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State Technology Taxes Face Stiff Resistance

samzenpus posted about a year ago | from the sending-an-angry-email dept.

The Almighty Buck 167

SonicSpike writes "As the nation moves from a tangible goods-based economy to a service-based economy, a few states are trying to keep revenues robust by taxing technological services such as software upgrades and cloud computing. But a backlash from the high-tech industry has quashed most efforts. As a result, the U.S. has a patchwork quilt of state taxes on technological services. Some states that have tried to impose such taxes have failed spectacularly, and most have not tried at all. According to the Tax Foundation, a nonpartisan think tank that studies taxes, only 10 states (Connecticut, New Mexico, Hawaii, South Dakota, Mississippi, Missouri, Nebraska, Tennessee, Texas and West Virginia) and the District of Columbia tax all writing or updating of software. Only New Mexico, Hawaii and South Dakota levy their general sales taxes on all software services. States with sales taxes do, however, levy those taxes on software that is sold on CDs or other hard storage materials. About half the states also tax 'canned' (non-altered) software that can be downloaded, according to the Tax Foundation. Elia Peterson, an analyst with the foundation, said in a recent paper that states are reluctant to tax computer services in large part because it 'is an especially mobile industry and could easily move to a lower tax state.'"

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"nonpartisan think tank" (5, Insightful)

Anonymous Coward | about a year ago | (#45289467)

There ain't no such animal, Jim.

Nonpartisan? (4, Informative)

Sponge Bath (413667) | about a year ago | (#45289471)

The Tax Foundation is nonpartisan in the sense they are against taxes and regulation and are run by representatives from Koch Industries, Exxon, former Bush-Cheney campaign advisers and Republican politicians. That kind of nonpartisan "think tank".

Re:Nonpartisan? (0)

Anonymous Coward | about a year ago | (#45289663)

Did you get the info from your MSM pimp? Keep toeing that party line..

http://taxfoundation.org/board-directors

Re:Nonpartisan? (3, Informative)

Sponge Bath (413667) | about a year ago | (#45289813)

Did you get the info from your MSM pimp?

From Wikipedia:

Former directors: Wayne Gable (Koch Industries), Joseph Luby (Exxon), Pam Olson (Bush-Cheney campaign), current director Bill Archer (former Texas Republican congressman)

"criticized by other think tanks, such as the Center on Budget and Policy Priorities (CBPP)[31] and Citizens for Tax Justice (CTJ),[32] citing repeated "methodological errors" and "reliance on early projections without hard data."

"Krugman has also accused the Tax Foundation of "deliberate fraud" in connection with a report it issued concerning the American Jobs Act.[47]"

Re:Nonpartisan? (0)

Anonymous Coward | about a year ago | (#45289829)

Ah yes... Wikipedia... I'm sure you edited the page yourself...

I also note there's plenty of citations for the propagandistic attacks but none for the former directors...

Re:Nonpartisan? (2)

Sponge Bath (413667) | about a year ago | (#45289943)

I'm sure you edited the page yourself...

I don't see why these facts upset you so much. If you believe in the no tax, no regulation agenda pushed by these Republicans, including support for Paul Ryan's budget, then you should proudly shout them from the rooftops. Just don't expect people to believe their self proclaimed line of "nonpartisan think tank".

Re:Nonpartisan? (0)

Anonymous Coward | about a year ago | (#45290065)

And you didn't deny it...

Re: Nonpartisan? (2, Insightful)

Anonymous Coward | about a year ago | (#45290197)

Paul Ryan has never advocated for either no taxes or no regulation. His budget cut spending growth to balance the budget against expected future revenue over a 10 year timeline. It was about as aggressive as Bill Clinton's budget cuts in the 1990s.

Perhaps you should spend more time reading the facts and less time reading DailyKos. The left just doesn't listen to reason.

Re: Nonpartisan? (-1)

Anonymous Coward | about a year ago | (#45290701)

A sane budget would cut 100% of military contracting.
A sane budget would cut revenue cuts.

Paul Ryan's budget is anything but a sane budget.

Re:Nonpartisan? (0)

Anonymous Coward | about a year ago | (#45291313)

I like the idea of an anti-tax foundation ... looking for donations.

In Canada (3, Informative)

msobkow (48369) | about a year ago | (#45289473)

In Canada, all goods and services are subject to the GST (Goods and Services Tax.) In many provinces, they're subject to HST (Harmonized Service Tax), which basically takes the rules of GST and adds on a provincial percentage.

It hasn't caused our software industry to implode because the taxes are applied across the board throughout the country.

Unlike the US, you can't just lobby your way to a tax exemption here. The goobermint is gonna get their share come hell or high water.

Re:In Canada (2)

Mr D from 63 (3395377) | about a year ago | (#45289553)

In the US, we just buy our products & services via venues like Amazon and simply forget about those troublesome taxes.

Re:In Canada (0, Informative)

Anonymous Coward | about a year ago | (#45289947)

Not in New York at least. We get taxed via amazon and it's bullshit.

Re:In Canada (1)

DiSKiLLeR (17651) | about a year ago | (#45289571)

In Australia and New Zealand we also have a GST system just like Canada. And Simgapore.

It's what a sensible country does. Your state based tax system is pretty brain damaged and only going to cause more and more problems as time goes on..... goodluck with that.

Re:In Canada (2)

somersault (912633) | about a year ago | (#45289613)

Simgapore

Is that your latest creation in Sim City?

