California Balks At Internet Sales Tax

bob_calder writes "California has walked away from $2 billion a year in revenue by declining to get on board with a group working to standardize tax rates so a national tax on Internet sales could eventually be implemented by Congress. Supporters of the tax think they still have a chance in New York, Texas, and Florida. At the moment the largest states pursuing the Streamlined Sales Tax Initiative are New Jersey, Michigan, Indiana, and Ohio. California didn't want to give up its autonomy in setting taxes to a coalition of smaller states."

Who is the "orginization" behind this tax?

[Mc_Anthony]

I searched around and wasn't able to come up with the name of the group pushing for this Internet tax. Does anyone have more information on them? What are their politics? Who is funding them?

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[Average_Joe_Sixpack]

Originally it was brick and mortar retailers, but many of them now have ecommerce sites.

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[purpledinoz]

I always wondered this about the US. If you don't pay sales tax on out-of-state items, isn't this like a subsidy for shipping companies? One of the costs of buying products online is shipping. If you're not paying sales tax, that saving goes into paying for shipping. I think there should be a US wide sales tax standard for cross-state purchases.

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[maxume]

Look up 'use' tax. Most states charge it, it is a tax on goods purchased in other states; in my state, it isn't owed on goods that have already had sales tax charged on them. It's on the honor system, so people don't worry 'bout it much, I imagine the state pays more attention to rich folks. For a lot of people, because the law is written with people not keeping track in mind(there is an option to itemize small purchases or pay a standard amount), it amounts to cheating for about $20-30.

Re:Who is the "orginization" behind this tax?

[Maxo-Texas]

The problem is that sales taxes are spent in the state, not at the point of sale. Sales tax cover costs for roads and other services to brick and mortar establishments. All they are on the internet is mostly a money grab. In a lot of cases, the products being sold are not even delivered from the state where the sale was registered.

The second problem is that if states 1 to 47 have sales tax and 1-3 do not, then a lot of business is going to gravitate to those last three states.

Of course, if they tax them to be the same as brick and mortar, then folks will just shift back away from the internet.

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[alshithead]

I think almost if not all states require all companies who have a presence in that state are required to collect sales taxes for purchases from within that state. If a company has a retail outlet, warehouse, office, etc. they must collect and distribute that state's sales tax even if the sale is conducted over the phone or internet.

Re:Who is the "orginization" behind this tax?

[i2amsam]

Something I actually know about!

My Dad is working on Streamlined Sales Tax Committee
It's an initiative that's being run by the states, but
the big push is from big online realators like Amazon and
E-bay because they don't want to face 50 sets of rules of
tax for all of the 50 states.

The current system is stupid on the face of it, since now
most states only tax commerce for corperations which have
a actual physical presence in that state, it encourages
companies to not setup any investment in states where they
do a high volume of sales.

It's been going on for *years* and I don't know that they're
making much progress, too many cooks.

should there be a sale tax on online purchases?

[falconwolf]

The current system is stupid on the face of it, since now most states only tax commerce for corperations which have a actual physical presence in that state, it encourages companies to not setup any investment in states where they do a high volume of sales.

Are you saying it is stupid that online stores don't have to collect sales tax? If so why should they have to to collect and pay state's sales tax? As far as I'm concerned there sholdn't be any sales tax on online purchases. If what is purchased is

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[i2amsam]

What I'm saying is that the states are activly discouraging investment from companies, because that might force those companies' customer's to pay state sales tax. (E.g. there was talk back when Amazon never charged any sales tax except CA that if they built a new data center in state X, that residents of X would have to start paying tax on their Amazon purchases, which discouraged Amazon from brining that investment in)
1) All tax is a money grab by the states
2) Everyone wants lower taxes, but the curre

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[fkicker]

The big push is from brick-and-mortar retailers who want to "level" the sales-tax playing field. The Direct Marketing Association (DMA) which represents e-commerce and catalog retailers opposes the initiative. Amazon is carefully neutral [bookweb.org].

The current proposal is a huge burden on small businesses. The biggest problems with the current proposal are:

Each participating state wants me to remit the collected sales tax to them separately. Why can't I send in one payment to my state and then they can make

It's called Use Tax

[Anonymous Coward]

California already taxes internet purchases via a Use Tax law which is imposed on all goods purchased and then brought into the state by residents. You have to calculate the tax yourself when you file your state income tax return.

Re:It's called Use Tax

[AuMatar]

And amazingly, 99.99999% of Californians don't buy anything off the internet, as shown by their use taxes. Its an amazingly offline state.

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[etnu]

As a California resident for nearly 2 years, I'm proud to say that I never use the internet, ever.

