Posted on 04/17/2011 6:37:04 PM PDT by Free ThinkerNY
The e-tax man cometh.
As early as this week, Sen. Dick Durbin (D-Ill.) told The Post he will propose sweeping legislation to tax all online purchases -- in a move aimed at closing state budget shortfalls.
Such a tax would plow more than $1 billion in tax revenues into the state coffers for the 2012 budget, according to some estimates.
William Fox, University of Tennessee economics professor, says that based on his own estimates, New York lost about $865.5 million in tax revenues in 2010 -- almost enough to close that year's $1 billion budget deficit -- based on its 4 percent tax rate. However, Fox acknowledges that a research report he helped author last year didn't appropriately factor the blistering pace of online sales growth over the past several years.
Fox estimates that the annual growth rate for online sales is actually about 14 percent from 2006 to present.
(Excerpt) Read more at nypost.com ...
Tennessee has no state income tax. Their revenue sources are retail sales, and property taxes. And yes I do make purchasing decisions based on sales tax. It’s 10%.
The aptly named “Dick” Durbin.
Turban Durbin has no authority to propose anything!!!
United States Constitution
Article 1
Section 7. All Bills for raising Revenue shall originate in the House of Representatives; but the Senate may propose or concur with Amendments as on other Bills.
We know there are a bunch of crappy (i.e Democrat, lib, etc) estimators out there. Every such estimate I've seen falls way short of reality. But legislators and reality -- you have to look no further than Kalifornia to see the disconnect.
Same here.
Several weeks ago I bought a dozen dress shirts from Penneys. Most are still in cellophane. It will be a `stitch in time saves nine,’ and so forth after the nice “I’m from the federal government and I’m here to help you” folks get involved. If it means we have to pay shipping AND sales tax, many of us will stop placing internet orders.
Those of us who work for a living will write our congress critters, then suck it up and buy less. Internet sales will suffer, jobs will be lost, and the responsible feds will sleep soundly having damaged this successful part of our economy.
As soon as you milk that cow, it will be a far smaller cow, that’s the one certain thing.
Ethically one might make a case of the obligation of “use tax” after the purchase, but not many people pay it and the states are like the Three Stooges when it comes to competently going after these taxes, even after the major credit card companies agreed to roll over. And then there are categories of items and different sales tax brackets — Durbin is contemplating a logistical nightmare.
Drubin’s state (IL) just raised their state income tax to unprecedented levels, to the point that Caterpillar is considering moving to a more business friendly state.
News flash for Durbin: the Democrat-controlled Senate does not control taxes.
They should really consider taxing stupidity.
Good point. Weren’t those things supposed to cure all the state’s budget promlems at one time?
When online retail was in its infancy, it made sense to keep it a tax-free zone to encourage its growth. But now that it's mature, exempting (or failing to collect on) online purchases is simply bad policy. It works to the detriment of local businesses, large and small, that contribute to the tax base and employ local workers.
I like saving money as much as the next guy, but dodging taxes is a poor substitute for cutting taxes.
When those in elected positions fail to cut taxes, yet instead increase said taxes, then dodging those taxes is a very suitable stategy.
Yep, I remember that. I sold all of my RJ Reyonlds and Philip Morris stock at a ridiculously high price. The consumer ended up biting the bullet for government greed on that one, to the tune of $178B.
I wouldn't think the house would vote for it. This is to be a federal tax right? I think the states might get 1% OR 2% of what the fed collects.
Then the states will add their sales tax plus shipping and buying online will cost more than in a store. That’s the ticket. We pay Fed, State, County and Local income taxes, county property tax, school property tax, sales taxes on everything but food and clothes so I guess another tax won’t hurt, I can still eat and not go around naked.
Exactly. But after 3 years I could support a flat 2% tax, now it’s just too fast and would drive small stores and affiliates out of business.
Companies like Dell, B&H Photo, Best Buy etc. can lower their prices to compete or totally negate the taxes but this will drive the small Internet only guy out of business. Maybe that IS the point.
Most conservatives I think believe that some government functions are necessary and constitutional. For example, the military at the federal level, and police at the state and local level.
Therefore, we need some form of taxation. I would say conservatives want taxes to be fair, broadly based, and only as big as necessary to pay for necessary government functions.
In this case, I would be fine if a state decided to lower their sales taxes (Virginia sales tax is 5%, so it isn't too bad, but we also have an income tax, also not terribly high, and localities have property taxes, which pay for schools, police, fire, and other government services.