Re:In Canada (2)

cdrudge (68377) | about a year ago | (#45289715)

Your state based tax system is pretty brain damaged

It would be a great improvement if it was just state-based. There's nearly 10,000 sales tax jurisdictions in the US, and each jurisdiction can have multiple categories for taxable goods based on product or service type. Taxes can be flat rate or progressive. It's a nightmare.

Re:In Canada (4, Insightful)

Entropius (188861) | about a year ago | (#45290325)

I live in Washington DC and went to go buy some soup at a Vietnamese takeout place the other day.

The sales tax is 6% here, but it's 10% on food. (It's an "entertainment tax"). Fine, I knew about that. But the check didn't add up.

There's a nickel tax on plastic bags: the city claims that it's to protect the Anacostia River from being polluted with bags. (Nobody has ever considered trying to get the folks who live by the river in Southeast from throwing their damned bags into the streets.) But I knew about that too, and the check still didn't add up.

Turns out there is also a quarter tax on to-go containers of any kind, including the little thing my soup came in.

Meanwhile, the last time Massachusetts Ave. was paved, it was paved by Barney Rubble. So these soup taxes sure aren't going to anything useful.

Urban tax codes are ridiculous.

Re:In Canada (0)

Anonymous Coward | about a year ago | (#45289827)

I guess your definition of a "sensible country" is much different than the traditional American position. Your opinion is coloured by your experience as an American''s opinion is coloured by theirs. (In other words, one size does not fit all.)

Re:In Canada (1)

geekoid (135745) | about a year ago | (#45290149)

Just because you don't understand how somehting works, or it's the way it is doesn't make it brain damaged.

Re:In Canada (0)

Anonymous Coward | about a year ago | (#45291753)

That would be a Democrat!

Re:In Canada (2)

quacking duck (607555) | about a year ago | (#45291919)

In Australia and New Zealand we also have a GST system just like Canada. And Simgapore.

It's what a sensible country does. Your state based tax system is pretty brain damaged and only going to cause more and more problems as time goes on..... goodluck with that.

State taxes (or provincial ones in Canada) are bad enough but manageable due to limited numbers, and you usually know if you're in one state/province or another.

But the US goes even further and has county/district sales and use taxes, adding thousands of slightly different tax rates across the country. Check out California's [ca.gov] ... and that's just for locations starting with "A"! Texas has an an equally ridiculous long list of slightly different rates [state.tx.us] .

This means that the shop down the street, but in a different county, may charge you slightly more or less for a product that has the same sticker price (which are almost always pre-tax numbers in the US... Canada does too but at least we don't do local sales taxes). I suppose locals know exactly where the county lines are, but what a mess to keep track of.

I get the historical reasons why this is--it's similar to why there's no federal or even in-state standards for election systems. Each county is theoretically independently managed and sets their own rates. This works for property taxes and infrequent purchases, but not online goods and services.

It's no wonder US online retailers and services have resisted sales tax for so long, it's a logistical nightmare to set up the database of thousands of tax rates across the country and keep them up to date.

Re:In Canada (2)

gl4ss (559668) | about a year ago | (#45289577)

that's how it is in most of the world, unless you're dodging taxes.

I mean, surely haircuts are taxed in USA? and plumbers? manicures, makeup sessions and cosmetic surgery surely is taxed under services taxes.. soooo what the fuck is so hard about enforcing the tax laws?

Re:In Canada (0)

Anonymous Coward | about a year ago | (#45289637)

The problem is that -income- is taxed. For the average prole, the IRS receives a copy of every single dollar of income, so there is no escaping it. If you have a job outside the US that doesn't report income or are able to set up a shell company in a tax haven, well, you pay little to none.

There is also payroll taxes. With the current laws, companies are encouraged to hire H-1Bs as often as possible because they are tax exempt. Same with outsourcing. More employees, more regulations.

Then there are state taxes. It pays people to buy a cheap one bedroom house in Texas or Florida and call that state their home. Otherwise, they will lose another ten percent of their income to state taxes in places like California.

This system is definitely not set up for the average person.

What needs to be done is to enact a VAT. Income is easy to hide; a Maybach or Lear Jet far less so. Europe has learned this fact, and a VAT is a lot less paperwork than income taxes.

But what do I know... with all the fuck-ups in Congress, I fear the US pays its bills by running the printing press, and this will mean Zimbabwe-level hyperinflation the minute the basket system gets implemented for oil trade.

Re:In Canada (1)

Jody Bruchon (3404363) | about a year ago | (#45289679)

That's entirely state- and city-specific, actually. Some are, some aren't, and finding out which and how much, and keeping track of it all plus dealing with different tax rates for different goods and services too is kind of a pain in the ass.

Re:In Canada (1)

rossdee (243626) | about a year ago | (#45289713)

"It hasn't caused our software industry to implode because the taxes are applied across the board throughout the country.:

The thing is that software, and other stuff that is data,(Ebooks, game downloads, music etc) can be purchased outside a country or state, and delivered via the internet. The country or state doesn't have jurisdiction to tax the transaction.

Of course if the purchase is of something that thte buyer is going to claim as a business expense, then they may have to pay taxes on it. If its something for personal use then it isn't reported.

Re:A business expense? (0)

Anonymous Coward | about a year ago | (#45289865)

"Of course if the purchase is of something that thte buyer is going to claim as a business expense, then they may have to pay taxes on it."

