absolutely kill the indy web stores, though.
Maybe someone will do a third-party tax API.
“after you ponder his inane math-ignant drivel ”
You know what the world median income is? $1,225/year.
I enjoy pointing out to Occupy Kids that they’re actually members of the hated rich, and that they’re going to have to give up some of the gravy.
For fairness.
Do their heads start spinning, sparking and later explode?
Usually it’s sheer denial. They have no idea of just how fortunate they are.
“can be” heh.
If the senate is leaving the taxation to the states, expect red states to further profit.
Expect blue states to see losses.