I believe that all of those taxes are OK at a limited level, and having multiple types of taxes is good because it levels out the effects of economic downturns.
In this fight, my concern is for the fairness aspect. For a tax to be fair, it should apply to every person who does the same thing, and it should apply at the same level. For example, everybody who buys a $20 copy of the Federalist Papers should pay the same sales tax.
And it is that way in every state I've checked, legally: either a store collects the sales tax, or the purchaser pays the sales tax either monthly, quarterly, or yearly (depending on what state you live in).
But practically speaking, few people follow the rules, and it costs the state too much to try to enforce the rules when people don't. So, you have three people -- one buys the book at a local store, one buys it from Barnes and Noble, and one from Amazon.
The first person pays sales tax, and the money paid for the book enriches the local economy.
The second person pays sales tax, because B&N has business in most states.
The third person pays no sales tax, because Amazon is located in very few states.
The 3rd person should pay the tax. People who believe in following the law will pay the tax, but people who break the law if they can get away with it don't pay the tax.
I don't like that. I obey the law, I pay the tax, but others don't. Just like I obey the law and don't loot stores, while other people do if they think they can get away with it.
I don't think that people who buy stuff locally, people who buy from the "wrong" online store, or people who believe their signature on their tax form is an oath, and therefore pay their "use tax", should bear the additional tax burden for people who ignore the law because they can "get away with it".
So I support limited federal action to make it possible for states to enforce their "use tax" laws -- thus convincing people to obey the law, if not because they are moral, then because they are afraid of getting caught.
I know some conservatives here at FR think states tax too much (I think most states do -- I don't feel particularly overtaxed here in Virginia, but I understand others do). But if you think taxes are too high, the answer is to rally the people, lobby the state government, and vote people in who lower the taxes. The answer is NOT to find ways to cheat on your taxes, and passing the burden of paying for government to others who won't cheat.
I'm certain each of the freepers who complain that their state already "gets enough money" and therefore think it's OK to cheat would not hesitate to call the police if their house is broken into, the fire department if their house is on fire, an ambulance if they have an emergency, or the state DOT if their roads haven't been plowed after a storm, or if there is a big pothole.
I would speak out equally against people trying to cheat on their income or property taxes. I don't think it is "conservative" (or "christian" for those who profess faith) to deliberately disobey the laws of the duly elected governments, when those laws are legal and constitutional.
At this point in time..I am a Conservative..and I'm totally ANTI-TAX!
I don't understand what you mean by "I make purchasing decisions based on the sales tax". Do they have a sales tax holiday periodically, and you wait for those times? Or do you not purchase anything right now, and are hoping they will lower the sales tax before you starve?
Or do you mean that you only buy things from places that don't collect sales tax? Are there local stores that break the law for you, and don't collect sales tax? Are they employing illegal immigrants to save on SS and unemployment tax payments as well?
Or do you do all of your purchases online, from stores that don't collect sales tax, so you can cheat on your taxes?
If the last, wouldn't it be easier for you to forge a tax-exempt letter, so you could use it at local stores -- because I'm guessing some things aren't conducive to online purchasing (although people even buy groceries online now).
Do you think Tennessee should have an all-volunteer police force? Should the roads all be privatized, so you can pay a per-mile toll instead of sales tax? Do you think your neighbor should pay more tax so you can pay less?
Anyway, here is the Tennessee law for sales and use tax. There really is no legal way for you to avoid paying the tax -- in order to get things tax-free, you pretty much have to break the law:
State sales and use tax - Sales tax is imposed on all retail sales, leases and rentals of most goods, as well as taxable servicesYour state sometimes requires quarterly payments for your use tax:Tennessee cities and counties have the option of imposing an additional local option sales tax.
Use Tax - The use tax is the counterpart to the sales tax. It is applied when merchandise (tangible personal property) is purchased from outside the state of Tennessee and imported into the state for use or consumption. The 45 states that impose a sales tax also levy a use tax.
Use Tax - Depending upon the frequency of your purchases, you may file quarterly or annuallyHere is more information on the Tennessee Use Tax::
Online and catalog sales are subject to use tax. This tax has been on the law books since 1947 and is the counterpart to the sales tax. When someone buys merchandise online or through a catalog and the seller of the merchandise does not collect sales tax, the consumer who bought the item has a legal obligation to file and pay use tax on the merchandise. The use tax is the same rate as the sales tax.So, if you are making pruchases "based on sales tax", you legally still owe the same tax. About the only choice you have is whether to buy things from a company that helps you cheat on your taxes or not.
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