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I'm a small government, anti-tax guy, but discrimination against bricks & mortar businesses seems quite unfair. Why should the tax I pay on a new computer vary

I'm a small government, anti-tax guy, but discrimination against bricks & mortar businesses seems quite unfair. Why should the tax I pay on a new computer vary based on how it is delivered to my home? Also, a sales tax is probably the fairest known model of taxation and is least susceptible to manipulation. To further the "Amazon should tax" argument, one could also make the case that the sales tax becomes quite regressive when upper-income people shop online but poor people (because they don't have credit cards, etc.) primarily buy from a local store. Certainly, Amazon must resist collecting sales taxes until all online/catalog retailers are required to collect them -- anything less would lead to a shareholder revolt.

yummyfajitas 17y ago
Why should the tax I pay on a new computer vary based on how it is delivered to my home? Sales taxes are a tax on the merchant. If the merchant is not located in a state, the state has no jurisdiction over the merchant. Do you really want the nuts in charge of {Texas, California} (depending on your political views) to have the power to pass laws binding on your state? Besides, if a state really wants the money they can simply tax their citizens (which many states do).
- SkipHeadJr 17y ago
  Sales taxes are paid by the customer, not the merchant. The merchants are required to collect and report the taxes, their customers are the ones who pay.
  - billswift 17y ago
    In fact, in many states the merchant must explicitly charge the tax to the customer, he cannot legally just include the tax in the price he charges for the item.
    - Psyonic 17y ago
      Even at movie theaters? I've seen movies in many states, and never ran into one that charged tax on top of the ticket/concession price.
nixme 17y ago
Also, a sales tax is probably the fairest known model of taxation My understanding is that it is one of the most unfair. Poorer people will lose a greater percentage of their income to sales tax than richer people because certain consumptions aren't elastic to increasing income. Now some states won't collect sales tax on items deemed "necessities" but the classifications can get tricky and imo just leads to inefficiency. Like you said, sales tax can be considered a form of regressive tax: http://en.wikipedia.org/wiki/Regressive_tax http://en.wikipedia.org/wiki/Regressive_tax. How is that then fair?
- evgen 17y ago
  I am guessing that the parent was suggesting that while it is regressive it taxes consumption and this seemed to be a fairer mechanism in his/her view. The fair/unfair distinction can be sliced in a lot of different ways, but there are some benefits that can be claimed for a tax that is applied to consumption regardless of whether or not that consumer is rich or poor.
- ShabbyDoo 17y ago
  You are right that it tends to be slightly regressive w.r.t annual income. However, every dollar earned that is eventually converted into something tangible must be taxed. So, it's eventually flat if earnings are ever enjoyed. Is flat fair? There's nothing inherently "fair" about a zero second derivative. I'm actually ok with some sort of government rebate for the first N dollars of taxation to reduce the burden on America's (relatively) poor people.
  - nixme 17y ago
    Except that the rich or even moderately well-off never convert even close to all their money into something tangible while the poor almost always must immediately. The rich don't live paycheck to paycheck. They save, invest, go on vacation, etc. They defer the second taxation (sales/use) to a later date or place -- they have choices where the poor do not. So while it might seem flat theoretically, it becomes regressive quickly. But we probably agree on more than we disagree. I actually agree that flat isn't fair and that the current situation isn't fair to b&m stores either. I just don't think the solution is to interfere with interstate commerce. States need to enforce use taxes, or if that turns out to be unenforceable, which I suspect it might, rethink their taxation strategy. By the way, not sure why you were downvoted. I upvoted to correct that. Thanks for the discussion -- it got me thinking about this situation quite a bit.
SkipHeadJr 17y ago
Sales taxes are paid by the customer, not the merchant. I'm sure your state requires you to pay the tax on that laptop. It is you that are depriving your state of income, not the out-of-state merchant.
ghshephard 17y ago
" discrimination against bricks & mortar businesses seems quite unfair." One rationale is that the Company in Nevada isn't using any services in California, so they shouldn't pay taxes for services they aren't receiving. I think that's ingenuine - it's a good reason not to pay _property taxes_ in California - but Sales Taxes are supposed to paid, they are called "Use Taxes" - and most larger business pay them, but individuals either don't bother or don't know. The debate is over anyways - Amazon will be collecting sales taxes in all states within two years. In the meantime, their behavior has been both ethical and legal - and they enjoyed a competitive advantage - for a while.
bshock 17y ago
On what do you base the proposition that "a sales tax is probably the fairest known model of taxation?" I would counter that sales tax is probably the most regressive known model of taxation, aside perhaps from the notion of a "flat tax." The poorer you are, the heavier the burden a sales tax imposes. When you're living hand to mouth, you're spending all of your income to survive, and so essentially a sales tax is like an income tax for you. As you rise on the scale of wealth, you tend to buy much less in proportion to your income, and so you are taxed a smaller percentage. Poverty is not a failing. Greed is not a virtue.
shpxnvz 17y ago
Why should the tax I pay on a new computer vary based on how it is delivered to my home? The tax you are legally required to pay does not vary. You simply choose not to pay whats required at the end of the year.
anamax 17y ago
> I'm a small government, anti-tax guy, but discrimination against bricks & mortar businesses seems quite unfair. A bricks and mortars biz in CA gets benefits from taxes paid to CA. Amazon doesn't.

