In the April 20 post entitled “Here comes the Internet sales tax grab” uber conservative Michlle Malkin sends a bold warning to her followers which was immediately twittered across #tcot that governments are finding loopholes to tax people.
Following closely on the heel of teaparty day Malkin expects to grab some easy pickins headlines with her anti-tax crowd. But is she going too far this time?
The “tax” she is talking about is on-line sales tax. If you buy a sofa from a brick and mortar in town you pay state sales tax. You can drive across to border to a neighboring state with lower sales tax and save some money, people do it, but its not exactly helping the economy and its not playing fair.
The best deal of all is to find an on-line retailer that does not charge sales tax.
This is a loophole we all knew had to close. Why should internet retailers not collect sales tax? Why should brick and mortar stores suffer because we fail to regulate on line stores in the same way.
What happened to the conservative sense of fair play?
Malkin loves to pick fights and she knows she has an easy audience ready to pounce of anything government. But this time she has exposed herself. Malkin is being unfair to traditional retailers wh should be treated the same as on line retailers.
The bill to be introduced this week is co-authored by both a Democrat AND a Republican which Malkin points out but fails to address. Instead typically she places the blame on Obama.
And what about President Obama’s promise not to raise taxes of any kind on families making under $250,000? Where is the revenue neutrality? And where does this end?
Where is the “fairness” is what Malkin should be asking. There is no question of revenue neutraility when all vendors are treated equally. The issue comes about when some are given preference in loop holes.
Malkin closes her column with “Tea Party activists, are you listening?”. I’m sure they are listening. Are they “thinking” is what I’m asking?
Her audience is the same audience who cries “Obama unfair ti small business”. These online retailers getting away with not charging state taxes are not small business. We are talking Amazon, OverStock.com etc. The small businesses are the brick and mortar, your neighbors that are getting hurt.
But Malkin would rather grab a headline. Next week she’ll be all about small business.
{ 9 comments… read them below or add one }
Its a logical and well thought out response presenting lots of options and all I’m saying is that equity has to be built into the system. I don’t see a trade off between delivery and taxes. When I buy a dryer I pay to have it delivered and pay sales tax. Its not up to the government to support FedEx by waiving sales tax revenues. That favors one business over another. But some things you said makes sense and I’d hope that Congress and the states think it out. But no retail sales tax for on line purchases for some states and not others is unfair. I think its a good and proper source of income for states looking to make up for shortfalls in this economy.
All I hear is no one wants to pay but everyone wants services. On purely local level want good roads, police, firemen, courts, well maintained boulevards, good schools and teachers, snow removal etc etc but no one wants to pay. Government needs to do its share and I’ve spent some time harassing a local council to lower city taxes but lets face it, right now they are all incapable of making ends meet.
Your argument is missing the point. You cannot apply the same laws to online business as you do to traditional retail. There are a whole different set of dynamics at play.
While you can purchase something online and not pay local sales tax, you end up paying shipping, which does stimulate the economy and more directly than a sales tax would (ask UPS and FedEx employees).
The government and legislators are just too far behind the new realities introduced by the internet to understand this perhaps, but in essence the geographical abstractions introduced by going online cannot be accounted for by traditional legislation.
Consider this_ if you want to apply sales tax to interstate trade and do it in as similar a way to traditional retailing as possible, then the obvious answer is to apply the state sales taxes of the state in which the goods are sold (this is what would happen if you bought locally or crossed a state line to purchase something). IE you pay the sales tax of the state in which the retailer is doing business. this is typically how legislators approach new legislation_ try to equate it to something familiar.
Sounds simple until you realize that sales taxes vary quiet a bit from state to state (EG Oregon has none). So the obvious next move for e-tailers would be to relocate to a state with no local sales tax. There go your online sales tax revenues. Just as Delaware is a great state in which to incorporate, the states with no sales taxes will become the preferred locations for e-tailers.
Now imagine the outcry from the states in which companies such as Amazon are currently located when these firms start relocating their operations and workforces to other states without sales tax. Geez, how “unfair” is that?
Now consider that most e-tailers do not carry much inventory but are actually just virtual storefronts for someone who does actually stock and ship product. So a consumer in Delaware purchases an item from an e-tailer located in California and the order causes the product to be drop-shipped from a warehouse in Montana. Which sales tax gets charged? Who is responsible for collecting it?
It’s just not as easy as it sounds and regardless of what gets done, someone will be miffed.
BTW, those employees of UPS and FedEx are roughly distributed according to the demands of online shoppers. They will then pay income taxes in the states in which they are employed (assuming that their states have income taxes) and THAT is how the online commerce feeds back into the economy and the tax base. Note that this way the dollars passed though the economy twice before being sucked up as taxes and the income is roughly distributed to the states where the buying and selling is happening in the form of more jobs and salaries.
Ah the typical language of the right. I’ve learned there’s no point answering anyone who resorts to name calling. I was going to delete the comment but what the heck.
Are you really going to debate “This Tax vs. That Tax” and the juxtapositional arguments between them … incredible ! QUIT SPENDING MORE THAN YOU BRING IN, MORONS ! … Then we all have LESS TAXES to whine about, idiots !
It would make more sense economically to repeal the tax the Brick & Mortars are forced to charge rather than levy a tax on the internet. How’s that for fair? Make the Fed as well as State & Local governments live within their means, their means being a 10% flat tax on income, period. No other taxes, “surcharges” nor any other disguised tax. The economy would go through the roof and all levels of government would have sufficient funding to operate properly.
The tax is hurtful in an economy where people are already pinching pennies to get by. Increasing taxes isn’t going to help anything except force people to cut back spending even more, which will cut back the taxes the government gets and add another thorn in the economy’s side.
Something’s fishy here. The bill was originally submitted in May 2007 where it died in committee. The ABA has been asking the bill to be re-submitted since January and then there’s this quote in the C-Net story:
A bill expected to be introduced in the U.S. Congress as early as Monday..
Congress is not in session today.
The internet interstate sales tax was intentionally waived for years in order to help spur the growth of the online economy. This tax was debated a few years ago and then again postponed by internet advocates. I think the tax has to come in eventually but this is a terrible time to do it. States may think they have no choice, but I’d prefer we get out of this recession first – the tax will hurt online sales businesses at a time when these businesses are the only ones holding up revenue for some retailers. This should be one tax bill Obama should consider vetoing, or at least figure a way to postpone implementation for a couple of years.
Whether you are for this or against this what does this have to do with the President? He didn’t propose it and it deals with STATE taxes. If anything with the stimulus states will be less likely to raise taxes. Regardless, it has nothing to do with whether FEDERAL taxes will go up on people making less than $250,000.