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Sen. Dick Durbin wants to step up taxes on U.S. citizens by forcing online retailers to start collecting sales taxes.  (Source: Progressive Illinois)

For small online retailers like ThinkGeek, having to navigate through 7,500 unique U.S. tax jurisdictions could prove disastrously expensive.

The measure is shaping up to be a battle royale for lobbyists. On one side brick and mortar retailers are funneling millions in campaign donations to try to "convince" politicians to support the measure. Meanwhile e-tailers like Amazon are pouring out similar amounts of money to try to convince politicians to oppose the coming bill.  (Source: Brand New)
"All your (taxes) are belong to us. You have no chance to survive make your time."

U.S. founding father Benjamin Franklin once wrote, "In this world nothing can be said to be certain, except death and taxes."

Thus it is perhaps not surprising that as U.S. Tax Day rolls around, Congress is considering yet another effort to try to impose sales taxes on the internet.  An aid to Senator Dick Durbin (D-Illinois) told CNET that the Senator would introduce a bill looking to implement an online sales tax after the Easter recess.

Sen. Durbin has been trying to push the issue for some time.  In a speech in Collinsville, Ill. in February he complained, "Why should out-of-state companies that sell their products online have an unfair advantage over Main Street bricks-and-mortar businesses? Out-of-state companies that aren't paying their fair share of taxes are sticking Illinois residents and businesses with the tab."

Currently online retailers like eBay Inc. (EBAY) and Amazon.com, Inc. (AMZN) collect no sales tax in most states.  That is because of a federal legal precedent called nexus, which states that companies only have to collect taxes in states they have physical presences in.  That concept was solidified by the 1992 case called Quill v. North Dakota, in which the U.S. Supreme Court ruled: "Congress is now free to decide whether, when, and to what extent the states may burden interstate mail order concerns with a duty to collect use taxes."

Formally, in most states people are expected to report these unpaid taxes at the year's end and pay them personally, but almost none do.

The decision to push taxes could hurt these major e-tailers.  But it could hurt small e-tailers like ThinkGeek even more; as they would need major infrastructure overhauls to support the collection of taxes.  There are over 7,500 taxing jurisdiction in the U.S., each with their own tax rules.  Navigating that mess would be a nightmare for these small players.

The new bill will be entitled "The Main Street Fairness Act".  According to his aides Sen. Mike Enzi(R-Wyoming) will co-sponsor the bill.  He sponsored a previous bill with the aim of internet taxation. 

In an effort to push for online taxes Sen. Durbin and other proponents may back a broad adoption of the Streamlined Sales Tax Agreement an inter-state proposal that 24 states have thus far adopted.  Formulated in 2002, the proposal seeks to do away with specialized, confusing tax laws and adopt a simpler sales tax code.

Retailers like Target Corp. (TGT) and Wal-Mart Stores, Inc. (WMT) would be deeply grateful if the bill passed.  They've been pouring millions into lobbying Congress to eliminate the online tax exemptions.  

And they're trying to convince small retailers to support them.  Some say that doing so may not be in those small players' best interests, though.  Argues Steve DelBianco, executive director of the NetChoice coalition, a group which represents eBay, Amazon.com, and other e-tailers, "Big box stores love to mobilize smaller booksellers to complain about competing with Amazon.  The irony is that those small booksellers have been clobbered by big box stores. The Internet's their friend."

Despite the bi-partisan sponsorship and fair degree of bipartisan support the measure is expected to have difficulty passing in the Republican-controlled house.  Many Republicans vote against high profile taxes increases as a rule and many Democrats may be wary of supporting the measure as the 2012 elections loom near.

Last time around, for all the retailers lobbying efforts, the e-tailers (who also lobbied pretty heavily) won.  The internet is tax free -- for now.





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Fair Taxes
By BioHazardous on 4/13/2011 10:13:51 AM , Rating: 5
In general I'm against the ridiculous taxes we pay for all kinds of programs that have nothing to do with me. However I'm for taxing online sales despite my personal love of not having to pay taxes when I shop online. Basically I just don't think it's fair for the brick and mortar stores to have to charge people taxes when somebody else will deliver for free and not charge taxes on the same item.

I've seen the argument that it has nothing to do with taxes whether people buy online versus a brick and mortar store, but from my experience with the people I know, it very much is the fact that they don't have to pay taxes. Sure some things are insanely cheaper online and you'd buy it regardless of taxes, but some brick and mortar stores are competitive price-wise with online retailers to the point where instant gratification may overcome a slightly higher price.

I'm kind of rambling now but my point is it should be fair for all retailers.




RE: Fair Taxes
By Ringold on 4/13/2011 10:23:20 AM , Rating: 1
If we as a country decide to make them pay taxes, then I'd at least think the best way would be to make them pay a federal tax instead of forcing small companies with small staffs to deal with distributing taxes to "over 7500" tax districts.

That's fair in my mind because while it doesn't directly go to local governments it is not as though the federal government doesn't pump untold billions in to local projects and bolstering state finances at different times.

Hopefully thats how they do it, but I don't underestimate the ability of government to smother business in red tape.


RE: Fair Taxes
By therealnickdanger on 4/13/2011 10:29:15 AM , Rating: 5
Just replace all taxes in the country with the Fair Tax. Goodbye IRS, hello GDP.


RE: Fair Taxes
By gamerk2 on 4/13/2011 10:36:35 AM , Rating: 2
So, you are against local governments and the people deciding what level of taxation and services they want provided, and instead want the Federal Government to force a certain level of taxation across the nation?


RE: Fair Taxes
By FITCamaro on 4/13/2011 10:47:23 AM , Rating: 3
While his statement is unclear, I think what he meant is that all taxes, be they local, state, or federal, should be modeled off the fair tax.

The SC state house is looking at scrapping our state income tax and implementing a fair tax. I for one hope they're successful because then I essentially get a 7% pay raise. And while yes, I'll be paying taxes on certain things I buy, I have a choice in the matter. Also it encourages business because I have to go perform an act of commerce in order to pay state taxes.

And I'll be honest, lately I look at the price of things online and locally. If there's not much difference, I'll buy locally. Because I'd rather have it today and then if I need to return it, its much easier.


RE: Fair Taxes
By bobny1 on 4/13/2011 9:42:57 PM , Rating: 2
what is he talking about?. You don't make money when Illinois residents buy in another state. but you collect money when residents from other states buy from Illinois. That's the beauty of the internet. Is a guive and take situation.


RE: Fair Taxes
By therealnickdanger on 4/13/2011 10:51:09 AM , Rating: 5
Yes, I believe strongly that federal taxes are necessary to maintain the Constitutional powers of the federal government as enumerated in Art. I Sec. 8.

No, I am not against local government. In fact, a portion of sales taxes will also go to the local level - how much would depend upon the citizen of said local government.

I believe taxation on what you buy is significantly more fair than taxations on earnings.


RE: Fair Taxes
By mcnabney on 4/13/2011 2:58:20 PM , Rating: 2
When sales or excise taxes go over ~10% the public begins to seek out ways to avoid paying them. Those methods include buying used or greymarket items. Blackmarkets are also common, but we generally only see those in states with very high cigarette taxes. The other reaction is that people buy less and save more.

A national sales tax would simply annihilate retail anywhere near foreign borders. Buffalo, Seatle, San Diego, Detroit. Consumers would be flocking across the border to avoid what will have to be 30-50% sales taxes.
Typical retail shops would have a hard time competing. Hell, selling a new car would be tough when a $10k sales tax gets slapped on it.

Oh, and don't believe the BS about 'only a 20% sales tax'. Income taxes take that much currently and we are in a massive debt hole. Since only a fraction of consumer's income is spent on 'things' the rates will need to be very high to make up for non-sales expenditures. Remember, most of a household's biggest costs - rent/mortgage, utilities, and insurance would not be subject to a sales tax.


RE: Fair Taxes
By rcc on 4/13/2011 4:33:11 PM , Rating: 2
I understand the premise. But I doubt it would be particularly good for the economy. Then again it would be good for peoples savings programs and retirement funds.

Basically you'd be rewarding people for not spending their money.

OTOH, currently we punish people for earning more.

Hmmmmmm.


RE: Fair Taxes
By Netscorer on 4/13/2011 9:13:24 PM , Rating: 1
I've heard this argument many times - implement cosumption tax and you hurt the economy. I have to call BS on this. Since when economy that is based on over-stimulated consumption is good for the country. Look at what have happened in the past 30-40 years since Americans fell in love with spending and going into debt. The real income levels have not increased, the economy constantly finds itself in one bubble after the other, both personal and national debt are through the roof, resulting in predatory lender practices and hidden inflation that further dilutes your income. I personally believe that economy can be based on the healthy consumption and rewarding people to earn money not to spend it. Currently we have it completely backwards. We punish those who earn high income while basically subsidizing unchecked consumption.


RE: Fair Taxes
By BansheeX on 4/14/2011 3:13:35 PM , Rating: 2
Look at what America does: we spend our tax revenue and then we borrow trillions more each year at interest to consume products the lending country makes. Then we "pay it back" by borrowing more. That is very reminiscent of a ponzi scheme and it only sustains itself until "next year's lender" doesn't step up. At that point, the country effectively defaults by printing money, resulting in hyperinflation that wipes everyone out. Including the entitlement freaks who are unwittingly fighting to ensure this result.

