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View Diary: Online sales tax loophole forces House GOP to choose between Norquist and local business owners (110 comments)

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  •  Universal application of existing Sales Tax? (18+ / 0-)

    Really?  The fact that people have been avoiding this established tax for years and now Congress wants to correct it and suddenly this is turning into an Occupy Amazon movement?

    When you buy things you pay your state sales tax on it.  People do it now everyday.  

    Even this "loophole closure" still exempts any business doing less than $1M in annual sales.

    Its sales tax.  Its not even a sales tax increase, just plain old simple sales tax.  A tax you are already supposed to be paying, but aren't.

    Color me unoutraged.

    Красота спасет мир --F. Dostoevsky

    by Wisper on Mon Apr 29, 2013 at 08:50:46 AM PDT

    [ Parent ]

    •  It will amount to annual 24B in tax receipts, (5+ / 0-)

      ....with.80% coming from the working and middle-class.

      Want more tax receipts?  Why not close other loopholes?

      Why not insist on the "universal application" of the income tax on carried interest?

      Why do Dems want to close a loophole which benefits working and middle-class Americans.

      Learn about Centrist Economics, learn about Robert Rubin's Hamilton Project. www.hamiltonproject.org

      by PatriciaVa on Mon Apr 29, 2013 at 08:55:41 AM PDT

      [ Parent ]

      •  Carried Interest is currently allowed (4+ / 0-)
        Recommended by:
        FG, ColoTim, Eyesbright, Odysseus

        I'd love to see it codified as regular income.  Sure.. sign me up.

        ...but this was the case of an existing law being deliberately unenforced.  Maybe you could justify it in the past as a "technology outpaced policy" kind of thing but in 2013 there is no reason not to have this applied across the board.

        Doesn't matter if its D or R, this kind of loophole should be changed.  

        This $24B is an even bigger loophole than the "Big Oil Subsidies" we are always lamenting.  Obama's budgetary estimates were $20B over 10 years to close the Oil loopholes.

        I think we should do those to.  

        You are trying to make this into some "either/or" argument or that we shouldn't fix THIS problem because RICHPEEPLE!!  

        Красота спасет мир --F. Dostoevsky

        by Wisper on Mon Apr 29, 2013 at 09:02:52 AM PDT

        [ Parent ]

        •  I think you are missing that many/most (5+ / 0-)
          Recommended by:
          AoT, Desert Rose, Odysseus, Zinman, stevemb

          people here think that the sale tax itself is a poor choice of a tax. Sales taxes are regressive, and they are costly to collect for the government and for businesses. And now, you've got this huge compliance problem with the growth of the internet. I think we'd all be better off if the state governments just gave up on sales tax and instead increased real estate and income taxes. It's not so much that you are arguing with people who are for the loophole as much as they are against any of these sales taxes.

          •  absolutely...increase real estate taxes. Because (1+ / 0-)
            Recommended by:
            Wood Dragon

            none of us are paying enough to local governments for the privilege of sleeping under a roof we are paying the bank for already.  And my Mom, whose house is paid off, but who is elderly and living on Social Security, certainly can afford to pay more rent to the state for the house she only thinks she owns.

            _"Love is the rosebud of an hour; Friendship the everlasting flower."_ Brook Boothby

            by Keith930 on Mon Apr 29, 2013 at 06:26:24 PM PDT

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            •  I favor Henry George's Single Tax (0+ / 0-)

              Everything we need - local, state, and federal - can most fairly be paid for through a proper property tax.

              Too late for the simple life, too early for android love slaves - Savio

              by Clem Yeobright on Mon Apr 29, 2013 at 06:37:00 PM PDT

              [ Parent ]

              •  What do you do with someone who lives on (1+ / 0-)
                Recommended by:
                Wood Dragon

                a fixed income but has managed to pay off their mortgage years ago, because they didn't move around every 5 years?  Their home is paid for, but they live on Social Security or SSDI, and barely earn enough to pay for necessities.  Do they forfeit their home to the state?  Move in with their kids?

                Because I can guarantee you my Mom can't afford to pay the annual property taxes on her house and still by groceries, her prescriptions, pay the utilities and other day to day expenses.  If the kids weren't helping her, she'd be up shit creek.

                _"Love is the rosebud of an hour; Friendship the everlasting flower."_ Brook Boothby

                by Keith930 on Mon Apr 29, 2013 at 06:54:26 PM PDT

                [ Parent ]

            •  Why not? Government needs revenues (1+ / 0-)
              Recommended by:
              Zinman

              from somewhere. Real estate taxes are easy to collect and can be very progressive.

              •  The numbers I'd like to see... (0+ / 0-)

                How does the value of the average working-class person's home compare to their annual income as compared to the average one-percenter?  My guess is that the less wealth one has, the greater percentage of it is tied up in one's home.

          •  You're joking about real estate taxes, right? (1+ / 0-)
            Recommended by:
            Clem Yeobright

            Because property taxes about as regressive as they come.

            •  Explain please (0+ / 0-)

              Property taxes tax wealth, the more you own, the more you pay, that is progressive. Exemptlons may modify the equation, but they don't essentially change it.

              Why would you think property taxes are as regressive as they come?

              Eradicate magical thinking

              by Zinman on Mon Apr 29, 2013 at 09:09:28 PM PDT

              [ Parent ]

              •  Property taxes suggest that your home (2+ / 0-)
                Recommended by:
                Clem Yeobright, nchristine

                is only a financial asset.

                So, if property values rise for whatever reason, people can be priced out of their homes. Yes, they can sell and get the cash. But people don't always want to do that.

