Is the cost of our hobby about to go up?

W

W.T. Beck

Joined
Jul 9, 2001
Messages
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I read a story in the Atlanta Constitution newspaper the other day stating that the law that exempts internet businesses from taxes is about to expire at the end of this month. Also, it was said that Congress has not decided whether or not to extend the law. Alot of state governments are eyeing internet business as a source of tax revenue, so could it be that we will soon have to pay sales tax on knives we order from internet dealers?

I think alot of us here buy knives from internet dealers. Personally I estimate that I have bought 80 percent of my knives from internet dealers. Maybe we ought to be writing our congressmen, asking them to extend the internet tax exemption.
 
It is always nice to get away from paying taxes. The problem that I see with internet sales being tax fre is that it gives internet dealers an unfair advantage over regular retail operations. All businesses should have to compete on level playing field. I would love to see sales taxes removed completely (good luck with that ever happening), but if they are going to be there for the brick and mortar stores, then it is my belief that they should be there for internet dealers as well.
 
No 'Mail order' type outfit charges sales tax for sales out of state (I don't think). This has been the way it's been for as long as I can remember. I don't see Internet stores as really being any different than mail order outfits. The problem is that the internet is just too darn convenient.

Most of the big internet stores started out as mail order outfits (Brigade Quartemaster, SMKW, Cabella's, CTD, etc...)

Just my thoughts,

-John
 
So if I am in VA and an ordering a knife from an outfit in Cali, which State tax would I pay?? CA or VA? Doesn't seem right that I would pay a different percentage sales tax than my own state authorizes. Seems like this would really complicate things and I don't see it happening.

Keith, while I understand the thought of an even playing field, but sales tax for E-Commerce sites still could never come close to rent, electric bills, insurance, etc.. that B&Ms experience.
 
the traditional reason mail order (and by extension internet) stores have been able to avoid charging state/local taxes is due to the "excessive burden" of trying to calculate, collect and pay taxes to innumerable taxing authorities

thats what the supreme court thought ... therefore no taxes on mail/internet sales unless you have a substantial physical presence in that state

now states are moving to simplify their codes...and when that happens...do not be shocked if the supreme court rules in their favor

the "internet tax" you here about is related to taxing your internet service (be it dial up/ cable etc) and any service they provide that way

the internet industry got a reprieve on taxation due to the crash of the tech-market (IMHO) ... with tight state budgets i would be suprised if it got extended
 
I know with some vendors, take Dell for example, they only charge tax if they have a presence in that state. So for me, since they have kiosks set up in some of the malls, I get charged tax. Even with most knife dealers I've with, if I'm in the same state they still charge tax, even over the internet. I'm sure they'll start making vendors charge tax no matter what, it will just be a matter of exactly how they do it.
 
The issue of internet taxes might be raised but its implementation would be very intrusive and cumbersome. I suspect the only thing that this would produce is an instant growth in our underground economy.

n2s
 
President Bush has stated repeatedly that he opposes taxing the internet or e-commerce.
 
One of the things most states and/or counties fail to see is the direct relation between high sales tax and people voting with their dollars and buying elsewhere. The most noticeable is the tobacco taxes. People who want to exercise their adult prerogative to use tobacco without paying de facto fines in the form of excessive taxes (for the children, of course...:barf: ) often buy tobacco from internet dealers or from Indian tribal internet outlets and avoid those taxes. (Well, the federal government has been for 100 years trying to convince the Indians to open businesses and once a few tribes hit on a moneymaker, here come the state governments whining "not fair!":rolleyes: ) So, here come the state governments, howling mad about being "cheated" out of the opportunity to steal money out of the pockets of people already overtaxed. Most people don't mind paying maybe up to .75 cents a pack for cigarettes, but when you start talking about $1.00 and up, people are going to rightfully look for business elsewhere. And here come the state governments, again, "justifying" these taxes on programs for "the children". Oh, spare me!:rolleyes: So, the state governments found a ring of Hezbollah operatives smuggling cigarettes into New York and said, "Aha! People avoiding taxes fund terrorism!" Yeah, well, I might say that excessive taxes are a form of economic terrorism by a state. Besides, who created the market for those Hezbollah operatives? The state did. Without their excessive sales taxes, the market just wouldn't have been there. This is because Hezbollah was buying the cigarettes at a regular price in a low sales tax state, Kentucky or North Carolina as I recall, and making their profit by selling them at a mark-up that was still well below the cost of taxed cigarettes. It was the exhorbitant sales tax that made the profit margin for smuggled (but legally purchased) cigarettes possible in the first place. With a .75 cents per pack tax, the mark-up for the smugglers probably wouldn't be able to favorably compete after they factored in the shipping and their labor.
 
