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From The Business Insider, June 3, 2009:
For years the internet has enjoyed its status as a relative haven from taxation, much to the chagrin of sales-tax reliant states. But with the fiscal situation growing more and more dire across all levels of government, and internet commerce continuing to eat into traditional forms of business, the lack of internet taxation sticks out like a sore thumb.
Indeed, the National Taxpayers Union, a libertarian anti-tax group says big tax hikes are definitely on the way.
Congressional sources say that introduction of federal legislation to implement the “Streamlined Sales Tax Project” (SSTP) could happen as early as this week. This comes in response to ongoing deliberation surrounding the issue of tax policy toward the Internet and the SSTP, a campaign that would allow states to collect sales taxes on transactions made by residents beyond their borders. States need Congress’s blessing for SSTP because of previous court rulings that governments cannot force firms within their jurisdiction to collect taxes on sales made to out-of-state customers.
“It is unfathomable that lawmakers, in good conscience, would place yet another tax burden on American families given our current economic climate,” said NTU Director of Government Affairs Andrew Moylan. “Passage of SSTP legislation would shovel more money into the coffers of states that don’t deserve it, while resulting in even more economic pain for hard-working taxpayers who have suffered enough.”
While the legal issues are certainly tricky -- particularly as it pertains to inter-state transactions -- the NTU is wrong on this one. It's time to start bringing the internet into tax parity with traditional forms of commerce.
First of all, the government needs the money. Yes, politicians could cut spending instead (and that may be preferable) but as long as citizens continue to support pro-spending measures, they need to be paid for.
Second, a big argument in favor of not taxing the internet is that such taxation would slow down innovation online, something we've been (smartly) eager to nurture over the years. But at some point that argument starts to lose its resonance as the internet grows more mature (if anything, perhaps it's physical commerce that really needs the help with innovation these days, given how miserable going to a store can be). What's more, to the extent that internet commerce innovates based on the protection of being tax-free, it may not be particularly desirable.
What's more -- and it's somewhat surprising that this doesn't get more play -- it's regressive to tax physical commerce and not tax electronic commerce, the latter of which is more popular with the affluent. There's no particularly compelling reason to offer a tax-haven to those who are more likely to be shopping online.
So yes, it's coming as the NTU says, due to economic reasons. And it's a good thing.
For more coverage, see The Business Insider:
It's a bad thing. I don't support pro spending measures or any new taxes.
wow, now that's what I call a cleansing.
joe w. must be a public school educated, government toadie congrats on another horrible article
They (democrats) want to slow down the economy more, they found yet another way... lets not wait for a full recovery to tax.. right?.. I can't imagine how those people in California do it!.. I can't stand the direction the country is taking. We have no more representation in government, they are totally rogue and on course to destroy America. Vote these bums outta there next election!
Never,never,never give government more money as they waste money through inefficient dispersal for projects that serve only their voting constituency or less. Those elected by the mass media and a minority of the working public do not have a clue as to how life is to work for a living. In fact, the voting polls are populated by government employees, their relatives and friends that directly benefit from these whackos that get empowered with their position. Their refusal to monitor the banking practices that spawned this economic crash and their resulting gigantan debt on taxpayers is a perfect example of their incompetence.
Regardless of what that racist jerk (above) says, it is still a bad idea to tax sales on the net. Don't kill one of the few pro-small business bits of free trade left in this country. The wheels of commerce will be permanently locked up and the only form of profitable business left will cash only, unreported income at going-out-of-business sales. We need to get money moving again in this country and you can't do that with tax, tax, tax.
I'm for lowering taxes anytime and anywhere. Where is Milton Freedman when we need him, God rest his soul.
If the premise for a local sales tax is to have local commerce reimburse the local community for the business's burden on the community, then the sales taxes collected nationwide should be paid to the local community where the business is located, not the community where the goods are shipped. Some communities, which have managed to control costs and operate on lower sales taxes, should not be shipping thier tax revenue to other communties that are NOT providing supporting services to the commerce business.
I would definitely buy less online with tax and shipping from the internet.
