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.
I live in WI, and I say this sucks (Score:5, Informative)
If it moves.... (Score:3, Insightful)
A tax on auto insurance? That's a regressive one. Oh, do they want more uninsured drivers on the road? Lovely. I can see how everybody wins with that proposal.
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"Uninsured driver" coverage is mandatory in Maryland and Pennsylvania. You mean it's not mandatory elsewhere? Surprising. What happens if you get hit by an uninsured person? Tough luck?
To borrow a quote from former president Andrew Jackson:
"The Supreme Court has made its ruling. Now let's see them enforce it," as he proceeded to ignore the court entirely because he considered the ruling unconstitutional. Likewise, Wisconsin can pass any law they want, but I am NOT going to collect sales tax or file
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You have to pay for all those government programs somehow.
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.
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If they loosed income, we'd all be richer.
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> When the state looses income don't stop the give away program, no, tax everyone
Why, yes, Pentalive, you can TAX your way out of a depression. Didn't you get the memo?
How do they enforce this? (Score:5, Insightful)
Re:How do they enforce this? (Score:5, Insightful)
I don't think the physical presence aspect is affected by this legislation at all. Previously, digital downloads were just not applicable to sales tax in Wisconsin, much like food or medical supplies are not taxable in certain states. If Apple or Amazon don't have a business presence in the state, their stores will probably remain sales tax free.
I'm not sure why these articles are such news. We've been paying sales tax on digital downloads in Washington for as long as I can remember. We have both an Apple (via Apple Stores) and Amazon (headquarters and all) presence too.
Re:How do they enforce this? (Score:4, Insightful)
If you tax something, you get less of it. This is kindergarden economics.
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they are actually encouraging businesses to not come to their state
Welcome to the wonderful world of taxes. I should know, I'm from New York and there's a reason our population has been dropping like a rock for decades.
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I like New York for two reasons, lake ontario and the weather.
Taxes are what is really annoying. I claim zero dependents with only 35,000 a year salary and i still owe NY state taxes.
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"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
Re:How do they enforce this? (Score:5, Insightful)
You do realize that having your withholding adjusted so that you owe instead of get a refund is a good thing right?
Re:How do they enforce this? (Score:5, Informative)
If you get a refund, you'll get exactly what you would've have spent when you initially paid your taxes and had withholding's taken out. In other words, it's like the government was saving your money for you without paying interest like a bank would do.
If, however, you owe money, that means you got to keep it in the bank or put it into some kind of investment, where it could grow grow. When it comes time to pay owed taxes, whatever interest or growth that money accrued is yours.
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Yes really. I get fined almost every year. Most years it's trivial, like $25, but last year it was a $105 fine. They must have rewrote the rules in order to catch people like me.
The IRS expects you to pay every week or file quarterly payments, and to be under $1000 owed on April 15. If you don't comply, you get punished.
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If mab claimed one dependent, less would be withheld making for a significantly larger check to be written to the state. That's a great strategy when you have other deductions that guarantee you a refund since you have more money each month and can make it work for you instead of letting the st
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Coulda' fooled me. I'm sure that's why the prices of real estate in New York are so much lower than they were ten years ago...
Re:How do they enforce this? (Score:4, Informative)
Large businesses like Apple or Amazon, which do such a large amount of online business, will probably end up stopping all operations in that state.
Yeah right. Apple's going to close down all its retail stores in a state (which bring in plenty of revenue) because of a tax on digital downloads. Economics isn't your strong point, is it?
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exactly. They've passed the law, now let's see them enforce it.
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Also, I figure a lot of people who live in that state will just list a friend's address in another state. Since nothing physical is being delivered, there's no effect on the actual purchase if one does this.
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Then they change the billing address of one of their cards, and pay it online.
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I am guessing (am hoping) that total revenue from a business must be above a certain amount to collect download tax. Small businesses on the Internet cannot afford the time or money lost to bookkeeping expenses.