Consider the following simplification: an island economy has 10 people on it. They each farm 10 bushels and eat 10 bushels. If they all had ploughs, they could each produce 20 bushels, but none are willing to starve themselves to go make ploughs. 1 man convinces the others to sacrifice a little each day so and give it to him so that he can make a plough for himself without starving. He's only able to convince them because he promises to pay back the food they sacrificed (savings) PLUS INTEREST from the added productivity of THE PLOUGH. The plough maker now has enough time to make ploughs himself and sell them to the others for food. The plough maker now has more food than anyone, but everyone else has a plough, which frees up their time to make more than just food, and so on and so forth. Everyone has more products now rather than an equal, but lesser standing.

Now what if the plough maker, after getting the loan, didn't make a plow, but gorged himself and handed out IOUs which the sacrificers started believing were product placeholders and integral to their export business? This is now the basis of the entire global economy. Don't look a gift horse in the mouth, just realize what is happening and how stupid people are and store your savings in gold or something that can't be printed.


RE: Fair Taxes
By rdawise on 4/13/2011 8:15:38 PM , Rating: 2
quote:
I believe taxation on what you buy is significantly more fair than taxations on earnings.


More fair? Define fair in this scenario. How does it make sense to tax someone for basically stimulating the economy? When people spend, the economy is good. When people save, others lose jobs. A fair tax would basically increase the cost (with the included tax) of goods for consumers. While you may smile at the fact that you are getting 10% more or you pay check, you while frown at the fact that the cost of goods increase proportionally.

How does this help businesses? The savings you will give them in "corporate taxes' would be balanced against them amount they would have to pay for goods from another business. You are just replacing one tax with another.

A fair tax would largely not be solvent for maintaining the military as well (as defined in the Constitution).

Besides, you really one to turn retailers into mini-IRS offices?


RE: Fair Taxes
By Arsynic on 4/13/11, Rating: 0
RE: Fair Taxes
By ebakke on 4/13/11, Rating: 0
RE: Fair Taxes
By knutjb on 4/14/2011 11:17:24 PM , Rating: 2
Because his state is raising taxes and wondering why companies are leaving. Next he will spend Fed money, because the state is broke, to send delegations to the companies to ask why they moved when everyone with a brain knows they moved because of the tax hike.

Don't believe me? That is what California just did. They sent people out to Texas to ask companies why they left, duh.

Reagan called it voting with your feet. If your city/state raises taxes you move to a city/state with lower taxes.


RE: Fair Taxes
By zornundo on 4/13/2011 10:50:29 AM , Rating: 2
Even with the Fair Tax, the government would need an agency to implement, monitor, and enforce compliance. There is no 'goodbye IRS'.


RE: Fair Taxes
By therealnickdanger on 4/13/2011 10:54:24 AM , Rating: 2
Well obviously. :)

It was a tongue-in-cheek statement. In effect, the IRS as we know it would be eliminated and be given a complete overhaul.

I'm a realist - the Fair Tax will probably never be implemented, so it's a moot argument. But hey, a man can dream, right?


RE: Fair Taxes
By ebakke on 4/13/2011 11:21:38 AM , Rating: 2
quote:
I'm a realist - the Fair Tax will probably never be implemented, so it's a moot argument. But hey, a man can dream, right?
If it ever happens, the first round of beers is on me!


RE: Fair Taxes
By drank12quartsstrohsbeer on 4/13/2011 11:29:26 AM , Rating: 2
Do you think all those Tax accountants and lawyers will ever let that happen? They would be out of work.


RE: Fair Taxes
By therealnickdanger on 4/13/2011 11:41:52 AM , Rating: 2
This.


RE: Fair Taxes
By mcnabney on 4/13/2011 2:59:26 PM , Rating: 2
Most lawyers don't work in tax and accountants have plenty of other jobs to do. Not a good thing for H&R Block though.


RE: Fair Taxes
By ekv on 4/13/2011 11:51:14 AM , Rating: 2
Yeah, I thought about that. There is a vested interest in seeing the complexity of the tax code continue, and they have lobbyists before Congress who work to that effect.

However, there is another vested interest not yet seen. If you have a lot more people making money then they'll need financial planner's and accountants to help keep track of the money. Look at Seattle during Microsoft's hey-day. Oodles of (new) millionaires. "Where do you put the money to work? safely. wisely." Accountants made out well too.

As for lawyers ... I do not address them, other than to say, rust never sleeps.


RE: Fair Taxes
By therealnickdanger on 4/13/2011 12:52:40 PM , Rating: 2
It's not even the tax lawyers that lobby. Our own elected officials work the system worse than anyone! They write off just about every dollar they earn as well as their expenditures during their terms, using every loophole possible, even creating new ones for themselves and specific corporations to ensure employment if they should be replaced.

It's a safe bet that most of the Obama administration (including our beloved CNC) would have no trouble landing high-level jobs at GE, Google, etc. should they not be re-elected in 2012.


RE: Fair Taxes
By sleepeeg3 on 4/13/2011 2:31:20 PM , Rating: 2
I strongly support FairTax, but the "all taxes" it is designed to replace includes all Federal taxes. Online stores already pay these. The fight is whether online stores should pay state/local sales tax.

I think eTailers should pay a sales tax, however they should only pay taxes to one state. Determining, which taxes to pay to all 50 states is a tax nightmare. There are problems with deciding, which one they should pay to, but I think the best method would be to base it on the state they employ the most number of people in. This would also encourage competition among states to lower their sales tax to attract companies and jobs to their states.


RE: Fair Taxes
By mcnabney on 4/13/2011 3:05:24 PM , Rating: 2
Yes, there is only 7,000 different taxing jurisdictions.

If there was only some system of interconnected devices working together in a network that might allow a POS or billing system to lookup and process a sale accurately. Maybe these 'online' businesses could create an 'Inter-Net' of computers to do this? Do you think a 14.4 modem could handle sending a query to a database with 7,000 fields?

Complexity my ass! More like cheap and lazy.


RE: Fair Taxes
By rcc on 4/13/2011 4:37:33 PM , Rating: 2
It's not a connection speed issue. It's a processing issue. All that gets transmitted is the query and the result.


RE: Fair Taxes
By Lerianis on 4/16/11, Rating: 0
RE: Fair Taxes
By ebakke on 4/20/2011 1:17:10 PM , Rating: 3
What you are describing is a flat tax, not the Fair Tax. I don't expect you'll do so, but feel free to read about it at http://www.fairtax.org

Furthermore, the only problem I see in your example is your math skills. The 10M earner keeps 1000 times the amount that the 10K earner does, not 1000000 times. The 10M earner also earned 1000 times the amount that the 10K earner did.


RE: Fair Taxes
By banthracis on 4/13/2011 11:01:21 AM , Rating: 5
Honestly, I don't see why the government keeps trying to make life more difficult for the middle and lower classes.

If you want to get more tax money, you'll end up with a ton more money by simply closing Corporate loopholes that allows companies like GE to pay ZERO taxes on 14 billion in profits.
A single company, tax at 15% and you've made the US gov $2.1 billion.

If you want to stop tax evasion from internet sales, then instead of asking online companies to deal with thousands of tax districts, enforce the LAWS that ALREADY EXIST.

Politicians have a really stupid policy of proposing new laws to accomplish the same goal as existing laws.


RE: Fair Taxes
By ebakke on 4/13/2011 11:25:03 AM , Rating: 3
It's been said a million times: Corporations don't pay taxes, individuals do.

You can charge GE whatever you want, but it's going to end up getting paid by the shareholders (smaller profits), the employees (smaller wages), and the customers (higher cost of the products). In each scenario, it's a person footing the bill.


RE: Fair Taxes
By Kurz on 4/13/2011 11:47:41 AM , Rating: 3
Though Why should some companies have the unfair advantage of being able to charge less because they have a loophole put in specifically for them?

Not saying you are saying this, just opening discussion.


RE: Fair Taxes
By ebakke on 4/13/2011 11:58:14 AM , Rating: 2
I think all of us could agree that they shouldn't.

I'd argue till I'm blue in the face that the government shouldn't be in the business of picking winners and losers. And to me that includes subsidies, grants, loans, tax codes, etc. (I can see an argument for local governments competing with these tools for a business to open in one place or another, but absolutely not for the federal govt).

For GE specifically, I'm not informed about the details enough to know what advantages they were given (or not given). Can someone share exactly what preferential treatment GE has in this situation?


RE: Fair Taxes
By Lerianis on 4/16/11, Rating: 0
RE: Fair Taxes
By ebakke on 4/20/2011 1:05:25 PM , Rating: 2
You still don't get it. A corporation is nothing more than a group of individuals. It isn't some mythical beast that makes its own decisions and vacations in the Bahamas. If you tax a business you'll get one of 4 scenarios:

1. The owners of that company decide they'll absorb the added cost, so as not to pass it on to their customers. This results in less profit for the owners.
2. The employees of that company pay for it in the form of lower wages (in an effort to keep the company's expenses the same).
3. The company's customers pay for it when the company raises the prices of its products to cover the new tax.
4. Some combination of the three above.

