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The $12 Billion No, Make That $24 Billion Tax Increase (WA internet sales tax)
The Daily Reckoning ^ | http://dailyreckoning.com/the-12-billion-no-make-that-24-billion-tax-increase/ | Dave Gonigam

Posted on 04/30/2013 7:34:09 AM PDT by Lorianne

“I have some concern about the legislation,” says House Judiciary Committee Chairman Bob Goodlatte.

Not that it’s stopping him from supporting an Internet sales tax. Not when it could raise $24 billion for state and local governments. (Where do they get these figures? It was only half that when we covered the issue in depth in late 2011.)

After 13 years of going nowhere, the idea suddenly has traction in Washington. Last Thursday, the Senate voted 63-30 to send the measure to a final vote one week from today, “and that tally is likely to be even more strongly in favor,” reports this morning’s New York Times. “House action, once seemingly unthinkable, may be unstoppable.”

Goodlatte’s “concern” notwithstanding, “We also recognize the fairness issue — certain items being taxed in certain circumstances, other items being not — is a problem for brick-and-mortar businesses, so we’re going to try and solve that.”

Ah yes, fairness. The bill’s even called the Marketplace Fairness Act. Who could be against that?

Certainly not Amazon. “Sometimes the biggest enemies of capitalism are not socialists, but the capitalists themselves,” quips Jeffrey Tucker in Laissez Faire Today.

As we first noticed 16 months ago, Amazon is fully on board with the idea. With it, Amazon can throttle smaller online competitors who don’t have the means to sort out which of 9,600 tax rates apply to an individual customer. That is, unless those competitors buy proprietary software from Amazon to do the calculations. For which Amazon will take a 2.9% surcharge of each transaction, thank you very much.


TOPICS: Government; US: Washington
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1 posted on 04/30/2013 7:34:09 AM PDT by Lorianne
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To: Lorianne
The bill’s even called the Marketplace Fairness Act.

They ought to change it to the "Anti Dog-eat-dog Act" so the parallels are even more obvious.

2 posted on 04/30/2013 7:40:08 AM PDT by pepsi_junkie (Who is John Galt?)
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To: Lorianne

Hard-working creative enterprising individuals built up business that operate by means of the internet. NO help from al gore or anyone else in government.

So naturally, government wants to tax it to death and control the hell out of it.


3 posted on 04/30/2013 7:42:55 AM PDT by I want the USA back (Pi$$ed off yet?)
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To: Lorianne; Tennessee Nana; Liz; TADSLOS; EXCH54FE; GeronL; Travis McGee; stephenjohnbanker; ...
RE :”“I have some concern about the legislation,” says House Judiciary Committee Chairman Bob Goodlatte.
Not that it’s stopping him from supporting an Internet sales tax. Not when it could raise $24 billion for state and local governments. (Where do they get these figures? It was only half that when we covered the issue in depth in late 2011.) “

Goodbye GOP, you support this tax bill and you are dead to me. That's 6% in Maryland, w House GOP collecting it for our lib Gov Martin O Malley..

Lets see how many in GOP who were willing to roll us off the cliff to protect the billionaires now vote for this screwing of us.

After all all of our taxes would of went up then too.

4 posted on 04/30/2013 7:43:47 AM PDT by sickoflibs (To GOP : Any path to US citizenship IS putting them ahead in line. Stop lying about your position.)
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To: Lorianne

It’s probably $24B now, because they could sell pot over the internet and tax the hell out of it...


5 posted on 04/30/2013 7:46:43 AM PDT by stuartcr ("I have habits that are older than the people telling me they're bad for me.")
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To: pepsi_junkie

This act should do wonders for off-shore internet sales....


6 posted on 04/30/2013 7:47:01 AM PDT by yadent
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To: Lorianne; stephenjohnbanker; ding_dong_daddy_from_dumas; Gilbo_3; Impy; NFHale; BillyBoy; ...
Found this at Ballotpedia:

Goodlatte voted against the fiscal cliff compromise bill, which made permanent most of the Bush tax cuts originally passed in 2001 and 2003 while also raising tax rates on the highest income levels. He was one of 151 Republicans that voted against the bill.”

Figures, he was willing to send us off the cliff to protection billionaires from an automatic tax increase but is now apparently will to support passing a new bill collecting that 6% on all my internet purchases.

This just shows who the GOP works for and its not us

7 posted on 04/30/2013 7:52:27 AM PDT by sickoflibs (To GOP : Any path to US citizenship IS putting them ahead in line. Stop lying about your position.)
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To: Baynative

Ping!


