Taxation With Representation

[kevin_standlee]

This morning I read a newsletter from an online retailer complaining about the bill that has passed the Senate to require online and mail order retailers to collect and remit the sales taxes for sales outside their states. I can certainly understand the retailer's objection to the proposal (which I expect to see die in the House), but I found myself annoyed once again at invoking the Boston Tea Party as tax protestors, for the same reason that I'm annoyed with the Tea Partiers in US politics today.

There is no doubt that the people we now revere in the USA as patriots who destroyed that cargo of tea as a protest against the taxes levied on it by the British Parliament were engaged in an act of defiance against lawfully constituted authority. But crucially — aren't they still teaching this in school? — "taxation without representation" was key to this protest. The American colonists had no say in setting the taxes being levied upon them. To me, this was valid protest. However, today, Americans have a representative form of government, and (for the most part; yes, I know about the District of Columbia) we are taxed by government entities for which we ourselves are responsible, as we voted for them. Therefore, invoking the "tea party" against taxes you personally dislike seems dishonest to me. If the mail-order/online sales tax law is passed by the government and signed by the president, it means that we have been taxed by a government that we elected, regardless of whether you voted for the individual members of that government or not.

Now, I suppose some of these tea-partiers are convinced that the current government is illegitimate in some way (presumably because Their Man Didn't Win). I have little patience with the conspiracy theorists. In general, with specific exceptions that need addressing, our government is elected by the citizens of the USA. (If you could vote but did not, you abstained, which means you said you'd agree with whatever decision the majority made.) That doesn't mean that every person is going to be completely satisfied with every government decision. (I certainly wish the Nevada government could see fit to subsidize rural transportation in Lyon County, for instance.) Anyone who thinks that "democracy" means "I always get exactly what I want," is being childish. Sometimes, our democratically-elected government does things that individuals don't want. Deal with it!

I guess if you're sufficiently ticked off, and are convinced the system has failed you completely and there's absolutely no redress through lawful means, you can go start a revolution. If you win, you were right; but until then, expect to be treated as traitors and rebels, just as the American revolutionaries were until they won. ("Rebellion is never unlawful in the first person, only the third person," to paraphrase Ben Franklin in 1776.) But I don't really see a real serious armed rebellion happening, gun-happy people and periodic crazies to the contrary. Even the US Civil War was waged by duly-elected-and-constituted state governments, albeit that one theory of Reconstruction stated that from the USA's point of view, those governments had committed suicide when they tried un-ratifying the US Constitution. Had it only been individual hot-heads, and had they not been able to get the local governments to back them, the War Between the States would never have happened.

I guess I'm just annoyed at the profoundly anti-government tone that so many people seem to take when the government does something they don't like. To restate Ronald Regan my way, Government is not necessarily the answer or the problem.

Comments

[billroper]

True enough.

My problem is listening to people talk about how easy it is to collect and remit sales tax when they've never run a small business. The Chicago Tribune published an editorial on the subject today where they were saying there should be no exemption for small vendors (the current Senate bill exempts vendors with less than $1 million in annual sales from having to collect sales tax). Obviously, they have never tried to deal with filling out sales tax returns from multiple states on a regular basis, let alone trying to figure out what tax rate should be applied on a sale to Random Town, Your State, USA. And just having to find and pay a vendor who can supply that information would be a substantial barrier to starting any sort of mail order business without some level of exemption.

*sigh*

[daveon.livejournal.com]

One of the reasons why Apple's App Store model so quickly took over for mobile phone software sales is that they handle the charging of, collection of and reconciliation of local/state sales taxes. It really is insane.

[kevin-standlee.livejournal.com]

Agreed, and it's bad enough within a single state. California has dozens of different sales tax rates depending on the county, city, or special district in question. SFSFC has had to deal with this when we've had taxable merchandise (like t-shirts) for sale at different conventions in different parts of the state, while we've treated all mail-order sales to California addresses as having happened in Santa Clara County, that being where our corporate headquarters is located. Furthermore, California has no minimum threshold for payment, so with the exception of the years where we've actually held a convention with an art show (in which case we collect and remit sales tax for the county in which the event was held), the amount we've paid the state rarely covers the cost of collection.

[timill]

That's also true in Tennessee. Looking at receipts, it appears that B&N do it by zip code. I live in Anderson County, but the zip is split with Knox County, and I'm paying the Knox Co rate on Nook books.

And there's the question of what's taxable: in TN I pay tax on food, but in TX I didn't.

[delosharriman]

The big push behind this has been street-level retailers who feel that they're being unfairly competed with, not States which are sore at being done out of revenue, probably because the States mostly figure they collect enough in business taxes to make up the difference. I'd far rather see a bill to impose a uniform Federal excise (say, 3%) on on-line sales to the exclusion of all State levies — but that would be a "new tax", so there's no chance of it. Of course, it would also have to start in the House of Representatives…

[redneckotaku.livejournal.com]

I am a Republican and would want the playing field equalized for nearly all retailers. We need the revenue because you can't cut alone and not have very bad circumstances. It is a fair compromise for the under $1 million threshold on this front. Their is too much tax that can help the states in untold ways. In MD, our gas taxes would go higher if it doesn't pass the house. I doubt it will pass, but I hope it does.