Owners are individuals (and in the case of a publicly traded company, there are lots and lots of them). Employees are individuals. Customers are individuals (even if not directly, you eventually reach the individual). Taxing corporations is and always will be a tax on individuals.


RE: Fair Taxes
By Nutzo on 4/13/11, Rating: 0
RE: Fair Taxes
By ekv on 4/13/2011 11:55:58 AM , Rating: 3
quote:
The main reason GE paid no taxes last year
And it doesn't hurt that Immelt schmoozes w/ Obama. That too is standard accounting/tax policy.


RE: Fair Taxes
By ekv on 4/13/2011 2:52:58 PM , Rating: 2
Whoever rated me down. Think for a second. It is a fact that Immelt and Obama are on good terms. [Think campaign contributions]. Is Obama the first or only president to have such a relationship? no, that's not where I'm going.

What I'm saying is, the current tax code actually encourages corporate intervention. I would like to see that minimized. A Flat or Fair tax is one way to accomplish that. With a Flat tax, everybody pays 19% (or whatever). That's it. No Lobbyists wheedling Congress for this loophole or that. At least in theory.


RE: Fair Taxes
By rdawise on 4/13/2011 8:19:21 PM , Rating: 2
quote:
What I'm saying is, the current tax code actually encourages corporate intervention. I would like to see that minimized. A Flat or Fair tax is one way to accomplish that. With a Flat tax, everybody pays 19% (or whatever). That's it. No Lobbyists wheedling Congress for this loophole or that. At least in theory.


So you want to encourage businesses to outsource or relocate since now your are forcing them to pay hirer taxes?


RE: Fair Taxes
By ekv on 4/13/2011 11:15:29 PM , Rating: 3
What is the current tax rate U.S. corporations? What, like 35%? Supposedly the highest amongst developed nations. Even a drop from 35% to 25% would have the outsourcing trend reverse.

Another point. Most small businesses are structured as S-Corporations. Even the current administration agrees that small businesses are the engine of job creation in this country. Raising taxes on these owners, instead of lowering, puts a damper on job and wealth creation. Focusing on class warfare does not solve budget problems.


RE: Fair Taxes
By Lerianis on 4/16/11, Rating: 0
RE: Fair Taxes
By headbox on 4/13/2011 2:13:03 PM , Rating: 2
and their losses were b.s. accounting

Go ahead- tax the internet- I live in Oregon where we pay NO SALES TAX! We also have below average income tax. Why? Look at the demographics...


RE: Fair Taxes
By sleepeeg3 on 4/13/2011 2:40:06 PM , Rating: 2
The media tells you GE pays zero taxes, but you obviously don't understand what this "loop hole" is.

GE lost money last year. Just like individuals, you pay no taxes if you make no profit.

The problem is the way they are claiming to have lost money. They lost money in the United States, but made billions internationally. The loophole is that it is possible they are lying about this, because they want to avoid the highest corporate tax in the world - the United States'.

This is a problem with our current tax code. It is broken - there is no way to fix all of the loopholes, without affecting legitimate businesses.

Solution? Replace it with FairTax. No more tax dodgers, no more accountants, no more loopholes.


RE: Fair Taxes
By sorry dog on 4/13/2011 11:51:40 PM , Rating: 2
quote:
GE lost money last year. Just like individuals, you pay no taxes if you make no profit.


yeah right...I wish.

Only problem is telling the difference between revenue and profit...so does that mean if my savings account is lower than last year, I didn't make any profit so I shouldn't have to pay taxes.


RE: Fair Taxes
By RivuxGamma on 4/16/2011 1:31:35 PM , Rating: 2
quote:
Solution? Replace it with FairTax. No more tax dodgers, no more accountants, no more loopholes.


You have got to be completely retarded if you think that. Why would someone that's currently not paying any taxes suddenly want to pay taxes if the amount is slightly lowered? Why would accounants no longer be needed? Are a company's sources of income and expenditure suddenly rendered irrelevant by a "Fair" tax? Are companies not going to lobby to either keep old loopholes or create new ones?

Fair Tax, btw, is just Flat Tax rebranded. It was introduced years ago and put down.


RE: Fair Taxes
By Reclaimer77 on 4/13/2011 5:55:24 PM , Rating: 1
quote:
Honestly, I don't see why the government keeps trying to make life more difficult for the middle and lower classes.


It's a Democrat. What do you expect? Even in the worst of times, in an economy that they are actively and purposely WRECKING for future generations, we apparently need Internet taxes?

And Dick Durbin of all people...this scumbag flagrantly commits insider trading and get's away with it. To propose something like this... honestly, I don't know how Democrats can sleep at night without smothering themselves with their own pillow.


RE: Fair Taxes
By rdawise on 4/13/2011 8:26:35 PM , Rating: 2
quote:
It's a Democrat. What do you expect?


I guess you skipped over the part that mentioned Sen. Mike Enzi (R-Wyo.). But it was so small that I don't blame you.

quote:
Even in the worst of times, in an economy that they are actively and purposely WRECKING for future generations


Even blame there for both parties. But I digress.

quote:
I don't know how Democrats or Republicans can sleep at night without smothering themselves with their own pillow


Fixed it for you!


RE: Fair Taxes
By Nutzo on 4/13/2011 11:35:08 AM , Rating: 2
quote:
forcing small companies with small staffs to deal with distributing taxes to "over 7500" tax districts.


This is the real problem. While a company like Amazon would be able to manage this (even though they would likely have to hire an entire department to deal with it), it would basically be impossible for a small company. How could an individual selling a few things on ebay know the rules for collecting taxes for 7500 different districts?

Many states require anyone collecting sales tax to have a state tax ID, some require advanced deposits, some only take electronic transfers. The items taxed and the amount of tax vary from state to state, and even city to city.
Also, the amount of days you have to forward the taxes collected varies from state to state.

If you mess up on any of these rules, you can face fines and even jail time. Is New York going to issue a warrant for my arrest because someone bought something from me on ebay and I didn't collect and send the taxes to New York?


RE: Fair Taxes
By DanNeely on 4/13/2011 11:36:08 AM , Rating: 2
There're major problems with replacing a various local rates with a single federal one. The first and largest is that sales taxes are much larger fractions of some states revenues than others, which would mean that (barring major changes in other, eg income, tax rates) that some states would have their budgets slashed, while in others the tax payers would have their total tax burden spike.

Related to the first issue is that not all states provide the same levels of service, and thus not all of them need the same level of taxation to be funded.

Then you have city/county level sales taxes that were either implemented because when most of the population fled to the suburbs income tax ceased to be an effective funding source, or theoretically temporary taxes that were put in place to pay off bonds issued for things like sport stadiums.


RE: Fair Taxes
By Taft12 on 4/13/2011 11:41:14 AM , Rating: 1
quote:
... forcing small companies with small staffs to deal with distributing taxes to "over 7500" tax districts.


If only there were some kind of widespread general-purpose tool that could use rows and columns to automate such tasks!


RE: Fair Taxes
By DanNeely on 4/13/2011 2:47:04 PM , Rating: 2
The last I checked spreadsheets/databases/etc weren't able to monitor ~7500 jurisdictions for changes in the tax code and to parse the changes into computer readable form.


RE: Fair Taxes
By Solandri on 4/13/2011 3:01:03 PM , Rating: 2
The problem isn't calculating all those tax rates in a spreadsheet. The problem is keeping the rates up to date. Right now, each "tax district" sees fit to change their rates on a whim whenever they want to. The onus is on the merchant to keep up to date on those tax rates or face fines for noncompliance. It's an impossible task for a small business - you'd literally spend every waking hour constantly checking the websites of every local government looking for any changes to their tax rates. Lots of small and big businesses have sprung up taking advantage of this, and providing this "service" for you. But they generally include a liability waiver saying they're not fiscally responsible should the tax rates they give you turn out to be wrong.

The onus needs to be shifted over to the government. There should be one central government site where you can quickly, completely, and accurately get the tax rates for all the "tax districts" in the U.S. It should be the responsibility of each local government to report changes to their tax rate to this site one time so each merchant can easily and quickly download tax rates he knows are current and accurate.


RE: Fair Taxes
By jbwhite99 on 4/14/2011 10:49:56 AM , Rating: 2
That is the problem. Companies like Veritax and Vertax and the like to the rescue! They sell services that plug into tools like SAP - you pass the type of item being sold, the address, and the amount, and these these tools calculate the tax.

Why the type of item being sold? Here in Anand's neck of the woods, (1st number = state, 2nd = county)
0% + 0% Services
0% + 2% Food at Grocery
5.25 + 2.5 Regular Goods
5.25 + 3.5 Prepared Foods

There are different rates for tires as well, but don't know them off of the top of my head. When I go to Jiffy Lube (as an example), I pay 0% on some, and 7.75% on some as well.

The problem will be reporting the taxes - there needs to be a simpler way to pay the states - all of these small businesses could have to file returns with all 50 states - which will be a mess!


RE: Fair Taxes
By Lerianis on 4/16/11, Rating: 0
RE: Fair Taxes
By ebakke on 4/20/2011 1:11:15 PM , Rating: 4
It may be how other countries do it, but that is exactly the opposite of how federalism should work. The whole point is to withhold power from the federal government and give it to the states. So if California wants to implement X and Wyoming doesn't, they're both free to do as they see fit. And to pay for it however they want. If we wanted a national government, that's what we would've created.


