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Newegg Defies New York Sales Tax Law
Posted by
kdawson
on Wed Aug 27, 2008 07:05 AM
from the not-expanding-here-thanks dept.
from the not-expanding-here-thanks dept.
JagsLive informs us that the electronics retailer Newegg.com is defying New York lawmakers; it has suddenly stopped collecting sales tax from New York online shoppers. The "Amazon tax," which went into effect June 1, requires online merchants to collect sales tax if they have any affiliates in the state. Amazon is complying but has sued the state on constitutional grounds. Overstock.com dropped all of its New York affiliates and then joined the Amazon lawsuit. Newegg started out complying with the law on June 1, but stopped collecting taxes for New York on August 21. From Newegg's letter to its customers: "After careful review and consideration, we are pleased to inform you that we have stopped collecting New York sales tax, effective August 21, 2008," reads an email the company tossed at customers late last week, including at least one loyal Reg reader. "This decision was driven by your direct and candid feedback and our continued commitment to you as our valued customers."
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I'll admit, I'm a bit confused (Score:5, Interesting)
I guess what I'm asking is: is this whole problem arising from the retailers' desire not to be burdened with the logistics of collecting tax, and the consumers' desire to evade the tax? Or is there something else I'm missing here?
Re:I'll admit, I'm a bit confused (Score:5, Informative)
You don't have to pay sales tax in your state on goods purchased in another state. The whole problem with internet companies is deciding what "state" they are in.
The argument Amazon et. al make is that under the US constitution the federal government has sole jurisdiction to regulate interstate commerce - and New York imposing a sales tax on goods purchased in another state would run contrary to that.
The arguments in court certainly are going to surround in what "state" Amazon.com is operating in.
Parent
Re:I'll admit, I'm a bit confused (Score:5, Informative)
"You don't have to pay sales tax in your state on goods purchased in another state. The whole problem with internet companies is deciding what "state" they are in."
Yes you do, albeit indirectly. You have to pay a "use tax [wikipedia.org]" on anything purchased outside of your tax jurisdiction which you then bring in for use or consumption. This is a whole branch of our tax code that doesn't cope well with the modern, internetworked world.
Parent
Re:I'll admit, I'm a bit confused (Score:5, Informative)
An outside observer might wonder why this is such a big deal since the tax is going to be paid as use tax rather than sales tax. The difference here is that sales tax is charge at the point of sale while the use tax is charged on state tax returns.
Use tax is notoriously hard to enforce because the state necessarily doesn't know about any items you bought in a different state. Many people lie about their use tax liability on their state tax returns because the state usually doesn't have any evidence to the contrary.
Parent
Re:I'll admit, I'm a bit confused (Score:4, Informative)
Parent
Re:I'll admit, I'm a bit confused (Score:4, Informative)
So it seems like you don't come out ahead by reporting, you actually lose money...
You come out ahead until you get caught, in which case you're looking at having to pay the tax, interest and penalties on pain of tax evasion charges. If you get caught a second time (i.e. after you've been cited for a previous "underpayment") or the tax in question is large enough, your state's tax authorities might decide to press criminal tax evasion charges right from the get-go.
Don't think you you're going to get caught? That's about to change as a result of the recent passed housing bill [slashdot.org]. This bill contained a provision to report nearly all online merchants' credit card transactions to the IRS; it's pretty hard to survive as an online business if you're not making more than 200 credit card sales a year or grossing $10,000 in credit card transations. Since the vast majority of Congress represents states that have a sales tax, if this data isn't already being shared with the state governments, expect it to happen in a bill in the next congressional session.
Five years from now, it's going to be very easy for states to find out their residents' out-of-state transactions, confirm the shipping address is within the state, and bill people for unpaid use taxes. If you hate the idea of paying sales and use taxes that much, you can move to one of the handful of states that doesn't have a sales tax. Otherwise, while it's been nice to catch a break from easy enforcement for the past 10 years, it's time to realize that buying online "tax free" in most states is basically tax evasion and that eventually Mr. Taxman will be looking for his cut.
Parent
Re:I'll admit, I'm a bit confused (Score:5, Interesting)
Right.. but the Use tax applies to citizens within a state buy something from out of state. Of course I don't understand how that survived any Interstate commerce challenges. It seems to be that while indirect, it's still affecting Interstate commerce.
