Opinions on current affairs moving the nation and world.
Friday, December 17, 2010
Online Sales Tax
There is controversy surrounding the avoidance of sales tax from our on-line purchases. Thanks to the utter failure of congress in dealing with the real estate crisis, the states are in a financial abyss that they have zero control over... It is now acknowledged by the "experts" that real estate values, and along with them, real estate tax revenue, will not again reach 2006 levels before 2022-2025! California alone has experienced over 3,500,000 foreclosures and short sales... with more than double that in "the pipeline"... thus to date, the state has lost over $8,750 Billion in real estate taxes. Thus the states desperately require keeping/collecting whatever sales tax revenue they are due...
A simple national online (only) sales tax, of say 5%, might be in line. The retailer would collect this tax, forwarding them as a separate line item in its already mandated quarterly reporting, to the treasury. The only additional forms being, a simple source of funds record sorted by the first two digits of the zip code identifying which state generated the sale (no specific mailing address allowed). .The treasury would then retain a 1% "collection fee" and forward the balance due to the various states. The various states would be required to accept these taxes as payment in full, waiving the right to seek any differential from the purchaser. These funds would be separate from, and not subject to any other legislation or the whim of congress. Granted, the states will receive less than their normal tax rate, they would also be relieved of the high cost of chasing down and collecting the tax.
We keep hearing that the "rich" ought to pay their fair share of taxes...With an online sales tax, we all pay our fair share of taxes due... at the same time avoiding the hypocrisy of "getting the wealthy"...The online tracking firm, Comscore.com, estimates that there were over one-billion dollars in online sales for cyber-Monday alone! At 5%, this equates to $50 Million in revenue.