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Should Taxes Be Collected on Amazon & Other Online Sales ?


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In reply to an earlier post on Jun 11, 2012 8:50:37 AM PDT
Mr. London,

If you are going to throw out a figure "51% of the US pop doesn't pay any federal taxes", then please show your work and tell everyone where that figure comes from.

The military budget is already being looked at for cuts, but to cut it "in half" would severely cripple our ability to defend ourselves as a nation. You assert another figure, "flying the President around the world on a 747 with an entourage of 500". Do you have the figures on whom is the President's entourage? There's a purpose to having a private plane for the President and SecDef.

If Fannie Mae and Freddie Mac were to shut down, the U.S. would likely be in a far worse situation with regard to unemployment, as you would be putting all their employees out of work, as well.

A flat tax has been pushed for by the wealthy for many years, and government has also been pushing for tax code reform, as well. Unfortunately, every time someone tries, it invariably complicates it more.

Supposedly, the USPS does not receive any government funding. The issue with the USPS has less to do with the cost of a letter or email or anything else, as many vendors here will state they use the USPS frequently. Their issues have more to do with poor management and hiring practises than anything else. When you hire people that have an "I don't care, you can't fire me" attitude, your work product will suffer. The bottom line with that is that the Postal employees aren't graded by accuracy or the number of items they properly deliver. They aren't even focused on service, which was their excuse for removing clocks in the Post Office. If you want people to focus on service, then put clocks IN, so people can see how fast they are serving people. No clocks, and one minute can seem like five. In Chicago, at least, the Postal employees are quite rude, and couldn't possibly care any less.

As far as a balanced budget for government, at least on the Federal level, that's virtually impossible, not only because of how far in debt we are, but also with the current armed conflict, it costs billions to send military personnel overseas. The housing mess was a result of bankers attempting to inflate their bottom line (bonuses) giving out loans to people they knew could not possibly ever pay back. It's like Enron, Tyco, WorldCom, Madoff, etc. They knew what they did would eventually come to bite them, they were just gambling they would still have money when everything came down.

Posted on Jun 11, 2012 9:28:59 AM PDT
Last edited by the author on Jun 11, 2012 9:30:49 AM PDT
duckles says:
The real issue with the post office as far as I can see it is that the congress requires them to do certain things like keeping open post offices that the postmaster general would like to close but NOT providing any funding for those mandates and setting rates via the "Postal commission". Those small localities would probably be best served by contract stations or just plain consolidation when they are not that far apart. Let the Post Office run like a real business and the management will do what is necessary to break even. I think it should have a non-profit organization status. As for the postal unions...well I think that what happened in Wisconsin probably points the way. I do know a number of postal employees who are quite service oriented. Get rid of the can't be fired mentality and the Post Office will run much more efficiently.

In reply to an earlier post on Jun 11, 2012 10:24:10 AM PDT
Last edited by the author on Jun 11, 2012 10:24:28 AM PDT
shiloh sales says:
Last year the state of Arizona added a line on the state income tax return for residents to pay a use tax for items purchased online and from what I believe on goods received from out of state.

In this mornings Arizona Republic newspaper was an srticle saying that even though most people were not aware of it, the state collected $1.5 million in use tax for the year 2011.

In reply to an earlier post on Jun 11, 2012 11:29:04 AM PDT
duckles says:
Those were the honest souls. I wonder how much they didn't collect.

In reply to an earlier post on Jun 11, 2012 6:02:49 PM PDT
Jordan L. says:
Hi Shadow, I was off on my 51% number, the number is 46.4%.

http://www.taxpolicycenter.org/taxtopics/federal-taxes-households.cfm

Now I'm sure everyone will flame me cause I use the headline # instead of the number after payroll taxes but the fact is that the US had a debt in 2008 of about 9.6 Trillion and now we are at 15.7 Trillion, in 4 years the debt has increased 6.1 trillion, I can only guess that some of the money went to "Fight Terrorism", some of the money went to other military programs, some of it may have been used to fund the banks during the bailouts, some of it may be going to the food stamp program and maybe some of it was spent on god knows what else but if as you say "As far as a balanced budget for government, at least on the Federal level, that's virtually impossible, not only because of how far in debt we are, but also with the current armed conflict, it costs billions to send military personnel overseas." then maybe the US government should file chapter 7 to get out of the mess, I realize that the government can't effectively do that but do you think that we just keep supporting this mess?

As for freddie and fannie, it would be tough to layoff all the folks there but are you saying that for the sake of their jobs that the US should continue to provide an artificially low interest rate on a 30 year commitment just so we can keep the freddie and fannie people working?