Parent
Re:I'll admit, I'm a bit confused (Score:5, Interesting)
It doesn't even cope well with the paved world. If you buy a box of matches in Ontario County, NY, use half of the matches, drive to your home in Monroe County, NY, and then use the other half, you have to pay the difference between Monroe County tax and Ontario County tax on half the purchase price of the box of matches. Somehow you should get the tax difference on half the purchase price back if you do it the other way around, but good luck with that.
Just a way to make sure that they can arrest any citizen in the country on tax evasion charges any time they want.
Parent
Re:I'll admit, I'm a bit confused (Score:5, Informative)
"This is a whole branch of our tax code that doesn't cope well with the modern, internetworked world."
Modern? Ever heard of a Sears, Montgomery Ward, or Best Catalog? Buying goods from an out of state vendor predates the modern income tax system and even the IRS in this country. Heck, buying from catalog predates indoor plumbing in a lot of places. The Sears catalog was commonly used as toilet paper in outhouses. This was a big deal back then when it was hard to enforce use taxes but now that the technology exists to squeeze more money from the taxpayer, governments are jumping at the opportunity.
Parent
Re:I'll admit, I'm a bit confused (Score:5, Informative)
You're timing is off a bit. Mail order sales started in the late 1800s. The first sales tax was in 1921, and most didn't start until the 1930s. [wikipedia.org]
Parent
Re:I'll admit, I'm a bit confused (Score:5, Informative)
You're omitting the difficulty in figuring out the tax status of items.
For example, in MA if you buy 1,2 or 3 donuts, that's taxable. If you buy a dozen donuts, that's not taxable. Why? One is consider "a meal", and one is considered "food" (i.e. groceries). Snacks over $3.50, taxable. Under $3.50, not taxable. Some clothing is taxable, some is not. Books are taxable, Textbooks are not. What makes a textbook a textbook? Retailers have fancy computer programs to figure out the tax status of each item, and even they get it wrong. The MA DOR recommends that you call or write for specific determinations "Because of the complexity of the law". http://www.mass.gov/?pageID=dorterminal&L=6&L0=Home&L1=Individuals+and+Families&L2=Personal+Income+Tax&L3=Forms+%26+Publications&L4=Publications&L5=Publications+Index&sid=Ador&b=terminalcontent&f=dor_publ_sales_use&csid=Ador#exempt [mass.gov]
Parent
Re:I'll admit, I'm a bit confused (Score:5, Informative)
Parent
Re:I'll admit, I'm a bit confused (Score:4, Insightful)
Liberals, meet liberalism. It costs money
It seems to me that Conservatism also costs money [nationalpriorities.org].....
And before you go and whine that Bush and the GOP aren't real "Conservatives" that's what they are passing themselves off as and they are getting the lions share of the support from people who fashion themselves as Conservatives. Where were the Conservatives when Ron Paul needed the support during the primaries?
Parent
Re:I'll admit, I'm a bit confused (Score:5, Informative)
Except, you do have to pay sales tax if you buy something out of state.
It's just that if you buy something out of state, the store isn't obligated to collect the sales tax. The purchaser is supposed to declare the item and pay it later to their state.
Parent
Re:I'll admit, I'm a bit confused (Score:4, Informative)
The states have different ways of determining whether a seller has nexus. Generally, these involve operating a facility or having employees in that state.
What New York did was to extend the definition to include the affiliates of the seller in the definition. This is not on its face silly, since the affiliates operate in much the same way as a store would.
Therefore, what will be before the court will not be the constitutionality of the sales tax, but the more limited issue of this extension of the definition of nexus.
This is a way to close a loophole the online retailers are using to give themselves a leg up over brick and mortar stores.
Parent
Re:I'll admit, I'm a bit confused (Score:5, Informative)
It doesn't matter how they feel. New York State can't tax a purchase made in Texas (or wherever Amazon is located) any more than they can tax a purchase made in Mongolia. Moreover, they can't impose taxes on New York citizens importing goods from other states, because the Constitution and its commerce clause forbid that.
Parent
Re:I'll admit, I'm a bit confused (Score:5, Insightful)
Parent
Re:I'll admit, I'm a bit confused (Score:5, Interesting)
Wrong questions.
Instead you should ask, "what does my state do to make it easier to purchase through Amazon?" That's directly related to how much tax they deserve.
All NY taxes that should be paid (road taxes, etc) are being paid by the delivery vehicle owner, a fact which is represented by the shipping price.
