Internet Sales Need To Be Taxed

[Adamski]

Guys,

Michigan has been claiming that it cannot make ends meet with its budget for several years now. Sometimes representatives have met into the wee hours of the morning trying to settle on a last-minute budget before a state-wide government shut-down occurs. They claim they don't have matching funds to get Federal highway construction money. They're always crying for more taxes and claim they're making all these huge cut-backs. Here is the reality:

1. Michigan has been installing these huge, expensive, LED highway message center signs along the freeways for several years now. The one in Muskegon has been finished for 4 months and I've yet to even see a single message on it other than the initial "Test" message.

2. Michigan has been funding state universities while, at the same time, providing scholarships to state citizens who want to attend those same universities. All the while this is happening, those same universities have been raising their tuitions at rates double or triple the rate of inflation. So it's not surprising that one of these universities has recently announced its plan to build a $60,000,000 Medical School on its campus.

3. Michigan has contracted to lease a huge new State Police Headquarters building in Lansing even though they already had a nice facility there for that purpose.

4. Michigan recently expanded its Mental Health building in Muskegon. The resulting enlarged facility includes curved interior walls and sloping ceilings all of which cost more to build. No cost-cutting there either.

In summation, Michigan still has areas where it can cut its budget further. Universities should not be expanding their facilities in these tough economic times. Too much money is being spent on things that are not absolutely necessary. It makes no sense to put additional burdens on Michigan taxpayers while state universities float in a sea of excess funding.

All states could benefit from a Federal tax on all internet sales. When several states tried to collect Sales Tax on internet sales, the Supreme Court ruled against them. There must be some way that internet sales could be taxed. Such a tax would help to level the playing field between brick and mortar stores and cyber space stores and thus help protect local entrepreneurs who actually support our communities.

[Super Clean]

Larry,

Don't worry about those LED HWY signs, we've had them for years here now, much like the dollar coin, the Americans are always behind the times of us Canadians ;)

[Howard]

Don't even suggest a Federal sales tax on the internet. That would just be more money for government waste. Key the F'ing Federal government out of our pocketbooks. The Federal bugdet should by law be reduced each year by the rate of inflation - don't let them just spend more and more. Stop all the spending then no need for more taxes.

[Adamski]

... don't let them just spend more and more. Stop all the spending then no need for more taxes.

Howard,

Don't you know? They need to keep spending because they still have many more monuments to build for themselves. They need buildings that they can name after each other. They need $100,000 signs that they can admire as they drive to and from work each day. They need to give away money to the poor and lazy so they feel generous. They need to expand government so they can feel even more important. There are all kinds of reasons that government must keep growing. It's like a voracious weed that is trying to entangle and consume every working person in this country.

[Howard]

Well let's buy lots of Weed-B-Gone then! :D

[Adamski]

It would be far better to have internet sales taxed rather than have services - especially laundromats - taxed. Laundromats are already paying property, payroll, sales (on purchases) and income taxes. I wonder how many Ebay sellers pay all these taxes.

[DaveLevenson]

As Larry explains so well, the government (at all levels, federal, state, and local) always thinks it needs more money. We're all likely to pay more in taxes. We're also being taxed by inflation that reduces the value of the cash we have already accumulated.

The last thing we need is a new tax. It costs far more to create a new tax than it does to increase the rate of an existing tax. A new tax needs a whole new government office or department to enforce and collect it, and imposes an additional workload on whomever pays it. Increasing an existing tax, on the other hand, requires only a modest expenditure of government funds to print revised forms and instructions. But increasing an existing tax looks like a tax-increase to the public. It thereby forces some politician who probably promised the citizens "no tax increase" to eat his or her words -- forcing the politician to tell the truth, and making the general population aware of what is happening. This might provoke enough public backlash that government might actually have to consider curbing its appetite for more money. Creating a new tax, somehow, looks different -- less like a promise broken -- which is why it is chosen far more often.

This is why we keep hearing proposals for things like Internet sales tax, value-added tax, medical insurance tax, applying taxes to previously-tax-exempt types of transactions, and the like. Lots of people, on hearing these proposals, initially think each new tax is somehow going to apply to someone else, not them, so they're not upset by it. They forget that all taxes are ultimately paid by consumers, either directly or passed along as price-increases imposed by the businesses who produce what the consumer consumes.

[Howard]

Dave makes many excellent points!

