What we want v what we need?

I am an Amazon fan. I have a Kindle and love it. Most of the books I buy, I buy from or through Amazon. I appreciate the convenience, the customer care, and the competitive pricing.

I used to appreciate that I didn’t have to pay sales tax if I ordered through Amazon.  I am re-thinking this “benefit.”

Amazon shut down a distribution center in Texas earlier this year after Texas sought $269 million in sales tax.  That’s a fair amount of money.  The article alleges internet business takes away a lot of sales tax

The comptroller’s office estimates Texas loses $600 million annually in uncollected sales tax from all Internet-based sales. National studies put the amount of uncollected taxes at $7 billion a year at a time when states are looking at multibillion-dollar budget gaps.

In these days of really tight budgets at the national, state, county, and city levels, it doesn’t seem fair to me to expect the government(s) to continue to operate when businesses (and individuals) can get around paying the taxes on which the current level of services depend.

I’ve been becoming more conscious lately of buying products made either in the US or somewhere else with reasonable protections for workers.  Perhaps I will also need to move toward buying things only from companies that have the integrity to collect and pay sales tax.

2 thoughts on “What we want v what we need?

  1. Steve,
    I don’t remember the exact history of tax code and the internet, so I am going off of memory here some what. As I recall the government wanted to foster this new type of commerce, ‘e-commerce’ as a new way for goods to be sold and for revenue to be generated. They made a distinct decision to not levee a tax on the seller of goods on the internet. Some goods sold on the internet are due sales tax and some are not. The payment of that sales tax, is upon the buyer, not upon the seller. Why? I don’t know why it is that way, but that is my understanding. I do know it has to do with retail presence in a state. So when I bought a Dell online while living in IL, I was responsible to pay the sales tax, not Dell, because Dell has no retail presence in IL (or didn’t at the time).
    The problem Amazon is facing is that they are not really responsible by law to collect the sales tax, but that doesn’t mean that state governments facing short falls aren’t trying to collect.

    With that short convoluted ‘history’ out of the way, I think you strike at a deeper question, which is should we pay sales tax on goods we buy on the internet, and/or should the government have the seller collect that tax for them? It seems that perhaps having a lower sales tax, like half wouldn’t be a bad idea. That would still encourage e-commerce while at the same time collecting funds for governments that they might be missing otherwise due to the item not being sold in a traditional store. Would seem reasonable to me.
    Now, the other thing that you touch on, maybe not intentionally, is the overall structure of tax code and taxation in the US. Wow. Now, that is a can of worms!

  2. While I can’t be said to LIKE any sort of taxation, I do think that sales tax (at the state level, anyway) is a more-or-less equitable way to collect revenue. The reason is — if you don’t buy, you don’t pay; if you buy cheaper, you pay less. Also, in the current system, if you buy used, you don’t pay at all. Buying used is cheaper, keeps stuff out of landfills, and in many cases enables people to get better-quality products than if they bought new. How to collect that sales tax on internet sales is a sticky problem though. I think the issue is jurisdiction (where exactly does the sale take place — where IS cyberspace, anyway?) as well as the practicalities of enforcing the law.

    If you can get ahold of a copy, I recommend “The Tightwad Gazette” books. These are compendiums of years of newsletters by the same name. I think there are three volumes. The main focus is on saving money radically — but she also often addresses other reasons for “extreme tightwad” living, such as the reasons I mentioned above. (Maybe you can get them used on Amazon :)).

    Some of the best stuff in our house came out of garage sales, flea markets, or off of ad sheets like the Thrifty Nickel. Also, being known as a family who will gladly take other people’s castoffs has scored us some great stuff. No sales tax paid on freebies either.

    I’ll even buy a used book through an Amazon dealer if it’s been marked up a lot, if the price is right. I prefer pristine copies, but some of the books I need are darn expensive, and it is worth a bit of extra effort to wade through the yellow highlighter.

    Being a cheap person frees up money to give to others (not to mention money to stash in savings). That way, less goes to government so somebody else can decide what’s “fair”, less goes to our family’s personal stupidity, and more goes to people/situations that are truly in need.

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