Parent
Re:I'll admit, I'm a bit confused (Score:5, Informative)
Only twice?
Your employer pays its taxes. Then they pay their share of your taxes. Then you pay your share of your taxes. Then repeat all three steps for the state.
Then, you spend your income. You get taxed on the purchase. You then get taxed to keep several of the items you buy in many states (home, car, etc).
Then you pay taxes to use your phone, even though your tax dollars helped pay for the infrastructure for the phone company in the first place. You pay a tax on your car's fuel, to register it, on top of the insurance premium you're required to have for it, and on any parts and labor to maintain it.
If you buy an investment and it actually does return money, you get taxed on that even though the company that issued the bond or stock pays revenue and profit taxes or that you're paying property taxes on real estate investmenats.
This really only scratches the surface. If everything was a simple, one-step tax, people would be horrified at the amount they pay.
Parent
Re:I'll admit, I'm a bit confused (Score:5, Informative)
It is required, in theory, but the Interstate Commerce clause of the Constitution prevents them from collecting tax on any sales across state boundaries.
They still try to do so, generally under the guise of a "use tax" that's conveniently only applied to purchases from out-of-state, but as far as I'm aware such unequal taxes have never been tested in court. IANAL, of course.
Parent
Re:I'll admit, I'm a bit confused (Score:4, Informative)
They have been, at least in the pre-web era. I don't recall the specific name of the case but the upshot of the decision was that as long as the use-tax wasn't discriminatory toward out-of-state purchases (i.e. as long as it closely mirrored the sales tax), it was ok.
Now the real question is what Constitutional grounds does the state of NY have to enforce *Newegg's* collection of this use tax. Is the State of NY going to sue Newegg in Delaware court? This could get quite complicated...
Parent
Re:I'll admit, I'm a bit confused (Score:5, Insightful)
Are you taxing the sale, or are you taxing the use?
If you're taxing the sale, then you're interfering with interstate commerce.
If you're taxing the use, then you're discriminating in favor of goods sold in state, because they aren't being taxed for use as well.
Parent
Re:I'll admit, I'm a bit confused (Score:5, Informative)
Parent
Re:I'll admit, I'm a bit confused (Score:5, Interesting)
No, that's exactly it. It save newegg the effort, and also increases their business from customers who intend to avoid paying the tax themselves.
It will even increase business from customers who DO intend to pay what they owe for 2 reasons:
1) Something you will owe later doesn't FEEL as costly to many people as something you have to pay now.
2) Many states (I'm not a new yorker, so I don't know if this applies to them) understand the difficulty in tracking your sales, and offer a flat tax option. If you intend to pay this way, then it's sort of like an all you can eat buffet. Once you've paid the flat rate, it's in your best interest to find as many retailers as you can that don't collect tax.
Parent
It is like every other tax. (Score:4, Insightful)
If consumers, for that matter income earners, had a true understanding of their tax load they would be up in arms. It is one thing to ask for this, that, and the other thing, from your government when you don't know the cost.
So governments do what they do best, they hide the tax. What is the number way to hide the real tax from the taxpayer? Embed it. This means hide it in the cost of goods and services. Lets use an oil company like Exxon for fun, after all its accused of having WINFALL profits. In 2006, Exxon's EBT (earnings before tax) was $67.4 billion, it paid $27.9 billion in taxes (41.4% tax rate), and its NIAT (net income after tax), or profit, was $39.5 billion. So, where does that 27.9 BILLION dollars come from. The taxpayer. Exxon merely wrote the check for all the dollars it collected from you and me to pay it.
The politicians win on every front here, they can hide the true cost of the tax load on the American worker and vilify any corporation that makes big numbers as being against the poor, downtrodden, hungry, or my favorite "children".
Ignorance and envy are the two greatest weapons the politicians employ and from watching the current elections it really pays off
Parent
Re:It is like every other tax. (Score:4, Insightful)
Parent
Re:How are you rated insightful? (Score:4, Insightful)
"I know, there are evil rich people who pay 35% and you pay 28% but its not fair they still have more dollars. What has this country come to if we are so filled with spite and envy that we begrudge anyone doing better than us or set limits on how well any one person is allowed to do?"