Re:It's called Use Tax

[walt-sjc]

Most states have this, but compliance is pretty low, and nearly impossible to audit. While they could force you to give them copies of your credit card receipts, they would have to prove that you purchased items for yourself and not as a gift to Aunt Millie in Alaska, or something that you used on a trip in the state your purchased the item in...

I think the biggest challenge to a standardized nation wide sales tax is states with ZERO sales tax. So what are you going to do in these anti-tax states? Force them to implement a tax? Is it going to be a compromise mid-level, or is it going to be on the high-end like California?

I looked at my own internet purchases last year, and a number were from companies that already collect local sales tax since they have a business presence in my state, and the tax on everything else is a few hundred dollars at best. My state requires that I itemize everything for the use tax collection, which is just nuts. I put down zero as I have done every year for the past 25 years.

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[Doppler00]

I think it's called a use tax because I believe it's technically illegal for a state to impose an interstate tariff (tax) on goods purchased from another state. Anyone confirm this? Something I was remembering from the federalist papers. I mean, it makes sense. Why wouldn't they just call it a interstate import tax? "Use tax" is a ridiculous name and is obviously weasel wording around something.

Re:It's called Use Tax

[Professor_UNIX]

What I don't understand is why vendors aren't required to charge sales tax on out-of-state sales, collect the money, and then give it to the state in question.

Article 1, Section 8 of the Constitution: The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States; but all Duties, Imposts and Excises shall be uniform throughout the United States;

...

To regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes;

The States don't have the power to tax interstate commerce, that is a power specifically allocated to Congress by the Constitution... that's why they try to skirt the issue by demanding "Use Taxes" and the only time you need to pay sales tax is when a company has a brick and mortar presence in that state.

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[falconwolf]

What I don't understand is why vendors aren't required to charge sales tax on out-of-state sales, collect the money, and then give it to the state in question.

Why should venders be required to tax out of state purchases?

Falcon

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[bcrowell]

I've done internet mail order, and it was enough work filling out and sending in one state sales tax return every year, based on the sales tax rate where my business is located. Filling out forty of them every year would be a crazy burden on a small business. Also, the rate is normally calculated based on the district where the business is located, for the very reason that they don't want the business to have to have the kind of database you're talking about. There are plenty of people doing mail order who

My favorite internet tax quote:

[andres32a]

"The debate over the taxation of the Internet isn't about feeding the already well-lined coffers of government. It's about the fundamentally American idea that there should be no taxation without representation.

"While there is no evidence that Main Street firms have lost business due to tax differentials, that is beside the point. The answer to these concerns should not be to raise taxes on the Internet, but to lower taxes on Main Street businesses."

Colorado Governor Bill Owens
In a letter to Congress urging the extension of the Internet tax moratorium, and opposing his fellow governors' plea for Congressional approval to force collection of sales and use taxes from remote businesses.
August 20, 2001

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[Fry-kun]

And while we're at it, let's also overhaul the tax system [wikipedia.org].
The only ones losing out on that would be companies that work on tax returns (like H&R Block)

sigh.. i really really wish... :(

So you want to tax the baby boomers twice?

[Ungrounded Lightning]

And while we're at it, let's also overhaul the tax system [linking to the "fair tax" {a national sales tax proposal} wikipedia page].

Federal sales taxes have a number of problems.

The biggest, IMHO, is that switching to them ends up taxing people's savings - especially retirement savings - twice. It was taxed once, at various rates, while it was was being squirreled away. Then it gets taxed again, at confiscatory rates, when it is spent.

Right now is especially nasty, since you've got the entire baby boom just reaching retirement age. They've already been massively soaked by the Social Security pyramid scheme to give bread and circuses to previous generations - amid constant predictions that it would collapse when THEY retired. So they had to build their own retirement nest-eggs on top of it, while paying the ever-climbing interest on the national debt (which first became intractable when their parents ran the Vietnam War on credit, back when the bulk of the boomers were opposing it). Now, as they're about to retire and have to live on what little they were able to save: And people talk about "replacing" the income tax (which they already paid on much of that money) with a similar percentage of sales tax.

That's one big voting block that will oppose such a measure until they die - by which time additional generations will be in a similar situation.

Next: Like all taxes, once imposed it will never go away and will always go up. Sales taxes, being largely hidden, make it much easier for the government to jack the rates. (See the "value added tax" debacle on the other side of the Atlantic pond for details.)