That not accurate. The Federal Government has a deduction for business expense for individual Taxpayers. The last year that I had business deductions, I could not claim the first 2% of income. Many years, I didn't spend more than 2% and could deduct business expenses.

The implication is that the Federal Government that the normal Taxpayer should expect to pay 2% (of their gross income) on business-related expense. These would be books, materials, consumables, etc. that are used to perform your job.

Re:A business expense? (2)

blackraven14250 (902843) | about a year ago | (#45290027)

You're missing his point. At the point of sale, states have no rights to collect taxes if it's on an out of state sale. Then, once the product is given/delivered to the end user, their home state doesn't have that information to collect the tax normally, since the seller is from another state. The end user is supposed to declare this spending and pay taxes on it, but nobody does, and it's really rough trying to figure it out from the state's point of view. They don't have access to the financials from companies located physically outside of the state, so they're SOL in figuring out that I bought a copy of some software from Amazon.

How does this relate to the GP's point? When a company declares that they bought a copy of Win7 as a deduction, then they also have to pay sales taxes on it, since the state government now has a record of the sale, so they can collect their sales/usage tax. It's the same reason why you don't get away with buying a car somewhere like New Hampshire to avoid paying sales taxes on it - you have to provide the proof of your purchase to your state government in order to register it. There's some technicalities around that, but for the most part, the loopholes aren't easy.

Re:In Canada (2)

geekoid (135745) | about a year ago | (#45290169)

"The country or state doesn't have jurisdiction to tax the transaction."
Actually they don't tax the company, the tax is paid by the individual, so the individual is required to pay.
Of course, people are cheap whiny short sighted bastards, so they don't pay their share if they can save some pennies.

And there is not reason a country can't create a treaty with other countries in that the country of origin collects taxes and then send it to the country.

Re:In Canada, which is not the USA (1)

Anonymous Coward | about a year ago | (#45289815)

In the USA, the fight to tax everything is not over. (Though the tax to tax the air we breath, that is, Carbon Tax, appears to be over.) Since, the citizen, that is, taxpayers haven't given up yet, there is still a controversy, resistance, and a fight against new taxes.

By the way, State and Local governments collect and spend more than the Federal Government according to the latest Main Stream Media reporting.

Re:In Canada, which is not the USA (1)

clay_shooter (1680300) | about a year ago | (#45289921)

Maryland has a new "rain tax". Well only certain parts of MD have the rain tax. The state levied the tax but has never determined how the money will be spent or what can be done to lessen the impact of runoff on the bay. It was supposed to help with runoff remediation but now its just a tax.

Make your mind up (4, Insightful)

PhilHibbs (4537) | about a year ago | (#45289493)

Are you a country, or are you a federation of states? If you are a country, then get your taxes sorted out. Your states seem to be willing to deprive another state of $100 in order to get $10 themselves, that way has just led to a crisis in state finances.

Re:Make your mind up (2)

PhilHibbs (4537) | about a year ago | (#45289517)

And yes, we have something of the same problem over here in Europe, we've removed the trade borders without harmonizing taxes. So a company operating out of Ireland into the UK pays no corporation tax in either. We need to sort that out too.

Re:Make your mind up (1)

TheRaven64 (641858) | about a year ago | (#45291217)

We've more or less harmonised VAT, which is equivalent of sales tax. It's not the same in every state, but it's slowly getting that way, and member states need EU permission to change it (as happened when the UK lowered it to 15% and then brought it up to 20%).

Re:Make your mind up (0)

Anonymous Coward | about a year ago | (#45289531)

"Are you a country, or are you a federation of states?"

Why can't we be both? Works for Switzerland.

Re:Make your mind up (1)

Anonymous Coward | about a year ago | (#45289545)

The race to the bottom will eventually end with a splat, and then everything will be solidly harmonized.

What was the Neal Stephenson phrase, again? "Everything smoothed out to a Pakistani bricklayer's idea of prosperity"?

Re:Make your mind up (-1, Troll)

jedidiah (1196) | about a year ago | (#45289567)

> Are you a country, or are you a federation of states?

If you have to ask then you don't have enough of a clue to be a meaningful part of the conversation.

Re:Make your mind up (1)

PhilHibbs (4537) | about a year ago | (#45289645)

Ever heard of a rhetorical question?

Re:Make your mind up (1)

luis_a_espinal (1810296) | about a year ago | (#45290017)

> Are you a country, or are you a federation of states?

If you have to ask then you don't have enough of a clue to be a meaningful part of the conversation.

His question is rhetorical in nature, and your answer is not a logical reply but a veiled invective.

Re:Make your mind up (2, Insightful)

Anonymous Coward | about a year ago | (#45289635)

It was originally a federation of states (or a United States), however, our current majority political party is working to eliminate that distinction and centralize power in a single federal government (when you hear about that other party trying to "defund" this and "defund" that, they're really trying to get the heck out of business that should be handled at the state and local level - it's not like they think nobody should get healthcare or kids shouldn't go to school).

One of the few powers explicitly granted the federal government was to moderate the interaction between the states but that power has been twisted to give control of just about everything to federal congress.

I'll get modded -1 for this because it's Slashdot, but it's still true.

Re:Make your mind up (2)

jythie (914043) | about a year ago | (#45289655)

Well, that is pretty well established history. The expansion of the use of the Commerce Clause is pretty well documented. What is less clear and often debated is if this was a good or bad thing on the whole. There are advantages and disadvantages in having a strong or weak federal system, and most of them are related to a specific culture and economic situation.