I guess you're right. I'd be happy to get back to the good old days of the USA, when "the greatest generation" had a top tax bracket of 70%-94% all the way from 1936 to 1981.
http://en.wikipedia.org/wiki/Income_tax_in_the_United_States#History_of_progressivity_in_federal_income_tax [wikipedia.org]
Parent
Re:It is like every other tax. (Score:4, Insightful)
FFS. I covered this. Gas is something that most people need. Not want, need. There are few enough oil companies that they can keep prices high and not worry about being out-priced by a competitor, and people will pay for it because they have to.
You have a point if you were looking at the United States in a vacuum. Globally however there are a bit more than a "few" oil companies and pump prices (with the exception of states that subsidize the costs for their citizens) are going up across the World. This isn't a uniquely American problem.
China is putting millions of new vehicles on the road each year. Ditto for India. Meanwhile oil production is falling pretty much everywhere. Is it really that hard of a concept to grasp that oil is a global commodity that is currently facing increased demand at a time when production is leveling off/dropping? This is economics 101 -- you don't have to be Adam Smith to understand it.
If they couldn't just charge what they wanted, the prices wouldn't be even as high as they are now, let alone what they were a couple of months ago
What are you basing this on other than your gut feeling? Congress has investigated the oil companies multiple times for price gouging. They've come up empty every single time. Do you really think that there isn't some ambitious politician that would love to make an issue out of this if he/she could prove they were fixing prices?
Where do you think Exxon gets their oil from? Do you think it's free to obtain? They have a pay the Saudis/Canadians/Mexicans/Venezuelans/Russians/etc market rates to obtain that crude. If they refuse to pay market rates then the producers will just sell it to someone who will -- the Europeans, Chinese or Indians. Even American crude operates under this same basic principle -- why would Exxon sell crude oil under it's direct control below market rates?
The only real solution to this problem is to change the energy paradigm or produce more oil. I prefer the former option given the environmental impact of carbon based fuel but even I'm enough of a realist to know that the switchover isn't going to happen overnight. Do you think the existing transportation infrastructure was built overnight? Tens of thousands of service stations? Hundreds of millions of cars? The mechanics that work on those cars? The dealers that sell them?
What should be done is either some regulation
What do you want to regulate? Honestly.... what would you regulate that would bring prices down? I'm not opposed to all regulation but in this instance I really don't think it's going to help us much. Moreover I'm not convinced that the current price of oil is a bad thing, given that it's finally resulting in people changing their consumption habits.
or trying to get some competition going
Where is that competition going to obtain it's oil from? Do you think there is some surplus of available oil on the market that American oil companies aren't taking advantage of?
And comparing oil companies to telecom doesn't help your argument at all
I wasn't comparing them. Just pointing out the absurdity of targeting the oil industry for it's "excessive" profits.
Parent
Re:I'll admit, I'm a bit confused (Score:5, Interesting)
Yes, but when you purchase something from out of state, the normally-unintelligible mess of tax laws become even more convoluted.
Many states have a "use" tax, which applies to items purchased from out-of-state by state residents. The burden of paying it rests on the individual, however, not the merchant (and very, very few people actually pay it except on items they can't avoid reporting, such as cars and boats).
The real issue here involves what constitutes a "presence" in a given state, as well as where the transaction actually occurs. Most states would like to claim the transaction occurs at the location of the buyer, but so far the federal government hasn't let them get away with that. More commonly, states limit their attempts to collect to vendors who have some physical presence in that state - Meaning they have some power to make life miserable for noncomplying vendors.
So then the question changes to "what constitutes a physical presence?". The largest online merchants such as Amazon have warehouses all over the country, but don't ever actually sell anything on-site, they just ship from there. So does that count as a retail presence, or not?
Parent
Re:I'll admit, I'm a bit confused (Score:5, Informative)
And just to make things more difficult, the NY law in question isn't even talking about warehouses. It's talking about affiliates. NewEgg is located in California, but they have an affiliate program. I'm an affiliate of theirs and I live in NY. Does that make NewEgg have a physical location in New York state? Of course not. I'm not an employee of NewEgg, I'm just an affiliate. I post a link to NewEgg on my website and get a small kickback for any sales that it generates. The website that I run is hosted by a company in Texas. Does that mean that NewEgg has a "physical presence" in Texas also and should pay Texas sales tax? The whole "affiliate = physical presence" argument is just a money grab. Then again, we shouldn't be surprised. This is the state that also taxes telecommuters on their full income even if they only work inside NY for a short period of time. (See the story of Scott Smallwood: http://www.nytimes.com/2008/02/20/business/businessspecial2/20tax.html [nytimes.com] )
Parent
The Register copy and paste? (Score:5, Interesting)
"After careful review and consideration, we are pleased to inform you that we have stopped collecting New York sales tax, effective August 21, 2008," reads an email the company tossed at customers late last week, including at least one loyal Reg reader. "This decision was driven by your direct and candid feedback and our continued commitment to you as our valued customers."