I think it would be better if all we had to pay was sales tax. Get rid of income and property taxes. That will allow those who want to save money to do so and also encourages it. You would only pay taxes when you spend your money.

But since that is not going to happen we ought to keep internet sales tax free.

KS
 
Sales tax is a repressive tax. As Mr. Keyser Soze points out, it taxes people who spend their money more than those who save. But, in general, the wealthy are able to save a greater fraction of their income than the poor.

If you're barely scraping by on minimum-wage, you've probably got to spend for retail -- that is sale taxable -- purchases about 100% of your take-home pay from every pay check just to live day-to-day. So, you'd be paying tax, sales tax, on 100% of your money.

But, if you're a highly-compensated executive, you may be able to save/invest a substantial fraction of your take-home pay and you may also get a fraction of your compensation in non-cash forms. For example, you may get your golf club membership paid for by the company, a company car, and you may get to borrow the corporate jet for your family vacation, stock options, stock grants, extraordinarily favorable loans from the company, etc. So, you end up spending for retail -- that is sales taxable -- purchases is much smaller than 100% of your take-home pay. So, you end up paying tax, sales tax, on substantially less than 100% of your money.

So, even though he may spend more in terms of dollars, the highly-paid executive ends up paying sales tax on only a small fraction of his take-home pay while the poor minimum-wage worker has to pay sales tax on virtually 100% of his. That's not fair. That's repressive.

In general, sales taxes are a bad idea. They are a tax that unfairly burdons the poor.
 
I see where you are coming from Gollnick but overall I think a reasonable sales tax would be fine with the elimination of any income and propery taxes. If they got rid of sales tax a flat rate income tax versus the variable rate nightmare that now exists would benefit everyone. As a note I am not a highly paid corperate exec and do not have millions in the bank. I think a flat rate income tax would be very fair but the whole property tax thing must go. When I bought my house I want to own it, not pay the goverment every year for the privilige of living in and maintaining it.

Of course this is knife forums and not political forums. I could go on and on so lets get on with what we like to talk about KNIVES.

KS
 
Property tax is one of the most reasonable taxes out there.

Why?

Because, for the most part, the money goes to your local city hall where locally-elected officials, poeple you could probably talk to if you wanted to, put it to work for you buying things that you want and need such as the road that lets you drive to your house, the fire engine that comes if your house is on fire, the police officers who patrol your neighborhood trying to (and succeeding at) reducing crime in your neighborhood, the street lights that light your neighborhood at night, and the park down the street where your children play.

Contrast that with Federal Income Tax which is sent off to Washington DC where a group of legislators -- only a few of whom you actually have any input into the election of -- spend the vast majority of it on things that you'll never even see.

And what's the bit nightmare with graduated income taxes? They do exactly what you originally stated that you want taxes to do: tax the rich who can most afford to pay more than the poor who can least afford to pay. And I don't know where this idea came from that graduated taxes are complicated or that reducing the number of brakets simplifies things. It's all built right into the tax tables. Unless you're making a huge pile, you just look down the table until you find your income and there on the same line to the right of it is your tax. If you can look a number up in the phone book, you can use a graduated income tax. And it doesn't matter how many brackets there are; all of the complexity is built into that one, simple-to-use table. A graduated tax and one with many brackets makes more work for the accountants and lawyers who prepare that table. But, if the truth be known, it's not very complicated for these people; this is the sort of thing they do for a living and they've got calculators and computers to help them. Once they've spend a day or so making that table and checking it twice, tens of millions of us can use it to figure out our taxes in a matter of seconds. What's the nightmare in that?
 
