Ramblings of an old Doc

 

The Marketplace Fairness Act… at least it used to be called that, is now being pushed through the Senate. Thanks for the “fairness”. They probably won’t even read it… as usual.

“Proponents argue the proposal confirms the ability of states to charge sales taxes as they see fit, and they have begun to frame the issue as a matter of states’ rights. In a letter to the Senate, David French of the National Retail Federation argued the tax changes are needed to modernize the market.”

- http://news.heartland.org/newspaper-article/2013/04/19/major-online-sales-tax-bill-being-rushed-through-senate

What Mr. French doesn’t relate to is the fact that allowing one state to tax a resident of another state (we’re not talking income tax) is a significant expansion of state taxation power which should end at the state’s border (logically). Now, tax collection would occur where the customer is located, not the business. That won’t be tolerated for long. By removing the actual physical presence standard and as a result of tax competition among the states, this would probably increase the taxes on everyone by the state where the business is located levying some sort of fee on the business selling the goods. This legislation encourages states to collect taxes across their borders from businesses with no recourse. Thus states will compete for revenue by increasing cross-border taxes, rather than lowering taxes. An incentive to raise taxes can never prove beneficial.

Another shot in the neck of the businesses and consumers. In the end, it will, of necessity, hurt our overly robust [insert sarcasm] economy. Typical.

The other byproduct of this benighted legislation will be the establishment of yet another crazy precedent. Once passed, the amendment would be used as an exemplar and precedent for other bills that dramatically expand state tax authority have enough support to be fast-tracked to the floor of the Senate without adequate discussion in committee… clearly in just whose interest? Not mine.

Just to let you know why those great deals you used to get on the net will be disappearing.

Source:

http://news.heartland.org/newspaper-article/2013/04/19/major-online-sales-tax-bill-being-rushed-through-senate


Comments (Page 1)
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on Apr 20, 2013

Looks like another money grab scheme.

on Apr 20, 2013

What a load of horse manure . Since when has anything the government's done, been logical...

 

on Apr 20, 2013

Orwellian naming as usual.

 

Marketplace Fairness is not forcing me to buy from localized monopoly chains by penalizing me for taking advantage of "fair market" capitalism to force companies to compete, and reward the better one. Of course, NAFTA is okay and even subsidized and corporations won't be "hit", this is just another means to attach costs to making choices to prevent choices from being made. Using prices, wages and taxes the poor can be ensured to be poor forever.

 

This started with the laws aimed at buying out of state/country cigarettes/alcohol. As some regions began using "punishment taxes" to regulate the impact of "bad habits" on the poor only, the poor responded by going to other places, using competition in the free market. Does this value only apply to corporations now? If these taxes were designed to have equal impact, the "punishment tax", or as Indiana calls it, the "Sin Tax" would scale with income to ensure that rich people are "just as restricted" from smoking/drinking as poor people.

 

To keep people down, laws were made and proposed ever since to penalize everything, including choice. If my locality only has monopoly chains I don't want to buy from and way overpriced crappy mom-and-pop stores who are just as bad, yet 2 miles to my east in Ohio, I can instead buy from a different seller, why shouldn't I? Punishing me for that reduces the choices I can make.

 

If my city decides to impose taxes against a product, and I can avoid the tax the next town over, then I should be allowed to make a choice and not be punished for it. If my town makes a law against R-Rated Video Games, the government shouldn't be able to stop Steam from selling me a game with adult content, and they shouldn't be allowed to punish me for using steam rather than going to EB Games, the only place in town (which I won't shop at).

 

One precedent this could lead to is city/county taxes being added to the penalties, so that if you go to the next town over to eat at a restaurant, get some gas and watch a movie, you have to pay city and county taxes. No surprise that all of these laws target citizen commerce and not corporate commerce, regulate humans but not the market.

 

I wish I were a corporation, because I would have more rights than I do as a human.

on Apr 20, 2013

Well for one thing, don't buy things online if you don't have too.  Some folks because of their location are stuck with buying online, I understand that. 

Whatever happened to supporting you locale businesses?

on Apr 20, 2013

Philly0381
Whatever happened to supporting you locale businesses?
I'm sure alot of people do that. But it may be that the local business doesn't carry what you are looking for. I support local business if it has what I need. 

However I will wait to put gas in the car, until I am going to another town where I can get it cheaper then in my town. Sometimes local businesses charge more for things, well often they do.

on Apr 20, 2013

teddybearcholla
But it may be that the local business doesn't carry what you are looking for.

teddybearcholla
I will wait to put gas in the car, until I am going to another town where I can get it cheaper then in my town.

 

Ditto.

on Apr 20, 2013

Philly0381

Well for one thing, don't buy things online if you don't have too.  Some folks because of their location are stuck with buying online, I understand that. 

Whatever happened to supporting you locale businesses?

 

What if:

a. The price is cheaper online, and you're on a fixed income (or not).

b. The object isn't on sale except through (say) Newegg, and you like the price... but then tax is added and it becomes less of a deal?

 

If you buy online prices should be lower, ideally. Brick and mortar (local) prices are generally higher (inventory, rent, etc.). Then, local taxes are added to the goods on the net... why? The business is say in L.A. (California), the goods are from whatever factory in whichever state.

Whose tax gets applied? The tax where YOU are. That goes against all common sense, and will cause the states where the businesses are to charge as well... then you get a vicious cycle.

The solution lies in providing services which have proved themselves, shrinking non-productive jobs (like government), and lowering taxes to stimulate the economy... which will provide monies via job creation.