RE: Fair Taxes
By invidious on 4/13/2011 12:32:52 PM , Rating: 2
The federal govenement is only good at two things, taking our money and spending our money. We don't want them handling our state taxes, EVER.


RE: Fair Taxes
By espaghetti on 4/13/2011 12:47:29 PM , Rating: 2
Still waiting on that social security "lock box"?


RE: Fair Taxes
By slippyrocks on 4/13/2011 1:50:13 PM , Rating: 2
All the pro-tax comments are shills paid for by the US government. This is just a push for a VAT tax like Europe has and is completely unsupported in our Constitution. In Indiana we are already liable for a 7% use tax on out-of-state purchases.
Standard rate
You pay VAT on most goods and services in the UK at the standard rate.
The standard rate of VAT increased to 20 per cent on 4 January 2011 but was 17.5 per cent for the period 1 January 2010 to 3 January 2011.


RE: Fair Taxes
By sleepeeg3 on 4/13/2011 2:48:54 PM , Rating: 2
I am not a shill. I consider myself among the Tea Party movement. The Constitution reserves all powers to the states and people that are not granted to Congress. A federal internet sales tax is unconstitutional - state sales taxes are not.

While the federal government is a massive burden to our economy, stealing over 1/4 of what we produce, local governments do need to collect taxes to pay for police, fire, roads and schools. eTailers should not be exempt from having to pay these taxes, just because they do their business on the internet.

We do need to work to reduce the federal government's burden, but some local taxes are necessary evils.


RE: Fair Taxes
By Tuor on 4/13/2011 4:32:28 PM , Rating: 2
I think you're confused. Those companies are not exempt from paying taxes. They are exempt from collecting *our* state sales taxes. And why should they? If a store is based in Seattle, WA, why should they need to worry about whether a New York resident is paying sales tax to their state? It's NOT THEIR PROBLEM. In the case of my hypothetical example, the problem belongs to the State of New York and its non-complying resident.


RE: Fair Taxes
By Wolfpup on 4/16/2011 1:51:33 AM , Rating: 2
Maybe there's some terrible downside I'm not thinking of, but that sounds like an interesting idea. At least worth considering!

The only real bad thing about this bill is just if that makes it hard for smaller companies. I know nothing about it, nor whether it's a big deal for them to just use a third party transaction system that handles that for them or something.

But yeah, if it's too complicated, having it just be a federal tax might make a lot of sense.


RE: Fair Taxes
By phantom505 on 4/13/11, Rating: -1
RE: Fair Taxes
By Fanon on 4/13/2011 10:37:43 AM , Rating: 2
The thing is, the govt. shouldn't be offering a good portion of the services it does offer. That's what it boils down to.


RE: Fair Taxes
By FITCamaro on 4/13/11, Rating: 0
RE: Fair Taxes
By tdawg on 4/13/11, Rating: -1
RE: Fair Taxes
By tdawg on 4/13/2011 11:21:16 AM , Rating: 2
*laid off in 2008, for those doing the math. Typo.


RE: Fair Taxes
By ebakke on 4/13/2011 11:31:35 AM , Rating: 5
quote:
Fortunately, with unemployment, my parents were not left homeless.
And here I was hoping you were going to say, "Fortunately, they were smart with their money and saved in the good times for a scenario just like this."

quote:
Without this social service, or what you'll likely refer to as an "entitlement program", my parents would have been in severe trouble and I can't even imagine how much worse off they'd be at the moment.
Alternatively, if they'd saved their own money, they also would've been fine.

quote:
Our constitution grants all people the right to Life, Liberty, and the Pursuit of Happiness; our government has a responsibility to uphold these tenets through assistance programs.
WTF? Seriously?! Our government has a responsibility to uphold these tenets through the rule of law so that your rights aren't trampled by someone else. Beyond that, you have the responsibility to take care of yourself.


RE: Fair Taxes
By tdawg on 4/13/11, Rating: -1
RE: Fair Taxes
By ebakke on 4/13/2011 12:56:25 PM , Rating: 5
quote:
I love that people can't imagine life screwing up best-laid plans.
Quite the contrary, actually. I've been advocating preparedness for precisely the reason you described - sometimes life throws you a curveball.

quote:
Only a small percentage of people in America can afford to save so much money that their savings can save them in every situation.
First, I'm not claiming you ought to be able to save for literally every possible scenario. I don't expect individuals to be able to have enough saved to cover getting laid off, being involved in a catastrophic car accident, developing cancer, getting your identity stolen and then having the same happen to his/her spouse all in the span of 3 months.

Second, Americans by and large choose instant gratification over delayed gratification. Our savings rates are awful, our debt rates are terrible, and we have all sorts of fun gadgets. Americans just live beyond their means. A comfortable savings account should come before a new flat panel TV, cable, a new car, eating out, taking vacations, etc.

quote:
Imagine what you'd do if you lost your job tomorrow. How long will your savings allow you to continue to pay your rent/mortage, allow you to buy food and supplies, gas or bus fare to try to find another job?
At my current quality of life with all of my same expenses, 6+ months. I could certainly drop a few things and stretch that out to 12+ months. And then if things were really bad, I could tap into retirement savings as a last resort.

quote:
I'm sure you're well aware that not everybody has as high paying, lucrative job, with an infinite market to jump from company to company.
You're correct, I am aware. All the more reason we should save when we do have jobs.

quote:
And, yes, I believe a fisrt-world country should help provide for it's citizens when they are unable to provide for themselves.
Yeah, so do I. Except I want people to choose to help their neighbors and countrymen, not be forced to. And I believe strongly enough in that freedom that I will accept the possibility of fewer people being helped. Though, I believe people aren't inherently evil, and would be willing to help their friends/neighbors in need. So even without the gov't taking my money to give to your parents, someone else they actually know would've stepped up. Maybe a church, non-profit, their neighbors, you, your siblings (if you have them), etc.


RE: Fair Taxes
By corduroygt on 4/13/11, Rating: 0
RE: Fair Taxes
By ebakke on 4/13/2011 1:49:43 PM , Rating: 4
quote:
but they also aren't inherently charitable and will not generally help each other.
That's patently false. Americans (83% individuals/bequests, 17% corporations/foundations) donated $307.75 billion in 2009 despite the poor economy. And that was down from the year before. We consistently give to causes we believe in.

quote:
That's why I believe federally mandated savings should exist.
The federal government doesn't have the right to do so. So even if you think you can't save money for yourself and the govt should do if for you, the states are the only ones with the authority to do so.


RE: Fair Taxes
By corduroygt on 4/13/2011 2:02:46 PM , Rating: 1
You are incorrect. For decades, surveys have shown that upper-income Americans don’t give away as much of their money as they might and are particularly undistinguished as givers when compared with the poor, who are strikingly generous.
The wealthy give less of their income to charity, it does not work as a replacement for taxation.

If charity worked, then the donations would have increased during the poor economy, because that's when people need it the most, and the rich are pretty much unaffected by it.

http://www.nytimes.com/2010/08/22/magazine/22FOB-w...


RE: Fair Taxes
By ebakke on 4/13/2011 2:28:59 PM , Rating: 3
quote:
particularly undistinguished as givers when compared with the poor, who are strikingly generous.
Just to be clear - you're talking as a percentage of income, not in raw dollars. And yes, you're right. VP Biden's a great example of that, averaging both a low percentage and a low dollar amount 0.2% of income or ~$370/yr for the last decade. And I guess we could also point out that self-described conservatives give more than self-described liberals. And religious people give more than secular people do. But my question to you is, what difference does any of that make? The only plausible reason is that you deem one group as not having given enough, and so it ought to be taken from them forcefully and given to whatever group(s) you feel deserves it. Feel free to correct me if I'm wrong.

quote:
If charity worked, then the donations would have increased during the poor economy, because that's when people need it the most
Well that's oversimplifying just a bit. If incomes drop, the amount of money that can be given to charity or taken for taxes decreases. Furthermore, there are plenty of charitable actions that aren't reported to any agency for reporting.


RE: Fair Taxes
By ebakke on 4/13/2011 2:32:31 PM , Rating: 2
quote:
The wealthy give less of their income to charity, it does not work as a replacement for taxation.
The government isn't a charity, nor should it be treated as such. If individuals want to redistribute their own wealth, more power to them. If they want to use the force of government to steal it from others through taxation and redistribute it to those with less, that's the exact opposite of charity.


RE: Fair Taxes
By mcnabney on 4/13/2011 3:17:15 PM , Rating: 2
We the People of the United States, in Order to form a more perfect Union, establish Justice, insure domestic Tranquility , provide for the common defence, promote the general Welfare , and secure the Blessings of Liberty to ourselves and our Posterity, do ordain and establish this Constitution for the United States of America.

You might call it charity, I would call it maintaining the Union. I know some people like you think it is just a god-damn piece of paper, but the Founders weren't a bunch of idiots. They understood that the government has responsibilities in providing for the body-politic.


RE: Fair Taxes
By ebakke on 4/13/2011 4:33:24 PM , Rating: 2
First, the Preamble doesn't confer power to the Government. And it's never been interpreted to.