Re:Make your mind up (2)

bondsbw (888959) | about a year ago | (#45289781)

It's not about strong vs. weak federal system. It's about checks and balances. In this case, the states and the federal government were meant to balance each other and provide a system of checks against each other.

It's about making it so that one small group of people (politicians) don't have total control over the nation, its economy, its military, etc. Imagine what a madman could do with that kind of power today.

Well, that was the intent, but now I fear we have given the group in D.C. irrevocable control over those things, and we're just waiting for a madman to step into office.

Re:Make your mind up (1)

Entropius (188861) | about a year ago | (#45290367)

Waiting for a madman to step into office?

Re:Make your mind up (1)

jythie (914043) | about a year ago | (#45290665)

Well, yes and no. The checks and balances that were put in place primarily addressed power sharing within the federal government and state's ability to disproportionally control the federal level. However in terms of weak vs strong, we have always had a 'strong' federal government (weak was tried in a limited form and the delegates agreed it did not work well), it has just been a matter of how strong.

Re:Make your mind up (1)

ZombieBraintrust (1685608) | about a year ago | (#45290199)

The federations of states has become less and less popular as people stopped identifying themselves as belonging to a state. Mobility and migration has made the states meaningless. People identify more with sports teams than they do with state goverements. I spent my childhood in OH, college in KY, and now work in IL. I have family in IN, KY, FL, TN, and TX. State law only covers a fraction of the places I care about.

Re:Make your mind up (0)

Anonymous Coward | about a year ago | (#45289653)

Are you a country, or are you a federation of states? If you are a country, then get your taxes sorted out.

These sorts of comments remind us that the mainstream politics of Western Europe is very liberal by US standards. The idea of European levels of taxation are anathema here, even to many liberals, such as IT executives in Silicon Valley. The key industries, population densities, and day-to-day economic concerns vary widely among the fifty US states, and state governments supplement the basic tax/political policies of the Federal government to reflect more local concerns.

Re:Make your mind up (1)

Anonymous Coward | about a year ago | (#45290163)

We are a country founded on a protest of excessive taxation. We've been doing just fine with that philosophy and battling out the details for 237 years. Don't worry about us.

Re:Make your mind up (0)

Anonymous Coward | about a year ago | (#45290749)

We are a country founded on a protest of excessive taxation.

- We weren't being excessively taxed; the taxes in the colonies were actually pretty reasonable compared to Britain
- That protest was not about excessive taxation, it was about being taxed without representation, which the British colonists felt was a violation of their rights as Englishmen

Flawed premise (4, Funny)

barlevg (2111272) | about a year ago | (#45289513)

As the nation moves from a tangible goods-based economy to a service-based economy

Because in the future, we will all move out of our houses to live in the cloud, we'll forego food in favor of HTTP cookies and email spam, and we will transport ourselves to our destinations not with cars but with through internet traffic.

Now, I know what you're thinking--we'll still need to buy computers to make this magic happen. But, you see, in the future, all of our computers will be virtual machines.

Re:Flawed premise (0)

Anonymous Coward | about a year ago | (#45289591)

Not sure what you're going on about, but from the World Factbook:

GDP - composition, by sector of origin:
agriculture: 1.1%
industry: 19.2%
services: 79.7%
(2012 est.)

Re:Flawed premise (1)

barlevg (2111272) | about a year ago | (#45289665)

GDP measures what we PRODUCE, but this article, as I read it, was talking about SALES taxes. So it's not relevant what we produce--it's relevant what we BUY. Did I misread?

Re:Flawed premise (1)

jbmartin6 (1232050) | about a year ago | (#45289787)

You are being sarcastic, but isn't it pretty much taken for granted that we will all become wandering self sufficient nomads powered by nanoassemblers and fusion reactors in place of lungs and intestines? Space-adapted of course since we will eventually disassemble the Earth for raw materials.

thank you (0)

Anonymous Coward | about a year ago | (#45289539)

In Canada, all goods and services are subject to the GST (Goods and Services Tax.) In many provinces, they're subject to HST (Harmonized Service Tax), which basically takes the rules of GST and adds on a provincial percentage.

http://www.hawi-tech.com

Tax it all! (0)

Anonymous Coward | about a year ago | (#45289555)

The faster we can screw EVERYBODY the faster we can get to the point that things change.

New meaning of "as". (1)

Hognoxious (631665) | about a year ago | (#45289593)

I wasn't aware that "as" meant "three decades after".

Sales tax (3, Insightful)

Charliemopps (1157495) | about a year ago | (#45289603)

There should be only a single tax. Sales tax. It should apply to all sales equally. There should be no loopholes and it shout not be "progressive" (i.e. higher rate for the rich) There should be no deductions or tax deadlines. It would be very simple and fair. Lastly it would encourage savings rather than consumption which is something we need desperately right now. Our current "progressive" system results in the rich paying less than the poor in many cases because they are better equipped to use the system in their favor. In a sales tax only system they would naturally pay more in taxes because they have more discretionary income.

There is absolutely no reason we need separate little "mini" taxes on every product, sales event, and service there is. The sole purpose of all of our tax mess is to obfuscate the real percentage we're all paying in taxes.