I also don't like hasty legislation. It rarely works as imagined.

We don't pay legislators by the amount of legislation they produce, so why not take the time to do it right?

Make sense?

 

on Apr 20, 2013

Doc I feel I must clarify something:

A business's requirement to collect and remit sales tax for a state is indeed currently based on its physical presence.  However, the absence of a business's obligation to collect and remit the sales tax does not mean that no sales tax is due on the transaction.  The consumer may very well be obligated to pay the sales tax to the state of his residence.  Instructions for doing so are typically included in states' personal income tax instructions and referred to as "Sales tax" or "Use tax".

I have not read this bill and I have no idea what all is packed into it.  On the surface it would appear we are talking about forcing the businesses to collect and remit taxes that are due to the state of the consumer instead of relying on the consumer to tell the state how much he owes.  In other words, the collection and remittance of taxes which are already in place, not new taxes.

on Apr 20, 2013

Dave, I'm not exactly sure why a state is entitled to tax a whole lot of what it taxes... other than to rake in money.

This expansion of even current policy without adequate discussion goes beyond what I'm tolerant of. An argument could be made for a Federal tax as well, seeing it's interstate (in some cases) commerce (for the sake of discussion).

Since the internet is "stateless" in essence, should any tax be levied at all? What's to prevent An unrelated state to ask for a cut... after all, it's tied to the internet too (all just for the sake of discussion).

Theoretically, there's no end to it... and it will cause an inflationary competition for tax monies. I'll guarantee one thing: It'll give the politicians more monies to buy voter blocks with those monies.

on Apr 20, 2013

DrJBHL
An argument could be made for a Federal tax as well, seeing it's interstate (in some cases) commerce (for the sake of discussion).

Have no fear, they'll get there.  An easy argument can be made for end-user VAT tax verses income tax increases on companies just because it avoids repetitious marking up and compounding down the supply chain.  End consumer pays for it all either way, VAT is less inflationary.

DrJBHL
Since the internet is "stateless" in essence, should any tax be levied at all? What's to prevent An unrelated state to ask for a cut... after all, it's tied to the internet too (all just for the sake of discussion).

As long as it sticks to the basic principle of end-user sales/use tax, it's not going to be anything new.  State of consumption gets the use tax.

I'm not crazy about them just jamming anything through either.  I don't want to digress into my opinion of Washington at this point though.

on Apr 20, 2013

VAT? That means a Value Added Tax, yes?

And just what value is being added? Not being sarcastic nor critical of you, Dave.

I'm asking the question because I can't see what of "value" is being added.

By definition, A VAT or GST (goods and services tax) is "a tax on the estimated market value added to a product or material at each stage of its manufacture or distribution, ultimately passed on to the consumer."

So, if it's software, where's the "each stage"... alphas, betas etc.? Who defines the "stages". I bet it's the guys who are telling you how much you owe. 

Just another way to rake in money to inflate government, depress commerce and the economy and take money from you and me. Oh, they'll give you a long list of "programs" and "services" that are being supported. How about cutting off the pork, fat and waste and leaving the money with the wage earner to put away for his/her kids, retirement, investments, etc.

Bet that'd help the economy a lot more... especially if they had a "Suze Orman" course in schools each year, so kids could learn financial responsibility...

on Apr 20, 2013

DaveRI
I don't want to digress into my opinion of Washington

After I wrote that I do feel compelled to add a little something though: Somebody there did a couple of things right in a few different states this week and for that I do have to say :     Enough said on that.

 

DrJBHL
And just what value is being added?

The value of the privilege of paying more taxes without calling it "income tax".

 

DrJBHL
Just another way to rake in money

Yep, that would be it. I'm honestly not eager to get into a tax/spending conversation, they just don't seem to go anywhere - even in Congress.

on Apr 20, 2013

Look at the source for this post.  Right-wing news outlet preaching fear.  This is a bill designed to empower states to enforce existing tax laws regarding sales tax.  Dave has highlighted some of this already but this is simply forcing all companies to play by the same rules regarding "use" taxes.  Online businesses do have an advantage over brick and mortar shops (both small local business and the mega corps).  There's nothing inherently wrong with that but there is also nothing wrong with making it possible for a state to enforce its existing tax statutes.  

 

People pay taxes everyday.  That money makes society function.  That's the agreement our forefathers made with the government they created.  

 

on Apr 20, 2013

The economist did an article on this awhile ago. It's a little old but presents another view.

http://www.economist.com/blogs/democracyinamerica/2013/04/e-commerce

on Apr 21, 2013

UTPriest
People pay taxes everyday. That money makes society function. That's the agreement our forefathers made with the government they created.

You really ought to look at that one sentence at a time... The fact that people pay endless taxes everyday doesn't justify the taxes. "That money makes society function." Not really... what makes society function is commerce, and a mutually agreed upon medium of exchange. Your tax money pays for a lot of other things... especially debt from money borrowed for not great reasons.

As for the agreements made by our forefathers, government has exceeded them decades ago... without asking for our agreement.

 

UTPriest
Right-wing news outlet preaching fear.

But not "Right-wing publication preaching sense." Being Conservative or Right-wing isn't a curse, you know.

 

 

Interesting read. I found this really good:

"The National Conference of State Legislatures reckons that the court’s prohibition cost states $23 billion in lost taxes last year."

As if they were entitled to that... lol. The court said there had to be a physical nexus unless the Congress legislated different. That's what this is all about... and why it's a rush job... a grab for money to fund programs which don't work continue to operate.

 

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