It looks like the free ride might be coming to an end. President Obama enthusiastically endorsed legislation that would introduce an Internet sales tax, perhaps even by year end. Obviously the bill has massive support from brick-and-mortar retailers who claim online retailers have a huge pricing advantage over them. It might surprise you to learn, however, that Wall Street is lining up against the bill.
The Securities Industry and Financial Markets Association and the Financial Services Roundtable said the measure could pave the way for financial transaction taxes on the state level, an idea that Wall Street and its supporters fiercely oppose.
“It’s important for Congress to explore all the possible outcomes and costs of the proposal, especially the impact on consumers,” Scott Talbott, the senior vice president of public policy for the Roundtable, said in a statement.
“A transaction tax on financial services products will hurt retail investors, retired Americans, and small businesses, effectively making it more expensive for them to invest and plan for the long-term. Without hearings, these implications and others will not be properly addressed.”
Predictably, the major online retailers are against it as well, with eBay CEO John Donahoe encouraging eBay users to get into the fight. The only exception is Amazon, which is actually lobbying for the passage of an Internet sales tax. Their reasoning is that the current system of tax legislation varying from state to state is too cumbersome and that a single, national Internet sales tax would simplify compliance for online retailers.
I'm personally dead-set against it, but I think most consumers would be. Anything to save a buck and all. But it would level the playing field a bit between online and brick-and-mortar, which could be better for local communities in the long run.
I'm interested to hear what you guys think. Will an Internet sales tax lead to the financial transactions tax Wall Street dreads so much? Should we be paying sales tax for online purchases? Would an Internet sales tax actually be a good thing for local economies? Or will people just not buy as much online?
As a Wal-Mart shareholder this is music to my ears!
http://www.wallstreetoasis.com/forums/marketplace-fairness-act
I'm not sure why this particular law would lead to a transactions tax, since a transaction tax and what this is doing are two separate things. Sales taxes already exist in the real world, all this does is extend that tax to purchases online being shipped in state. That's completely different than establishing a new tax on financial transactions that currently does not exist on a state or federal level.
I very much doubt this is going to affect people's buying habits in any impactful way. It seems to me that a lot of people are making a mountain out of a molehill. In the grand scheme of tax policy, there's a thousand other policies that I think are far more hurtful to the economy than what they are proposing.
Then again, I live in a non-sales tax state, so it's not like I would be affected by this. If it does pass though, I might establish a shipping company to route packages to other state, for a fee....
Of course it wouldn't. But when you oppose something politically, your best bet is to misconstrue what it entails. That's why Senators that voted against background checks for gun buyers kept talking about it being the first step to a gun registry. Not like that's such a bad thing (we do it for cars), but whatever.
You say that you doubt this will affect people's buying habits and then in the same paragraph talk about setting up a shipping company to route packages to avoid the tax? I used to live in NY and would see people driving to Indian gas stations to avoid tax. People sell their cars for cash and report a lower sale price to avoid tax. Look at sales figures when there are clothing tax holidays.
Sales tax absolutely impacts buying habits. Add on top of this the cost for businesses to collect and remit taxes to all the cities, counties and states in this country. No small task even with software.
IMO, states with high sales tax should lower it. And what about when people buy things when they travel. This isn't just a tax free vs high tax issue. Many people travel outside a city and pay a 2-3% lower sales tax. Will they be taxes based on their drivers license address?
States need to stop looking to squeeze every drop of blood out of people. We need to end public sector unions and pension plans and have defined contributions.
The comment about setting up a shipping business was made in jest. Obviously it would make no sense since me charging to ship packages from my non-sales tax state to a sales tax state to get around the tax would cost more than just paying the tax itself (if I'm going to make money at my business). My point was I doubt purchasing habits for people buying online is going to change by tacking on their state's sales tax, usually cause 1) these people prefer buying things online, and 2) it would cost them as much (if not more) to drive to stores and purchase items from a physical store than buying online (and they would still have to pay sales tax on those purchases). Still, most people are not intellectual enough to do a mental cost-benefit analysis to figure that out. I do agree that states should have low sales tax rates, but obviously some don't. That's something for their citizens to decide, not me.
And incidently, a number of bills have been introduced into my state legislature about charging sales tax for out-of-state individuals on purchases in state, so your idea is not unheard of (though I don't think they ever got any traction). Personally don't support it, but it theoretically could work that way in the future.
I don't understand how wall street opposing this is surprising.
As a college student, I was already pretty sad with the shipping fees of some minor online websites.
In any case, I believe that most online companies won't see such a big loss of clientele after a while
Online retailers already make close to 0% margins, and now they won't have any more room to raise prices.