Retailers like Amazon and Apple can- they have armies of accountants who can take care of the paperwork.
Re:How do they enforce this? (Score:5, Insightful)
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Re:How do they enforce this? (Score:4, Insightful)
Really its easy to enforce. (Score:2)
Technically in most states anything you purchase in another state and bring home is subject to your state's taxes too. So really this is already in place.
No one claims it since its hard to track so we all feel safe ignoring it. However, its easy to track these purchases if you use giant services like paypal, or master-card to pay the bill. The small time operators taking money orders will sneak past, for now.
Not too hard to ditch... (Score:4, Insightful)
Option 1: Start using PayPal with an out-of-state relative's address
Option 2: Get a PO box over state lines, and open a bank account there while you're at it.
I am curious, though - they expect to make $6.7m per year... how much of that will disappear into enforcement and accounting? Doesn't really seem like there's enough return on it to balance the hordes of pissed-off constituents.
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Option 4: http://thepiratebay.org/ [thepiratebay.org]
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Option 5:
Pay the 4cents to keep your local government solvent.
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Option 5:
Pay the 4cents to keep your local government solvent.
Why should a government not be forced to lay people off when the economy is? Besides, if the economy contracts, there's less paperwork and accounting and everything to be done, as well as less tax revenue to spend, so there should be no problem getting rid of jobs.
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Why should a government not be forced to lay people off when the economy is? (sic)
Assuming the missing word in your question is "bad", the answer is that laying off people worsens the already worsening economy. Even conservatives should admit that one of the basic roles of government is to govern (thus the name). A governor, in mechanical terms, regulates an engine from going too fast or too slow. If it slows an already too slow engine, it is not doing its job. Laying workers off is the exact opposite if what government should do during a downturn. Laying them off in a booming economy i
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I am sure the government will start laying off policemen when organized crime starts laying off criminals, and laying off teachers when families start laying off children...
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New Jersey...
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And guess what? We have some of the cheapest gas in the country - the full-service law (which adds jobs, however bad they are) comes with a decrease in fuel tax.
Cheapest gas on the eastern seaboard, NJ has.
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My fiancee is from NJ. She used to make this gas price argument until I pointed out that, sure, the gas is cheap. But with all the tolls, I think it's at best, a wash.
Re:Not too hard to ditch... (Score:4, Insightful)
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We have both types of gas stations out here. The cost difference is so negligible (2-3 cents a gallon?) that I go to full service stations any time the weather is inclement and I need fuel.
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You forgot to mention that gas is about 25 cents per gallon in Oregon because self-service gas stations are illegal.?
Can we ban self-service stations here in the Northeast, too? I'd love 25 cents a gallon...
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The key is to sneak the tax in early, when it doesn't make much money, so the early adopters get used to it. Then, as its use increases exponentially, the tax is just accepted as the way it is...
Re:Not too hard to ditch... (Score:4, Insightful)
Yeah, this seems strange that you would go as far as to commit tax fraud, but you seem to be against downloading a free copy from file sharers. I am curious; is there a moral reason for this duality (maybe you think it is wrong to not pay an artist but not wrong to not pay the government?), or do you just enjoy thinking up ways to get out of having to do something someone is trying to make you do?
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economy (Score:5, Funny)
Glad to see that WI is working to help stimulate the economy by pulling more money out of it!!
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And big government fans think this is rational behavior and cheer it on.
There aren't really any big government fans. Just "government by our side" fans who don't mind the government being too big. Witness the last sixteen years, where each party suddenly loved small government the instant it lost power.
Re:economy (Score:5, Insightful)
Both parties have figured out that the best way to get control is to take advantage of the fact that everybody thinks everybody else is an idiot and cannot be trusted with their own money.
Nobody in their right mind will vote Govt. into taking decision making power over themselves but it's usually acceptable to do it to 'those people'.
The net result of this is that if you are in the under six-figure income bracket you'd probably better get used to the idea that there will soon be a bureaucracy in charge of everything in you life.