[buddykat.livejournal.com]

$1 million is a ridiculously low number. Small businesses with less then 5 employees could *easily* go over $1 million, but not have the resources (financial or people) to be able to comply with the proposed law. $10 million would be a much more reasonable number; at that point, the business would be able to afford to comply without undue hardship.

[kevin-standlee.livejournal.com]

Agreed. A lot of people don't quite realize that $1 million gross revenue doesn't mean, "Big Business Mr. Moneybags has a million dollars in the bank."

[billroper]

Well, yes. But the Tribune was arguing against a possible increase to a $10 million exemption and then went further to argue against any exemption.

Because, you see, we're a big company and we can afford to pay people to sort this out now that we're out of bankruptcy. Obviously, if you can't afford the time and effort to file all of those tax returns, then you have no business being in business.

Idiots.

[michael j. walsh (from livejournal.com)]

Well, their logic is rather Vulcan: "Every Main Street business, big and small, has to collect sales tax when it's due. Every online merchant should too."

[scott-sanford.livejournal.com]

The flip side of "too big to fail" is "too small to succeed." While this can be a matter of scale or logistics, it rubs me the wrong way to see it manufactured by legislation.

[delosharriman]

Well, we've seen the revivial of nullification acts, for God's sake, so there's no stupidity that can shock me now.

[kevin-standlee.livejournal.com]

Urgh, yes. You would think something over which our country fought a (literally) bloody civil war would be considered completely and totally settled for good, wouldn't you?

Of course, I reckon that you have it even worse, you might say, living where you are surrounded by people who really do believe that they have either the unilateral right to secede or to split into five separate states (neither is true, and the latter is a misreading of the act that annexed Texas in the first place). OTOH, I've moved to a place disparagingly nicknamed "Ferntucky" for its supposedly redneck, uneducated, hick attitudes, so maybe I'm no better off.

[delosharriman]

On the other hand, that's just kind of in the water around here — most everybody plays with the idea for a little while, then sets it aside as it becomes obvious it just doesn't make any more sense than in the days of Sam Houston. And the whole credibility of the idea is torpedoed by the way in which Governor Goodhair, who's been the leading exponent of that particular brand of stupidity lately, runs snivelling to the Feds he affects to despise whenever something bad happens. To see it elsewhere is much more disquieting.

[michael j. walsh (from livejournal.com)]

Here's a synopsis of the current proposal: http://www.marketplacefairness.org/what-is-the-marketplace-fairness-act/ (http://www.marketplacefairness.org/what-is-the-marketplace-fairness-act/)

Here in the book biz, the American Booksellers Association has been pushing for this "level playing field". Anyone who thinks that collecting online sales tax is going to cause anyone to rush to their local bookstore ... well, they don't understand why people buy stuff online.

A few thoughts:
- consider the sales taxes that Amazon will be collecting. Think of it a free loan that earns interest.
- There has been speculation that Amazon is toying with the idea of same day delivery. With sales collection there's nothing to stop Amazon from building more warehouses to that end.
- I do wonder how the merchants in the 5 state without a sales tax will take to audits from the 45 states.

[michael j. walsh (from livejournal.com)]

Harrumph - that was suppose to be a clickable link.

[scott-sanford.livejournal.com]

I can see it pushing people toward Amazon - which hardly needs any more help. The reasons to shop at local bookstores are different.

I do like local bookstores. Of course, one of my local bookstores is Powell's, which is basically amazon.com with a physical location and a store map to keep people from getting lost inside; I may not be well calibrated any more.

[michael j. walsh (from livejournal.com)]

I don't think the legislation is going to push many away from Amazon or pretty much any online company.

& having Powell's as your local bookstore is dreadfully unfair. I've been there .... oh my. That said, the bookstore landscape across the US is pretty bleak these days.

[lisa-marli.livejournal.com]

SFSFC I think has had it's Sales Tax Permit revoked AGAIN, because we didn't any sales last year. I think I got the Please Don't Revoke Us letter to them in time, but one never knows. We will collect Sales Tax at Westercon and some how get the money to them.
But for MythSoc, we stopped trying. We so rarely sell anything in California, most of our sales are through Amazon, that I've stopped trying to collect the money only to hassle with getting this small amount to the state. So when they cancelled that account I let it go.
And frankly, The Mythopoeic Society would have a similar difficult time with any other state. We mostly sell memberships (non-taxable) and a few books - $2000 in recent years, 3/4 of them to Amazon. Yes about $500 in personal sales all over the World. No state wants to deal with that.
But yes, the whole We need an Armed Rebellion because "Obummer" isn't doing exactly what WE Want, never mind they want different things at different times, It is actually scary. Glad I'm not president. Mind you if a liberal says the any where near the same thing when a Conservative Republican is in office we are called UnAmerican. But the Hate People are really pounding the drums right now and fomenting a whole heap of trouble.