And: Sales taxes zap the lower income earners harder than the upper (since the lower-income people are working hand-to-mouth and need to spend pretty much all of it, while the upper can avoid spending much of it - investing it to make more, moving it to places and situations where the tax can be avoided before spending it, etc.). This scheme attempts to avoid the effect by "rebating" a certain amount of tax to each individual - approximating a flat-tax plus dole scheme. What a massive opportunity for cheating (by creating multiple fake identities to get multiple "rebates".) What a massive excuse for the government to impose a national ID / registration / citizen tracking system.

I could go on...

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[bnenning]

The biggest, IMHO, is that switching to them ends up taxing people's savings - especially retirement savings - twice.

That's true, and it's definitely an issue. But some of the double taxation already exists today; when I buy something with my after-tax income, a significant chunk of the payment goes to corporate taxes and other taxes embedded in the purchase price, which would be eliminated under the FairTax. And if I invest the money instead of immediately spending it I end up paying capital gains taxes, w

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[Ungrounded Lightning]

Well, you can do that today by inventing extra children for more deductions, and that's just one of the countless ways to cheat on income taxes. And I don't see why we'd need a national ID other than the existing SSN.

The point is not whether you'd need any additional ID number.

With the current SSN, while it's not legal to register more than once, there's little incentive to do so, because benefits are largely proportional to pay-in. Somebody who switches identities loses his accumulation in return for anon

Getting same effect with less downsides

[Ungrounded Lightning]

You can get most of the same effect as the (un)"fair tax" with less downsides (including avoiding the double-tax effect of switching):

- Stick with an income tax but make it DEAD flat. Collect the full amount as withholding at paycheck time. Everybody pays the same percentage, so there's no need to track I.D.

- Do the flat "rebate/dole" as a separate (though related) item: One to a customer, regardless of income. Registration is voluntary, as is picking up the payment. Anybody who wishes

Federal sales taxes have a number of problems.

[falconwolf]

The biggest, IMHO, is that switching to them ends up taxing people's savings - especially retirement savings - twice. It was taxed once, at various rates, while it was was being squirreled away. Then it gets taxed again, at confiscatory rates, when it is spent.

Sales tax does not tax savings, it only taxes spending. When it is spent it changes from savings to spending money. Actually income tax should be abolished and replaced with a national sales tax.

Right now is especially nasty, since you've got th

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[miskatonic alumnus]

I would say that of all the purchases I make online, only about 10% of them can be found locally. And for that 10%, the base cost is cheaper online than what is charged locally BEFORE taxes.

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[tkrotchko]

"Nobody talks about buying it locally."

Mostly because it's impossible to find the latest gadgets locally, even if you live in a major city in the U.S.

And even then, it's not the sales tax that drives people away, it's the fact that the stores that have cutting edge gadgets are often boutique sellers that charge a significant premium over "regular" retailers.

For example, it's pretty difficult for most people to buy an Apple computer locally (defined as 45 minutes away or less), or BluRay recorder for your PC

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[dave1g]

45 minutes? I wouldn't drive more than 15 minutes (30 minutes max) to buy anything less expensive than a car!

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[bogjobber]

This has to do with many, many other factors. Taxes are fairly far down on the list of reasons why buying things off the internet is superior. Companies like Amazon, eBay, NewEgg, Dell, etc. probably wouldn't exist without the internet, and if they did they definitely wouldn't be as successful. This has more to do with their business models than with the tax differences. Even in areas with no sales tax internet retailers are still killing brick and mortar stores.

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[David Greene]

No, it isn't. It's classic Grover Norquist anti-tax, anti-government rhetoric packaged up in populist clothing. We levy taxes for a very important reason: they fund the services necessary for us to maintain our society and prosper.

It's not insightful to blather on about government inefficiency. You've got to show where it can be improved. More often than not, government programs are running on barebones budgets. There's no fat to cut.

I'm sick of right-wingers fanning the flames of fear and isolatio

I thought us Aussies were taxed weird

[inphorm]

That is a strange tax law, this is from TFA

"The state also requires its residents to report purchases made over the Internet and pay taxes on them"

How can they enforce that? Our tax laws are pretty uniform across the country, but I buy something from overseas, I don't have to pay our local GST (Goods & Services Tax) of 10% on the item. I may or may not have to pay the import tax to get it through customs, depending on what it is and how it is sent over.

I see buying something over the internet as the same as actually traveling to the state / country where the item is and buying it. As long as the seller obeys local tax laws, who cares what the buyer does?

I may have an overy simplistic view of things though.

- paul

http://www.paulpichugin.com.au/ [paulpichugin.com.au]

Re:I thought us Aussies were taxed weird

[ScrewMaster]

I may have an overy simplistic view of things though.

Perhaps, but I think it more likely that our elected leaders have an overly complex view of things.

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[minion]

I may have an overy simplistic view of things though.