An Internet tax is a bad idea because the last thing we all want is a Federal Sales Tax (VAT?). It would end up not being a replacement for existing sales taxes but an additional layer of tax to fund all new waste. The way you kill a cancer is to cut off its food supply - we need to do the same with government - cut its revenue intake to force it to cut spending as there is no way it seems to be able to cut spending on its own.

[pressandclean]

Don't you guys listen to Obama? The worlds problems are so big, only the government can solve them. That takes BIG government. So what if that means more taxes. That only affects the bad people that have been holding back the good people for so long.

[Adamski]

Guys,

For those of you who don't know how a Value Added Tax (VAT) works, here is a quick explanation:

A VAT is a super sales tax enacted by countries on businesses. Unlike regular Sales Tax which is applied only to the product at the retail (final sale) level; Value Added Tax is applied to all levels of a product's development - not just the retail level. For example: A company buys a forest and cuts down the trees and sells them to the mill. The mill pays for the trees plus a VAT. The mill cuts the trees into boards and sells the boards to the local Home Depot. The Home Depot pays wholesale for the boards plus a VAT. The Home Depot sells the boards, in small quantities, to you and I. We pay retail for the boards plus a VAT. So you see, in this simple example, the end product that you and I bought was actually taxed 3 times before we got those boards home. In a more complex example, the final product could be taxed 6+ times.

This is why the VAT is such a voracious tax. This is the last thing any of us want. Nobody is advocating a VAT in this country. When I talked about a Federal Sales Tax on internet purchases, I was not referring to a VAT. I was simply referring to a sales tax on the final purchase price of items already being sold on the internet.

I am all for a fair and equitable method of taxation to support our local, state and federal governments. I am against complex tax structures that include big tax abatements for select companies, high implimentation costs, subsidies for select industries and any inequity that helps one business at the expense of another. It's time to level the playing field and let consumers decide where they want to spend their money without big government artifically influencing their decisions.

[Howard]

Larry, good explanation - but it is still a slippery slope. Once the Fed is empowered to have a National Sales tax they will grow it into a VAT just wait and see.

While it would not be good for our industry, I must admit that I do believe services should have sales taxes applied just like products. As it is now some services are taxed and others are not. We should simplify things and everything should be subject to a sales tax. Either that, or just eliminate the entire sales tax system.

[mmurra]

Larry - the Michigan Goveronrs's race is wide open. Why don't you run? I'd vote for you! We need a small business owner running the state government, not a politician. Mark

[Adamski]

Larry - the Michigan Goveronrs's race is wide open. Why don't you run? I'd vote for you! We need a small business owner running the state government, not a politician. Mark

Mark,

Well, that would be one way to prevent a sales tax on laundromat services.;)

[mjwalsh]

Larry,

If you run for Governor of Michigan or some other key position, I know some Michigan people & I am confident I can convince them to be some of your best supporters. Based on:

1. Your early service to our country.

2. Unwavering support for dollar coins.

3. Advocate of leaving the door open to keeping older equipment if it matches new equipment in energy savings with less than 25 % cost for the proven upgrade as a general guide.

4. Capable of handling a little limelight.

5. Seeing the light to avoid Fed'l sales tax based on input from your wise fellow forum members & the fact this going on as a tenacious joint effort between the states at the following link: http://www.streamlinedsalestax.org/index.php?page=faqs

6. I am pretty sure you won't laugh too hard when if you see or hear a bit more about our newly completed self service dog wash that is attached to our laundromat!

Mike Walsh from North Dakota

[Adamski]

Guys,

You have to understand that I cannot run for public office because I'M TOO HONEST and I always TELL IT LIKE IT IS instead of telling people what they want to hear. So, as you can see, I could NEVER get elected.

Anyway ... "Thank you ... thank you very much." (My Elvis impression)

[mjwalsh]

Guys,

You have to understand that I cannot run for public office because I'M TOO HONEST and I always TELL IT LIKE IT IS instead of telling people what they want to hear. So, as you can see, I could NEVER get elected.

Anyway ... "Thank you ... thank you very much." (My Elvis impression)

Just a heads up ---- remember that quote by Abe Lincoln---- something about "All it takes for evil to prevail is for good people to do nothing"

I remember at a tax study in our state, the legislative counsel had brought in a older person who uniquely had high level positions at several State governments & saw both sides of the coin so to speak. He held a high level job at some kind of a federal multi state tax commission & traveled from Washington DC to speak. When he spoke everything rang true --- it was a moment that tipped the scale in favor of not taxing services with the members of the interim tax study --- which was pivotal for the next session.

Just to give you a hint, most of the elected officials promoting the services tax that would include laundromats did not get re-elected.

MJ