8 posted on 04/30/2013 8:07:28 AM PDT by JDoutrider
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To: sickoflibs
This just shows who the GOP works for and its not us

Taxes are the drugs of politics. All are addicted.

To the GOP, they are pot. To the Dems, taxes are heroin.

9 posted on 04/30/2013 8:09:25 AM PDT by llevrok (2013: America is in a cold civil war.)
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To: llevrok
RE :”Taxes are the drugs of politics. All are addicted.
To the GOP, they are pot. To the Dems, taxes are heroin.”

This bill is telling me the difference.

The Dems will raise taxes on us (when they can get away with it) to help the poor and the moochers and other victim figures.

But the GOP will raise taxes on us (when they can get away with it) but do everything they can to protect the rich $$$ contributors from tax increases.

Both make sure that they themselves will do great.

I just called up Bob Goodlatters office and left a message, 'Dont do this' and cited his cliff vote.

10 posted on 04/30/2013 8:16:43 AM PDT by sickoflibs (To GOP : Any path to US citizenship IS putting them ahead in line. Stop lying about your position.)
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To: JDoutrider; Just Lori; Libertina; Lexinom; horatio; freebird5850; Horatio Gates; Ramius; ...
WA Ping



Surprise, SURPRISE - Jay Inslee pledged no new taxes during his campaign.

11 posted on 04/30/2013 8:17:45 AM PDT by Baynative (Lord, keep your arm around my shoulder and your hand over my mouth.)
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To: Lorianne
I'm thinking there might be a Constitutional challenge to this! Consider: each state once had usury laws on the books, limiting the amount of interest that could be charged for consumer debt. Remember when loan sharks were criminals and not running payday loan service? Well, someone moved their credit card operations to a state without such laws (S. Dakota?) and made the case that their S. Dakota business should not be subject to the laws in the various other states. After all, what business did Taxachusetts have telling a S. Dakota business what rates it could charge!

Well, haven't we come full circle? All of a sudden it is proper not only for 57 states to impose their tax schemes on a company operating anywhere in those United States? Not to mention enough counties and cities to bring a whopping 9600 tax schemes to bear?

Obviously the above is not fully researched but the nub is there for someone to look up the case law involved and perhaps take a novel stand against the tax grab. Or perhaps get usury laws back on the books.

12 posted on 04/30/2013 8:19:25 AM PDT by NonValueAdded (3 guns when you only have one arm? "I just don't want to get killed for lack of shooting back")
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To: NonValueAdded
How a Supreme Court ruling killed off usury laws for credit card rates

And from the article: Marquette National Bank of Minneapolis vs. First of Omaha Service Corp 439 U.S. 299 (1978)

13 posted on 04/30/2013 8:22:32 AM PDT by NonValueAdded (3 guns when you only have one arm? "I just don't want to get killed for lack of shooting back")
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To: Lorianne

The economy is anemic. The unemployment rate is high. Yet, our geniuses in D.C. want to increase taxes on internet sales across state lines! Raising taxes, especially in this economy, is a terrible idea.

#1 Higher taxes are a drain on economic activity. Does anyone seriously believe all of the lost internet sales will return dollar for dollar to “brick and mortar” businesses?

#2 The cost of compliance isn’t part of the tax itself, but there’s a definite added cost to track, calculate, and remit state, county, and municipal sales taxes. The cost of compliance is another drain on economic activity.

#3 Reduced sales means certain items will no longer be economical to produce. Looking for a pair of fuzzy dice for your classic car? You may be one of only 1000 people nationwide who want fuzzy dice. Meaning? A large internet retailer may be able to consolidate enough demand to make the dice economic to produce, but if demand drops, those dice may not be cost effective to manufacture given the available customer base. This means it may be harder to find low demand, specialty items. BTW, these items aren’t likely to ever be stocked in “brick and mortar” businesses simply because there’s not enough local demand in any given area.

Bottom line, this tax is going to create a drain on the economy and have ramifications beyond the most obvious one of higher sales prices for internet transactions.


14 posted on 04/30/2013 8:29:39 AM PDT by CitizenUSA (Why celebrate evil? Evil is easy. Good is the goal worth striving for.)
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To: Lorianne

LAst year, I spent a little over $1200 at Amazon. This year, I spent almost $5000.

Maybe THAT is where they got the increase they note. I had to pay $250 in use taxes this year, vs less than $100 last year.

BTW, when the headline can’t get facts straight, it doesn’t speak well for the article. There is NO TAX INCREASE. This bill has NO TAXES in it. It is a TAX COLLECTION bill. The taxes are already due.

You might as well claim that if you drop one of your deductions on your W-4, you got a “tax increase”.

