U.S. Senate Democrat wants Internet sales taxes

“A Democratic senator is preparing to introduce legislation that aims to end the golden era of tax-free Internet shopping,” Declan McCullagh reports for CNET.

“The proposal–expected to be made public soon after Tax Day [April 18]–would rewrite the ground rules for Internet and mail order sales by eliminating the ability of Americans to shop at Web sites like Amazon.com and Overstock.com without paying state sales taxes,” McCullagh reports. “Dick Durbin of Illinois, the second most senior Senate Democrat, will introduce the bill after the Easter recess, a Democratic aide told CNET. ‘Why should out-of-state companies that sell their products online have an unfair advantage over Main Street bricks-and-mortar businesses?’ Durbin said in a speech in Collinsville, Ill., in February… Durbin’s bill will be called the Main Street Fairness Act.”

“Making matters more difficult for the pro-tax forces is the decision by Rep. William Delahunt, a Massachusetts Democrat, not to run for reelection last year. Delahunt was probably Congress’ most enthusiastic proponent of Internet sales taxes, and it’s not clear a Republican-controlled House will be as eager to embrace the idea,” McCullagh reports. “One early indication: Rep. Dan Lungren, a California Republican, introduced legislation in February saying that allowing states to levy “onerous and burdensome sales tax collecting schemes on Internet-enabled small businesses that do not even reside in their state would adversely impact hundreds of thousands of jobs.” Former GOP presidential candidate Ron Paul is one of the sponsors.”

McCullagh reports, “The Direct Marketing Association, which sued Colorado last year to block a state tax law from taking effect, is preparing to rally opposition to Durbin’s legislation… Support for Durbin’s forthcoming legislation is likely to come from the Alliance for Main Street Fairness and like-minded companies including WalMart and Best Buy.”

Read more in the full article here.

[Thanks to MacDailyNews readers too numerous to mention individually for the heads up.]

85 Comments

  1. A Democrat proposing a new tax? No way!

    Hey geniuses – maybe you want to focus on the far more serious huge looming problems facing our country? This is like a guy trying to fix a squeaky window hinge while his house is on fire.

    1. um… don’t most Very Serious People agree that deficit/debt is the country’s biggest problem? Or is the “house on fire” you are referring to, something else?

      1. You’re not seriously suggesting that a state sales tax on internet purchases (squeaky window hinge) is going to somehow tackle the national debt (house on fire) – are you?

        Particularly as (at least from what I understand) state sales taxes can’t possibly do anything to pay down our national debt?

        Sure, it might help some of the states involved. And that guy might finally get that hinge to stop squeaking, before the whole house comes down around him.

        1. What tax increases? The only tax increase I’m aware of since Bush stole the 2000 election was when they wanted to extend the Bush tax cuts recently, and in that instance, the only people who got their taxes raised all made less than $40k! From what I can tell, we’d all be better off if we raised taxes on the Koch brothers (and gave them the middle finger in the process).

        2. Um, income taxes are lower than almost every civilized country and lower than they’ve been since they were invented. No, I don’t get it. Why would you STOP SPENDING when SPENDING is what buys civilization: police, public safety, environmental protection, roads, bridges, transit, I could go on. All come from SPENDING! If you want to see what a country looks like without SPENDING, I suggest moving to SUDAN! Without SPENDING, you can live in a locked compound, own as many guns as you like, and hire all the private security you like without paying any taxes! Also, you can afford an armored Hummer to naviate through the crowds of starving people and over the dirt potholed roads to get to the armored mall! Yes, I’d like to see a world without SPENDING.

          Moran…

  2. Bloodsuckers. How much is enough for you fools to fritter away on bloated, ineffective, dependency-inducing, bureaucratic, centralized garbage?

    Interestingly, the exact same question could rightly have been posed to executives during any Microsoft shareholder meeting held in the last 10 years.

  3. I know we need to raise the tax revenue, but it needs to be income taxes, not sales taxes. Sales taxes hurt the worst off proportionately, whereas if we raise income taxes on the highest earners, as well as capital gains taxes, that levies the sacrifice on those most able to pay.