Perhaps, but I think it more likely that our elected leaders have an overly complex view of things.
 
You're both wrong. I think our elected leaders have an overly greedy view of things.

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[ScrewMaster]

Yes, and I think that while those trends were in force for a long time, you can look at World War II as an inflection point for big government.

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[Jeff DeMaagd]

In the US, taxes on out of state purchases is called a use tax whereever I've heard it called by a technical name. I don't know if Australia does random audits, if a person is not reporting them, I think at least some of it might show up, I don't know. My state has a very lenient amnesty program such that I pay a very small amount, proportional to my annual income so that I don't have to keep track of all the out of state purchases to stay honest. I think I paid $3 US. At least the state will mis-spend

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[Red Flayer]

How can they enforce that?

Ever been audited? It sucks. They will comb through your credit card statements looking for online purchases. Paypal account? If they suspect malfeasance, don't be surprised if those records are made available to the state -- just like b&m banks are subpoenad to provide records in the case of suspected income tax evasion.

All they need to do for enforcement is make sure that (probability of begin audited * average perceived punishment for audited people) is greater than t

Sales Tax vs. Use Tax

[jevvim]

It should be the same for things bought over the internet, the same as if you were to travel to the state and buy the product.

Actually, it is.

No matter where an item is purchased, the purchaser owes a "use tax" payment to the state in which the item is first used. If "sales tax" has been paid on the item, the amount paid in "sales tax" is deducted from "use tax" payment which is due. When you buy an item in your state of residence, the "sales tax" and "use tax" amounts are equal, so while it was collecte

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[inphorm]

Wow, talk about making things complex for people. That would make most people, technically speaking, tax evaders, something that is illegal in 99.9% of countries in the world.

In Australia you just pay sales tax on something when you buy it, but you don't get taxed for using it. I can go to Melbourne and buy a car or a piece of furniture or whatever and bring it back here to Brisbane and not have to worry about any extra taxes on the product.

I'd hate to have to keep track of everything I bought interstate, I

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[hurfy]

"How can they enforce that? "

well, they can't very well. That is why the other states want an easier way. Currently to do the US there would be thousands* of tax codes and rates :(

*thousands assumed but there are around 250 for Washington :(

Washington is even better, they do it the same way except there is NO personal income tax thus no form, thus probably less than the 00.0001% someone else made up ;) I don't even know how to pay it if i wanted to, i am sure people are just racing to look up how to pay tax

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[lelitsch]

Use tax laws are actually pretty common in the US. For example, Illinois has a similar law that requires you to pay sales tax for all purchases made out of state. Strictly speaking, anytime someone from Chicago buys anything in Indianapolis or New York, they would be required to keep the receipt until April 15 of the next year, then fill out a ST44 tax form for all these purchases, and file it with all your receipts. Even if you fill up your car in Gary 20 miles from Chicago, you would strickly speaking hav

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[Pinky3]

This isn't just for the internet. If I go to Nevada and buy a new car and bring it back to my home in California, the law says I need to register (license) it in California and pay the use (sales) tax just as if I had bought it in California. The same is true of furniture, a new tv, or any other item I buy out-of-state and bring back to California as a new item.

Purchases from a mail order catalog are treated the same way by the law.

a better idea

[cashman73]

Congress should instead just focus on implementing a 1% national sales tax on everything (brick-and-mortar stores, internet sales, the whole 9 yards). Don't discriminate. Then, they could wipe out the income tax and seriously downsize the IRS (sorry, can't completely eliminate 'em ... they still need to handle the national sales tax).

Fair Tax

[John.P.Jones]

I direct you to FairTax.org where the dream lives on, although I believe its more like 23% to be revenue neutral.

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[evilviper]

I direct you to FairTax.org where the dream lives on,

Yes, I suppose the extremely wealthy have dreams of pushing even more of the tax burden upon the poorest and middle classes, so I _guess_ calling it a "dream" is a fair characterization.

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[bnenning]

The FairTax is progressive; because of the universal rebate the poor will pay low or negative taxes. Try again.

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[Copid]

The FairTax is progressive; because of the universal rebate the poor will pay low or negative taxes. Try again.

The interesting question is, after accounting for the rebate, is it as progressive as our current income tax is? I strongly doubt it.

True fair tax formula.

[NotQuiteReal]

(Cost of Government) / (Number of Citizens) = the fair tax per citizen.

Anything else is unfair, but necessary simply because not everyone can afford their fair share.

All the shenanigans of modern tax code boils down to the politics of extracting unfair amounts of money from whomever will pay.

Re:True fair tax formula.

