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Internet taxes will raise consumer prices to fill state coffers

In the summer 2013 Heritage Foundation Members News, an analysis of the Internet sales tax is reviewed with some interesting conclusions.

First, is another inappropriate title for the proposed internet tax, the “Marketplace Fairness Act” – why do all liberal government taxes or restrictions on people’s actions, deal with so-called fairness?

The Internet tax would subject online companies to over 9600 tax jurisdictions throughout the United States, places where the business have no physical presence, making this proposal, in effect, taxation without representation.

Heritage Foundation President, Jim DeMint has noted, “a small business owner in South Carolina could face simultaneous audits from California, New Jersey and Hawaii, with no political recourse.”

The law is primarily being proposed to benefit tax-addicted states that always need more money to pay for bigger government and to reduce the competition for the large retail corporations and other special interests, thus raising the costs for internet providers and prices for consumers.

The Heritage Foundation’s daily Morning Bell e-Newsletter, and posts on their blog, The Foundry, is helping conservative lawmakers and citizens to keep informed on this measure and protect not only online businesses, but consumers from this new tax.

State governments, especially those who are going bankrupt like Illinois, always have their eye out for new ways to increase their tax revenue on the backs of taxpayers and/or consumers.

The tax-addicted states will never be satisfied, and of course, will continue to spend more than they receive, regardless of the increase in revenue due to another tax.

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25 Comments

  1. Interesting that when the Big Boxes came to town, and drove all of the small businesses out of business, nobody gave a hoot. By nobody, I mean politicians, of course.

    Now, all of a sudden, Dick Durban and company are all about the “fairness”! What a joke. Our leaders couldn’t tell the truth if it slapped them in the face.

    John

  2. Brian Opsahl

    John, big box businesses wiped out the small business when Ron Reagan changed the tax laws and rules so those big companys could overrun those little ones as time has proven out…

  3. Steverino

    Many of these companies already enjoy a plethora of tax breaks and incentives. Just look at the number of corporations in Illinois that are getting away with little or no state income tax while rewarding their CEO’s with rock star wages and benefits. Jim DeMint has taken the Heritage Foundation from a conservative think tank to anarchy stink tank.

  4. Brian Opsahl

    Why do you think Caterpiller never moved ….they only threatend to….then they got that big tax break…called extorsion..and wala.

  5. snuss

    Brian forgets that Caterpillar didn’t build their newest plant in Illinois, because of the poor business climate (it is being built in Georgia). See: http://online.wsj.com/article/SB10001424052970204880404577229252169260694.html

    I presume that they got enough of a tax break to justify not moving current operations.

    Notice that they are also building another new plant–in Texas.

  6. Brian Opsahl

    Those plants have more to do with logistics than the State itself.
    Around the Union circles Cat, is known for it’s anti-labor stances and down right rotten way they treat it’s workers and they are having trouble finding workers who put up with there tactics and low pay….that is a fact

  7. snuss

    Is that the Democrat/union talking points? See what Caterpillar told Illinois cities, who were trying to get the plant:

    “Please understand that even if your community had the right logistics for this project, Caterpillar’s previously documented concerns about the business climate and overall fiscal health of the state of Illinois still would have made it unpractical for us to select your community for this project,” said the email, which was obtained by The Associated Press.

    Are you having any trouble understanding that total and complete rejection?
    Read more at: http://www.huffingtonpost.com/2012/02/13/caterpillar-ceo-blasts-il_n_1273263.html

  8. Brian Opsahl

    No nuss your correct…but as I have said that company is not the great job it once was…they have a hugh turnover because of it…the pay is not great either and the bennys are not worth mentioning.

  9. Steverino

    Another wrinkle in the Illinois tax law allows employers to pocket state income tax withheld from a worker’s pay for up to ten years. It’s called diverting taxes for public projects for corporate gain and has successfully been negotiated throughout this state while police, fire and schools suffer.

  10. Brian, you may be correct, I don’t know enough about Reagan Tax Policies vis-a-vis big box operations to say one way or another.

    However, while that may have brought them here, there is a big picture that both pleases and silences Illinois politicians. Corprations may or may not pay enough taxes on their PROFIT’s to please everyone, but they rake in massive sales tax collections from consumers. They are cash cows for “tax and spend” politicians.

    This is why “fairness” was not a concern when the big boxes pushed out an entire generation of merchants. But then along comes the Internet and Illinois politicians see both a new opportunity to rake in money by the bushel, and they see themselves not getting their “cut”. Now, all of a sudden, “fairness” is important.

