[mmasters]

Net taxes could arrive by this fall

The era of tax-free e-mail, Internet shopping and broadband connections could end this fall, if recent proposals in the U.S. Congress prove successful.

State and local governments this week resumed a push to lobby Congress for far-reaching changes on two different fronts: gaining the ability to impose sales taxes on Net shopping, and being able to levy new monthly taxes on DSL and other connections. One senator is even predicting taxes on e-mail.

At the moment, states and municipalities are frequently barred by federal law from collecting both access and sales taxes. But they're hoping that their new lobbying effort, coordinated by groups including the National Governors Association, will pay off by permitting them to collect billions of dollars in new revenue by next year.

If that doesn't happen, other taxes may zoom upward instead, warned Sen. Michael Enzi, a Wyoming Republican, at a Senate hearing on Wednesday. "Are we implicitly blessing a situation where states are forced to raise other taxes, such as income or property taxes, to offset the growing loss of sales tax revenue?" Enzi said. "I want to avoid that."

A flurry of proposals that pro-tax advocates advanced this week push in that direction. On Tuesday, Enzi introduced a bill that would usher in mandatory sales tax collection for Internet purchases. Second, during a House of Representatives hearing the same day, politicians weighed whether to let a temporary ban on Net access taxes lapse when it expires on November 1. A House backer of another pro-sales tax bill said this week to expect a final version by July.

"The independent and sovereign authority of states to develop their own revenue systems is a basic tenet of self government and our federal system," said David Quam, director of federal relations at the National Governors Association, during a Senate Commerce committee hearing on Wednesday.

Internet sales taxes
At the moment, for instance, Seattle-based Amazon.com is not required to collect sales taxes on shipments to millions of its customers in states like California, where Amazon has no offices. (Californians are supposed to voluntarily pay the tax owed when filing annual state tax returns, but few do.)

Ideas to alter this situation hardly represent a new debate: officials from the governors' association have been pressing Congress to enact such a law for at least six years. They invoke arguments--unsuccessful so far--like saying that reduced sales tax revenue threatens budgets for schools and police.

But with Democrats now in control of both chambers of Congress, the political dynamic appears to have shifted in favor of the pro-tax advocates and their allies on Capitol Hill. The NetChoice coalition, which counts as members eBay, Yahoo and the Electronic Retailing Association and opposes the sales tax plan, fears that the partisan shift will spell trouble.

more at:
http://news.com.com/Net+taxes+could+arr ... =nefd.lede

[Twilight]

I just misread "federal system" as "feudal system". Must be getting tired.

[Tyler_JC]

Good luck getting President Bush to sign on to a massive tax hike. Bush Senior passed a massive tax hike in 1990 and it killed the Republican party in '92.

Or, try to imagine a Democrat raising taxes in his/her first term in office. The GOP would love to dusk off the old "Tax And Spend" liberal label and crush the Democrats in 2010 or 2012.

[Falconoffury]

Great, more tax money to be flushed down the various Federal toilets. The biggest toilet being Iraq. I know Ron Paul would never pass something like this. He's not the answer to all of our problems, but at least he'll rein in spending on wasteful foreign endeavors. Then we won't need more taxes.

[cynicalheretic]

They make me laugh, how do they propose to tax email. I would like to see them fucking try. HAHAHAHA Politicians are fucking stupid.

That's all i have to say about that.

[eastbay]

They make me laugh, how do they propose to tax whiskey. I would like to see them try. HAHAHAHA Politicians are really stupid.

That's all I have to say about that.

John Swanwick, 1794

[cynicalheretic]

Completly different, any idiot can set up thier personal computer as an email server.

[eastbay]

Completely different, any idiot can set up in their back 40 a personal or neighborhood still.

[Tyler_JC]

How do they propose to enact this?

Tax email senders and put Facebook, Myspace, Amazon.com, etc. out of business?

Or tax email receivers and make 100 million people permanently pissed off at spammers for both filling their inbox and emptying their wallets.

It's a lose/lose.

[eastbay]

Oh I couldn't agree more.

This taxing email program will be a huge mess, much like so much of what the government does... which is why I wouldn't be surprised one bit to see it kick in in a few years.

It will create at least one more layer of government infrastructure to fund. Hilarious.

[eastbay]

... people could simply use the 'pm' section of boards like this as their personal (well, maybe not exactly 'private') email. Would that still be free?

[mlit]

Its not technically possible to tax email, the tie up in the courts and costs of collecting the data and taxes would would more than destroy any gains from it.

And people would start up services that they could say weren't technically email as they don't use pop or smtp but do pretty much the exact same thing.

[Baldwin]

So either the government invades the "internets", or they raise income and property taxes? It's worse than being between a rock and a hard place. It's as bad as Jesus being caught between Pontius Pilate and angry Jews....and we all know how that turned out...

That money will go to funding a war, paying welfare for all the colored people, or paying out social security to some baby boomer who'll use it to buy a Ford expedition to go to Florida in or a new motorcycle.

[eastbay]

Why not simply raise the gasoline tax which would allow us to eliminate a few other taxes. Plus, the collection infrastructure is already in place!

[I_Like_Plants]

This internet tax scare seems to come around every few years. I'll believe it when I see it.

[pitbull]

$this->bbcode_second_pass_quote('eastbay', 'W')hy not simply raise the gasoline tax which would allow us to eliminate a few other taxes. Plus, the collection infrastructure is already in place!

[Twilight]

I keep hearing the same tax rumours about virtual property. Don't laugh, but speculation in games is no different to speculation in "real" markets - it's all confidence-based, high risk, uses funny money, requires lots of reading and understanding, but if you're in and out at the right time, you make a return even though what you're trading is vapour.

What I don't understand is what's the point of attempting regulation. The likely tax revenues will be a lot smaller than the exaggerated claims you hear, and cost of implementation would be high. Structures evolve too fast, lifecycles are too short. Taxing the internet is nuts. Are governments really that desperate for the extra tax revenue? Are they just contriving reasons to keep their bean counters employed? Do they think a tax in one place will be viewed differently to a tax in another? Or is it a sign of diminishing returns on complexity, a system staving off collapse by adding new layers, a la Tainter?

[NoLogos]

Perhaps they will reluctantly give up taxing emails and just slap a huge tax on your internet access. It's one way to get people off the 'internets.' Maybe the bloggers and people downloading "Loose Change" are starting to really annoy TPTB. And the free wireless places? They'll have to start charging for code words to cover the tax, and they'll be allowed to collect a little extra.

Dunno what's the matter with me. How can I be such a doomer when it *rained* last night!

[Tyler_JC]

They already tax the internet!

There's a tax on my cable and broadband access. There's a tax on all telephone connections too.

Why don't they just raise that tax by a couple bucks a months? I'd be unhappy but I'd survive.

But God have mercy on the bureaucrat who tries to tax each individual email.

[peaker_2005]

Perhaps they'll charge the Inbox provider as opposed to the end-user, or only tax paid accounts?

How do they plan to solve the myriad jurisdictional issues with email?
For example, I have a hotmail account, but reside in Australia.

Taxing online shopping, however, is somewhat easier -- it's actually done here, and the charging of tax can be linked to location quite easily for such purposes.