[Ibag]

I think this is an overly simplistic view. If my rich friend invites several people out to an expensive restaurant for his birthday, some people share dishes while others get for themselves, with one person getting something obscenely expensive that nobody else could even afford, what is the fair way to pay the bill? It wouldn't be fair to just split things evenly, because not everybody contributed to the cost equally. It could be argued that the fair way is for everybody to pay for what they ate, but what about the people who can't afford even that, and wouldn't have come unless explicitly asked to? Maybe, since it is his birthday, the rich friend shouldn't have to pay anything? Maybe since he invited the people out, he should have to pay everything? Maybe just the tip should be split evenly? There are dozens of different ways to split the bill, each with it's own rationale, and none of them clearly "the" fair bill payment method.

Taxes are the same way. Not everybody uses government services the same. Many government services (like having a military) are not directly used by the majority of people. Everything needs to be funded* somehow, and charging the people who both use less and make less an amount which is more than their annual salary is not fair by any means. What is the most fair tax plan, then? It doesn't exist! But a system that charges more money to the people who can afford it or who use more government services is a lot more fair than charging a homeless man more money than he has spent in the last decade while charging Bill Gates less than he makes in 5 minutes from bank interest.

*let's not debate whether the budget is just or not.

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[Ibag]

You may pay far more than your equal share. That does not mean that you pay far more than your fair share. In this context, the word "fair" is a loaded, and mostly meaningless term. That's the entire point.

More than just the autonomy.

[WindBourne]

Many of the servers reside in CA. In addition, so many sales. As such, CA gets to collect the sales tax on those sales. Once an internet tax comes through, then you can bet that many of the servers will change location basically to asia. Now California loses not just the tax base, but all those lucrative jobs.

California wants to be a State now?

[Speare]

In the last story, California wanted to be a bland featureless part of the Federation letting someone else manage the citizen identification issues. Now in this story, California wants to retain full sovereignty over taxation. I know there's more than one person, and therefore more than one opinion on the whole statehood thing here, but come on, fellas.

REPEAL PROP13!

[MilesNaismith]

If they want to make more tax money magically appear in California budget, they just need to repeal Proposition 13. This is the ridiculous measure from decades ago, wherein property tax is decided at time of purchase. So if you bought your house in 1979 well you never have to pay higher property taxes. This measure has also been called "Screw The Newcomers!" as anyone buying a house now, will not only get to enjoy the outrageous mortgages, but disproportionately high taxes. Unfortunately, much like Soci

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[konekoniku]

actually, prop13 provides for a 3% property tax increase a year, in order to take inflation into account. the idea behind it is that people who bought their houses decades ago should not be at risk of having them repossessed by the state just because property taxes have risen too high, too fast for them to pay it. i agree though, that it has led to some negative side effects like those you just mentioned.

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[Doppler00]

Property tax == rent you pay to the government to exist

Otherwise they kick the door down to your house, arrest you, seize your assets, and throw you on the street.

That is all.

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[Copid]

How is it flawed idea to allow people to stay in the homes they had previously bought and planned to spend the rest of their life in (or a good portion of it)?

Your question presumes that the property tax in general is a good idea. I tend to think that taxing the primary property of residence is not a wise policy. However, taxing two houses in the same neighborhood at ridiculously different rates is a worse policy. Likewise, when dealing with skyrocketing housing costs, giving home owners a strong disi

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[Copid]

One could make the argument that it is fair because the newcomers are benefitting from the effort of those who have came before. Consequently the newcomers can do better than those who starting lower in the effort ladder.

I'll certainly buy into that argument for GDP. I'll heartily thank the generations that came before me for my high standard of living. I don't think that they're to thank for the housing bubble, or that a housing bubble is really something to be thankful for. It's more of an unhealthy

Different rationale

[Qwavel]

> California didn't want to give up its autonomy in setting taxes to a coalition of smaller states.

Let's restate that. CA didn't want to give up it's opportunity to score some political points. Autonomy and tax bashing sell extremely well in politics. Voters pay much less attention to issue like the efficiency of a harmonized tax system.

If this is done on a state by state basis it will be an inefficient mess with many more ways to get around paying. The result will be much less revenue for the states

The real reason this won't work

[deblau]

Most government services are funded through excise (purchase) taxes. Road maintenance is funded through user fees (the gas tax). National parks are funded through user fees (including fishing and camping permits). The patent office is funded through user fees. The national phone & electric services are funded through use taxes on your bill. Etc. The only real reason to tax the Internet is to pay for administering Internet services. But the Internet is largely run by private companies, not the government. What, exactly, would the Internet sales tax pay for? Lining politicians' pockets. There is no need to tax the Internet.