Re:Sales tax (4, Insightful)

MozeeToby (1163751) | about a year ago | (#45289699)

You can have your flat tax when you have a guaranteed minimum income for every man, woman, and child in the country. Until then, all you're doing is massively, massively increasing the burden on the poor. There are basic requirements to live, levying a 25% sales tax (more realistic would be 40% or more to maintain current funding levels) on poor people who already don't meet those requirements is just incredibly stupid.

Re:Sales tax (0)

Anonymous Coward | about a year ago | (#45290345)

If there is a guaranteed income and a 40% tax rate, why would any sane person ever work?

Just take your government issued income and stay at home watching Springer all day. Once that tax becomes too burdensome on your minimum income, they will make you exempt and then working will be even more of a fools game. You are nearly there now and having to pay for health care is about the only reason to work at this point, medicaide sucks, and if you make a single payer system I'm not sure its worth it for me to bother working any more.

I guess you just hate middle class people. Why do you hate people who work for a living so much?

Re:Sales tax (0)

Anonymous Coward | about a year ago | (#45290831)

If you are so dull that watching Springer all day on a subsistence income is "sane", maybe American productivity would be better without you.

Re:Sales tax (3)

Entropius (188861) | about a year ago | (#45290411)

What would you say to a flat sales tax (or VAT or goods+services tax or similar) combined with a national income?

25% tax (or whatever) on everything, everyone gets a check for $thousands per year, which they can spend on ice cream, rent, food, or whatever else they please, replacing all other handout/welfare programs. It's been proposed by quite a few people.

Re:Sales tax (0)

Anonymous Coward | about a year ago | (#45290747)

You can have your flat tax when you have a guaranteed minimum income for every man, woman, and child in the country. Until then, all you're doing is massively, massively increasing the burden on the poor. There are basic requirements to live, levying a 25% sales tax (more realistic would be 40% or more to maintain current funding levels) on poor people who already don't meet those requirements is just incredibly stupid.

Think of it an an incentive to stop being poor.

Right now, we subsidize and encourage being poor.

Yes, we do.

You can argue the morality of whether or not we should do that. But you're downright lying to yourself and everyone else if you claim that we don't subsidize and encourage people to be poor with handouts, "guaranteed minimum income", "free" health care, food stamps, progressive taxes, and a lot of other things.

Re:Sales tax (0)

Anonymous Coward | about a year ago | (#45290975)

That is why there is a minimum wage. Of course there are small exemptions to that, with some service-based salaries such as waiting and the bottem end being unemployment. When I was in high school, my effective tax rate was somewhere on the order of 25%-30%. In college was about the same (though I didn't have to pay rent then either). Now my income is high 5-digits, The ratio of what I take home / what I make is about 56%, or a 44% *tax* that includes things like 401k contributions (5%), insurance (health/vision/dental). This is to say nothing of sales taxes, property taxes, "internet" taxes, "phone service" taxes, "utility" taxes, "insurance" taxes (yes, my auto/home insurance charges taxes too), gas and electric utility taxes... The obfuscation is the hardest part. I'd guesstimate that of my total expenditures including income taxes and taxes paid for food/clothing/home/car/gas/etc.. the amount I actually spend on goods/services is close to 30% of my income.

Re: Sales tax (1)

O('_')O_Bush (1162487) | about a year ago | (#45289703)

I'm not quite sure sales tax is simple and fair to begin with. The Fed and State already get their cut of my income when I make my money, then they take another cut when I spend it, and another cut from the company that got the sale on those same dollars. Seems to me that a flat cut on income and corporate earnings would be enough, without the hand in the middle as well.

Re: Sales tax (1)

C R Johnson (141) | about a year ago | (#45290191)

There are some big advantages to replacing the income tax with a sales tax: Cost of compliance and Personal Privacy. Your personal cost to comply now would be zero. You are no longer have to send a report to the government every year. Because it is none of their business how much you make.
Yes if you are in a business which sells things, you have to pay the tax, but in most states you are doing that already. And your burden to report everyone's income is gone so you are saving time and money there.

Re: Sales tax (1)

geekoid (135745) | about a year ago | (#45290247)

Tax work best when the tax happens when the money moves.
The only time money has value is at the moment it changes hands.
Everything else it point scoring and project potential.

Re: Sales tax (2)

Entropius (188861) | about a year ago | (#45290469)

There's that idea, though, that if you tax something you get less of it.

It's more correct to say that money only creates value when it changes hands; the point of a medium of exchange is to enable barter-by-proxy where everyone comes out better in the end. Since exchange of money for goods and services is the key activity that creates value in an economy, taxing it puts a damper on economic activity. (Suppose someone has a business idea that runs at a margin of 5%: I can make a widget for $10 that people would be glad to buy for $10.50. This would be a very profitable enterprise, making lots of people happy, without sales tax. It can't exist with sales tax.)

For that reason I think property taxes (on real property, not things like pencils and computers) are less dampening to the economy. If you tax private property ownership you get less of it, which would indeed drive up things like housing prices, but which would also encourage more unowned and public property. It would discourage the model where ten thousand people own a half-acre yard and encourage the model where they own a quarter-acre yard and there's a 2500 acre park by the neighborhood.

Re:Sales tax (1)

CrimsonAvenger (580665) | about a year ago | (#45289741)

There should be only a single tax. Sales tax. It should apply to all sales equally. There should be no loopholes and it shout not be "progressive" (i.e. higher rate for the rich) There should be no deductions or tax deadlines.

So, based on the size of the US economy and the US governments, you like the idea of a 20-25% sales tax? Because that's what it would take to pay the various government's bills...