If you were capable of making good decisions you'd be wealthier wouldn't you?
Similarly, those of you who are in the over six-figure bracket will get your own bureaucracy to redistribute the wealth. No don't whine. You get your own welfare too.
Everything has to be managed. And, of course, anything not controlled by bureaucrats is not managed.
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Re:economy (Score:4, Informative)
negative ghostrider - a tax involves a middleman, who involves an ever growing support structure, all of whom must be paid via tax, and who does not make decisions based on a profit perspective, but on a position of influencing a vote for him. That which is not profitable but is paid for regardless because of edict will not have competitive pressure for improvement. It will eventually cost more than an alternative that required continuous improvement to survive in a competitive environment. Anything that costs more than is necessary, espcially that which is legislated to exist and so has little incentive to be withdrawn because *voters* become dependent on it, draws away the ability to create and improve everything else, from stem cells to flying cars.
Tax is not zero sum - it is a negative use of money. It should be kept to those minimal actions necessary for the survival of a society - like the Constitution envisioned.
Re:economy (Score:4, Insightful)
Yes because we all know that a privately run fire department would be a much better use of tax payer's dollars. Or a privatized police force is the best use of a community's resources.
Also city streets should be an amalgam of competing enterprises trying to win your daily commuting nickles.
Needless to say I disagree with your assertion that EVERY enterprise performs better when exposed to competitive pressure.
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"Give a man a fish, feed him for a day. Take his fish away and tell him he's lucky just to be alive, and he'll figure out how to catch another fish for you to take away tomorrow!"
I guess the governor of Wisconsin has read the Seven Habits of Highly Effective Pirates.
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Actually it looks like they're trying to redirect spending away from out-of-state online stores and towards local retail shops. If online stores don't have a competitive advantage in prices due to no tax, they're hoping it will result in greater local shopping. Therefore more local stores stay open, more local jobs, etc etc.
Basically another form of protectionism.
Why now? (Score:5, Insightful)
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Amazon has a presense in WI. They own ShopBop.com, and I believe the store "the bop" on state street, Madison, that goes with it..
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And do they make more money from those interests than it will cost to implement a single-state sales tax? Because if they don't, I can't imagine they'll still have those interests by October.
Also, here in the UK, I'm fairly sure that my local Apple store is actually a franchise. I don't know if that's a common feature, or not.
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Quill doesn't prohibit that kind of taxation, it just requires that the seller have a nexus in that state. Apple could easily be taxed, as they have Apple stores in Wisconsin. I think, but am not sure, that Amazon might have some brick-and-mortar presence in Milwaukee.
If that's the case, then Apple and Amazon should be collecting sales tax now, no new legislation required.
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They do already on physical items (ie: books, computers) but not on downloads (songs, ebook, ...)
because, obviously, it was not required in Wisconsin yet. It is required in other states, and they do collect on those items too.
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I'm in Michigan and the Apple store and iTunes have always collected sales tax on anything. Our sales tax laws are pretty much [everything ever] unless the state has an exception, and those are few for things like food and labor services like plumbers and auto repair (but they still tax the parts).
I don't see how all these laws really change anything, they have no jurisdiction on out-of-state vendors with no PoP. And the big vendors in the state are already doing the same as their B&M's.
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Quill doesn't prohibit that kind of taxation, it just requires that the seller have a nexus in that state
That decision is going to hurt in the long run. Here in the UK there are problems caused by exactly this kind of law in the EU. When you buy something in the EU, you pay VAT in the seller's jurisdiction. Companies like play.com exploit this by having their offices in the channel islands. The energy cost of buying from them is significantly higher, because their goods are all shipped out to the channel islands and back again, but the total cost is lower because they don't charge 15% VAT on top. It's har
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Wrong. They're part of the same business. Divisions don't count. Subsidiaries might be a differing story, but that's not what we're talking about here.
iTunes would be considered a part of the company that has a Nexus in that state so the iTunes sales would be subject to that state's tax laws.