On the President and his plane, I don't have the actual numbers but I know there are atleast 300 in the secret service alone that are sent in advance and while he is anywhere outside the US, there is a press contingent that flies with the president and all the rest of the staff like drivers, cooks, cleaners and every other position, I'd bet 500 is a good estimate, I realize he has to travel private but every time he flies there is 2 identical 747's for him and there is a host of other aircraft to safe guard him, this may be required but it's still costly.

Again, while we are way off topic here, my only point, and this one is on topic is that if our government spends $100 then we need a budget that brings in $100 to offset this, in any given year or even a 5 year period we could run a deficit but over the long haul we need to balance out or face financial collapse, remember I never said pay the debt down to 0, I only advocated balancing the budget so that as GDP grows the ratio of debt to GDP will shrink. If we say "the interest alone is out of control so don't worry about debt" then for me personally I'd get my money to a safer currency, fortunately for the US the safest currency overall is probably the US dollar but certainly gold is starting to look reasonable even at $1600 an ounce. The ausi dollar and Canadian dollar look good as they both are resource rich but with Canada tied so closely to US via it's exports I think that currency can't support too much more than par.

So Shadow Fire, I'm curious even though off topic if you believe that the US can't ever balance the budget then what is the likely outcome for the US dollar? Inflation? Deflation? Stay the same? Abandon the US dollar? go back to the gold standard? I'm not trying to flame you I'm just really curious as I know what I believe but I also know that a percentage of what I believe is also completely wrong.

Posted on Jun 11, 2012 8:04:35 PM PDT
Last edited by the author on Jun 11, 2012 8:05:08 PM PDT
duckles says:
I thijnk you two are talking apples and oranges. Certainly the government can have a balanced budget or even a surplus in any given year. We just can't expect to have a balanced budget EVERY year like some of the tea party members are advocating. It certainly is possible to correct our course and work our way to a balanced budget and even a surplus. I felt that one of the things that the fed really didn't understand back at the end of the Clinton administration was how much a budget surplus acts like a brake on inflation and the economy. After all they hadn't seen a surplus in all their working lives. Therefore they were worried about inflation even though none was visible and started raising interest rates which was a second brake on the economy which started a recession.

In reply to an earlier post on Jun 12, 2012 6:05:02 AM PDT
Jordan L. says:
Duckles,

You raise a good point about a surplus causing deflation, or even a recession. I only want to see inflation and I think we could use about 5-8% for the next 5 years or so. I know that creates hardships but so much of the US economy is based on home prices and a bit of inflation will do wonders to personal wealth.

In reply to an earlier post on Jun 12, 2012 6:17:11 AM PDT
[Deleted by the author on Jun 12, 2012 6:18:36 AM PDT]

In reply to an earlier post on Jun 12, 2012 9:23:07 AM PDT
Mr. London,

We did read the link provided, but that link is not an accurate representation. It's a "think tank" website, which means that those numbers aren't coming from the government itself, it's their estimation of facts. Not the world's best source.

Not being in government, or finance, we can't say what would be the most effective way out of the current financial crisis, but it's far from "only" President Obama's fault, since the country has been operating in debt for decades.

With regard to Fannie and Freddie, there are other programs that the government could conceivably cut, and spare the unemployment rate. It's hardly the best solution to reduce unemployment by creating more of it.

We're certainly far from economists, and we wouldn't dream of trying to create solutions, because we leave that to smarter folk. We just know that creating unemployment to reduce it is asinine. Similarly, the U.S. has been in debt almost as long as it has been a nation unto itself. While your ideas of revenue=debt is logical for a business, it just fails to be a feasible solution (at least for now), not just because the size of the debt, and not just because "that's the way it is" (or has been), but just because it's almost impossible to do such.

Now, there are some ways to at least reduce to an extent. There's something to be said for massively lowering the salary that politicians receive and negate the ability to give themselves a raise, but of course, that won't ever happen. There's also something to be said about forgiving the debt of other nations, (yes, there's no way most of them would be able to pay us back anyway, but still...). As a company run by a Veteran, we would strongly oppose slashing the budget of the military, as our Veteran employees would be able to tell you that reducing budget kills readiness. Not a good idea. Throwing government money at the VA is also not helpful, since (at least here in Chicago), the VA has the same "you can't fire me, so I don't care" attitude. Money won't help their attitude. You need (like the Post Office) a way to actually track progress that doesn't include putting a piece of paper from one stack to the next. You need good people, too. Efficiency is what the government could use. The bank bailout was ridiculous. Automakers also could have seen the whole auto industry dying, too, but if people want to buy a big SUV, then who are they to tell you "no"?

