Wisconsin Passes Digital Download Tax 327
McGruber writes with news that the State of Wisconsin has passed legislation to extend sales tax to digital downloads. The new law will go into effect on October 1st. Estimates suggest that the 5% tax on "downloads of music, games, books, ring tones and other video entertainment" will bring in $6.7 million annually. "[Wisconsin Governor Jim Doyle] has been fighting for the change for years. He and other state officials say it is a matter of fairness: Internet vendors shouldn't have a tax-exempt advantage over Wisconsin's brick-and-mortar retail stores." Similar legislation has been proposed in North Carolina, and we've previously discussed New York's foray into taxing sales made online in addition to downloaded purchases.
Re:Order out of state (Score:3, Interesting)
I believe Wisconsin internet vendors can only tax Wisconsin buyers. Out-of-state taxation would basically be taxation without representation, which is what previous legal precedents have disallowed... that is, until the federal government decides to pass a law enabling states to cooperate on internet sales taxation.
And just wait until the federal government gets involved directly. For only pennies on the dollar, an eBay sales tax could fund Social Security and Medicare for through the baby boom crunch. (Or could it...?)
no one wants to pay taxes (Score:1, Interesting)
This have further fascinating implications. For instance, the US goes into a situation that drives the US national debt up to 10 trillion(for the rush fans out there, we are talking the total debt, not the yearly deficit: on in this case the total debt is about 80% of GDP which happens when you run a 5% yearly deficit for 8 years, assuming that you start with a 40% debt). Every one complains that the soldiers in the situation do not have enough equipment, but they really can't because at the same time we are spending too much money, we are also cutting the taxes(another note for rush listeners, the DOE is about 13% of the budget, while military and terrorism spending is spread along 3 departments, about 25% of the budget, including a new spending item, department of homeland security, which was added by a conservative government to the tune of 2% of the budget).
Now, if we as people would reduce out garbage so it could be picked up every other week(food wastes for composting picked up every week) or our driving of big cars so the roads would not get so torn up, or sent kids to school with supplies and computers and food so that schools would not have to provide these items, then maybe we could complain about taxes. But since we like to spend the money, then we have to pay the money. That is the true conservative model. Not the foo foo french model where only the peasants pay the taxes, and the aristocracy gets to buy a new pair of silk stocking every day of the year.
FAIRNESS? (Score:1, Interesting)
He and other state officials say it is a matter of fairness
That is such bullshit. If you want to make it "fair", eliminate the sales tax on brick & mortar operations.
What? That wouldn't be fair to the State you say? Well, how about you find some fiscal responsibility so you won't need so much tax revenue in the first place. If you want to talk about fairness, that would be a far better place to start than simply finding another taxation opportunity.
Bloodsucking leeches, all of them. Although I'm not really being fair to the leech. At least that little bloodsucker will give you an effective anticoagulant in exchange for a bit of your circulatory fluid, maybe help prevent a heart attack or a stroke. Goddamn tax-intoxicated politicians, on the other hand, are far more likely to cause a heart attack.
Re:That's it -we're fucked. (Score:3, Interesting)
interesting... let's say someone downloads something from the pirate bay. There's no sales tax involved, and that's not "fair".
There are two solutions:
Re:I live in WI, and I say this sucks (Score:5, Interesting)
That's the problem with "business" taxes that aren't on property values. Michigan's reeling too, because the auto makers can basically pick and choose how much "profit" to have in a year. You and I are taxed on Income, with few deductions for "capital" investments (hint YOU can't deduct rent or car payments.. your company can). We can't choose to not make income. That's why PEOPLE have to pay the taxes. California has Hollywood and Silicon Valley.. they should generally be rolling in cash... both industries that are highly profitable.. .and very good at not actually showing that profit on the bottom line where the state gets a cut. That's why you don't ever let businesses off the property taxes.. it's the only thing that's hard to filch out of.
Re:How do they enforce this? (Score:3, Interesting)
"Taxes are what is really annoying. I claim zero dependents with only 35,000 a year salary and i still owe NY state taxes."
That's about right. You have to spend money on tax-deductible things to get past the "standard" exemption. Your company accountant isn't pulling enough from your paycheck figuring you have something to claim that will get you a little back. When my wife and I bought our house the mortgage interest wasn't high enough to kick us past the standard deduction... you have to have a lot of tax-effecting bills (mortgage interest, business expenses like training, school, or travel, etc) to get over that "standard" deduction hump.
Re:"FAIR"??? What's fair about taxes? (Score:5, Interesting)
Let's put is this way: taxes are never fair.
Or, they're always fair, but "fair" doesn't mean "you get back exactly the amount of services that your taxes paid for".
I mean, as you say, one could argue that a tax on brick and mortar stores pays for such things as roads to get to the stores, police to watch the store, etc. But it's not like a $1000 piece of jewelry (for which you pay $80 in sales tax) costs that much more to transport and guard than a $10 package of steaks (for which you pay 80 cents in sales tax). And it's not like the money is earmarked to be spent only on things that directly apply to retail stores.
The fairness in taxes, or lack thereof, comes from how they're applied to people, not how the money is spent. Sales tax is arguably fair because everyone pays the same rate per purchased item. Income tax is arguably fair because the burden is highest for those who have the most disposable income. (Of course, these arguments are conflicting: if you like income tax because it's progressive, you ought to dislike sales tax because it's regressive.)
Robert Heinlein said it best, "The power to tax, once conceded, has no limits; it contains until it destroys." ("The Moon Is A Harsh Mistress", 1966)
Hmm... judging from the fact that countries with far higher tax rates than ours are still around, facilitating higher standards of living rather than becoming dystopian hellholes of oppression, it looks like Heinlein was wrong.
resurrecting an old post (Score:3, Interesting)
YOU ARE SUPPOSED TO BE PAYING TAXES ON ON-LINE PURCHASES. THEY'RE CALLED USE TAXES.
http://en.wikipedia.org/wiki/Use_tax [wikipedia.org] [wikipedia.org]
Here is the deal:
- If you don't pay them, your state can send you nasty grams in the mail saying "We see you have filed zero dollars in use taxes, please pay them." These notices are fairly common. IOW, the state tax departments are saying "Look, we aren't stupid, you're buying stuff on line, pay your tax". Now who here wants to keep records of the crap they buy JUST so you can pay use tax at the end of the year?
- With a mandated sales tax, it means YOU don't have to keep records for paying end-of-year taxes. They just add it on to your purchase like any other state(if your state has a sales tax). I don't know about you but I'd much rather pay the friggin tax up front then worry about the stupid EOY paperwork.
One thing to make life easier for consumers AND businesses: only allow one tax rate per state. example: Wisconsin has a moronic tax system where every county can charge differing rates something up to like 1/2% on top of whatever the state charges. Some counties are 5%, some are 5.5%, or like 5.25%. So to make it easier on on-line retailers, just legislate single tax rates per state for those that have a sales tax. End this moronic madness now.