Obama is the biggest fucking idiot to come out of Harvard. Brady, your school is a disgrace. Should've gone to uChicago.
Sometimes you say really stupid things BT
Now, why do you think taxing consumers is a good thing?
I feel bad for people who don't like next to a sales tax free state. If Republicans in the House support this it will be pretty damning for them. Nothing like an increase that directly impacts lower/middle income individuals.
I think less taxes are better for everybody. The government already grabs enough taxes from everybody and they are still going broke because all of these faulty promises promised by political leaders just to maintain their seat in office at any cost. I don't see why anybody in their right mind would be for this bill, but besides the fact I cannot stand Obama, unfortunately he is a good speaker and he tells the public what they want to hear but that is about it.
Personally if you shop online now, then most likely you are doing it for the convenience of not having to go anywhere to buy your shit. I do not see how creating a sales tax will change that in people. Unless the tax is going to be significantly greater than the sales tax at a retail store I doubt people will actually start going to the stores to purchase their merchandise.
Not true at all. For instance, I used to make almost all of my expensive purchases online to avoid sales taxes. When you're spending $1,000+ in an individual transaction, you save ~$100 simply by buying online.
I just feel bad for people not living near a sales tax free zone. Democrats - the party of tax.
Very upset about this. If there was a way to tax the air you breathe, these guys would fast-track it. We need to get that whole "Stop SOPA" spirit going again!
Well of course the Senate and Obama would support a tax increase. Lets just hope the Republicans block this.
Imagine how many taxes would be passed if Democrats controlled the House and Senate. Party of tax.
I hope you realize this has a lot of Republican support in the Senate (a non-binding vote got 75-24 back in March). Hell, if Mike Enzi (one of two senators from Wyoming, the reddest state in the nation) is co-sponsoring this bill, I don't see a lot of hope for Republicans putting up much of a fight in the House. We'll see though.
We will see who votes for it. And while I have no doubt some traitors will support this, the overwhelming amount of people supporting this will be Democrats.
We shouldn't look to level the playing field for brick and mortar stores by levying a tax on businesses to comply with a state they do not reside in (taxation without representation anyone?). We should be looking for ways to lower the burden on the brick and mortar businesses.
Of course Amazon is all for this new rule. They are setting up local distribution centers to offer same day shipping service. Offing this would make them have to comply with the state and city that center is located (paying local taxes anyway).
We'll see more of this as time goes on. The fed sees the internet as a massive potential for additional taxation.
It's either this or remove taxes on everyone...
Simple solution: buy your online junk in the deep web... using Bitcoins
lol
Why didn't I think of that?
You just need to shop at smaller retailers or those over the $1MM cap need to split into multiple entities to avoid compliance. Government just looking for more ways to steal from its slaves, oops, I mean citizens.
If my purchase total is $100 but shipping is $10, I'll take my $100 elsewhere.
So, if they think I'm going to pay something as nonsensical as an "online tax", they got another thing coming.
Can someone call Anonymous or something?
Eh, I'll still shop online to avoid the People of Walmart. I guess similar to the whole tax-rich people's 401ks thread last week, I can understand the logic behind it, but the cynic in me knows it's about getting more and more tax revenues and not about "fair."
Having a free Internet isn't a given, and I'll miss when it's gone.
Amen.
http://www.youtube.com/embed/ghrDIQ-K8mg
Eddie I am with you on this. It would even the "playing field", but in some respects that is the internet's competitive advantage. Internet has lower cost/taxes and stores have a competitive advantage by immediately supply goods/services rather than the customer having to wait 2+ days. I am against it from a tax perspective, this is just another way for governments to take more money from tax payers. I would be more accepting of this bill if it was part of a grand bargain and/or a balanced budget...but the President is too smart to ever let something that simple stop him from stealing from the people.....
I concur. The two biggest economic issues in this country are currently our debt and our slow economic growth. Unfortunately, tax policy affects these two inversely. If you raise taxes you can attempt to curb debt, assuming you aren't using the taxes to pay for more stupid welfare crap, but that will or should cause a decrease in spending from consumers thus putting less back into the economy. If the Fed is spending all the cash it can and all the time it has suppressing interest rates to supposedly 'drive economic growth' then how the hell does the government think creating new taxes on a multi billion dollar industry is going to help? It's as if the right hand isn't talking to the left hand, which when it comes to government doesn't surprise me. The point is though that this administration is pushing as many new taxes as it can to squeeze the population, particularly the middle class. (Forgive my conspiracy theorism). Also, just from a consumer standpoint it's naturally inconvenient. If you place an order online for say $50 then you're already probably paying $5 or more for shipping, unless in a case like an amazon prime member you pay a yearly membership fee to get perks like free 2 day shipping. That shipping fee is 10% of your order or think of it as a 10% tax. If you are now going to add on a few hundred basis points more in an actual sales tax how is that going to make you feel? In my neck of the woods between the state sales tax and the city sales tax I pay over 10% on anything I buy whether it be clothes, food, whatever. Being able to purchase something on amazon with free shipping and no sales tax saves me probably a few hundred dollars a year. Perhaps that isn't that much but when you start adding all these new taxes the middle class is going to get nickeled and dimed to death.