Re:The Register copy and paste? (Score:5, Funny)
Parent
Uh oh! (Score:4, Funny)
Boy, I wish I could raise $50 million without providing any additional benefits to anyone. Is there anyway to donate to Amazon/Newegg's legal defense team? : )
-Grey [silverclipboard.com]
"This decision was driven by your feedback." (Score:5, Insightful)
"This decision was driven by your direct and candid feedback and our continued commitment to you as our valued customers."
This is obviously just a publicity statement. There is no way in the world a large corporation would assume the massive risk of defying a law like this on the advice of its customers. Something else precipitated this.
Most likely, the law department in the company examined the law, and then the risk management division (or whoever it is: I have no idea how Newegg is managed) decided that the risk was worth taking. PR, seeing an opportunity for, well, PR, made up a fluff statement about how the dear customers were the reason.
Not that I'm complaining.
And this is good for local businesses exactly how? (Score:4, Insightful)
[quote]Overstock.com dropped all of its New York affiliates[/quote]
This measure was supposed to boost local businesses and lower unemployment. Do you think if Amazon and NewEgg drop theirs, the $50m in revenue will be paid out in unemployment?
I am disgusted by the government of my state. I moved from PA to NY for a better job, but literally everything is higher taxed and more expensive. The taxes don't make any sense either. I live near Rochester, NY. Depending on the locality you're in, you can pay 6% (Henrietta) to 10% (Greece) taxes on a variety of things but if you send a letter it's all Rochester, NY. And then there is the paper store, I mean government agencies. Everything needs a permit, paper, registration or a tax. You can't get a single piece of paper without paying at least $10 for it.
Dear IRS, (Score:5, Funny)
After careful review and consideration, we are pleased to inform you that I have decided to stop paying my Federal and State tax, effective August 27, 2008.
This decision was driven by your direct and candid feedback and our continued commitment to you as our valued collection agency.
Any tax revolt is a good one. (Score:4, Insightful)
How ironic it is, that, we hear a bunch of liberals bitching about those terrible people on Wall Street, in New York, and it turns out those terrible people on Wall Street took such a beating that the state is looking at a nearly billion dollar tax short fall. Thus, in New York we learn the ultimately failing of progressive taxation, just as we have learned nationally. If the rich do not make any money, the government is screwed.
I'm sick of hearing everyone try and talk about increasing taxes as "providing revenue". It's an insult to compare the activities of government to the activities of the private sector. Government is basically a collection of pie in the sky power mongers that use the power of the gun, cops directed by the legislature, to impose their financial will on people. By contrast, all a private company do is offer a good or a service in return, and thus they are compelled to offer something back.
New York, in particular, is disgusting. They have a tax policy that reflects decades of liberal orthodoxy and the stupidity of the results just staggers the mind. I mean, they raise taxes on cigarettes, and are suddenly horrified to find that people do not buy cigarettes in New York. Now, what do you think the enlightened liberals do up there? Do you think they set the tax at a more reasonable level? No... they call out the cops and pass even -more- laws designed to try and ban people from cigarettes from out of state.
Now, of course, they reach out and are suing, again, with the barrel of the legislative gun, trying to sue someone outside of the state, like a crab or a cancer spreading and grasping desperately for any piece of loot that it can steal.... and they call this revenue.
So NY wants to collect tax from the whole USA (Score:5, Funny)
Its not called the Empire state for nothing!
Parent
Re:Any tax revolt is a good one. (Score:5, Informative)
If you are any kind of economicist you would realize that no functioning economy in the world today taxes at a rate that exceeds the Laffer curve inflection point. Regeanomics is a ridiculous idea
First off, the argument of Reaganomics is that the industrialized world is actually to the -right- of the inflection point, in other words, taxes are too high.
Meanwhile, the rest of the industrialized world has lowered corporate tax rates and investment tax rates below that of the USA. So, yeah, on one hand, you have the Europeans saying that Reaganomics is terrible, and people like you say, "oh yeah, you are so right"... but then, the Europeans lower their taxes, and suddenly the Euro goes sky high because of the flood of investment into the old continent.
