The real “loophole”

Just to clarify my last post.

The real “loophole” Spitzer has closed with this new tax policy is that, in the past, we taxpayers were supposed to voluntarily report our Internet shopping and voluntarily pay sales tax on our Internet purchases.

He figures not everyone does this. So he’s going to make retailers collect the tax on our behalf.

What bugs the bejeepers out of me is that the state keeps asking for more, more, more. If our government wanted to demonstrate leadership and fiscal responsibility, they’d figure out a way to make do with what they have.

Instead they sit around dreaming up new ways to make us pony up more & more & more of our cash.

The Internet should have been left alone in the first place. New York State should have respected the Internet as a place where commerce could be left alone, for once, to flourish without a sales tax burden.

At the least, the state should have satisfied itself with revenues from NY State-based Internet companies.

It’s been a shameful affair from the start and Spitzer’s latest move only adds to the shame.

[tags] Eliot Spitzer, New York State, sales tax [/tags]

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2 Responses to The real “loophole”

  1. Dad says:

    Sorry kid, but your rant is off base on this one.

    First, Spitzer has just joined a long line of legislators on both sides of the aisle that want to get their hands on Internet commerce money–everything from taxing Internet use (ala telephone) to collecting sales tax on purchases. NYS tried the volunteer method and, given human nature, that hasn’t worked so the governor, along with state and local pols, are trying to figure some way to force compliance.

    Second,(and in truth) it is grossly unfair to local merchants(not to mention local,nonInternet using tax payers) that someone can get a bargain by buying over the Internet from out-of-state markets. For example if a local merchant sells widgets at $100 each it will cost a NYS buyer $108.75 to buy locally. At the same time, http://www.widgetsRus.com sells the same widgets for $100 but with no tax and, if you buy two or more, will ship for free. Who are you going to buy from? Not only are you screwing the local merchant–who pays NYS income and real estate taxes–out of $200–assuming you buy two to save shipping coust–but shorting NYS out of $17.50 in tax which could go to offset some of what you’re paying in local/state taxes.

    While, in truth, no one is going to pay these taxes on purchases if they can help it, they will if forced to. The only problem is the one of privacy and how the government is going to force out-of-state merchants to collect the tax. That is the hurdle that every legislator, including Spitzer, has to overcome. Short of having the USPS, FedEx, UPS, etc, open every package from an out-of-state seller, I’d be interested in seeing how he, or any other legislator, plans on doing it.

  2. Kirsten says:

    Not backing down, Dad. First of all, Spitzer never justified this in terms of protecting NYS businesses — the state is struggling fiscally and his administration is trying to find any way they can to raise more tax money. That’s the stated reasoning his administration gave.

    Second, the whole idea of leaving Internet commerce alone is that doing so lets it flourish. That helps everyone.

    E.g.: there’s nothing to stop NYS based busineses from selling over the Internet. I know one local second hand bookstore that does more business online than from local traffic.

    Plus the money I save by getting a deal on the Internet doesn’t go under my mattress. I spend it — and chances are it will go into the till of a local business.

    If, however, states start to step in and require these businesses to collect taxes — and Spitzer’s move was likely to trigger copycat actions by other states — that adds to the cost of doing business for everyone, and transfers yet more money from taxpayers to the government.

    Internet-based businesses face another disadvantage compared to local businesses, besides potential shipping costs: you don’t get to “try before you buy” and you have to wait for the item. That’s an advantage local businesses can leverage if they want. Easier returns is another.

    So yes, Internet commerce has changed the business environment, but lots of things can do that. Businesses have to adapt constantly.

    Expecting governments to come in and protect businesses from having to adapt is the sort of reasoning that has saddled taxpayers with a host of stupid expenses — just look at the farm subsidy debacle.

    Fortunately, Spitzer has backed down on this — for now —

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