yummyfajitas 17y ago

Why should the tax I pay on a new computer vary based on how it is delivered to my home? Sales taxes are a tax on the merchant. If the merchant is not located in a state, the state has no jurisdiction over the merchant. Do you really want the nuts in charge of {Texas, California} (depending on your political views) to have the power to pass laws binding on your state? Besides, if a state really wants the money they can simply tax their citizens (which many states do).

SkipHeadJr 17y ago
Sales taxes are paid by the customer, not the merchant. The merchants are required to collect and report the taxes, their customers are the ones who pay.
- billswift 17y ago
  In fact, in many states the merchant must explicitly charge the tax to the customer, he cannot legally just include the tax in the price he charges for the item.
  - Psyonic 17y ago
    Even at movie theaters? I've seen movies in many states, and never ran into one that charged tax on top of the ticket/concession price.

nixme 17y ago

Also, a sales tax is probably the fairest known model of taxation My understanding is that it is one of the most unfair. Poorer people will lose a greater percentage of their income to sales tax than richer people because certain consumptions aren't elastic to increasing income. Now some states won't collect sales tax on items deemed "necessities" but the classifications can get tricky and imo just leads to inefficiency. Like you said, sales tax can be considered a form of regressive tax: http://en.wikipedia.org/wiki/Regressive_tax http://en.wikipedia.org/wiki/Regressive_tax. How is that then fair?

evgen 17y ago
I am guessing that the parent was suggesting that while it is regressive it taxes consumption and this seemed to be a fairer mechanism in his/her view. The fair/unfair distinction can be sliced in a lot of different ways, but there are some benefits that can be claimed for a tax that is applied to consumption regardless of whether or not that consumer is rich or poor.
ShabbyDoo 17y ago
You are right that it tends to be slightly regressive w.r.t annual income. However, every dollar earned that is eventually converted into something tangible must be taxed. So, it's eventually flat if earnings are ever enjoyed. Is flat fair? There's nothing inherently "fair" about a zero second derivative. I'm actually ok with some sort of government rebate for the first N dollars of taxation to reduce the burden on America's (relatively) poor people.
- nixme 17y ago
  Except that the rich or even moderately well-off never convert even close to all their money into something tangible while the poor almost always must immediately. The rich don't live paycheck to paycheck. They save, invest, go on vacation, etc. They defer the second taxation (sales/use) to a later date or place -- they have choices where the poor do not. So while it might seem flat theoretically, it becomes regressive quickly. But we probably agree on more than we disagree. I actually agree that flat isn't fair and that the current situation isn't fair to b&m stores either. I just don't think the solution is to interfere with interstate commerce. States need to enforce use taxes, or if that turns out to be unenforceable, which I suspect it might, rethink their taxation strategy. By the way, not sure why you were downvoted. I upvoted to correct that. Thanks for the discussion -- it got me thinking about this situation quite a bit.

SkipHeadJr 17y ago

Sales taxes are paid by the customer, not the merchant. I'm sure your state requires you to pay the tax on that laptop. It is you that are depriving your state of income, not the out-of-state merchant.

ghshephard 17y ago

" discrimination against bricks & mortar businesses seems quite unfair." One rationale is that the Company in Nevada isn't using any services in California, so they shouldn't pay taxes for services they aren't receiving. I think that's ingenuine - it's a good reason not to pay _property taxes_ in California - but Sales Taxes are supposed to paid, they are called "Use Taxes" - and most larger business pay them, but individuals either don't bother or don't know. The debate is over anyways - Amazon will be collecting sales taxes in all states within two years. In the meantime, their behavior has been both ethical and legal - and they enjoyed a competitive advantage - for a while.

bshock 17y ago

On what do you base the proposition that "a sales tax is probably the fairest known model of taxation?" I would counter that sales tax is probably the most regressive known model of taxation, aside perhaps from the notion of a "flat tax." The poorer you are, the heavier the burden a sales tax imposes. When you're living hand to mouth, you're spending all of your income to survive, and so essentially a sales tax is like an income tax for you. As you rise on the scale of wealth, you tend to buy much less in proportion to your income, and so you are taxed a smaller percentage. Poverty is not a failing. Greed is not a virtue.

shpxnvz 17y ago

Why should the tax I pay on a new computer vary based on how it is delivered to my home? The tax you are legally required to pay does not vary. You simply choose not to pay whats required at the end of the year.

anamax 17y ago

> I'm a small government, anti-tax guy, but discrimination against bricks & mortar businesses seems quite unfair. A bricks and mortars biz in CA gets benefits from taxes paid to CA. Amazon doesn't.