    1. A flat income tax with vouchers for lower incomes is the fairest possible system. No loopholes.

      Because it’d be so fair and so easy while also increasing tax revenues, it’ll never happen.

    2. So you are saying, tax those that work hard and earned it, and don’t tax luxury items bought with welfare dollars by those who want to live off me.
      So I pay taxes on what I earn, then a chuck to keep others in welfare, then again when I buy goods. You are saying those on welfare shouldn’t pay any taxes at all?
      Spoken like a true Democrat!

      1. No, I’m saying we stop pretending that we can handle the deficit by hacking and slashing at programs that benefit the middle class (I’m not even talking about welfare now – I’m talking about education and labor) and actually consider raising taxes on the people most able to pay, which incidentally, are people who didn’t earn it, like you think they did, but they like to lie and act like they did. But if we do want to cut something, we should cut something that deserves to be cut. Say, the Pentagon.

        There, now I’ve actually spoken like a Green. 🙂

      2. I agree. People receiving welfare — the few of them still eligible — are wasting all this money on luxuries. Stuff like food and medicine and rent and gasoline. How dare they!
        (By the way, people on welfare pay all sorts of taxes other than income tax, including sales tax, property taxes, utility taxes, and so on and so on).

        1. Yeah, not to mention that when those on welfare buy food and medicine and gasoline, it keeps money in circulation and keeps the economy afloat – unlike a tax cut for the rich which allows the 1% to just park their money somewhere.

          And not just welfare – it’s unemployment benefits, too!

          1. You are clueless. When have you ever received a job from a poor person. You scum bags love to live off your neighbors hard work. F you. Go earn your own money and get the GD government out of our hair you freaking losers.

        2. LOL. Have you really taken the time to go into the “poor” areas to see what they “buy”. I used to be a social worker that dealt with food and medicine issues for the poor and nearly 50% of the “poor” homes we went into had large screen TV’s, Cable or Satellite, many had fridges full of alcohol and the places stank of smoke. There were many places where the elderly truly needed help, but so many of the places were just scammers. One stop I made actually had friends over discussing how to double dip in their welfare checks and how to get free gas from a local dealer by faking papers. If they spent 1/2 their time starting their own business to make money, they wouldn’t have any problems. After 1.5 years, I had enough. Equal opportunity does not equate to equal outcome. You have to actually want to get off your butt and do something.

          1. I’m taking a Sociology class, and this is a prime example of the Fallacy of Personal Attack: the notion that poor people are poor because they don’t work. While there might be a few dramatic instances (another fallacy), a large majority of the poor ARE hard working people who are barely scraping by because the system that has been created doesn’t allow them to escape it.

            As far as people buying big screen TVs (and iPods, and iPads, etc…), there is a theory that there are certain businesses that centre their profits on the poor. An example here in Canada is Easy Home: http://www.easyhome.ca/easyhome/home.aspx.

            The poor would like to appear that they are not poor, and buying a big screen TV eliminates that. Easy Home will advertise that you can own a TV for $22/week! Wowzers! What they don’t tell you (at least not in big print or readable language) is the interest that must be paid just to “rent” the TV out, upon which afterwards, you must buy the TV at full price. The consumer ends up paying sometimes double or triple the cost of the original item. It’s very shady business.

            Be careful who you lend the blame to.

            1. Oh, so because the poor don’t WANT to LOOK poor and to feel better about themselves, they need to hurry out and pluck down, at the time, $3k to 4k for a big screen TV, or pay $100 a month for that one TV? IF they spent that $100 on a normal TV, had gotten the “basic” cable instead of the 300 chanels, maybe they could have afforded the things like diapers or food for their families. Having seen this first hand, I understand your question, but reality bites and most people are used to the made up for prime time TV joke of reporting the poor and not interested in how the game really works. I can’t tell you how many times I was told that “I don’t want a job”, or “why work, you bring me food”. Yes, I know there is true ‘need’ out there, but what happened to those times when the ‘down trodden’ pulled themselves up by their bootstraps, worked hard, and moved ahead. Oh yes, they are the terrible “rich” people now. Don’t get me wrong, there are very poor, and very helpless people out there that need our help and care, but by my findings, about 50% are just coasting on the free stuff so they don’t have to do anything.

