The $12 Billion — No, Make That $24 Billion — Tax Increase (WA internet sales tax)

“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.

You probably can’t afford me. I didn’t say I’d do it for free. The point is that the programming for such a thing isn’t hard, and it really only has to be done one time, or at least one time for each company that decides to compete in the market.

When every company needs such a program, there will be a half-dozen software firms who will be happy to put out a relatively inexpensive program to do this, with probably a monthly service fee; they will make money on the volume.

Meanwhile, I will cheat. If you want to know the sales tax on an item for any state, do this: Go to Walmart.com, pick an item that has the price you are looking to pay. Put it in your cart. Go to checkout. Put in the address you want to check for sales tax. Go to the “finalize order”. The sales tax for that price of that item will be right on the form.

Then cancel out before ordering.

See, the program already exists, probably in multiple forms. I chose Walmart because they are in most states.

If you find a state that doesn’t have a walmart, then just pick a local store in that state that allows online ordering, and do the same thing, entering the address from within the state, and the order form will tell you the tax.

Heck, I bet even YOU could figure out how to write a creeper program that would do those manual steps. But if you can write out the process, you can write the program.

They will if they do the sale on-line like the internet company does.

If they sell at the point of sale, they will assume the address is local, and charge local sales tax. Which still leaves the purchaser with the burden of comparing the sales tax to their home sales tax, and doing a “use tax” filing if it was less. Not that anybody does that. I don’t actually check when I buy souvenirs, but Virginia sales tax is pretty low, so I have a feeling we are talking about pennies one way or another.

You are absolutely correct though, that the one “advantage” the brick-and-mortar shop would have over an internet shop AFTER a law like this was passed is that, if the out-of-state people show up IN the store, the brick-and-mortar shop doesn’t have to figure out where they really live and file taxes for that state.

That advantage of course is a miniscule one, compared to the huge advantage internet companies currently get by undercutting the total cost of a product by 5% or more.

Except that this advantage only really exists because the purchaser then fails to correctly file their “use tax”. In reality, there is no free sales tax purchase in a sales tax state, only the ability to cheat on your taxes.

So my big reason for supporting the concept is twofold. First, it will relieve all the law-abiding citizens of their current burden of tracking all their untaxed purchases and calculating and remitting their own sales tax. Second, it will lower my tax burden by keeping others in my state from cheating on their taxes.

For example, in Virginia, the new transportation bill specifically says that if they don’t pass a federal law to allow this tax collection, the sales tax will go up. If everybody paid their use tax, then there would be no need for a federal law, and our taxes would not go up. So, because people in my state buy untaxed items and don’t pay their taxes, everybody who DOES file use tax, and everybody who buys something in-state and pays the sales tax, will have their taxes raised to cover the tax cheats.

THAT is why I support the concept. Can’t say if I’d support the specific bill, it is probably poorly written.

Yes, I actually DO like the idea of you having to collect my taxes. It will make my life easier.

But really, if it was just me, that would be a lousy reason for a law.

But it is 150 million people. We are going to relieve the burden of 150 million people keeping records all year, and filing monthly, quarterly, or yearly reports, and the paperwork, and the government workers needed to handle 150 million+ filings, by shifting that burden to the point-of-sale, where it can be much more easily tracked and managed.

If I were writing the law, I would gladly include re-imbursement to business for performing this task. The money the state would spend on that would be less than what the state would spend processing the millions of “use tax” submissions each year.

Of course, in reality most people aren’t submitting their paperwork. Which is the real reason for burdening you with my taxes, because it is the only way to keep people from breaking the law. It is sad, but unfortunately true.

But I apologize for the burden, and can only note that if you don’t want the burden of collecting the sales tax for Virginia, you have an easy solution — refuse to sell items to anybody who lives in Virginia. You could even write to Virginia and tell them your demands — like tell them they have to pay you, and only require remittance quarterly, and should provide an online program for free that will tell you what the tax is for an address.

And I bet Virginia would work to streamline the process, if you got enough businesses to band together in this boycott.

And if not, at least you won’t be burdened. It is your choice if the cost of collecting sales tax is worth the sales to my state, just as everything in your business is based on your evaluation of the costs compared to the benefits.

Two hours for one jurisdiction that you live in. Multiply that by 46. That’s 98 hours or almost 2.5 work weeks. So that is not remotely equal to the burden of complying in only the jurisdictions in which you maintain a physical nexus.

Then there is the matter of liability. The bill cleverly instructs that states will not hold sellers for filing mistakes based on errors caused by software providers or the state agency and not hold software providers liable for errors by sellers or the state agency.

Which means every audit will be a nightmare of liability shifting and lawyer fees.

Nothing in there that states be required to prove an intent to defraud and avoid collection and remittance. So any error in using the software and boom you owe fines and interest for your mistake.

Liability for 46 jurisdictions in a bigger burden than liability for one.

No exception for sellers in non tax states.

This complicated cockamamie plan is merely an attempt by states to avoid responsibility for their high taxes and big spending ways and prevent market place competition between high and low tax states.

There is a better and simpler way, but it exposes politicians to responsibility for their actions regarding spending and taxation.

Again, why do you argue that it is oppressive to pay the taxes you owe by law?

I said no such thing.

It is a bizarre world view that tries to claim honor from the dishonor of being a tax cheat.

FYI, I have never cheated on my taxes.

All your posts seem to indicated that your greatest joy is making sure government gets everything from you that they ask for. What a sad pathetic view of government.