If California did not accept it...

[mkiwi]

There is absolutely no way Texas will ever agree to something similar.

As in Beer

[wytcld]

Vermont has just signed on to this project. The biggest effect on most of us: Beer now has sales tax; that's part of this interstate standard. What does this accomplish? You cannot legally ship anything with alcohol into Vermont to a retail customer (unlike some states where you can buy wine that way), and none of Vermont's small brewers are trying to mail order beer out of Vermont. Would you want your beer delivered by UPS?

Those of us on the eastern side of Vermont already drive to New Hampshire to buy other stuff that's taxed at home. Now, since this new law to protect the taxability of future internet beer sales, we're getting our beer there too. Smart move, legislature.

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[sydbarrett74]

And an income tax isn't? With all of the loopholes, our 'progressive' income tax is actually quite regressive for all but the wealthiest of individuals. FairTax(sm)

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[Marxist Hacker 42]

And an income tax isn't? With all of the loopholes, our 'progressive' income tax is actually quite regressive for all but the wealthiest of individuals. FairTax(sm)

Federal yes- Oregon takes great pains to make sure our income tax is extremely progressive. It's the main complaint of business people in this state.

No, Income Tax is "Progressive."

[Garrett Fox]

Not true. Although some super-rich people are able to skate out of much of their taxes, the rich in this country pay a vastly disproportionate share of all income taxes. Income tax is a highly "progressive" system, meaning it's designed to hurt the rich the most. Corporate profits are in a sense double-taxed as well.

Having said that: The "FairTax" proposal would be a good idea.

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[AK Marc]

It follows that under our current system, where the average person is taxed in the range of 45% of their income (income tax + payroll deductions + sales tax + property tax + capital gains tax + estate tax), we're 45% enslaved.

Well, I make above average, and I paid about 8% in federal income tax for 2006. Add in all the taxes I pay (including the portions of all companies I own parts of through stock and such, as well as "taxes" I pay that I will get back in old age) and I'm still well below 20%. And yes

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[DogDude]

Sales tax is just another way to transfer wealth from the poor to the rich.

How so? That doesn't make any sense to me at all. Sales tax is the great equalizer. The more you spend, the more you pay in tax. Sales tax also encourages people to save and invest. I think you have your logic backwards.

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[Marxist Hacker 42]

How so? That doesn't make any sense to me at all. Sales tax is the great equalizer. The more you spend, the more you pay in tax. Sales tax also encourages people to save and invest. I think you have your logic backwards.

Savings and investment are things only the rich can afford to do- a tax shelter in a state that lives on sales tax would be getting Howard Hughes Syndrome- living very poor off of your investments. Likewise, in a state like mine that is already cash poor, you don't WANT people to save. Y

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[walt-sjc]

Savings and investment are things only the rich can afford to do

I think you meant to say that "Savings and investment are things that everyone except the very poor can afford to do." Hell, even freakin Walmart has a 401K plan. It all depends on whether you decide to spend all your cash and buy all the coolest toys, or whether you live frugally and put money away. I sure don't consider myself rich, and I have been saving since high-school, and minimum wage jobs. I just save a heck of a lot more now.

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[Marxist Hacker 42]

I think you meant to say that "Savings and investment are things that everyone except the very poor can afford to do." Hell, even freakin Walmart has a 401K plan.

401k plans are not investment. 401k plans are the federal government using a tax loophole to funnel money from the poor into brokerage acounts, at which point it gets eaten up between "stock market downturns" and "brokerage fees", with the total zeroing out every 5-10 years. REAL investing doesn't use the con game known as a stock market; inste

Clueless much?

[alexhmit01]

I know it's all a conspiracy, and the people that actually put money in the stock market over the past few decades and live off of their investments are a myth. I also know that only rich people have money, and they have everything, which is why the people in the big houses and fancy cars are often leveraged to the hilt, and their neighbors with smaller homes and cars aren't seen as wealthy, but may or may not have more wealth.

However, your understanding of the VC market is illusionary. The real rate of r

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[Marxist Hacker 42]

And we come to why no one should ever take financial advice from someone titled "Marxist Hacker 42". I could save and invest and I'm certainly NOT rich. I just had the discipline to do it, instead of playing the "blame game".

I suppose this could be true- but I find living in a cardboard box usually means that employment soon ends. If you were truly *not rich* then you'd be spending all of your money on food, clothing, shelter, water, heat, electricity, and enough tools of the trade to get hired. By defi

Re:

[Marxist Hacker 42]

Spending shifts and transfers wealth. Production creates wealth; doing things that encourage productive activity is generally a better idea than encouraging spending.