Just curious.

Re:Sales tax (1)

Mr D from 63 (3395377) | about a year ago | (#45290171)

So, based on the size of the US economy and the US governments, you like the idea of a 20-25% sales tax? Because that's what it would take to pay the various government's bills... .

No opinion here........The theory, as it goes, is that if you do away with income and corporate taxes, the price of an individual item would drop by some amount before that 20% or more sales tax is added. So if, for example, 20% of the 'delivery cost' of an item is due to corporate and income taxes, and you added 20% sales tax, the end cost would be the same. I think most would predict that the item would probably wind up costing some amount more to the consumer. Some folks would have more money to spend since they are no longer paying income taxes, so folks are not paying any now, so they would be burdened more.

Its an interesting thing to analyze, but it is almost impossible to assess the end impact because our present system is so convoluted. I do find it interesting that a lot of posts in this thread mix income and sales taxes without making clear distinction which one they are talking about, and the property taxes have not even entered the discussion, which is also a key tax source for the states.

Re:Sales tax (4, Insightful)

aralin (107264) | about a year ago | (#45289749)

Sales Tax is actually a reverse progressive tax. Depending on the percentage of your income spent each month, you are taxed more or less. The most at 100% income spent, which is poor and lower middle class. Then middle class gets to about 95% spending, upper middle class 85% spending and then you get the rich, which spend generally at 10% or less. So their tax burden is 10 times lower than the poor and middle class. There is nothing fair about a sales tax.

Re:Sales tax (1)

Mr D from 63 (3395377) | about a year ago | (#45289833)

There is nothing fair about a sales tax.

I agree 100% that sales taxes are inversely progressive as a percent of income. I don't agree that there is nothing fair about sales tax. In the sense that everyone pays the same tax for the same purchase, they are completely fair. Progressive taxes are necessary and I believe they are good in proper balance, but it really doesn't have much to do with "fair". I don't like the term 'fair' because it means different things to different folks. Most people agree 'fair' is good.

Re:Sales tax (1)

geekoid (135745) | about a year ago | (#45290315)

y fair, he doesn't mean money, he means impact to the persons actual life.
A millionaire is still likely to eat, cloths and get around with a 10% sales tax. The lower the income the more it restricts the person.

Frankly, the first thing I would like to see done is removal of dedication from donations/tithing.
Then I want the tax on the wealthiest to go back to 1999 rates.
Then I want a .5% tax on all 'wall street' trades trades.
Then I want interest deductions removed.

Than I want a blessings of unicorns for my daughter.

Re:Sales tax (1)

Bob the Super Hamste (1152367) | about a year ago | (#45290577)

There is nothing fair about any tax as it will always affect some more than others depending on what metric chosen. The proper question is what form of taxation are we as a society willing to accept to pay for the services provided by government?

Re:Sales tax (0)

Anonymous Coward | about a year ago | (#45290609)

This is not correct at all. The rich spend almost all their money just the same as the poor. The only difference is that for the poor, the majority of the money is spent on consumer goods and services like black beans and plumbers. The rich spend their money on goods and services related to increasing production, like data centers and engineer's salaries.

As long as your "Sales Tax" accounts for every sector of goods and services, the grandparent's post holds merit.

Re:Sales tax (0)

Anonymous Coward | about a year ago | (#45290779)

Sales Tax is actually a reverse progressive tax. Depending on the percentage of your income spent each month, you are taxed more or less. The most at 100% income spent, which is poor and lower middle class. Then middle class gets to about 95% spending, upper middle class 85% spending and then you get the rich, which spend generally at 10% or less. So their tax burden is 10 times lower than the poor and middle class. There is nothing fair about a sales tax.

There's NOTHING "fair" about any tax.

"Fair" is always "I pay less and get more."

Re:Sales tax (1)

misexistentialist (1537887) | about a year ago | (#45289779)

Our current "progressive" system results in the rich paying less than the poor in many cases because they are better equipped to use the system in their favor.

Do you seriously believe that the rich pay less in tax than the poor?

Re:Sales tax (0)

Anonymous Coward | about a year ago | (#45290081)

Percentage-wise, yes, by a rather large margin.

Specific tax cuts over the last few administrations targeted at the wealthy have turned what was once a progressive tax system into a regressive one. That's one factor explaining why the wealth disparity has increased so dramatically.

Re:Sales tax (2)

geekoid (135745) | about a year ago | (#45290415)

Fair means each group pays the same percentage of the overall taxes. Not 1 person pays more then another person.

As a group, yes the poor pay more. 12% of taxes come the the bottom 20%
7.9% come from the top 1%

The top 1% pays the least percentage of tax revenue then any other group.
http://www.cbpp.org/cms/?fa=view&id=3505 [cbpp.org]

10% of 8000 has a hell of a lot bigger impact on a person. / family then 39% of 400,001

Re:Sales tax (0)

Anonymous Coward | about a year ago | (#45290483)

Of course the rich pay MORE overall in taxes. If your income is $100,000 gross a month a 38% tax rate doesn't mean nearly as much as it would if you make $1200 a month gross and pay 15%. That is a lot of meals or rent that is gone... Think before you start typing.

Re:Sales tax (0)

Anonymous Coward | about a year ago | (#45290631)

Mitt Romney himself claimed to pay less than 13%. I pay way more than that, and I'm fortunately not anywhere near being poor. That the wealthy pay more in absolute dollar terms is completely irrelevant as they are also able to keep way, way more.