Usage Tax (Score:2)
It seems like some states are trying to force the collection of the usage part of the sales and use tax onto the retailer.
Dear Wisconsin... (Score:4, Funny)
Good luck with that.
Love,
anyone who ever used the internet *ever*.
Golden Goose (Score:2)
Goose, meet axe.
Next: A Tax Per Kilobit on your Router (Score:2)
Between this new trend, and the proposed legislation that users will have to maintain their router logs for 2 years, the next step will be metered internet access where you pay a tax per KB of data transferred. I mean, you are "purchasing" the use of that data through your ISP right, so it's sales-taxable?
Then, since users will be confused and able to circumvent, the govt will issue standard routers for all citizens to use which maintain your tax meters and also monitor all of your traffic to make sure you
How many times (Score:2)
This is an over-reach by a state once again. Here in RI we have the self reported 'use' tax. Under the legal theory they can't charge you if you buy it, but can if you use it.
Almost makes me want to buy a few million dollars worth of gear and store it away.
WHAT "brick and mortar" stores? (Score:5, Insightful)
Umm, what? We're not talking about selling physical products, we're talking about selling data. Are there any brick and mortar stores in WI that let you come in and pay to download things to your USB drive using a connection at the cash register or something?
And will Wisconsin get Free Health Care ? (Score:3, Insightful)
What exactly will Wisconsin do with this tax revenue? Will they now start providing their ALL of their citizens with Free Health Care?
I suspect not. What exactly CANT wisconsin do that they're already doing with their current taxes?
If we're going to tax our citizens more, then lets provide them with more services!
When i'm buying something, i want to know what i'm getting, and it better be worth it.
Wiki France.
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.
That's it -we're fucked: Film at 11. (Score:3, Funny)
Between this and the recent story about how they're going to require home routers to maintain logs, we're completely fucked. Everything decent about the internet has been shot in the ass.
Fuck, this shit sucks.
Slashdot has been shot...Where?!
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Between this and the recent story about how they're going to require home routers to maintain logs, we're completely fucked. Everything decent about the internet has been shot in the ass.
Fuck, this shit sucks.
Slashdot has been shot...Where?!
Right there...that big gaping shot gun hole called idle.
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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:
"FAIR"??? What's fair about taxes? (Score:4, Insightful)
An interesting statement. So, you think it's only "fair" that everything should be taxed? One cold argue that a tax on brick and mortar stores pays all the services the state provides: a road to get to the store, police to watch the store, and... what else does the state provide? For the on-line stores? Would it be fair to make the internet sellers pay for the services only the brick and mortar stores need?
Okay, so the state provides schooling for the poor. But then, why do rich people pay income tax? Isn't that meant to redistribute wealth, to let the poor have the same opportunities the rich had?
Let's put is this way: taxes are never fair. They are an unavoidable evil. 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)
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.
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Life expectancy, infant mortality, poverty rates, general reported happiness, leisure and vacation time, broadband availability... virtually any measure of "standards of living" one could come up with, except perhaps "number of dollars taken home in one's paycheck".
Now, Mr. Citation Needed, the ball is in your court. Where's all the destruction caused by the power to tax? What horrors in Europe or Canada are we avoiding by having lower taxes here in the US? What horrors in the US could we avoid by moving to
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BZZZZT.
Tax rates:
Germany: 36.2%
USA: 28.3%
Iceland: 41.4%
Your entire post is based on lies. That 'gapminder' site has its numbers all wrong, it massively underestimates tax levels. Maybe it's only counting national taxes. You're better off with the OECD numbers that count taxation at all levels
Re:"FAIR"??? What's fair about taxes? (Score:4, Insightful)
Or yet another option (which politicians also seem to forget), is to cut wasteful spending!!
Cut the govt. back to basic services, shed the waste and I think they could drop the need for a lot of tax revenue.
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interesting... let's say someone downloads something from the pirate bay. There's no sales tax involved, and that's not "fair".