Second, if the general welfare clause in the Article 1, Section 8 was intended to be used for this type of thing, or if it was a catch-all that the feds can do whatever they want in the name of "general welfare" then why even both with the rest of the document? Why not just write a one liner "Congress controls the money; elect wisely"?


RE: Fair Taxes
By ebakke on 4/13/2011 4:35:12 PM , Rating: 2
*... why even bother with ...


RE: Fair Taxes
By GreenEnvt on 4/13/11, Rating: -1
RE: Fair Taxes
By ebakke on 4/13/2011 1:02:29 PM , Rating: 2
quote:
There is no way 90% of Americans, let alone a young married couple, could cope with that.
1. That's why you have insurance. 2. Don't have a baby if you can't afford one.

quote:
Shit happens, sometimes it's more than you can bear. The government should step in to help it's people in those type of situations.
I disagree. People should step in to help others in those types of situations.


RE: Fair Taxes
By corduroygt on 4/13/2011 2:05:00 PM , Rating: 1
Why don't you ask the people you know for money because you're having a child and see the responses you get before stating that? Just ask and see how far that takes you.

Give up this republican ideal of "people will help each other out." They won't, especially not when they're rich.


RE: Fair Taxes
By ebakke on 4/13/2011 2:37:51 PM , Rating: 2
quote:
Why don't you ask the people you know for money because you're having a child...
What? How about I just don't have a child until I can afford to have one? That's the plan I'm on now, and I gotta say, it's been working out pretty well for me.

quote:
Give up this republican ideal of "people will help each other out." They won't
I don't ascribe that ideal to the Republicans or any other political party/ideology. I genuinely believe, a belief formed by my personal experiences, that people will help each other out.

quote:
especially not when they're rich.
What difference does someone's wealth have to do with their generosity? Why is it any better/worse/different for me to help someone than it is for Bill Gates to help someone?


RE: Fair Taxes
By nuarbnellaffej on 4/14/2011 9:05:22 PM , Rating: 2
quote:
Why don't you ask the people you know for money because you're having a child and see the responses you get before stating that?

If you cant afford a baby, don't get pregnant. If you still happen to get pregnant by accident, flush it.
quote:
Give up this republican ideal of "people will help each other out." They won't, especially not when they're rich.

Ummm my father is very wealthy man, and donates tons of money to secular charities, and has personally helped out alot of people financially and otherwise. So please don't paint people with a broad brush.


RE: Fair Taxes
By acer905 on 4/13/2011 12:54:05 PM , Rating: 2
First off, its Unemployment Insurance, not a welfare program. You can only get said insurance if you paid into it, unlike welfare programs. In fact, UI is exactly like any other insurance, especially auto-insurance because auto is also a mandatory insurance system. If you have a car/job, you pay into the insurance so that when you have an accident/get laid off, you are compensated.

Second, it is true that many Americans lack the ability to support themselves in situations of job loss. However, this is not because they may not "earn enough." Rather, they spend too much. If every single person lived their life on no more than 60% after tax income, the odds of unemployment crippling them would drop dramatically. Work for 1 year? You can survive without a job for nearly 5 months. Work for 5 years? Survive for 2 years jobless. Work for 30 years, survive 12 full years without a job. All of this is without any earnings from investments.

The median household income for the US is around $45000. The poverty line in the US in 2009 was $22000. Using 60% of your income would then mean $27000, and a family that is not poor. If you want more, go get a better education and get a higher paying job.


RE: Fair Taxes
By ebakke on 4/13/2011 1:10:03 PM , Rating: 2
All good points. One addition about unemployment insurance: if you own a small business, you're forced to pay UI premiums to the state, but are prohibited from filing a claim if your business goes under.


RE: Fair Taxes
By Solandri on 4/13/2011 3:49:40 PM , Rating: 2
That actually makes sense. If your business goes under, your employees will be unemployed, and thus will need to collect from the fund. The money was not entirely the company's either - in most states it's also partially deducted from employees' paychecks.

The unemployment insurance system as I saw it when I was managing a small business is a good system. They base your company's UI rates on the number of past employees who have filed for unemployment. The long-term goal is to maintain an $x reserve. If your company's employment history has few layoffs and low turnover, x goes down. If your company has lots of layoffs and high turnover, x goes up. Except the changes are spread out over several years so as not to induce too great a shock on any one company (essentially, you're using the inertia of the entire business community to stabilize rates). From a statistical standpoint, I really can't think of a better way to do it.

The problems I had with it stem from the inane decisions made by the people the government has running the system. We had an employee whom we hired, he worked for one week and never showed up for work again. After 2 months, we badly needed someone to fill his position, so we terminated him for being MIA and hired a replacement. A few months later, I got a letter from the state saying he filed for unemployment. I sent the state documentation showing that he stopped coming to work. The state incredulously decided that we had fired him and that he was eligible to draw unemployment from our UI funds. It wasn't much since he'd only been with us for a week, but the number of principles this violates is just staggering.


RE: Fair Taxes
By Targon on 4/13/2011 11:24:58 AM , Rating: 2
Tell that to the people in New Orleans who lost their homes when Katrina hit, or other people who have lost their homes when the economy took a nosedive and the company they worked for went out of business.

Poverty can come from many different sources, from things like college(needed for a good job) costing too much for many people to afford, to living in a part of the country that does not have a good economic situation in the first place.

I agree that if someone makes some blatantly stupid decisions(such as getting an interest-only mortgage) that they deserve what they end up with, you can't fault everyone for poverty. If there are no jobs due to a high unemployment situation, then how do you expect people to escape poverty? I am not talking about the useless lumps who live on welfare for their entire lives here, I am talking about people who WANT to work, but because of economic and social conditions, it can't happen.

Back in 2001-2002, there were people in the San Francisco Bay area with a Masters degree working for McDonalds because the jobs were gone.


RE: Fair Taxes
By ebakke on 4/13/2011 11:34:21 AM , Rating: 2
quote:
I am not talking about the useless lumps who live on welfare for their entire lives here, I am talking about people who WANT to work, but because of economic and social conditions, it can't happen.
The problem is that gov't assistance doesn't distinguish between the two, so we all end up funding both.


RE: Fair Taxes
By tdawg on 4/13/2011 12:16:36 PM , Rating: 2
Every program is going to have to deal with the small percentage that wants to defraud the program, but we can't punish the large majority that actually needs the help because of those that take advantage of the system.

Perhaps better oversight is the answer to try to weed out those that are taking advantage of the system.


RE: Fair Taxes
By ebakke on 4/13/2011 1:18:48 PM , Rating: 2
quote:
but we can't punish the large majority that actually needs the help because of those that take advantage of the system.
Do you have any proof that it's actually a large majority that needs the assistance? Or is that just you perception/opinion/hope? And who determines what's a legitimate need vs someone trying to game the system? What might be legit to you, might be bogus to me. Which is precisely why I advocate letting people chose where their money goes. You can give it to anybody you want, I can give it to anybody I want, and neither of us have to give it to people we feel are undeserving.

quote:
Perhaps better oversight is the answer to try to weed out those that are taking advantage of the system.
Yay, more bureaucracy!!!


RE: Fair Taxes
By tdawg on 4/13/2011 5:14:35 PM , Rating: 2
Taking the total number of people on welfare, social security, disability, medicare, medicaid, are you thinking it's 50/50 legitimate versus gaming the system? I honestly don't know where one would pull stats or how you could possibly derive stats/proof without interviewing every single person and determining their level of "deservability", so chalk it up to my perception that the vast majority of people utilizing these services are deserving and a small minority of "gamers" are tarnishing the opinion of the population as a whole.


RE: Fair Taxes
By Targon on 4/13/2011 5:51:55 PM , Rating: 2
When you see people buying potato chips with food stamps, and when people living in "the projects" have flat panel TVs because some idiot in the government thinks that is something everyone SHOULD have these days, you have a problem.

Those who are on long-term government assistance programs really should not be living too much better than those in prison when it comes to what "luxury" items they have. I am all for helping people get out of poverty, or helping people get back on their feet after something happens beyond their control(fire, flood, etc), but those who have children while on welfare for longer than nine months should have their children taken away from them and they should be put out in the street for abusing the system. Punish those who try to game the system, and people may not be as inclined to game the system.


RE: Fair Taxes
By ebakke on 4/13/2011 6:12:16 PM , Rating: 2
tdawg, that is exactly my point. You can't possibly know who's a deserving recipient and who's not. However, if you're choosing to give an individual (or an individual organization) some of your money you have had the chance for an interview of sorts, and deemed them a worthy recipient.


RE: Fair Taxes
By The Raven on 4/13/2011 12:04:59 PM , Rating: 3
quote:
Back in 2001-2002, there were people in the San Francisco Bay area with a Masters degree working for McDonalds because the jobs (in high-rent San Francisco) were gone.
Fixed it for you.
Places like SF attract thousands of highly-educated people. It is inevitable that the number of available jobs for such folks will shrink to zero at some point. That is when you need to head to greener pastures.

Not to mention the gov't tells everyone to get into as much debt as possible through education loans whether they have the needed drive to make good with the education or not. Then they just suck up a job instead of creating one.

