Amazon.com debate heats up at Colorado Capitol

Denver Post ^ | 03/10/2010 | Tim Hoover

[mvpel]

Amazon "chose to make an example of our state and unfairly punish their own business associates for political gain," the group ProgressNow Colorado said in a release.

The pot is calling the kettle black, sounds like.

[Hostage]

Keep in mind that HR. 25 is for the Federal FairTax. Each state would have to implement their own State FairTax and that would need to address property tax.

But you’re in the right area of the debate issue, that is how to manage competing forms of local taxation? Business versus property etc. Tell me what you think of my local tax bond idea in post #19. Thanks!

[ALPAPilot]

It completely depends on the services that are being provided. Tax issues cannot be decided upon justly prior to determining what services are provided. Example: It used to be that fire protection was provide by an insurance company (Ben Franklin's idea). A property tax seems reasonable for fire protection since that is what is protected.

Using property tax to fund education? This makes no sense: why should I support public education when I will use it, ever?

[Hostage]

Good points, really good points. Have to go to a meeting now but will get back to you!

[NaughtiusMaximus]

Demos want to know what part of “Tax and Spend” Conservatives don’t like.

[catnipman]

Dims in control = less jobs.

Dims never met a tax they didn’t like and never met a way to kill jobs that they wouldn’t implement.

[Peet]

Also, why should an e-tailer in another state be required to pay for another state’s fire/police/idiot politicians when it will derive no benefit or service from said monies as they are not in that state?

The "e-tailer" does not pay the tax. The purchaser who lives in the state pays the tax.

[TChris]

Big government types hate liberty. Amazon is free to associate with whomever it chooses, and they have exercised that right.

Cry me a Colorado river!

[TChris]

The "e-tailer" does not pay the tax. The purchaser who lives in the state pays the tax.

Right, but they would pay the tax on purchases originating outside the state, right?

Interstate sales have always been off-limits for taxation, haven't they?

Legislation such as this turns the e-tailer, or Amazon, into a tax-collection agency, and puts them under the jurisdiction of the State of Colorado, to one degree or another. See the problem?

[Uri’el-2012]

The Marxist "useful idiots" think tax policy will not change behavior.

They are like the Underpants thieves from South Park

[denydenydeny]

I was an Amazon affiliate until just a few days ago. I have earned tens of thousands of dollars in online affiliate sales each year for the last 3 years. Each year I have paid Federal and Colorado income taxes on this income. I will have no choice but to move out of state to Wyoming unless this is repealed. So long libs........

I would be in the same boat if Pennsylvania was ever stupid enough to do this. I'd have to rent a PO box in Delaware.

[Peet]

I said: The "e-tailer" does not pay the tax. The purchaser who lives in the state pays the tax.

Right, but they would pay the tax on purchases originating outside the state, right?

No. The retailer is supposed to collect the tax for the buyer's location. This is, of course, ridiculous because state, county, city, etc sales taxes are all over the place. Vendors would need hugely complex systems to comply.

Interstate sales have always been off-limits for taxation, haven't they?

Not in my state. For example, we pay sales tax on most purchases from e-tailers who also have a brick-and-mortar presence in-state. We are expected (by law) to pay sales taxes on all other out-of-state purchases, (internet, or B&M) though I suspect not many do. The state just went after a tire retailer in a neighboring state trying them to collect our state's sales tax on tire purches made in their state. They failed.

Other states' laws may be different...

[familyop]

"Tell me what you think of my local tax bond idea in post #19. Thanks!"

Ah...you're interest here is unusually analytical. Sorry about the rhetoric and hyperbole. Philosophically and generally, I think bonds are a great way to go.

Yields should be going up for newer Treasury bond investors, but we might be seeing the rare chance of risk for such bonds (reason for demands for higher yields). Some advisors have even recently spoken of a possibility of collapse in the future. If you know much more than I do about bonds and see returns with low enough risk, do it. Otherwise, you might seek more well informed advice or devote some study to Treasury bonds, as local accounts would be dependent on them. ...wish that I could be of more help than that.