                Similarly, if you lose your job, your income might go to zero for that year. You won't owe income tax. But you'll still owe property tax, and for some people in some states property tax on a relatively ordinary home can be $1,000 a month (and you still have mortgage and insurance).

                Moving is expensive and hard on the kids. People having to move because of taxes is probably not a good situation.

                There are frequently exemptions for farmers, who might be earning $30k a year off a property that is valued at $1m if you sold it for houses or commercial development.

                So it's not regressive per se, but it is not without disparity and pain.

                Fry, don't be a hero! It's not covered by our health plan!

                by elfling on Mon Apr 29, 2013 at 11:13:17 PM PDT

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          •  I'd much rather have the online merchant... (0+ / 0-)

            ...collect the sales tax. I'm tired of having to keep track of every online purchase so I can pay the state the amount that should have been collected every year when I do my taxes.

            When I buy things online it's because I've checked to see if I can purchase the product locally. If I can't, THEN I buy it on the Internet.

            I'm retired, and I really don't want to see my property or income taxes go up.

        •  wrong. (4+ / 0-)

          "...but this was the case of an existing law being deliberately unenforced."

          existing law only requires state sales taxes to be collected at the source, if the business has a physical presence in the state, going back to the USSC decision in Quill v Michigan. it is the states themselves that are failing to enforce their state laws, requiring that individuals file a sales & use tax report, for purchases made with out-of-state sellers. they want the federal gov't to basically enforce state law for them. frankly, i'm not certain this bill will withstand judicial scrutiny.

          •  Washington state won this arguement (1+ / 0-)
            Recommended by:
            Odysseus

            against Mattress World, an Oregon company, by establishing nexus. Deliveries were made, beds assembled, and old mattresses disposed of in WA by Mattress World employees or third party vendors hired by Mattress World, thus establishing a business relationship. WA Dept of Revenue assessed 1.7mm in taxes and fines. I can't see why an online retailer would be considered any differently than a company like Mattress World, clearly doing business in the State and not collecting the taxes due. Quill decision had no bearing at that point.

            http://djcoregon.com/...

          •  Quill v North Dakota (1+ / 0-)
            Recommended by:
            Odysseus

            The decision was pretty clear. Congress does have the authority. From that decision:

            Accordingly, Congress is now free to decide whether, when, and to what extent the States may burden interstate mail order concerns with a duty to collect use taxes.
        •  Loophole? (2+ / 0-)
          Recommended by:
          Kane in CA, stevemb

          I don't mind paying a local or state sales  tax because that's one of the things that pay for fire protection, police, the water system, streets and so forth. The PHYSICAL issues of being a brick-and-mortar store. When an out-of-state or out-of-country merchant is tasked with collecting a local tax - that's a problem - and it's already been settled by SCOTUS in 1967, part of the Dormant Commerce Clause.

          Retailers like Amazon are building warehouses in many states now and WILL have a presence in many states, but most retailers do not, and get no help or protection from states, who want to charge them anyway without having to provide ANY services.

          So someone buying over the internet would pay NOT ONLY sales taxes but shipping too, thus emboldening the locals to the detriment of the internet merchant. Often Shipping and local sales tax are a wash, states are just unhappy that the money goes to UPS instead of them.

          I buy locally whenever I can, after looking up part numbers and options on the internet, then finding someone who sells locally, even if they are a little more expensive.

          I'm a small merchant and almost never sell anything in my home state in person, but I have a state Sales tax license and have to submit a report every 90 days. The fact that states are having problems raising money is not an excuse to overturn the traditional tax rules and muddy the waters. I would be exempt from the requirement anyhow on account of low dollar volume, but it's simply a money grab.

          Put more people to work who will spend more money locally and tax receipts, both sales and income, will rise. Paul Krugman thinks that's a good idea, but what does he know????

          Without geometry, life is pointless. And blues harmonica players suck.

          by blindcynic on Mon Apr 29, 2013 at 09:22:10 PM PDT

          [ Parent ]

      •  Not closing a Loophole, changes to improve (7+ / 0-)

        compliance.

        The most important way to protect the environment is not to have more than one child.

        by nextstep on Mon Apr 29, 2013 at 09:43:02 AM PDT

        [ Parent ]

    •  Teachers and students depend on Amazon for (0+ / 0-)

      supplies and textbooks.  Mom and pop stores charge double and have very limited supply.

       This is outraging teachers. Why do all tax hikes have to be on the shoulders of the poor and working class...middle class too??

      •  Amazon already charges sales tax... (2+ / 0-)
        Recommended by:
        Clem Yeobright, elfling

        ...in quite a few states.  And it will soon be doing so in several more.  Between the "already collecting" and "about to collect" categories, Amazon will be collecting sales tax in California, New York, and Washington.  Add in some of the smaller states where they collect taxes already, and probably half the population of the US will be in states where Amazon collects sales tax.

        It doesn't look to me like the impact will be that great on students and teachers buying supplies from Amazon, because half of them will be paying sales tax regardless of whether this bill passes or not.

        Political Compass: -6.75, -3.08

        by TexasTom on Mon Apr 29, 2013 at 08:55:22 PM PDT

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      •  I paid sales tax on all my textbooks and supplies (0+ / 0-)

        and lived to tell the tale.

        Certainly the cost of books is a huge burden, but it's not the sales tax really driving the issue.

        Also: y'all now have the option of eBooks, which are not subject to sales tax, at least not in my state.

        Fry, don't be a hero! It's not covered by our health plan!

        by elfling on Mon Apr 29, 2013 at 11:16:59 PM PDT

        [ Parent ]

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