But the society with all these safety nets has made people's behaviors worse, not better. We would be much better off if we relied on more (note: I said more, not all) private charity.
quote:
Tell that to the people in New Orleans who lost their homes when Katrina hit

Tell that to the people like me who donated to the relief efforts. I guess next time I'll abstain from making any donations because I'll be thinking, "It's cool, the gov't has already taxed me for what they need. FEMA's got this handled."


RE: Fair Taxes
By Fanon on 4/13/2011 10:36:18 AM , Rating: 3
I haven't met one person who rejects brick and mortar stores based solely on taxes. I'd love to meet one of these people and slap them upside the head.

I'll reiterate the argument that it has nothing to do with taxes; it comes down to price comparisons and item availability. That's it.


RE: Fair Taxes
By BioHazardous on 4/13/2011 10:47:28 AM , Rating: 2
quote:
I'll reiterate the argument that it has nothing to do with taxes; it comes down to price comparisons and item availability. That's it.


That's not an argument, that's your opinion on the matter. I personally don't avoid brick and mortar stores because of taxes, but I know a good number of people who only shop online specifically because they don't have to pay taxes.


RE: Fair Taxes
By quiksilvr on 4/13/2011 11:10:47 AM , Rating: 2
Taxes implies costs which goes back to his original point. We buy things online because they are cheaper even after shipping and taxes.

I am against online taxes because there is no store. There's no parking, no electricity, no security, no open or closing hours, no maintenance and no nonsense. Amazon gets a small share of the money you pay for a product online, it goes into their pockets and a portion of that *smacks head* goes to the taxes they have to pay.

In other words, the government believes that the brick and mortar store tax mentality works online when it doesn't. There are much less costs on both ends and therefore taxes are reduced. It isn't that we aren't paying taxes, we are paying it when Amazon takes a small chunk of what we pay for the product and they use a portion of that to pay taxes.


RE: Fair Taxes
By Griffinhart on 4/13/2011 1:34:27 PM , Rating: 2
quote:
Taxes implies costs which goes back to his original point. We buy things online because they are cheaper even after shipping and taxes.


I really need to support this statement. It is the simple truth. I do the bulk of my purchases online, but not to avoid taxes.

I live in Mass but the nearest retailers are in New Hampshire as I am only a mile over the border I shop there. NH has no sales tax, yet I still do most of my buying online. Why? as stated, prices are cheaper and the selection is much greater.

About the only times I buy from B&M is when I want or need something TODAY, or when I want/need additional services that e-tailers can't provide.

A clear example is Newegg vs Bestbuy. The same model Seagate BaracudaLP 2TB hd. Bestbuy sells for $129. NewEgg $89 with free shipping. Amazon $98. Not only that, if I go to best buy I have, if I am lucky, two options for a 2TB HD while I can go to NewEgg and get a much wider selection. Note: All three options are Tax Free purchases for me.

What is hurting B&M stores more is that cost differences like this are so common, that even in the cases where they may sell something at the same or cheaper cost, It's not the norm so people don't even think to look there. Bestbuy carries the Nikon D3100 DSLR kit at a lower price than Amazon, yet it is the last place I would think of going to look for one.


RE: Fair Taxes
By codeyf on 4/13/2011 11:50:18 AM , Rating: 2
I wholeheartedly agree with the second part of your statement. However the first part really depends on what the sales tax is where you live. For example, no sales tax in Oregon. If price is comparable, you're more likely to go to a B&M. For me however in Washington state, the sales tax is darn near 10%.

Given the same price, on an item say over $100, I'll go with internet just about every time (barring immediate need for said item).


RE: Fair Taxes
By dxf2891 on 4/13/2011 11:05:03 AM , Rating: 2
Is this truly fair? A brick and mortal store enjoys the local infrastructure, police and fire protection and even curb appeal upkeep, that will be paid for with these taxes. Why should I pay for police officers in Illinois when I live in Alaska for example? This is a twisted greedy money grab. If congress wants to make cuts, let's start with their salary and benefits as well as their corporate contributions.


RE: Fair Taxes
By Taft12 on 4/13/2011 11:37:38 AM , Rating: 2
quote:
A brick and mortal store enjoys the local infrastructure, police and fire protection and even curb appeal upkeep, that will be paid for with these taxes


These things are all enjoyed by YOU the local resident who is paying the tax that funds these services on a game or DVD you buy from Amazon.

I'm having trouble figuring out who you are angry at and what is unfair?


RE: Fair Taxes
By Kurz on 4/13/2011 12:30:22 PM , Rating: 2
Except why should we pay for another states taxes when we don't use any of their services?


RE: Fair Taxes
By Exedore on 4/13/2011 2:23:20 PM , Rating: 2
No, you have it wrong. If you live in Alaska and buy from an online store in Illinois, this law would require the Illinois store to collect ALASKAN taxes from you, and then pay those taxes to ALASKA. This would mean that the Illinois store would have to maintain current records of ALL those 7500 tax districts, about rates and how and when to pay them, etc.
Current law in most states requires that you report your Illinois purchase on your tax return, and pay USE tax on it...which is usually the same as sales tax would have been if you had bought it in your state in the first place.


RE: Fair Taxes
By Exedore on 4/13/2011 2:24:50 PM , Rating: 2
On second thought, maybe I have it wrong. The comment I wrote above is from a different tax proposal I had read. I don't know enough about Durbin's proposal to know if it is different.


RE: Fair Taxes
By HrilL on 4/13/2011 12:45:42 PM , Rating: 2
How about we just eliminate sales tax and then not worry about any of this unfairness. Oregon has no sales tax and they're doing just fine. Their income tax is also lower than a lot of states. Almost makes you want to live there if they had some decent jobs.


RE: Fair Taxes
By Wiggy Mcshades on 4/13/2011 2:55:13 PM , Rating: 2
There just isn't a point to brick and mortar stores anymore. I understand why you think it should be fair, but the point of a sales tax is that the state in which the business operates gets some portion of the sale because they provide the store and customers with x, y, and z, thus allowing them a place to conduct business operations. For example the roads you used to get to the store, the police to make the area "safe", and what ever other thing you can come up with I guess. If I purchase something from newegg and I live in MA, who gets the sales tax? Shouldn't MA get some of it because half of the participants in the transaction live in the state? The state the item is sent from is also going to want a cut, but did they provide anything besides the land where the warehouse sits, meaning they technically got their cut in property taxes? It gets quite convoluted and this is even worse, the federal government wants to tax internet sales, but they provide nothing that enables the sale to happen and already "get their cut" from the taxes payed by the company you purchased from and the taxes you pay them.


RE: Fair Taxes
By bio123 on 4/15/2011 1:23:56 PM , Rating: 2
It's hard to say who all should get a cut of the taxes as there are arguments for all sides involved from the state the warehouse resides in to the corporate headquarters to the roads used to move merchandise to the destination state, to the state and city itself that the end user resides in. I'd think the best way would be for the taxes to be split something like 80/20 between the end user's city/state and the warehouse where it was shipped from to cover the local roads used to transport items.


RE: Fair Taxes
By Reclaimer77 on 4/13/2011 6:05:03 PM , Rating: 2
quote:
Basically I just don't think it's fair for the brick and mortar stores to have to charge people taxes when somebody else will deliver for free and not charge taxes on the same item.


That's just an absurd position to take, "fairness" has nothing to do with it.

Prove to me how they are being hurt. I have a report here, and oh look, brick and morter retailers consistently out-gross online retailers year after year. So what's your point?

Using taxes to enforce "fairness" is what got us in this mess in the first place. Don't you understand? You can ONLY bring everyone down with taxes, you cannot raise someone up and level a playing field. It doesn't work that way.

If you honestly believe less taxes are what makes the deciding factor of where THAT many people shop, then what has taxing internet sales done exactly? Duh, all you've done is HURT the economy and stifle stimulus. You haven't made brick and morter stores more viable, and you haven't made online shopping "more fair".

I shouldn't be, but I'm shocked you got a 4. What you are saying SOUNDS good, to soft headed sponges out there. But you are simply repeating the same failed reasoning that got us into this mess we have now.

quote:
I'm kind of rambling now but my point is it should be fair for all retailers.


It already IS. Business isn't meant to, and quite often should NOT be fair. It's called COMPETITION. Online retailers have to compete with brick and mortar stores in the small areas that they can, with the thin margins they have to work with. Online retailers have ALWAYS been at a disadvantage. Poll after poll shows, shoppers usually PREFER to go to stores rather than shop online. If you take away the ability of online retailers to compete with lower prices and less taxes, well now who are you being "fair" to?


Businesses Pay Taxes
By allometry on 4/13/2011 10:16:18 AM , Rating: 2
By rolling it into their product pricing.

Yes, the government will expect more receipts into the treasury from a hike in taxes, but they never anticipate customer drop off, because of a rise in product cost.

So while food and energy costs are rising, we can expect if this bill passes that everything else will begin to rise in cost. Point being, people who are already strapped will just stop buying stuff they want.




RE: Businesses Pay Taxes
By mcnabney on 4/13/2011 10:20:06 AM , Rating: 1
Most of the shiat sold online and without sales taxes is made in China anyway, so I don't really see the problem with this.


RE: Businesses Pay Taxes
By DawsonsDada on 4/13/2011 10:30:34 AM , Rating: 2
What does where a product is made have to do with wether or not we pay taxes on things we buy?