The number one thing that creates production, is having somebody to buy your production. In other words, spending. Destroy your customers, and you destroy any hope of having a business OR wealth above minimum wage.

Re:

[The One and Only]

There's a certain floor level of spending that's required to sustain a living. You might talk about exemptions for food and stuff, but unless you exempt every single thing that poorer people buy (thus making your "sales tax" more of a "luxury tax"), it still affects them more than richer people who can and do invest.

Re:

[Copid]

How so? That doesn't make any sense to me at all. Sales tax is the great equalizer. The more you spend, the more you pay in tax. Sales tax also encourages people to save and invest. I think you have your logic backwards.

In absolute terms, you're right. In relative terms, there's a big difference. A person making millions of dollars typically spends a much smaller fraction of their income than a middle-income wage earner. As a result, the average person pays sales tax (7.75% in my locality) on a much la

Re:

[hedgemage]

As an Oregonian, I echo the OP's resistance to sales taxes. I'm also a proponent of keeping the taxing body as close to those taxed as possible. If you have more local control over taxes collected, there is less chance for corruption, inefficiency, and more control over how the money collected is spent. I'm very dubious of adding another layer of government between state and federal that would have power to regulate taxes even if states enter into that layer voluntarily. Taxation needs to have more cont

Re:

[Marxist Hacker 42]

Me too- life's just easier when you can find the guy who cheated you, in either government or business, and punch him in the nose if you need to. You must have grown up rural Oregon like I did- few of the Yorkies or Californicators who have moved into the valley in the past 15 years would agree with us.

Re:

[Marxist Hacker 42]

I watched my hometown economy go down in flames, when the "Spotted Owl" scandal happened, I don't want to see that here.

Unfortuneately it already happened. I used to live in a town that had logging trucks roll through every day- but the sawmill was based on old-growth sized trees (most were really 80 year old 2nd growth), and spotted owls killed it.

Re:

[bogjobber]

Are there municipalities in Oregon that have sales tax? I lived there when I was younger (Eastern OR), and none of the places I knew had sales tax. It would seem to make sense, though, because the Portland-area cities especially really love public works and in other states it's very common to fund local projects through slight increases in sales tax. Do they just cover it with property/income taxes?

Re:

[Somnus]

If the rich consume more resources, presumably they're paying for such consumption, and so they pay a consumption tax proportionally.

There are at least a few good reasons to have a progressive income tax instead of a consumption tax, but you have not offered a single one.

Re:

[Marxist Hacker 42]

If the rich consume more resources, presumably they're paying for such consumption, and so they pay a consumption tax proportionally.

Doesn't work that way because they hide behind fake persons called Corporations, and Corporations don't have to pay local taxes. Likewise, the corporations can afford to save, unlike regular people.

There are at least a few good reasons to have a progressive income tax instead of a consumption tax, but you have not offered a single one.

Ok, here's one: taxes as a percent

Re:

[Somnus]

First, corporations do have to pay local and state income taxes, but the amount varies by location and business; this is why corporations shift their headquarters to places like Delaware and South Dakota, which have very low corporate income tax rates. Corporations certainly have to pay state sales taxes on goods purchased for use.

Even if this weren't the case, how would wealthy people hide their income behind a corporation? Any "realized" gains in stocks (i.e., proceeds from sale or dividends) are subjec

Re:

[pilgrim23]

I am also in Oregon and Mister, I don't care if your oposition to the sales tax is due to alien communications or your pet ferret thinks its a bad idea as long as you oposes it!

NINE times we have voted on a sales tax. 9 times it has been voted out... and they STILL keep proposing it.. When will the wastrels we call Gu'bmint figure it out? WE know your game and we want NO PART OF IT HERE!

Re:

[Marxist Hacker 42]

NINE times we have voted on a sales tax. 9 times it has been voted out... and they STILL keep proposing it.. When will the wastrels we call Gu'bmint figure it out? WE know your game and we want NO PART OF IT HERE!

I think they're hoping for the day that foreigners and Californicators outnumber 'Gonies like you and me.

I am also in Oregon and Mister, I don't care if your oposition to the sales tax is due to alien communications or your pet ferret thinks its a bad idea as long as you oposes it!

Six more li

Re:

[SEAL]

NINE times we have voted on a sales tax. 9 times it has been voted out... and they STILL keep proposing it.. When will the wastrels we call Gu'bmint figure it out? WE know your game and we want NO PART OF IT HERE!

Funny... it's the exact same thing with income tax in WA state. We keep voting it out; legislators keep putting it on the table. (For those not familiar: Oregon and Washington state legislatures are both fairly liberal and love their taxes. OR has a state income tax but no sales tax. WA has the

Re:

[SonicSpike]

What kind of tax do you suggest then?