With regard to your final question, we would need to consult our crystal ball for that, and unfortunately, that's in our other pair of tights...

In reply to an earlier post on Jun 12, 2012 12:37:29 PM PDT
Jordan L. says:
Well Shadow Fire,

I guess we'll never agree on some things, just to be clear though, I don't think I ever said that this was Obama's fault. I did state that since he has taken office the national debt has grown by 6.1 billion regardless of who is at fault. Debt is also not that bad if kept in check and that only matters as measured against GDP, if the US had a debt of $100 trillion but a GDP of $125 trillion then the ratio would be 80% and manageable for sure but if the debt is say 22 trillion in 2016 and the GDP is only 17 trillion then the ratio is 129.4% and much less manageable. If you are saying that debt growing faster than GDP is okay for any country over a long period of time then you are wrong so far 100% of the time unless you don't acknowledge Zimbabwe, Mexico, Brazil, Hungary and the other 25 examples here:

http://en.wikipedia.org/wiki/Hyperinflation

I know those are examples of Hyperinflation but the hyperinflation was brought on ultimately by runaway debt to GDP levels, right now the US is in the drivers seat but one day debt may cripple the US.

In reply to an earlier post on Jun 12, 2012 12:58:24 PM PDT
Mr. London,

Forgive us if we implied that debt growing faster than GDP is okay. To continue on that for a brief moment, the issue is that (especially now), with troops in China, Korea, Australia, AND Afghanistan, there's absolutely no way for the U.S. to ever hope to reign in debt, when just the cost of the actual bodies alone would total in the billions, if not more. That doesn't count the weapons systems, ammunition, other gear, etc.

Has the debt grown while President Obama is in office? Sure. We're still out there trying to fight wars in three different countries, while providing security forces to at least two others. How has Obama compensated? That's for the political pundits to speculate. Did he inherit a mess? Yes, but he's hardly blameless, since he hasn't done much to fix it as yet.

As far as the ratio of debt to GDP, the government needs to quit thinking that offering contracts to a few select firms authorised to do business with government is "creating jobs". However, it's also not all government's fault, either. When people that watch news hear, "The economy is terrible! People are in debt!", they listen and think, "Gee...I better not spend in case I get fired..." (or similar sentiments). It's a trickle down effect, and the news media doesn't help much with that...however, with people (and companies!) not spending, that means fewer companies want to hire, which also prevents the economy from noticeably shifting (which includes farms, manufacturing firms, etc). As far as unemployment rates, that's always been a "loaded" figure. When quoting people having jobs, they don't mention the person with the BA working for Dominos or the person whose unemployment ran out. It's a little misleading. Of course, there are plenty of companies that do well, in any economic climate.

Is debt good to have? Depends. Keep in mind, though, if you look at the history of the U.S., the country has been in debt for almost as long as it has existed. Can the change be made? Possibly. Probably. However, that requires a lot of politicians and government officials to be forced to agree and/or compromise. A LOT.

Again, we certainly don't claim to be economists or political pundits. Just a thought.

We also agree with Duckles and what he mentioned about how good an economic shape we were in at the end of President Clinton's term. Unfortunately, it didn't go very well after that, for whatever reasons...

Posted on Jun 12, 2012 3:38:15 PM PDT
duckles says:
I'd say there wer 3 reasons. First the fed raised rates causing a recession, second Bush pushed through large tax cuts as a "stimulus" and third we got attacked and the war on terror started and we didn't create any funding to support the spending.

Posted on Jun 12, 2012 9:05:06 PM PDT
Andrew says:
State can collect sales tax from amazon...then the sales will just move to smaller online sites that does not pay state tax.
When state start taxing those site too, then sales will just move to oversea sites. Then US will loss the work to oversea workers and the state/fed income tax plus the sales tax.
For example, when I don't buy bicycle parts from amazon, I move to smaller out of state sites. when that does not get cheaper..I go to wiggle.com in UK where the state can't impost tax. Who is lossing? america.
Also back to does it help local business? No! with sales tax equal to online, they still have overhead like employee in store, rent, etc etc...so they are going to die a slow death anyway. Only food and clothers etc will survive at local level...Electronic? not so much. price difference is too high.
So it's short sightness that state try to force tax on online trade. they could have give incentive to online businesses to open office in their state to make income tax and business tax.