If you're concerned about keeping a local government going during unusually poor conditions, some very unique backup plans might also be good for possible rare economic occurrences. Elected officials and employees won't accept the notion of reductions very well, so some discretion would be in order for planning worst case scenarios. I've wondered about how we might retain the most essential services (commissioners, judicial officers, roads, municipal equivalents) and will put a little thought into that off and on. Most people tend to avoid thought about conditions requiring changing mindsets in leadership (e.g., pay reductions, working with volunteers, and the like).

Yes, that's downbeat, but someone should do it. And yes, planning for unexpected times of plenty should also be made. Military commanders maintain plans for varieties of scenarios, and they also do much civil work (from politics to roads).

I don't know whether any of that was of any help, but I tried.

[familyop]

It could be that indirect investments in Treasury bonds are a good way to go, BTW, for a term. I don’t know. At least some of the negative predictions about them came from skittishness after the Greece debacle—that, along with debt and deficit to GDP ratios for the UK and our country. It’s more difficult for economists and financial advisors to make good predictions during or immediately an economic decline because of radical fluctuations that occur around such declines. History isn’t even really of as much help as would be hoped, because the current situation includes unprecedented volumes and dependencies of commodities and other products in international trade.

[I’m not an economic or financial advisor. This is only a discussion of public policy.]

[familyop]

Oops—predictions during or immediately after an economic decline...

[Hostage]

Good points again. Until I read this thread about the impact of e-commerce on state/local sales tax revenues, I was all for sales tax at both state and federal levels using the FairTax at both level.

I don’t want to see property taxes, business taxes, cap gain taxes and on and on.

I always thought states and locals could subsist off sales tax but now am not so sure.

I don’t support taxing internet retailers as this thread discusses.

So what to do?

I know there is a lot of waste and so people are fed up with all the spending and would like to see spending cuts.

But if we could define a list of essential services such as you started to point out, and then use a revenue stream taken from US Treasury Bonds to fund only those essential services, then that would leave all the socialists with pretty much nowhere to go to panhandle for tax money, because that is exactly what they are, political panhandlers.

So now I see the FairTax would work at the federal level but not necessarily at the state level if we enact laws barring states from taxing internet sales and sales tax revenues begin to decline.

So what’s left in the tax engineering design is how to fund a list of essential services at the state/local level without using taxes on property, business, cap gains, income and also reduced in-state sales.

The beauty of attaching revenues from US treasury bonds is that the federal government could sell the bonds at a discount to state and local governments, limit the quantity of discounted bonds by constitutional apportionment and mandate that the interest revenue from discounted bonds be used only for the defined essential services.

As far as the bond market stability, I know things now are precarious but federal bonds should not default although their market value can plummet. The reason they won’t default IMO is because the Fed will just monetize the debt, which they have been doing of late. The danger is hyperinflation but we are in a deflationary environment in many respects, and also all currencies float leaving the benchmark GDP performance amd other relative measures to interact and set the price of a dollar against commodities and other things ecnomic. IOW we the USA will likely remain at the top of a giant mudslide of all falling economies. So we may be shielded from hyper-inflation. We will see, Geithner and the Fed are getting away with it for now because so many other economies are doing so poorly relative to the USA.

I really liked also ALPAPilot pointing out the history of fire protection being a matter for property insurers and for property tax to fund fire departments.

[familyop]

"So what to do?

Well, now, that's an open-ended question. I would stop zoning ordinances against new, small manufacturing in rural counties and get taxes from that (sales). It would take some time, but that would be the greatest source of revenue that any county could want.

Granted, they'd have to turn against existing businesses that want such ordinances against potential competition, but those are declining anyway. I have some manufacturing plans. ...may as well repeal those ordinances and tax my work in the near future, or I'll do it without paying local taxes (cheap, rural location in a more free county nearby).

[familyop]

BTW...complete repeals and deletions of those ordinances. Most men of some ingenuity won’t be asking for variances. Hard feelings have gone too far for that. If locals want caps on sizes of local manufacturing operations, they could do that (e.g., small maximum number of employees, say between 4 and 10). Unreasonable flooring costs (leases, etc.) have killed more new businesses than anything else. Allow the technologically inclined to start on their home properties. No one should be bothered by a small operation on, for example, a neighboring 35 acres or so, and we already do such projects as hobbies.

[familyop]

...more considerations on rural manufacturing. Nuisance regulations (noise, restricted to indoors, traffic, etc.) would be necessary to keep it from being squashed.