Re:Sales tax (0)

Anonymous Coward | about a year ago | (#45291757)

No less than the "Sage of Omaha" (Warren Buffet) made the point that his secretary paid a higher tax rate than he did.

Not really fair (1)

rsilvergun (571051) | about a year ago | (#45289801)

Your assertion only works in a completely fair society. So maybe it would work in Sparta where they everyone grew up in a barracks. Here in the real world it's not 'fair' because the playing field isn't level. That's why the best way to guess the income of a child growing up is to look at the income his parents had.

Re:Sales tax (0)

gallondr00nk (868673) | about a year ago | (#45289891)

Lastly it would encourage savings rather than consumption which is something we need desperately right now.

Like it or not, if a consumption led service economy stops consuming, it'll be in far worse trouble than if it doesn't. Anything that stifles consumption (especially among the poorest) is in my opinion economic sabotage.

Yes, household debt ratios are very high, but this is due to poor job creation and stagnant wages, and could be solved through income redistribution. The consumption in itself is not the evil here, consumption is the way out of this mess.

We should really be enabling *all* segments of society to consume, including the poor. Non progressive sales taxes are detrimental to that effort. This isn't just on humantarian grounds but also one of economic self interest.

On a government level, compare the mess in Europe to China or the US if you wish to see the results of reduced consumption.

Re:Sales tax (1)

geekoid (135745) | about a year ago | (#45290447)

Long term, savings is better for the people. Saving is not no spending.
You're thinking logically ends in a spiral of un-need consumption.
If we save a consume moderately, we have a more stable growth situation, as well as fewer people in situation where they lose everything.

Re:Sales tax (2)

ultranova (717540) | about a year ago | (#45289995)

It would be very simple and fair. Lastly it would encourage savings rather than consumption which is something we need desperately right now.

Because a recession is not bad enough already, let's discourage economic activity and turn it into Greater Depression!

Then again, much of the country can't save up because they're already living paycheck to paycheck, so I guess they'd end up paying more taxes and going into deeper debt. But I guess kicking people who are already down is some people's idea of "fair". What I don't get is why they think this won't lead to an outright rebellion.

Re:Sales tax (1)

geekoid (135745) | about a year ago | (#45290223)

This, again?
It' been complete destroyed. There are many reason why.

Assuming your goal is ACTUALLY to maintain tiered class system with ways to move between the classes.
If you want 2 classes, Workers and the wealthy, then go right ahead, it would work extremely well.

Are system can be adjusted, loopholes can be removed. Over all it's a good system, just get involved to make change happen.

" The sole purpose of all of our tax mess is to obfuscate the real percentage we're all paying in taxes.
false.

Re:Sales tax (1)

rossdee (243626) | about a year ago | (#45290743)

"Lastly it would encourage savings rather than consumption"

No it wouldn't, since you would have to pay the tax when you seventually take the money out of the bank and spend it.

A new or increase in sales tax encourages you to spend the money before the tax comes into force, rather than saving the money up to buy something later.

I think that only the following items should have sales applied

Tobacco and other smoking substances (Some of the money go to fund healthcare and quit smoking programs
Alcohol for recreational use (same as above)
Carbon based fuels (proceeds to fund transportation infrastructure and research into non-carbon energy sources
Firearms and ammo (to fund background checks, and crime solving institutions like police and FBI
gambling (which is already controlled and taxed in most states

Tech and State Taxes (2)

jythie (914043) | about a year ago | (#45289689)

Given how easy it is for tech companies to uproot and move their entire operation elsewhere, we might be looking at a slow end to the effectiveness of state level taxes. Over the last few decades we have been seeing a 'race to the bottom' in some industries, with regions dropping corporate taxes to near nothing or even investing public money in encouraging companies to move there, while shifting the burden of paying for it onto the middle/low end workers. If a state tries to stand up and tax an industry, companies move to another state. The net result is a steady decrease in state's ability to fund themselves and an increasing reliance on federal money (since companies have a harder time escaping those taxes easily).

Long term we might simply be looking at a situation where it is pointless to even try to tax some industries at a local level.

Re:Tech and State Taxes (1)

VortexCortex (1117377) | about a year ago | (#45290005)

Simply don't sell the software.

The game engine can be gratis.

You want the art and level assets that go with it? I'll charge for those.

Re:Tech and State Taxes (1)

jythie (914043) | about a year ago | (#45290649)

Ah, memories of Doom ^_^

Taxing anything (0)

Anonymous Coward | about a year ago | (#45289745)

If you want less of something, tax it.

Re:Taxing anything (2)

Entropius (188861) | about a year ago | (#45290487)

The problem is that if you want public services you have to tax something.

WHat has goverment ever done for us? (0)

Anonymous Coward | about a year ago | (#45290129)

Except get in the way of profit and innovation?

Re:WHat has goverment ever done for us? (0)

Anonymous Coward | about a year ago | (#45290279)

Goverment does a lot for us!
1. Food stamps for poor... um... being reduced
2. Education .... um... cost is killing our buying power
3. Protection from high credit cards ... um... O'h right.. went from 9 to 15 percent
4. Dream of owing one's own home... um.. O'h crap... the morgage problem
5. Goverment working together for what's good for the country... um.. that shutdown thing again!
6. Best health care in the world... um... O'h that obamacare disaster brewing..
On second thought.. goverment has done one thing good, and that's fucking us over.
I knew there was at least on thing the do right!