How big of an idiot are you?! Oh that's right, you are just another idiot who wishes he was a European instead of an American. 1. The last thing government needs is more money. They have too much now that just gets wasted. And don't start telling me how much they do for me because if they dissapeared into thin air my life would go on just fine. Remember we came to this continent to get away from big government. 2. There were about 58 million of us who didn't vote for the current gang-in-charge and don't want any of their stimulation or anything else from them. I don't see where any citizenry has voted on stimulus spending. I do see where some politicians have taken it upon THEMSELVES to purchase all the votes they can and spend money they haven't printed yet. You need to keep your third grade socialistic self out of the big game if that is the best you can do because you basically sound like a youth from a Nazi brown shirt convention, dumb and useable.
Less jobs, lower wages, higher taxes. Sounds like the formula for success to me.
Are you all serious? Where do you think the money will come from to pay back the HUGE debt we were just put in? We will have to pay it back like always through taxes and an Internet tax is the perfect way to do it for two reasons. A: It will get people off their lazy butts and force them to go out and shop (and get exercise). It is a fact that you are more likely to spend more if you walk into a store rather than buy something online. B: It will definitely help save in-store jobs. I don't know how many times I've walked into a store and I can't find a person to help me. No one shops = less workers for customer service. Seriously, why are people so lazy? No one wants to talk on the phone, just text or IM. No one wants to shop in a store, just sit home and buy it online. Sorry, that's not saving gas, that is called being lazy and unsociable. The Tech word is good in a lot of ways, but it is taking people social skills away and human nature. Pretty soon, everyone will sit home for everything, work, food, shopping, communicating. No need to go to a bday party, just webcam yourself there. What a sad world we are living in.
Are you all serious? Where do you think the money will come from to pay back the HUGE debt we were just put in? We will have to pay it back like always through taxes and an Internet tax is the perfect way to do it for two reasons. A: It will get people off their lazy butts and force them to go out and shop (and get exercise). It is a fact that you are more likely to spend more if you walk into a store rather than buy something online. B: It will definitely help save in-store jobs. I don't know how many times I've walked into a store and I can't find a person to help me. No one shops = less workers for customer service. Seriously, why are people so lazy? No one wants to talk on the phone, just text or IM. No one wants to shop in a store, just sit home and buy it online. Sorry, that's not saving gas, that is called being lazy and unsociable. The Tech word is good in a lot of ways, but it is taking people social skills away and human nature. Pretty soon, everyone will sit home for everything, work, food, shopping, communicating. No need to go to a bday party, just webcam yourself there. What a sad world we are living in.
My state does not tax out of state sales. Are regulators saying the federal tax overrides my state authority? The only real selling I do on the internet is trought Ebay. Are they trying to distroy that business as well. Big government is always trying to find ways to get into my pocket in order to pad their own. This is just another attempt to skim off huge sums. It may sitck in their craw that there is no taxation across state lines; only because this is one thing government does not have COMPLETE control of. If you want it screwed up, let big government regulate it. BUSINESS 101 .. Within a matter of months, internet commerce will die on the vine with government intervention.
they have been in office sooo long ,that most of them attend congress and senate in wheel chairs and tilt beds...we need more than 2 parties, term limits, and less spending .
If you think the gov't is getting enough of your money, you can always have more withheld from your pay check. Go on, lead by example, or be a hypocrit, but keep your grubby hands out of my wallet. I don't support increased spending and the socialism it sponsors.
If you think the economy is bad now try taxing internet sales. The only place people are spending any money is thru the web, myself included. Once tax becomes legal every state, city, county, school district, etc. will want a piece of the action and internet commerce will grind to a slow, painful halt. Of course with Obama telling Israel that Iran has the right to nuclear power all of this won't matter soon anyway.
Just what we need, another @#($(#$ tax!!! Take your socialism and stuff it!!!
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Mike - Wednesday June 03, 2009 08:54AM EDT
What's the matter with you Weisenthal? If you loved being taxed at all angles and honestly believe that the various gov't fiscal problems are due to revenue shortfalls and not overspending on failed programs, then I suggest you move to Europe. They've got VAT and a host of taxes which consume greater percentages of their GDPs. Their higher burdens haven't prevented them from suffering fiscal and monetary crisis.