      3. Cire,

        You parrot your right-wing radio heroes about supporting people on welfare, but if the truth were known we could probably refund all of your federal taxes (all $500) and never miss it. Welfare people buy luxury items? Really? Gucci bags and Rolex watches? Or BMW perhaps? I have a friend who’s a single mom with 6 kids and a deadbeat ex-husband (the 6 kids were his idea), and believe me, if she gets a quart of ice cream with her food stamps that’s a luxury to her. Get a grip. The corporations and their pimps have you arguing and voting against your own best interests. A 10% tax cut for you is a few hundred dollars at most while BofA saves billions of dollars. Wake up.

        1. She shouldn’t have had 6 kids to begin with. There’s much more help out there than that Zeke. And she can do things to make her situation better. Stop spouting your communist PMSNBC talking points you Marxist.

          1. If I had half a cent for every time a partisan-bot called somebody a communist or Marxist without having any clue what either of those words meant, I’d be a multi trillionaire.

            Anyway, the solution isn’t to raise taxes OR to stop spending. It’s to start dragging people away to prison when they charge the government $100 for a screw that cost a few cents to manufacture, or when they ask for millions of dollars in funding for some program that at worst would only incur a few thousand dollars in expenses. Also, if you’re a politician and you greenlight any of these things, or perpetrate them yourself, that should mean insta-prison for you.

            But this would require the system to not be corrupt, so it will never happen.

    3. We don’t have to raise taxes. We need more revenue not more taxes. We need to STOP SPENDING and take those steps to increase revenue without raising taxes.

      In fact, in many cases, cutting taxes will increase revenue. For example, our capital gains tax in one of the highest in the world. This is why many companies move overseas.

      CUT the corporate tax rate and we’ll increase treasury revenue because more businesses will stay and come back to the USA.

      There are many other examples of cutting taxes to increase revenue.

      But regardless we have to stop spending.

      1. Um, the whole definition of revenue is that it is _income_, meaning that the only way to increase revenue, or income, is to raise taxes. Or fees, or close tax loopholes, or the like. Cutting spending cuts expenses, but it doesn’t increase revenue, and if you try to solve your budget problem by only cutting expenses, eventually, you create more problems than you solve.

        Cutting taxes has not prevented jobs from going overseas. That’s why a lot of the hemorrhaging of jobs happened under the Bush years, when they kept advocating for tax cuts. And why was the Chamber of Commerce advocating for the pro-tax cut politicians? Because they would also make it _easier_ to outsource jobs overseas.

        From a pure economic point of view, spending money on government services, particularly unemployment benefits, gets money circulating into the economy, gets people spending more, and that is what creates more jobs. Straight tax cuts do not. And we certainly shouldn’t be pushing for massive tax cuts for the rich and then turn around and whine about how we have to cut services for the middle class because of the deficit.

      2. Tax cuts are spending bills. Make the rich and corporations pay their fair share by closing tax loopholes and the revenue problem is fixed without raising taxes. The folks crying for tax cuts don’t want to admit it, but they don’t pay even close to what their tax bracket calls for. That’s the real joke, and it’s on everyone, including the small businesses that pay their taxes and vote Republican.

  4. Dick Durbin!… Figures that Democratic piece of s*it would do something like this! Stop spending you idiot! Read the Constitution you dumb f*ck… “powers not granted to the federal government nor prohibited to the states by the Constitution are reserved to the states or the people.” You know, the tenth amendment, part of the Bill of Rights. You know “Rights” of ‘We the People’!

    DICK, you need to retire!