    It’s all about revenue generation. Any politician who claims it’s about “fairness” to “brick and mortar” merchants is a liar. Dick Durban says it’s about “fairness”

  11. snuss

    In a similar manner, gun control is much more about control, than guns. So-called “assault weapons” account for a miniscule number of murders, even fewer than bare hands and blunt objects. Yet, the gun-grabbers of the Left raise a hue & cry about how they intend to make us safer, with another gun ban. Concealed-carry hasn’t created “Wild-West shootouts” in the other 49 States, yet our benevolent Democrat overlords seek a highly-restrictive CCW law that will make it difficult (and expensive) for the average gun-owner to afford. And Gov. Jello wants even more restrictions, which would make it virtually unusable, except within walking distance of your home. When a politician says “fair”, or “safe”, your rights, and your money, are at risk.

  12. Juice

    The Chicago P.D. is now asking for tips on Twitter. Send me a tweet, I’ll drop my doughnut and rush right over.

  13. Brian Opsahl

    Does’ Juice have something against Police officers..? or do you just insult everything and everybody….just asking.

  14. Juice

    I just insult stupid ideas and news conferences that do nothing to solve problems. If they want people to help with crime, that is what Crimestoppers is for. That is still around isn’t it? Haven’t heard much about it. People will rat on others if there is money involved.

  15. Brian Opsahl

    Why would twitter be a stupid idea…it’s free, kids use it contantly…if it works whats the problem…?

  16. snuss

    For one thing, I believe your Twitter account can be traced, unlike Crimestopper’s phone calls. I can see defense attorneys demanding to know the source, and what the results might be, if they are released.

  17. Brian Opsahl

    Traced by who…? these defence attorneys already can do that nuss…

  18. snuss

    So, would you tip off the cops, if the criminal’s attorney gets access as to who tipped them off? I doubt it.

    Crimestoppers doesn’t have Caller ID.

  19. Brian Opsahl

    Again they do that anyway..it’s called a subpoena…nuss
    The more tools in the toolbox the better chance they get there man..

    I will ask my brother the policeman tonight and see what his opinion is…thats my expert

  20. snuss

    But aren’t you more likely to get tips, if the informant doesn’t have to worry about getting themselves, or their families, attacked and/or killed by the crook, or their friends?

  21. azguy

    You’re right Ted. When those local Rockford libs wanted to sell the sales tax increase for roads they talked about the “fairness” of out-of-towners who drove on Rockford streets paying their share. Oh wait, that was you and your compadres. You weren’t a liberal back then were you?

    • Ted Biondo

      Azguy, if you knew what you were talking about it would be refreshing, but you don’t. The sales tax brings in twice as much money $16M as the bond issues did at around $8.5M. Everybody pays the tax when they but stuff, except for food medicine and titles, etc. You then have to pay $3.5-$4.0M to some damn bank making the total cost $11.5 – $12M over 12 to 14 years, depending on interest.

      With the sales tax, the city gets all the money for infrastructure and city residents pay about $10.5 – $11M of the total sales tax, as the bonds are being paid off – there was nothing wrong with the deal, except that the city kept raising property taxes, not to pay for the road bonds, but to pay for union contracts and other things.

      The property tax rate would still have been 5 cents more if the city was still bonding for the roads instead of using the sales tax. It was about the cost, the money spent, not liberal or conservative – do you understand?

  22. Ted, whether a regressive sales tax or bonds paid off over many years thru property taxes is a better method of paying for roads is debatable by reasonable people. What I was trying to point out and evidently went over your head was the hypocrisy of your implying that liberals are the only ones using the “fairness” card when you are guilty of the same thing. Just like when you sold the sales tax for roads using the argument that the city could leverage “state money” by using that method. But your standard spiel is that there is no such thing as “state money” only the tax money they “steal” from the public. More hypocrisy. Do you understand? I understand this. You’re just another politician who says whatever works to sell your agenda.
    By the way, you never answered my previous questions regarding the roads sales tax. Are the roads better these days? Is a Rockford family of four living in a 100k home and earning 60k a year paying more or less towards roads repairs than they did before the sales tax increase? I’m sure crunching those numbers is child’s play for you.

  23. Let’s get back to your numbers. The city is getting 16m from the sales tax instead of 8.5m from bonds. That means that the sales tax is costing people a lot of money. Are the out-of-town shoppers paying the huge increase or is it mostly paid by Rockfordians? If I borrow $8.50 from you today and pay you back $12 by 2027 are you making a $3.50 profit after adjusting for inflation? So let’s throw in all the variables when discussing the issue instead of just the ones that favor your argument.

  24. If the sales tax brings in twice as much money as the bond issues, wouldn’t a 1/2 % sales tax been sufficient to replace the bond issues? Sounds like a revenue issue was turned into a “spending problem”.
    I missed the part of your reply that stated that city residents are paying approx. 3/4 of the total sales tax. Sorry. I guess the 1/4 paid by non-residents speaks to the “fairness” issue that was pitched to garner votes for the sales tax.

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