I pay MORE than enough taxes through federal, state, local, property and sales taxes without having an additional burden of paying an "Internet sales tax" as it is.

There has to be a better way for a state to balance its budget than taking more money from you and I and everyone else out there don't you think?


RE: Businesses Pay Taxes
By BioHazardous on 4/13/2011 10:35:38 AM , Rating: 1
I'm all for lower income taxes and less government, but I am not against sales tax. Online retailers don't need the advantage of no sales tax to succeed. They already have an edge on normal retailers by not having to have anything other than a website and a warehouse. Some places don't even need warehouses. They shouldn't have a further advantage over other businesses because you don't like to pay a sales tax.


RE: Businesses Pay Taxes
By gamerk2 on 4/13/2011 10:39:16 AM , Rating: 2
The Sales Tax does have one major flaw though: It favors established businesses [IE: Those with lower costs] as opposed to startups [which need to PURCHASE a lot of equipment to get started]. That being said, unlike Property Taxes and Income Taxes, Sales Taxes are FAR more recession resistant. A National Sales Tax as a REPLACEMENT for the Income Tax does deserve some attention...


RE: Businesses Pay Taxes
By mcnabney on 4/13/2011 4:15:32 PM , Rating: 2
Businesses don't pay sales taxes on production equipment.


RE: Businesses Pay Taxes
By Targon on 4/13/2011 11:43:52 AM , Rating: 2
The real problem with the idea of sales taxes for buying items online is the reason for the sales taxes in the first place.

If a business is located out of state, or even in a different town, my transaction with that business does not add to the need for LOCAL police, fire, or just about any other local service, except for road maintenance. The local government does not encourage or do anything to help sales from out of state transactions either. The state I live in does not do anything to facilitate online or over the phone business transactions from out of state, so tell me again WHY I should pay local sales taxes for an out of state transaction.

Local businesses get the protection of fire, and police departments, plus the other local services, so there being a local sales tax to help pay for those services makes sense.


Save some money Taget, Walmart -
By Dr of crap on 4/13/2011 10:18:30 AM , Rating: 2
From the article -
"Retailers like Target Corp. (TGT) and Wal-Mart Stores, Inc. (WMT) would be deeply grateful if the bill passed. They've been pouring millions into lobbying Congress to eliminate the online tax exemptions."

Maybe they could have LOWER prices if they'd stop giving money away. And those millions could pay for that damn sales tax they have to pay! Saving them even more money.
And then ebay and Amazon and all the rest could KEEP they're lower prices too!

Solution Target, Walmart - save money, don't give money away to fight the internet sales tax problem.




RE: Save some money Taget, Walmart -
By C'DaleRider on 4/13/2011 11:17:42 AM , Rating: 2
quote:
And those millions could pay for that damn sales tax they have to pay!


You do understand the consumer pays the sales tax, not the stores. So it's not costing the stores much except in getting their sales programs to split the tax off from the sales totals and the filing of that money that was collected....something that can be done completely via software and a single person.

In fact, the stores get to keep an albeit small percentage of the sales tax they take in when they send in the tax in their quarterly sales tax payments to the state they're operating in.


By Dr of crap on 4/13/2011 12:51:47 PM , Rating: 2
You took that to litteral.
Taxes are taxes, be it sales or property.


Already in Europe for 10 years
By Nyu on 4/13/2011 11:02:30 AM , Rating: 2
Online tax has been the norm in Europea already for almost 10 years, we pay for every online service like hosting, mmo subscriptions, and anything sold online. Some hardware stuff is often twice the price here than in the US.




RE: Already in Europe for 10 years
By Narcofis on 4/13/2011 11:33:19 AM , Rating: 2
This actually proves the point on why this is a bad idea. you point out that the online taxes had a big influence on the pricing structure and you sometimes pay double what we do in the US.

Now this points something else out. Not hurting only the online retailers but all virtual goods business like gaming industry, hosting and such. You know the next step would be taxing everything bought on the internet be it physical or virtual.

The need to look further and see the real repercussion such a tax would do!


RE: Already in Europe for 10 years
By mcnabney on 4/13/2011 3:07:36 PM , Rating: 2
Pricing in Europe is higher for technology due to duties, fees, and VAT. Sales tax goes ON TOP of that.


Overstating the problem
By DanNeely on 4/13/2011 11:29:36 AM , Rating: 2
quote:
But it could hurt small e-tailers like ThinkGeek even more; as they would need major infrastructure overhauls to support the collection of taxes. There are over 7,500 taxing jurisdiction in the U.S., each with their own tax rules. Navigating that mess would be a nightmare for these small players.


I'm definitely in favor of things like the Streamlined Sales Tax Agreement that would reduce bureaucratic overhead, but I don't see the current situation as being catastrophic for small businesses either.

While the bigger players like amazon will probably implement the entire thing in house, 99% or better of the other e-tailers would simply outsource it to a 3rd party that does all the complicated sorting out and offers the needed data via a web service.




RE: Overstating the problem
By Nutzo on 4/13/2011 11:56:32 AM , Rating: 2
quote:
While the bigger players like amazon will probably implement the entire thing in house, 99% or better of the other e-tailers would simply outsource it to a 3rd party that does all the complicated sorting out and offers the needed data via a web service.


And do you realize that this is not allowed under most state tax laws? Most tax collection agencies only deal directly with the reseller.


RE: Overstating the problem
By DanNeely on 4/13/2011 1:28:14 PM , Rating: 2
I'm not suggesting as much outsourcing as you appear to think I am. Automated check printing is something that all but the smallest companies already have. All they need is a lookup service to provide what the rates are for different product types at the customers location, not a payment processing service.

Beyond that, companies like yahoo provide canned storefronts for customers, and AFAIK anyone using yahoostores still needs to pay sales tax for their location; so it's clearly not an impossible situation.


Nice Title
By Shuxclams on 4/13/2011 11:29:58 AM , Rating: 2
quote:
Sen. Mike Enzi(R-Wyoming) will co-sponsor the bill.


How about "Senators Look to Drop Tax Bomb on the Internet"

Partisan hack....




RE: Nice Title
By ebakke on 4/13/2011 11:45:02 AM , Rating: 3
"According to aides" Sen Enzi will co-sponsor the bill. At this point he hasn't yet, and the only indication that he will is an unnamed source. The title's fine (for now). Relax.


One-sided headline much?
By gamerk2 on 4/13/2011 10:42:31 AM , Rating: 4
quote:
The new bill will be entitled "The Main Street Fairness Act". According to his aides Sen. Mike Enzi(R-Wyoming) will co-sponsor the bill. He sponsored a previous bill with the aim of internet taxation


So...The bill is co-sponsered by a Republican, the headline reads "Top Senate Democrat looks to add Tax Bomb to the Internet".

Nevermind the fact that frankly, internet operations have had a major competitive edge for a while now, and a LOT of people think that loophole in the tax code should be closed.




Annoying
By Evadman on 4/13/2011 11:46:58 AM , Rating: 2
Online shoppers already pay a tax, but the tax is paid to UPS instead of the state. Besides that though, taxes on top of other taxes is stupid. Same for the many different rules that a retailer would have to follow in order to collect taxes. The amount of logic that would be involved in creating a taxing software that could handle sales tax for everywhere in the US is absurd.

If a tax law is going to be put into affect, then make it simple to understand and administrate. Make the sales tax a flat value that is not dependent on geographical location or jurisdiction. For example: everything sold online to any location has a 3% (or whatever) tax that is remitted to the state that the shipping address is in. Then, (if possible) do the same thing in B&M stores. Worst case, there would be 2 different sales tax rules: B&M and Online.

A graduated tax, based upon selling price, would also work. Say, between $0 and $50 is 3% tax, $51 to $500 is 2.75%, $501 to $5000 is 2.50% etc.

Whatever the solution is (if it must happen), the solution must be easy to administrate.




RE: Annoying
By Dr of crap on 4/13/2011 1:02:22 PM , Rating: 2
While that sounds nice - with the govt involved it will never be that simple!


Ok, but who do I pay taxes to?
By jimhsu on 4/13/2011 1:34:57 PM , Rating: 2
This is a somewhat contrived example, but it's realistic and shows how online taxation is far more complicated than what is put here.

Imagine that I (living in Texas) wants to buy a gift for my cousin (in California). I order a camera (made in New York, by a manufacturer headquartered in Pennsylvania) from Amazon, Inc. (headquartered in Seattle, Washington), who ships it from a warehouse in Oregon. Since my cousin is in Las Vegas at the moment, he contacts me to change the destination to his hotel in Nevada when the package was picked up by UPS.

Now, which states should collect the tax? None? All of them?




By HansQGruber on 4/13/2011 4:22:42 PM , Rating: 2
No, it isn't that complicated. The taxes should be collected for the state that the purchaser lives in, simple.

Now, I am assuming they use the billing address as the address of residence for tax purposes. So you theoretically could get a P.O. box in, say, Oregon where they have no state sales tax. Then get a credit card tied to that P.O. box and use that for purchases and not have them collected. The probably is technically fraud of some sort though.


Hands off my Amazon!
By stm1185 on 4/13/2011 1:20:30 PM , Rating: 1
Why doesnt Dick "up his ass" Durbin go after Obama's best friend GE and companies like it that made Billions in profits and payed 0 taxes before he starts trying to force the people of his state and others to pay taxes shopping online?