Posted on Jun 12, 2012 10:00:42 PM PDT
duckles says:
Is it really cheaper to ship it from UK? Their shipping rates must really be low.

In reply to an earlier post on Jun 13, 2012 7:12:42 AM PDT
Last edited by the author on Jun 13, 2012 7:14:03 AM PDT
shiloh sales says:
Duckles, I don't know about shipping from the UK to the USA but shipping lightweight packages to the USA to the UK is very affordable. The person getting the package is responsible for any customs charges.

I just shipped a DVD that weighs 4 ounces to Denmark, "First Class Air Package" cost me $5.34, a good number of my lightweight items on Amazon are available for international shipping. My shipping credit for international shipping is higher than shipping credit to domestic sales.

In reply to an earlier post on Jun 13, 2012 7:20:52 AM PDT
shiloh sales says:
It seems like I only read about the states going after Amazon to collect taxes, are they going after Ebay as well?

Posted on Jun 14, 2012 5:42:14 AM PDT
income is already taxed, so spending that same money should not be taxed again, if they want to tax all purchases then they should eliminate income tax. otherwise it is double taxation. they even tax it again if you die then that person who inherits gets taxed when they spend it, what is that at least triple taxation? Its ridiculous! enough is enough

Posted on Jun 14, 2012 6:46:24 AM PDT
Last edited by the author on Jun 14, 2012 6:47:24 AM PDT
Marilyn C says:
Buyer. I buy almost everything but groceries (and then some dry goods) from Amazon. At Christmas I spend thousands and avoid the crowds and taxes.

What makes it preferable is the lack of taxes and shipping on most orders. The price on a comparable item is the same or somewhat less than local buying; but without taxes, it can make a huge diference. As long as I don't mind waiting for the product, it's a great deal. If they begin taxing, I will reduce my spending on Amazon and just go to the local Target or Walmart. The "great deal" goes out the window and there's no reason to shop on line. I'm sure I'm not the only one.

In reply to an earlier post on Jun 14, 2012 8:44:39 AM PDT
A. Rotar says:
YES!!! California has been collecting use taxes on online purchase for at least 5 years now on our state income tax return. I pay this every year, but people seem to ignore it. Maybe if people paid the use tax in CA we wouldn't be in such a horrible financial mess.

In reply to an earlier post on Jun 14, 2012 8:46:28 AM PDT
A. Rotar says:
It's not like the sales tax money is coming out of your pocket. You collect the money from your buyer and then you forward it on to the appropriate state.

In reply to an earlier post on Jun 14, 2012 9:58:45 AM PDT
shiloh sales says:
Many people have said they will stop or reduce their shopping on Amazon if they have to pay sales tax. You may not know this but what if the seller knows he has to pay tax on the sale of the item and knows many people said they will stop shopping on Amazon so the seller adds the tax into the selling price and you don't know it. You're still going to buy from the seller if the price you pay for your order is still a good value. You are still paying the sales tax but do not know it.

In reply to an earlier post on Jun 14, 2012 10:31:08 AM PDT
Jordan L. says:
If the total price of an item is better through Amazon then elsewhere people will still buy at Amazon, if the tax is 5% then the total disposable income they will have to shop for goods before the tax will be 95% of what they had before. but if a local item is $20.00 + 5% tax and Amazon is $15 + tax then Amazon will get the sale.

People can bitch about taxes all they want but the reality is if a tax is instituted then people will pay it unless they can find an underground way of avoiding it and the Government will work to eliminate the underground methods to the extent that they can.

In reply to an earlier post on Jun 14, 2012 11:05:45 AM PDT
bigE says:
I'm sure that if the government did such a thing, you can expect an uprising of the anon community. The internet was made for freedom and free market, if you remove this.just like the way that the people of Egypt had an uprising not in the same way, does not matter, give freedoms then take it from the people. Expect an uprising, enough is enough the government already spends too much of tax payer money on stupid pet projects. Stop feeding them try and shrink the government back to what it should be.

In reply to an earlier post on Jun 14, 2012 11:26:19 AM PDT
Last edited by the author on Jun 14, 2012 11:27:34 AM PDT
duckles says:
Jordan, I agree with your post. In addition some people will be willing to pay a bit more on Amazon for the convenience.

Shiloh, I'm not going to raise my prices for everyone just so I can pay taxes for one state. It would affect my sales more than collecting the taxes. I exist in a VERY competitive sector. If you are not at or near the best price, you don't sell.

In reply to an earlier post on Jun 14, 2012 12:02:19 PM PDT
DisplacedMic says:
yeah, not enough taxes is California's problem
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