Re:WHat has goverment ever done for us? (1)

OFnow (1098151) | about a year ago | (#45291103)

Goverment does a lot for us! 6. Best health care in the world... um... O'h that obamacare disaster brewing..

You have not been paying attention. In the 1950's US health care was the best. But since then it fell dramatically in the world list. A change that has been widely reported. We are now way down the list, and have been for 20 years and more. Not a recent fall at all.

Re:WHat has goverment ever done for us? (0)

Anonymous Coward | about a year ago | (#45291951)

Exactly. we keep electing idiots. the best solution is to destroy it and start again this time without giving stupid people the vote. land owners only I say.

Adam Smith vs. Service Economy (3, Informative)

EngineeringStudent (3003337) | about a year ago | (#45290157)

Read "Wealth of Nations" by Adam Smith and take microeconomics 101.

Service economy is a transitionary state where you have no creation of value, and the money hasn't yet been drained, and poverty. People pass around the same dollar bills, but only a tiny minority actually create value. Given the natural system perturbations that must come - that is an unsustainable model. It is the glass vase on the top of the wobbly table. It must crash.

Exactly the argument I had in 1984 (0)

Anonymous Coward | about a year ago | (#45290859)

In collegiate academia with my microeconomics prof. that it's NOT sustainable since MOST guys want the stability & familiarity of ROUTINE (8-4/9-5 job) + don't CARE for a lot of responsibility (what union jobs gave you with SPECIFIC parameters of your task/job as requirements, nothing more, nothing less) - a nice "steady-eddy" pretty much once you got the job down mindless job!

See... You CAN'T HAVE more "chiefs" than "indians" in other words, & what does a "service economy" produce? NOTHING tangible, & that exact phenomenon.

Pretty soon, offshoring for lower wage would happen because of the system itself trying to "maximize profits" which is the "MBA MANTRA"!

(& that is what I pointed out as a young kid only no less),

Since in that very class we WERE TAUGHT that WAGE IS THE SINGLE EASIEST COST-CENTER TO CONTROL & often is!

What is the 'trend' today? That very thing. Fine!

Well - that is, until you have NO DISPOSABLE INCOME in the "hands of the many" that spend FAR MORE than their wealthy 1% counterparts EVER could as a mass.

That's when the "shit starts to hit the fan"... economies aren't HEALTHY unless money changes hands frequently for goods & services... especially ones no longer based on physical good sold for GDP, but instead, intangible 'services'... dumb!

Then, you start to see the SMALL businesses die (which is what is happening - bars, theaters, restaurants - where "fun money"/disposable income go), which in turn, forces prices up from their suppliers, which in turn forces up prices @ the point-of-sale retailer of whatever good/service, & the wheel keeps doing this, until the tire is out of air.

APK

P.S.=> I saw it coming as a kid - anyone with 1/2 a brain & a set of eyes would! I told him "Did you read that in FORBES & just 'spit it back to us' NOT thinking of the outcome, long-term?" To which he said "This is HOW it's going to be whether we like it, or not!" (& that told ME that this entire economic fiasco has been "in the making" for @ least 2-3++ decades now, & here we are, @ the mercy of these "economic geniuses'" plans (for ruin & due to their greed)) - Then, that economics prof. threatened I might not pass the class, to which I told him "I am keeping a current B+ avg. & I am SURE that others in the class would witness for me as to your threat, & I'll take it PAST your dept. head IF NEED BE pal"... needless to say, I left the class with a B+ iirc... ... apk

No (1)

The Cat (19816) | about a year ago | (#45290189)

As the nation moves from a tangible goods-based economy to a service-based economy...

"As Americans continue to be ripped off by illegal Chinese currency manipulation..."

FTFY

Limit Taxation (1)

b4upoo (166390) | about a year ago | (#45290865)

As it stands every little thing seems to attract a tax. We even do things that are counter to our announced intentions just to find a new source to tax. For example some states now apply a special tax to electric vehicles under the excuse that they don't pay gasoline taxes. You can bet that some governmental idiot is thinking about taxing bicycles as they also pay no gasoline taxes. That makes as much sense as taxing people who walk rather than drive as they also do not pay gasoline taxes and after all cause the city to build those annoying sidewalks.
                  We do need a Robin Hood tax that taxes financial transactions as that industry gets away with economic murder. For example if your spiffy computer system can trade stocks 1000 times a second maybe a tax on each transaction would stop that kind of nonsense stock sales.
                    However, other than financial services taxes we need a no new tax law as well as laws that halt all increases in tax rates. We also need to fix the value of a dollar in such a way as inflation does not effectively create a new tax rate for the government.
   

No more software "licenses"? (2)

DoctorBonzo (2646833) | about a year ago | (#45291245)

So, in the states that have sales tax on sales of software on CDs or other tangible media, does this mean we can forego the "license" fiction and consider the purchase to be an actual sale?

let me make this really simple (1)

slashmydots (2189826) | about a year ago | (#45291841)

What are they even talking about? You buy ANYTHING in the state, it's taxed. Buy ANYTHING from outside the state, it's not taxed. Unless the product is classified specifically as tax exempt, it gets taxed. I know this, as I run a computer repair and accessories store. If I sell a copy of Malwarebytes, it's subject to sales tax because it is a thing and I'm selling it in the state. So saying they might start taxing software sales is idiotic. They either already do or it's interstate so it's against Federal law for them to do so.
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