Oh wait they bribed his party! F$&% the Democratic Party. Friends of the middle class my butt. Letting GE get away with paying 0 taxes then trying to force every middle class American to pay taxes on Amazon. I guess they are adding a Walmart logo next to the GE logo on their uniforms.




RE: Hands off my Amazon!
By ebakke on 4/13/2011 1:26:48 PM , Rating: 2
quote:
F$&% political parties.
Fixed it. Democrats don't have exclusive rights to suckiness.


No overhead...
By CrazyBernie on 4/13/2011 10:00:32 AM , Rating: 2
= more money to spend on lobbyists. Seems like an uphill battle for the brick and mortars.

It's bad enough I have to pay taxes if I want something from Newegg.com (they have an office/warehouse in TN)... if I had to pay taxes from TigerDirect as well... that would suck.




It only seems logical.
By eskimospy on 4/13/2011 10:27:37 AM , Rating: 2
If you're going to have a sales tax, then that sales tax should apply the same no matter where you buy something from. I can't see a logical reason to advantage internet business over physical business.




By vazili on 4/13/2011 10:43:19 AM , Rating: 2
They have virtually nothing in overhead whereas Brick and Mortar stores have a ton. Why should e-tailers get another one because they dont have to pay tax?




Go pound sand, @@!# Turban!
By MeesterNid on 4/13/2011 12:52:37 PM , Rating: 2
quote:
paying their fair share of taxes


Makes me sick! People that spend our tax revenues like drunken sailors, get this country into debt that is threatening default and then tell us that we need to raise taxes to fix their spending problem!

WTF, Turban!? How about you resign and let non-morons create budgets that are grounded in common sense and where we "don't buy stuff we can't afford" (http://www.hulu.com/watch/1389/saturday-night-live...




By BeatriceV on 4/13/2011 2:25:37 PM , Rating: 2
The Main Street Fairness Act would enable states to require out-of-state retailers to collect sales tax, but only if that state has already revised their sales tax laws to comply with Streamlined. Twenty four states have already done so and more are considering doing so. Also, sellers with less than $500,000 in REMOTE sales would be exempted from having to comply.
As part of the Streamlined Agreement, states have certified several companies to provide technology solutions to online merchants to make collecting sales tax easy. My company offers a service, called TaxCloud, that automatically calculates accurate local sales tax. It also prepares, files and remits the sales tax to the Streamlined states. TaxCloud is completely free to merchants.
This debate is not about whether you should be taxed, why you should be taxed, or at what rate you should be taxed; that debate takes place at every election when you choose your local representatives and weigh-in on various ballot initiatives to authorize funding for these services in your community.
It is better that Congress address this issue so that all businesses collect the correct tax. Until then, more and more states are going to be attempting on their own to collect these taxes (for example by passing affiliate nexus laws and notification/reporting laws), which will increase complexity.




Long overdue
By taxcloud on 4/13/2011 3:31:22 PM , Rating: 2
Passage of Main Street Fairness Act is long overdue.

Sales tax is already due on all internet purchases (in the 46 states which collect sales tax). Sales and use tax laws have been in place in most states for over 50 years.

The only reason many online retailers elect to not collect the sales tax at the time of a transaction is because in 1967 (yes, 44 years ago) the Supreme Court ruled in Bellas Hess v. Illinois, that a remote retailer (then mail-order catalogs) should be obligated to collect sales tax just as a local retailer must, but also conceded that unlike a local retailer, a remote would be "entangled in a virtual welter of administrative and record keeping burdens." To resolve this undue burden, the remote retailers were relieved of the obligation to collect unless they had local physical presence or nexus (although the sales tax obligation of the consumer was not discharged). The matter came before the Supreme Court again in 1992 (Quill v. N. Dakota), which largely reaffirmed Bellas Hess, adding that economic nexus (door-to-door salespeople) would also trigger collection obligations.

Even in 1967, the court recognized that someday "man and his ingenuity with machines" would someday solve this problem, and placed the issue before congress:

quote:
"The underlying issue is not only one that Congress may be better qualified to resolve, but also one that Congress has the ultimate power to resolve. No matter how we evaluate the burdens that use taxes impose on interstate commerce, Congress remains free to disagree with our conclusions"


Well, a lot has changed since those rulings. Today, the internet enables businesses of all size to sell products and services anywhere in the country in seconds. Frequently these websites offer the ability to calculate accurate shipping fees directly to any doorstep, variable by weight of item, and speed of delivery - certainly a more complicated task than looking up a sales tax rate. There is even a free service (http://TaxCloud.net) which does local sales tax calculation and reporting for every jurisdiction in the country, and for states which have adopted the Streamlined Sales and Use Tax Agreement (24 so far, with 4 more pending), TaxCloud can also do all the jurisdictional tax return filings and remittance, and will even handle any state-by-state audit requests. And again, it is completely free.

Congress should finally resolve this issue as a basic matter of fiscal responsibility - and the states cannot do it on their own (no matter how hard they are trying with all the Affiliate Nexus legislation attempts now passed in 5 states, and pending in 8 more).

These are not new taxes, or even an increase of existing taxes. The Main Street Fairness Act simply says, if you sell goods and services online, you must collect sales tax just like any other retailer.

R. David L. Campbell
Chief Executive
The Federal Tax Authority




By kenyee on 4/13/2011 3:32:49 PM , Rating: 2
And convince all the stupid suckers like the average joe and the lazy politician to vote for and support this :-P

You know it's just a money grab...they might as well say if you don't do it, we'll take away your police, fire department, schools, and your parks! Typical...




Why is this an issue?
By HansQGruber on 4/13/2011 4:13:33 PM , Rating: 2
This shouldn't even be news, you all have been reporting your online purchases and paying your sales taxes on them; as required by law....right? (yeah me neither)

Just because currently companies without a presence in your state are not required to collect sales tax does not mean you are not supposed to pay them. All this guy is proposing is requiring companies to collect sales tax regardless of the state they sell to. It isn't adding some huge overhead to small companies, those companies already have to collect sales tax for local sales.

I hate taxes as much as the next guy and think increasing them or adding new ones isn't the fix to spending problems, but this isn't a new tax -- it is just enforcing one that most people have been skirting for a long time.




Give and Take
By Rhodenator on 4/13/2011 6:04:54 PM , Rating: 2
As some others have mentioned, I am OK with an Internet Tax, even though I currently enjoy the benefits of not being forced to pay taxes for online transactions.

HOWEVER, all the government ever does it spend more money over and over and over and over... so until they are willing to adopt something such as the fair/flat tax and/or do some HUGE spending cuts (and I mean HUGE), they shouldn't get another penny. If you are driving yourself in debt out of stupidity, why give you more money to go even further in debt?

First SOLVE the problem with a solid, non-corrupt plan and then generate additional/new revenue (one may debate my term revenue w/goverment).




Nice Headline
By thurston on 4/13/2011 10:42:29 PM , Rating: 2
You have learned quite a bit during your research for the sensationalism in the big news outlets editorial series.

I think a better headline would have been "New tax legislation being introduced to help level the playing field between brick and mortar and online retailers."

But I'm sure my headline is not sensationalist enough as you have obviously learned during your research.




Typical
By L1011 on 4/14/2011 4:03:18 PM , Rating: 2
Pardon my generalizing but what a typical move from a typical Dumocrat. How about following New Hampshire's lead and NOT having a sales tax at all? (We don't have an income tax either). Why can't a Democrat EVER think like this? God forbid we actually try to reduce the size of government in this country. It's always more taxes more taxes more taxes from the Dumocrats.




Dumb Idea
By Ammohunt on 4/13/2011 3:17:56 PM , Rating: 1
All this does is kill online businesses! I order online not to avoid taxes but for convenience(don’t have to roam the store for an hour trying to find what I want and deal will all the selfish assholes) since adding shipping costs more often than not make up the difference in price; adding taxes to that makes brick and mortar places somewhat cheaper. So in reality the only reason this tax is being proposed is because it’s an easy target the end result will be in people changing their buying habits and online retailers folding up shop the exact opposite effect of generating additional revenues which is not what we need right now in today’s economy.
Fair tax is a dumb idea since it’s based solely on consumer activity. in the time of reduce, recycle, reuse coupled with a national VAT tax smart consumers will avoid new purchases like the plague and choose to repair rather than replace. The best and only fair solution is a 25-27% flat tax on income across the board for everyone including the majority of the country that currently pays no taxes at all so if you make $100 a year or $100M a year everyone pays their fair share.




By gorehound on 4/13/2011 4:49:15 PM , Rating: 1
does his name sound like a porn star.it does to me.
anyways the guy is a dick and this is not a good idea at all.




By rika13 on 4/13/2011 10:10:25 PM , Rating: 1
Dick's tax isn't about making things fair for retail, it's about tag team screwing over Illinoisans after Quinn shat all over us (I want Blago back, he may have been corrupt, but they all are here, and he did a much better job than Quinn) by requireing that companies here collect sales taxes for online orders and skyrocketing corporate income taxes so high that companies that have been proud to be a part of Illinois (Caterpillar and Eureka to name two) are leaving like Illinois' MMA-fighter husband pulled in to the driveway.




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