Yeah, the EU is saying Reaganomic sucks, but that's not what they did, and they are laughing all the way to the bank.
Parent
Why both candidates are retards. (Score:5, Interesting)
I do not think that word means what you think it means. In the context of taxes, it's not a meaningless epithet; the sales tax is not progressive, it is flat
Actually the sales tax is regressive.. but that's another story. I was really thinking more about how income taxes tend to be shifted to the rich. What happens now is that, because the taxes are stacked so much on the wealthy, the revenue stream for the government is wildly unstable.
The thing is, about Republican politics, is that, they haven't honestly told the whole story about how taxation is supposed to work. Really, to get the lowest overall rate, everyone has to pay -some- taxes. But what's happened over the years is that this has been translated into the idea of tax cuts and for the wealthy to get tax cuts, thus, the middle class has to get them, and right now, poor people aren't paying any taxes at all.
If you really wanted to maximize both the size and the stability of the tax stream against all other goals - in other words, without being "nice about it", you should probably have a federal sales tax to tax the poor and criminal classes and enough of one to also be an effective tax increase on the middle class, and then lower the tax rates on the rich so that effectively, everyone is paying the same overall rate. That minimizes the risk to the tax collection portfolio.. oh christ, there I go using that "revenue" term that i just flamed about, by spreading it to the most people.
Then, if taxes are too high for people, then you cut them, but you also have to decide what out of government you don't want. Realistically, at the federal level, this is going to mean BOTH a capping of the entitlements AND a cut to the size of the defense budget.
In the face of that, when you look at the candidates, you can see that both are pretty much retarded. Obama wants to raise taxes on the rich and then tease with a middle class tax cut and take the poor off the roles altogether, completely destabalizing the payment stream. McCain wants to lock in Bush's taxes, which is ok, but he also needs to think about a national sales tax, to hit the poor with. Both sides need to chop spending. In Obama's case, that means saying by by to his big social programs, and in McCain's case, it means that the army shouldn't get Future Combat System and the Navy might need just build more normal ships, and the air force might need to choose one kind of fighter rather than two.
Parent
Finally (Score:4, Interesting)
As a NewEgg customer and a New Yorker, I'm glad they finally quit playing along with our rogue Attorney General.
This is the same attorney general that convinced major ISPs to block access to newsgroups [slashdot.org] because they might be used to transmit child pornography.
I can't wait until he's up for election, personally.
NY taxes (Score:5, Interesting)
I live in upstate NY as well and I see the tremendous issues NY has with attracting good paying jobs. NY is unable to attract new business' therefore they look to supplement their revenue by taxing the business' they can't attract here even if said business has no physical presence in the state. NY government has this view that they are entitled to a piece of the action. They are not. If they can't attract the business here they lose and should lose. The NY government is what is getting in the way of business' coming into NY and entrepreneurs starting new business'. I'm afraid you will see more of what Overstock did and thus hurt the NY economy even more. We in NY have politicians completely out of touch with the reality of the business world.
I find it amazing that when a government raises taxes they think the rich will pay it. The rich will just raise the cost of the goods they are selling accordingly in most cases.
Correction To the Email (Score:5, Insightful)
Re:Use tax = sales tax and you are supposed to pay (Score:5, Insightful)
No, it means we can't ignore use taxes as an unconstitutional violation of interstate commerce. Pay if you want, but few do - And suggesting we make it "painless" by having the merchants handle the tax completely misses (and actually hides) the point that we shouldn't pay such taxes in the first place.
End this moronic madness now
And there, we agree (in word if not in spirit) - Let's entirely do away with the single most regressive taxes we have. Personally, I think we should also do away with "withholding" as well, and make everyone actually cough up $10-30k every April 15th - Watch how fast we get serious tax reform when people realize how much they actually pay, rather than merely bitching about it as a mostly-meaningless "rate" they don't really feel thanks to the government slowly boiling the frog.
Parent
Re:Use tax = sales tax and you are supposed to pay (Score:5, Interesting)
Your rates in Wisconsin is just the half of it...
Towns in AR are incorporated around county land. The town has 1% added to already 5% making 6% - FOR THE TOWN LAND. Post Office makes these two lands appear as 1 so the only choice is charging the 6% for the county land. Military Bases and Parks also fall into these traps.
