Comment on Dr. Laffer’s recent Wall Street Journal opinion piece on taxing internet sales.
Sales taxes are legally due for in-state transactions. The online retailer (e.g., Amazon, etc.) does not have the obligation to collect these taxes due to the Internet Tax Freedom Act (ITFA), enacted in 1998 and extended in 2001, 2004 and 2007 and remains in force until 2014, as well as legal precedence from the 1992 Supreme Court case Quill Corp. v. North Dakota. It should be no surprise that these legally due taxes are not willingly paid when state’s lack enforcement for sales taxes. Generally sales taxes on the Internet are not collected by any online retailer unless a company has a physical presence in the state.
Concurrently, the Great Recession has left many states with balanced budget amendments reeling. Sales taxes make up to one-third of most state budgets. A convergence of government and competitive pressures are being forced against online retailers are being played out in a very public fashion through the media and public referendum.
Amazingly, Wal-Mart, Best Buy, Home Depot and Target have been actively funding interest groups, such as Alliance for Main Street Fairness, that often target large brick-and-mortar retailers as well as backing state legislative efforts across the country to attack what they say are online retailers (e.g., Amazon’s) unfair competitive advantage. States are looking for additional sources of revenue without the political burden of raising taxes in a down economy.
I agree with Dr. Laffer’s assertion that collection of sales taxes can reduce the need for income taxes. With willing accomplices from major retailers pursuing policy as a competitive pressure, I doubt states’ willingness to make that reality.
My brother Ryan is an excellent writer. He often gives books as gifts. I came across this article in the WSJ: A True Adventure at Sea and on Shore by Angus Phillips and was reminded of one of the great gifts he has given me over the years.
Two Years Before the Mast by Richard Henry Dana, Jr. is an amazing true story. Dana was part of the well-heeled Bostonian political class. He was in this third year at Harvard when he contracted the measles. Recovery was slow and his eye sight poor, so he decided to go to sea as a sailor. This class jumping was unusual. He and his family could have easily afforded a passenger trip; however, he determined it would do him more good to work. He left on the brig, Pilgrim, in 1834 and returned in 1836. Crossing the Horn twice and traveling round to California before the Gold Rush and before it was part of the United States. It is a fascinating tale of men, new worlds and character. I will agree with Philips, it is not an easy read, but it will grip you.
Low, low price of $0.00 on the Kindle. Happy reading.
Long time, no-post. Been busy in the good way. A trend over the past few years is talk of commoditization of products, features and generally everything. Is the current market seems to be headed towards rampant commoditization? Check these two excellent articles that say this is not true.
MIT Review: The Myth of Commoditization
WSJ: Raise Your Prices!
Interesting weekend read at the Wall Street Journal on a bond-trading specialist from Cantor Fitzgerald that wants to treat casinos like the stock market.
WSJ: Whether Bonds or Touchdowns, They’re Still a Gamble
Nice article on Gist and the impact of Office 2010. If you have not tried Gist, check it out.
WSJ: Updating Office on the Cheap
For more of my thoughts on Gist, check my earlier posts. 12Sided on Gist
I have been on a networking role lately. Found this today in the WSJ which sums up what I have been learning and re-learning.
WSJ: How to Network – Live & In Person
Been very busy and unable to blog as much as normal.
Solid read today worth checking out by Jessica Vascellaro in the WSJ Why Email No Longer Rules…
Solid read on the WSJ blogs on why you need to “ABC” “A, Always B, Be C, Closing” on you. Another great tidbit from over the weekend, “Do not focus on the role. Focus on you. If they are looking only for requirements on a job rec, you will be unhappy within 6 months — if you get the job.”
WSJ Blogs: Advice: After Years With an Employer, Jumping Back Into the Interview Process
Another read on Amazon’s private brands. I would love to think that the WSJ got inspiration from my earlier post Amazon’s private brands. Plus I re-learned that Pinzon is the name of the Spanish explorer who discovered the Amazon River. In reality, the new products and accounting for “general merchandise” are getting mainstream attention.
WSJ: Amazon Is Selling Designs of Its Own
Disclosure: The wife is employed by Amazon, but she steadfastly refuses to read my blog.