We could list a million ways that the government utterly wastes our money. The GAO has stated the government wastes $550B a year in duplication and fraud. Of course, you would likely be more worried about paying ALL your taxes than having righteous anger at the sadistic humans in government that squander our hard earned money.

I have many friends with successful businesses. They all have horror stories how at one time or another sadistic government parasites have descended upon them with the goal of finding some small bookkeeping error or some physical asset not in compliance. The sole reason for their visits is to extract hard earned money through insane fines or fees. Ahhhhh, government, such a Noble enterprise /sarc.

You seem to have no perspective on the accelerating destruction of our Republic at the hands of Statists at all levels of government.

You seem to worship at the Alter of State Power. You truly have no sense of Liberty that our believed. Your thought process is more at home at the DUmp that at a site that believes in Liberty and natural distrust of government.

In a few years, government will unmask it's true nature and I hope you wake up.

Have a good day :)

We are arguing over a new law by the government that would improve enforcement of existing tax law, to make it more certain that people pay the taxes they owe.

In the discussion of the government passing THAT LAW, you said:

The bottom line is that anyone who supports this bill is an enemy of Liberty and an enemy of our Constitution.
Government at ALL levels is becoming more oppressive.

Now, maybe your statement that government is becoming more oppressive was just a random though, and had nothing to do with this bill. But it is reasonable to assume that, since you are talking about this bill, your statement meant that you thought this bill was an example of government oppression. That was reinforced by your statement that every person who supported making people pay the sales tax they owe were "enemies of liberty", implying that liberty meant "not having to pay your sales tax".

And you keep arguing that support of the idea of enforcing the sales tax, making people pay their taxes, is a non-conservative principle, when it is in fact a core conservative principle of the rule of law.

I never said you cheated on your taxes. Your argument though clearly indicated that you think the honorable thing is to support people who cheat on their taxes, and the dishonorable thing, worthy of DU, is to give the government any power to enforce the tax law.

All your posts seem to indicated that your greatest joy is making sure government gets everything from you that they ask for. What a sad pathetic view of government.

Sadly, that is wrong and illogical on two levels. If the first sentence was true, it would be a sad pathetic view of MY existence, because it has no implications as to the view of government, only how I felt.

But nothing I have said would lead logically to the claim you make. I feel no joy paying my use tax. What I feel is the exercise of a legal obligation, much like how I feel after I complete my income taxes, or send in my DMV paperwork to update my license and registration. Not joy. Relief.

What I do feel is the value I get from behaving ethically when there is every chance to behave unethically, and much too gain from doing so. I don't "have" to pay my $250. The state won't come after me. Nobody would know. Except I would know.

And I come from a time when we were taught that this, above all else, was important -- that I would know I had done wrong, even if I could get away with it.

So I pay my use tax because it is the right thing to do, since I am obligated to follow the just laws of the state, and there is nothing unjust about the sales tax. If there were, I would publicly protest, and go to jail, to fight to change the unjust law.

And I argue that we should find a way to convince people to pay their obligations, because it is clear that even among conservatives, there is little honor left, as too many are proud of "sticking it to the man" by not paying their sales taxes.

Of course, you would likely be more worried about paying ALL your taxes than having righteous anger at the sadistic humans in government that squander our hard earned money.

That is the false argument of singularity. You can do both. I should hope that EVERY conservative would obey the rule of law, and therefore be worried about paying all their taxes. Are you saying that you do NOT worry about paying all your taxes? That you would feel fine if you didn't pay all your taxes? Because earlier, you seem to get pretty upset when you thought I called you a tax cheat, and seem proud to claim you have never done so.

If you have never cheated on your taxes, it seems clear that you have spent time making sure that you had paid all the taxes you owe -- so why do you fault me for the same thing?

I think government takes to much, and spends too much. But I have no more right to cheat on my taxes to deprive them of money, than the hippies have to cheat on their taxes because they don't like the government funding the military. Our country has laws, and you don't get to pick and choose which taxes you pay based on how you feel they are being used.

Unless you believe they are being used immorally, in which case you could have the obligation to publicly refuse to pay taxes, and go to jail, and thus practice civil disobedience.

You seem to worship at the Alter of State Power. You truly have no sense of Liberty that our believed.

I don't worship at any altar. I do believe in the rule of law, and don't believe it impinges on liberty to ask that all people be treated equally when it comes to taxes.

As I have said repeatedly, and I wait for you to disagree, all taxes should be as low as possible, applied as broadly as possible, and be paid by as many people as possible, in the same proportions.

Taxes are the fairest when every person who is in the same circumstance and does the same thing pays the same tax. The current situation with sales/use tax does not meet that conservative criteria, and this failure of the tax code is skewing business decisions and the marketplace, in bad ways.

I can see why an operator of an internet company who is benefiting from the current government policies wouldn't want skewed policies replaced with evenly applied taxes.

But it is unpersuasive to try to argue that this artificially manipulated marketplace is somehow representative of liberty, and that those who seek to impose a more "free" system, free that is from government interference that picks winners (internet companies) and losers (brick-and-mortar companies) is somehow an enemy of the very liberty we are trying to restore.

Just argue that the bill will make your life harder, and therefore you oppose it because you like things the way they are.

In a few years, government will unmask it's true nature and I hope you wake up.

Government did this long ago, but unfortunately it does not give me liberty to cheat on my taxes, nor does it persuade me to stop fighting for a more conservative application of the tax burden.

Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.