So all Obama's done for this country is increase taxation....Tea Party's even starting to look good compared to him right now.
We didn't get $16T in debt because we don't tax enough. Just like a guy doesn't get $100K in debt because he doesn't earn enough. We spend too much and have too high fixed costs. More money coming in isn't a solution, it just continues the cycle.
We need to stop looking for more ways to milk money out of people and impose more hindrances on businesses and look for ways to cut spending and make the government cheaper.
What is the next step? We all know this isn't going to balance the budget as spending is increasing. We know this isn't going to actually reduce our debt which is expected to go up to $20T. What is the next thing to tax.
If we took 100% of the paper wealth of the top 100 richest Americans we couldn't balance the budget for one year. Spending IS the issue. Furthermore, people have a right to their earnings. This idea that we should rob Americans every step they take is bullshit. There are subtle taxes on everything and anything that we do. This will never stop until we are working for the government and nothing else.
?? Okay, I just pressed keys on accident an ended up with this: ◘
I'm about to make an account and sign this thing:
https://petitions.whitehouse.gov/petition/stop-online-sales-tax-bill-it…
I just don't understand how they can get away with this. Individual states are already taking independent action with the larger online retailers (many states already charge sales tax on Amazon). That is fair, state-level taxation. How can the federal government justify stepping into these transactions?
Why are online retailers being focused on. I think brick and mortar retailers should have to check ID's can charge sales tax per location of the consumer. Why burden just online sellers. Whenever someone stops at a gas station they should be charged tax for where they live.
Man, to think this country got pissed over a fucking stamp and tea tax. What a joke.
I'm gonna let the Beatles speak for me on this one;
[quote=Apple_iBank]I'm gonna let the Beatles speak for me on this one;
] Word
http://beta.congress.gov/bill/113th-congress/senate-bill/336/cosponsors…
Cosponsors seem to be dwindling. 80% of them are Democrats. The Republicans who betrayed their party are the following:
Sen. Alexander, Lamar [R-TN]* 02/14/2013 Sen. Blunt, Roy [R-MO]* 02/14/2013 Sen. Boozman, John [R-AR]* 02/14/2013 Sen. Collins, Susan M. [R-ME] 03/14/2013 Sen. Corker, Bob [R-TN]* 02/14/2013 Sen. Graham, Lindsey [R-SC] 03/19/2013
Just another tax. Nothing to see here folks. Keep being sheep.
I'm always very skeptical when someone says that best way to help someone is to hurt someone else. In many cases, this breeds crony capitalism, which I think we would all agree is not a good thing.
I would also question whether we should even care about preserving "local communities," brick and mortar retailers, and/or local businesses. If a business no longer best serves the needs of its customers or a community no longer meets the needs of its residents, why should we preserve them via an artificial means? Businesses and communities, like everything else on this planet, are part of an evolutionary process - they must adapt and change to meet the demands of the environment. And when they do, everyone ends up better off in the long run.
It's also worth considering what exactly you are preserving when you say you want to help local businesses and communities. Most local businesses represent the end of a long chain of middlemen: someone makes something and then sells it one guy, who sells it to another guy, who maybe puts a brand on it and then sells it to the next guy. Finally, by the time it reaches the showroom in your town, it's been marked up 7 times, and to add insult to injury, the local guy probably doesn't have it in your size or your preferred model/style. Online companies eliminate at least several middlemen in this heinous chain and give you access to basically every variation of the product in existence. So when you say "I want to support local and/or brick and mortar businesses," you are in essence saying you want more middlemen and fewer options.
Another thing you are saying in many cases is "I want to give idiot politicians more control and power over me." The reason a lot of local businesses cannot compete is because they are often forced to adhere to arbitrary, ill-conceived restrictions to which businesses elsewhere may not be subject. Keeping these restrictions in place by not allowing outside competition (or screwing over everyone equally as in the case of the national sales tax) keeps you trapped in a crappy system because there are no other options.
This.
Word on the street is that Patrick is going to start taxing banana points.
Gotta love people who stick up for their slave masters.
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