The reason it raises more tax money is that it catches tax cheats.

Also, Amazon isn’t the only company that knows how to calculate sales tax. In fact, there are companies that actually sell that software. And of course, there are hundreds of companies that collect sales tax online for all or most states. And they aren’t paying Amazon.

Amazon wants this solved because the state-by-state push is getting expensive for them to litigate, and they want to make sure all their competitors have to collect taxes (by competitors, read companies that have significant sales, because the bill won’t cover mom-and-pop low-volume businesses).

Hell, give me a week, I’ll write you a program that can tell you what your tax is based on your address. Because, you know, every state already has thousands of businesses that have that covered for the state, all you need to do is use 50 state’s worth of programs, and feed the data into the right state based on address.

Of all the arguments against this, the idea that in 2013 we have a problem with the SOFTWARE is the most ludicrous. It’s the Free Software Foundation era, people. Nobody is going to pay Amazon 2.9% per transaction to run a stupid tax program.

BTW, look to Paypal. They’ll certainly have this up and running on day one, so all transactions online that go through PayPal will have this. So it might well drive more businesses to use PayPal, which many already do because the real drag on business is the 2%+ taken off every transaction by credit card companies.

And note — Amazon has it’s own credit card, which many of it’s users use. A mom-and-pop store can’t do that, so Amazon has a competitive advantage there, as do other big-box retailers who get volume discounts from banks, or run their own credit cards.


15 posted on 04/30/2013 9:38:21 AM PDT by CharlesWayneCT
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To: NonValueAdded

The case law you are looking for is Quill vs North Dakota in which the USSC declared that states could not regulate businesses that did not have a physical presence in that state, thus freeing mail order and virtual sales from sales tax enforcement. The decision found that it was both an undue burden and a violation of the commerce clause (states have no power to regulate interstate commerce).

But they also suggested Congress could grant the states the power...

Thus, this bill will not be found unconstitutional regarding the commerce clause, although it might still fail the undue burden test because the states have NOT made a good faith effort to find less burdensome ways to collect the sales and use tax.

I’m sure that a group of online retailers will challenge it if it passes and is signed into law.

The important thing now is to oppose it and prevent its passage and save ourselves from the greedy politicians.


16 posted on 04/30/2013 9:44:12 AM PDT by Valpal1
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To: CharlesWayneCT

PayPal rates are the same as the credit card companies. Business pay this amount regardless. The problem is having to pay fees on the taxes I collect. I am aware that some states allow businesses to keep a percentage of the taxes collected to cover these costs, but it doesn’t appear to be in this bill.

This is enslavement, being forced to provide tax collection services at my expense on behalf of states that I have no presence or representation in.

The software is an issue because even if it is free, I will still have to spend precious time and resources learning to use it and keep it updated. I will still be legally liable and subject to fines for any errors I make.

Over and above the software issue is the compliance costs issue.

I still will have to spend hours filing monthly tax returns to 57 jurisdictions when I only have a physical presence in one (and its a non sales tax state, so I am further burdened by total unfamiliarity and my bookkeeping isn’t set up for it).

I use a decade old version of Quickbooks. It’s doubtful that this free software will work with it smoothly, so I will have to buy a new version or pay an expert to integrate it with the old one.

So having free software doesn’t make it free to use.


17 posted on 04/30/2013 10:00:46 AM PDT by Valpal1
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To: CharlesWayneCT; CitizenUSA
The reason it raises more tax money is that it catches tax cheats.

You insult any Liberty loving person with your stupid accusation of "tax cheats."

You seem to think that willingly giving money to government parasites is a noble thing.

Government at ALL levels is destroying our Republic. Any person that eagerly tries to supply more $$ to sadistic parasites are fools and aiding the enemy of Liberty.

Your mindset is so far removed the from the spirit our Founders expressed.

This bill be proposed will do more harm to our Republic. Anyone who supports this evil bill is an enemy of Liberty.

Please see post14 of this thread for realistic understanding of the results of this bill.

18 posted on 04/30/2013 10:03:07 AM PDT by sand88
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To: sickoflibs; Lorianne; stephenjohnbanker; ding_dong_daddy_from_dumas; Gilbo_3; Impy; NFHale; ...

” This just shows who the GOP works for and its not us “

Correct.


19 posted on 04/30/2013 11:14:28 AM PDT by stephenjohnbanker
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To: stephenjohnbanker

The GOP can go FTS if they join uber-lib Martin O malley to collect that 6% from me.


20 posted on 04/30/2013 11:16:35 AM PDT by sickoflibs (To GOP : Any path to US citizenship IS putting them ahead in line. Stop lying about your position.)
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