Re:

[Marxist Hacker 42]

Well, I actually perfer a form of income tax based on multiples of the minimum wage / 10 (with all money below the bracket being tax free- you're only taxed on additional income. Which gives you ten brackets between the poorest and the richest Americans out there. More than enough to preserve motivation, but a low enough maximum wage to minimize the hyperinflationary aspects of allowing people to be excessively rich due to inflation, savings, or investment. At minimum wage, all money you earn between min

Re:

[SonicSpike]

But that is NOT equality under the law. Why should one be rewarded or punished by the government based on the amount of money they make? People should be taxed equally. We should not discriminate based upon income.

Re:

[MadUndergrad]

But that is NOT equality. Why should one be rewarded or punished by the store based on what they buy? People should pay the same for every item. We should not charge more for a Ferrari than for toilet paper.

Makes about the same amount of sense.

Re:

[tkrotchko]

"What kind of tax do you suggest then?"

Lower.

Re:

[SonicSpike]

I agree with that. Cut spending, and cut taxes! Vote Libertarian.

Re:

[siwelwerd]

Taxation is just another way to transfer wealth from Group A to Group B. It is always a scam. I reccomend always avoiding it whenever possible.

Re:

[the eric conspiracy]

I recommend always avoiding it whenever possible.

Tax avoidance is always a worthy goal, and sales tax is one of the least fair taxes there is for the simple reason that it is a flat tax levied against what are the necessities of life for many people with low incomes.

There are so many large problems with the current hodge-podge of taxes as implemented in this country that I believe that it is an affront to morality.

- Cigarette taxes - rather than treating tobacco as the giant public health problem it is and

Re:

[Jeff DeMaagd]

How do "the rich" get the money that is taxed from "the poor" based on your view?

Re:

[Mr. Underbridge]

Sales tax is just another way to transfer wealth from the poor to the rich. It is always a scam based on a will for the rich to avoid any responsibility for their greater consumption of natural resources that they would otherwise be paying for. I recommend always avoiding it whenever possible.

Great speech, comrade. Read that in Pravda, did you?

Re:

[Marxist Hacker 42]

In Corporatism, the only class that is political is the class that is rich enough to hire lobbyists. Only they have any real power, voting is just a show for the masses between two people picked by the lobbyists.

I HACK Marx, I'm not a communist. Marx wasn't a communist either, strickly speaking. Das Capital and the Manifesto are the same document written from different perspectives. Right now I'm more of a distributist- I prefer small economic communites (of no more than 6000 people at the most, prefer

Re:

[bnenning]

I prefer small economic communites (of no more than 6000 people at the most, preferably more like 500) that are isolationist and defend their borders against foreign imports with large amounts of force.

So like North Korea, but with no economy of scale. Let me know how that works out.

Re:

[Marxist Hacker 42]

So like North Korea, but with no economy of scale. Let me know how that works out.

A slightly less violent form has worked out for the past 1600 years: Catholic contemplative communities. Many are self-sufficient now, especially since the teachings on environmentalism came along.

Re:

[nvrrobx]

Somewhat convenient doesn't begin to describe it.

If the retailers were expected to charge the local sales tax rates for where the buyer is located, this would require an large amount of data, as states and counties can set their own tax rates. This is especially problematic as the retailers would need to make sure this data stays up to date. It also adds an extra burden to the retailer to submit the monies and forms back to said localities.

This will undoubtedly cause the cost of buying things on the Inter

Re:

[nero4wolfe]

The standardization effort is the response of a group of state government to complaints by mail order businesses (not specifically internet businesses) that if they had to pay local taxes for every customer purchase... there would be hundreds, if not thousands, of local tax rates to keep track of (state, county, city, special district, etc.) you couldn't depend on customers to tell you the rate; they may not know; they may be wrong, etc. each mail order business would have to register with potentially

Re:why standardize tax rates?

[walt-sjc]

The problem is bigger than you realize. It's not just 50 different state taxes, it's local taxes too. Cities in California can add their own sales tax. Also, in some places clothing is taxed, and not in others. The exceptions and special cases for sales taxes nationwide is a total freakin nightmare.

Re:

[LWATCDR]

Actually yes it really is. It isn't just a different rate per state but a different rate per town and or county. Some locations even have different rates per type of item. Then you have tax holidays. For example some states have tax free days for school cloths and or hurricane supplies. Then you have the problem of writing checks for 20 cents to cover that mouse pad that you sold in North Dakota.
A small operation could have file 300 different tax reports a month and write 300 checks for 10 cents too ten do