Gollnick, that's a vast and vicious socialist propaganda conspiracy theory of lies intended to disillusion and obfuscate the citizenry. Regressive taxes are meant to be paid by all for the greater good. The wealthiest people in America number among themselves the small business owners and corporate world leaders of the future and as such they MUST retain a much greater real percentage of their own hard earned income because there are so few of them to do all the work required in order to create jobs for the good of the country, and so tax incentives must be justified in order to keep America the world leader. Honestly, if you want to consider minorities, aren't wealthy people truely a minority? Just think of the enormous financial burden they have! Why they have such huge financial exposure and risk they MUST be protected or they could realisticly cut back on investment and spending which would cost numerous jobs! Plus, if they lose all of their money, where would it go? Overseas and dale, lest there be any doubt. The well heeled and well connected wealthiest, as is well appreciated, also bear the onerus financial burden of the well oiled election process, which they may well quit paying for if they don't get their right and just lions' share, which is bought and paid for the old fahioned way. It is the great American Way that many may share the sacrifice for the good of the needy few so that the burden is no more than normal. And there is faith in the American working person, that he and she may carry any burden at all, that no sacrifice is too large to bear. It has always been thus, and so it shall be, as long as we remain the world leader in family values. There is always a big-loss lag time associated with any fundamental hemmorage in accepted economic policy logic, but it must be fully implemented and founded in faith in order to achieve maximum results for the intended benefactors. And, given time, there will be a vast torrent come trickling down to enrich one and all everafter. Then deficits will truely be a product of the failed policies of years past come home to roost. The inexoriable conclusion is that internet taxes, invented by another, are the only fair way to finance future foreign policy, so that all may share in the quest to keep America strong.
 
The law is that if a seller has a brick and mortar store in a state, they must charge sales tax on all sales in that state, whether it be from that store or over the internet or mail order. They do not charge tax on sales outside that state. Not usually, any way. I think there are some internet sites that actually have, as a "courtesy" to some states, started charging state sales tax even in cases where they do not have a physical presence in that state.

As far as tax in general is concerned, the founding fathers would freak out if they saw how much tax we are paying. Figure your total tax burden, and it is depressing. Income, sales, excise, property, and corporate taxes. Yes, you pay corporate taxes, since they have to charge their customers to cover that expense. And to think, the Boston Tea Party was over a measly 10%.

As for sales tax, it is repressive, but it is not regressive. It is actually fair, if done right, since the rich tend to buy more expensive items, and thus pay more of the taxes. The key is to make certain essentials, like groceries, non-taxed. Here in TN, groceries are taxed. That should change.
 
One more thought: We should have elections April 16th. And not have taxes deducted from every paycheck, so everyone has to write a check to the government every year for the full amount, so it becomes clear just how much it costs. Things would change.
 
People don't realize how much taxes we pay. If you shop for some item, you do so in a store that has electric lights. The store's light bill has tax on it. The store employes people, so it pays payroll tax. And, of course, the store pays property tax. The store, of course, adds the cost of these taxes to every item it sells. So, you're buying merchandise with money on which you've already paid state and federal income tax, you may then pay state and local sales tax on the whole purchase amount. But, part of that purchase amount goes to taxes paid by the store. So, you're paying sales tax on the store's payroll, property, and utility tax. You're paying tax on tax! And, in fact, what you're doing is taking money that's already been taxed (you paid income tax) and using it to pay tax on tax! That money got taxed three times! But it doesn't stop there because your employeer had to pay payroll tax on your income before he even gave it to you. So, you're using money that's already been taxed twice and using it to pay tax on tax. It's not unusual for money to be taxed five or six times in America.

Some countries, in Europe especially, roll all that into one tax, a sort of super sales tax, called Value Added Tax, or VAT. Americans often cringe when they see the VAT rates in Europe, but, in reality, we're not really paying that much less when you look at how much we pay tax on tax on tax here in American.
 
Don't take this as a defense of sales taxes, but what most folks don't seem to realize (or choose to ignore) is that, in most states that have a sales tax, the purchaser is legally obligated to pay the sales tax on any taxable item they purchase out of state. This includes items purchased on the internet. Granted that at present this requirement is almost impossible to enforce, at least where small purchases are concerned, but that does not change the fact that failure to comply is tax evasion, even if you, me, and everybody else does it. From the states point of view, if internet sales are perceived as having too great a negative effect on tax revenues, the alternate to a law taxing internet sales may very be a requirement that credit card companies and outfits like PayPal disclose all intersate transactions.
 
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