Washington state has MTA the follow the boundaries elementary school districts. Again you do not know for a given address if it is in or out school district.
Mobile AL has MTA so EVERY postal code two rates.
Texas has multiple rates that can add up to 3% over the state rate, but they are added in order so that if the full rate can be used (ie going over 3% total) then it skipped and you add the next rate.
Memphis Area has sales tax rate ONLY for the first $2500 then it drops to 0.
In most states Sales Tax is charged at the point of consumption (ie Where is the Cash Register). But that can also mean "Where is the customer's mailbox" since the goods are being delievered to customer, no consumption occurred until delivery. Texas just changed theirs back to be where the business is located, to help delivery companies (like flower) from having to figure out all the local tax rates.
Even the large tax rate companies are not being of help. They need a system that does Address Correction and Tax Rate following geo-boundaries.
Parent
Welfare States (Score:5, Insightful)
Actually, the "lazies" you're talking about are the "Red States", which all get more money back from the Federal government [taxfoundation.org] than they send it in Federal taxes. The "Blue States" like New York pay to prop up those Welfare States by sending more taxes to DC than we get back.
There are a few notable exceptions. New Mexico is the poorest state, with the most tribal population, and lots of large Federal military bases and labs, so its welfare goes mainly to big Federal contractors who don't spread it around the state much. Hawaii is another state with a lot of poor people, many of them tribal, and lots of large Federal military bases. Maine gets a little more than it pays, but again is overall pretty poor. Texas, that "Republican Paradise", is taxed and feeladen every which way, in a giant ripoff, getting just a little less than it pays. Florida is right near the breakeven, but at least it's paying to prop up a system it was #1 in ushering in with its 2000 election. New Hampshire somehow gets screwed, too.
But other than that, the other 44 states all demonstrate that voting Democratic does get you taxed to redistribute your wealth to the rest of the country - even when the redistributors are a Republican controlled Federal government. The list also demonstrates the myth that "the West is independent": other than NM and TX, all those Western states are subsidized by the rest of the country, as they have been since they were colonized.
That list represents the most valuable wealth redistribution programme ever undertaken. Run by Republicans, at the peak of their power. Even as those Republicans cut Federal taxes while running up the Federal expenses, both in record amounts. But evidently spreading the benefits along more or less strict Party lines.
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Re:Welfare States (Score:5, Interesting)
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Re:Welfare States (Score:5, Informative)
Uh, according to you own link, there are several states in the West that pay more than they receive. California ($0.78), Washington ($0.88), Oregon ($0.93). In fact, California subsidizes at a higher rate than New York ($0.79). So, yeah, we are pretty independent.
"Maine gets a little more than it pays"
Maine gets a shitload more than it pays ($1.41). Do you even read your own link before you post?
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Re:Welfare States (Score:5, Informative)
Actually, the "lazies" you're talking about are the "Red States", which all get more money back from the Federal government [taxfoundation.org] than they send it in Federal taxes. The "Blue States" like New York pay to prop up those Welfare States by sending more taxes to DC than we get back.
Well, there's a textbook logical fallacy for ya. Just like those nationwide red/blue election maps that make it look like 90% of the country voted for Bush.
Big cities pay more taxes because they have more people, and big cities tend to vote Democrat. Those two data points aren't necessarily related, and without showing that they are, your entire argument falls apart. Come back when you have some "laziness per capita" figures.
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Re:Welfare States (Score:4, Insightful)
Although it was poorly put, he does have a point. Cities naturally operate more efficiently, so while each citizen can afford to pay more taxes, they don't need as much taxes to operate. Some things the federal government pays for, like the highway system, are more keyed to land area than population. Places that are more sparsely populated will most likely get more money than they give.
Likewise, the Red/Blue State probability is linked to population density: people starting families tend to move to places of low population density, and they are highly correlated with voting Republican [nytimes.com].
Now, is it a good thing that some states are supporting others? Ideally, every state would be equally efficient, but realistically they are not; no one is going to build a Manhattan in the Rockies. But could the more efficient states still benefit from subsidizing the less efficient ones? Ostensibly yes. For example: Minnesota and Washington both "pull their weight", but none of the states connecting them do. Still, the two benefit from having federally funded rail lines and highways between them, along with police, an educated populace, a number of national parks, etc.
All that said, "bridges to nowhere" greatly annoy me.
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