Well, you don't pay sales tax on a CD that you lift from Best Buy so they're both equally unfair. I've never really heard people complain about paying taxes for something because others have gotten away without paying at all for the item.
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http://www.govtrack.us/congress/bill.xpd?bill=s111-436 [govtrack.us]
http://www.opencongress.org/bill/111-h1076/show [opencongress.org]
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No taxes on our torrent downloads, either.
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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
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In California they call it a "use tax" instead of a "sales tax" and therefore have managed to evade the whole brick and mortar problem. You can't bring a new car into CA and have it registered unless you pay the difference in sales tax, for example. Oh, I mean "use tax".
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Got issues?
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You still pay tax when you hire something, don't you?
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AFAIK, gift cards/certificates/checks, etc, are NOT initially taxed, precisely /because/ the tax is paid when they're redeemed. I know that's the way it has been around here, anyway. They're handled straight across. A five dollar bill gets you a five dollar gift check/card/certificate/whatever.
It's also worth noting that the business doesn't book the sale of the gift check/card/certificate, either. It's considered the equivalent of a cash for cash transaction, a five dollar bill for five ones, or whatev
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Complaining about taxation is valid (Score:2)
Because even while the economy sputters the Federal, State, and local, governments are expanding. Where is the sense in that? Why shouldn't people complain? Better yet, the pay of government jobs keeps going up faster than inflation in many areas and exceeding the private sector as well.
Take a look at this chart, http://www.ppinys.org/reports/jtf/governmentemployment.html [ppinys.org]
Now, explain how we can keep adding so many government jobs and not expect the burden to become too much? We are creating more non wea
Re:Complaining about taxation is valid (Score:4, Insightful)
Now, explain how we can keep adding so many government jobs and not expect the burden to become too much?
Cherrypicking statistics is easy. Let's put those numbers in perspective
Total goverment employment growth 1997-2007: 12.3%
Total population growth 1997-2007: 12.7% (Using 267,000,000 and 301,000,000)
Sure, the goverment is employing more people now. Oh, dear I wonder why. Could it be because there are more people in the country than there used to be.
We are creating more non wealth producing jobs than wealth producing jobs.
Ah damn. Another one who thinks that the goverment doesn't produce wealth. I guess you are now thinking about claiming that the goverment doesn't earn money, it just taxes the private sector. That is the standard propaganda used. The statement is literally true, but is a simple deception.
Using that incorrect reasoning, no private business makes any money either. Because every single one has to get their money from other companies in the private sector. One company getting more money means that the remaining companies gets less. A wealth transfer as some like to call it. And no, taxing is no different than private companies charging for services. It is just that anyone living in a country has a life long contract with the Goverment business. It sucks to be in such a contract. But that is the price for not having your own private army.
All of this of course have nothing to do with wealth creation. Wealth is created by workers who do productive work, farmers, factory workers, miners, teachers, policemen, road workers. Some work in the public sector, and some in the private sector. There are of course also many mostly unproductive or even contraproductive jobs in both sectors.
So we have this big slow down, with many private sector jobs lost, yet government keeps growing
That one is simple to understand. Firing someone costs a private company nothing, but it costs the goverment in a loss of production that can no longer be taxed. By employing the citizen instead of letting him go unemployed the goverment creates work that can be taxed.
As long as the value of the work created is greater than the surrounding expenses of employing, it is a win for the goverment. This of course only applies as long as the person in question don't have a large chance of getting employed in the private sector, because in that case you have to start comparing the relative worths of the private and public sector jobs.
We are simply running amok. The real problem with government paid jobs is that are nearly impossible to do away with them.
And yet the republicans cried when the jobs the stimulus package created temporary jobs. That of course was the whole point. Creating temporary jobs in a recession to avoid having labor go unused while not creating permanent jobs that are difficult to make away with.
If you want to yell at wastage, yell at the bailouts (bank, auto industry, mortage). Those are about throwing money at bad investments which is almost always a bad idea.