  5. This is not a Federal tax. Here is the issue, when you shop locally, you are supporting your local region. With Internet sales tax, there was a moratorium to not have it in order to foster growth in that sector, to the detriment to local shops. It’s about time to make it fair for the local shops, not add another tax. This tax goes to your state, county and city, which desperately needs it. It’s a liability that almost everyone was paying prior to Internet commerce. It’s a correction, not something new.

    1. Why do they so desperately need it?

      Because for the last several decades Democrats have worked to create a dependency class (votes) and unionized public sector employees* (more votes) and any state with a large inner city population is broke or soon will be because of it. Look at New York: the whole (up)state works, so that people in Queens and the Bronx don’t have to – meaning they get to live in subsistence squalor until they DTFD.

      Democrats never make their welfare work really well or their dependents might not be dependent enough and –gasp!!!– might stop voting for “the Democrats, protectors of the little people.”

      If states (and feds) cut spending and would work on minimizing the dependency class instead of increasing it, they wouldn’t “desperately need it” to waste on Durbin’s and all of the others’ pork.

      * Against the advice of FDR, no conservative he.

    2. Well said. Someone on this list actually thinks before posting.
      I hate paying taxes, and buy lots of my electronics on Amazon to save the 8.75 percent rate in my local jurisdiction (and mostly to avoid dealing with the horrible service at BestBuy). Having Amazon collect tax and reimburse local governments is fair and appropriate. Any jobs lost on the Internet side will be made up by jobs added on the local side.

  6. @Eric Spoken like a true Democrat. Tax those that work for a living to give to those on welfare. Indeed, those unwilling to work and claiming welfare should not be taxed when they buy their luxury items using my hard earned tax dollars.
    Free iPad for all claimants.

  7. Investment bank execs sometimes “earn” $20-$40M/year. GE pays no taxes. Met a hedge fund guy retired at age 40 with hundreds of millions. The Waltons and Mars’ and Kochs are billionaires and never worked a day. Tax these people instead.

    1. Ironically, with more and more taxes levied by the federal government, more and more savvy GE-type companies will figure out ways to park money outside of the US, thereby sucking infrastructure, jobs, and liquidity out of the US too. The guys stuck with the higher taxes will be you and me.

      As for what private banks pay their CEOs, it’s up to them, they’re private enterprises. It would work, if the government didn’t bail ’em out when they were in trouble.

      As for the Waltons of the world, guess what? You build up an empire like Walmart, you get to leave it to your kids as an inheritance if you want to.

      1. In correspondence among the founders of this nation there is general agreement that one of the great evils of European society was the phenomenon of inherited aristocracy. Jefferson, Adams, and others intended high tax rates on wealthy estates to prevent such a thing as is now occurring.

    2. The late Senator Russell Long used to say, “Don’t tax you, don’t tax me, tax that man behind the tree.”

      The top 5% of earners already pay about 57% of taxes. The bottom 50% pay in total about 3% of taxes.

      What’s wrong with that? If the top 5% of earners have a bad year, tax receipts drop sharply.

      More ominously, we develop a culture where the politicians find it easy to get support from the bottom 50% (who don’t worry about the cost because they don’t pay it) by ever increasing spending—like the free bread and circuses in the old Roman empire. Ulimately, that culture will crash.

    3. Sam Walton worked his butt off to build his empire and continued to live humbly. Unfortunately, the same cannot be said for his heirs. However, what Sam created has generated a lot of local taxes and employment. Since Walmart is in almost every state, I suspect Walmart collects and pay sales taxes on all of their on line sales.

  8. It’s just like a politician to manipulate and weasel something like sales tax into a “fairness” issue.

    I’m so sick of the “vs.” mentality in Washington. Main St. vs. Wall St. Rich vs. Poor. Black vs. White. Heartland vs. Coast.

    All this propaganda does lower everyone’s standard of living in the interest of “fairness.”

  9. The problem with this idea isnt’ the few extra pennies it adds onto every dollar of stuff you buy on the Internet. Hell, usually shipping costs are a bigger drag on your wallet than what an Internet sales tax will be.

    The real problem with this idea is how difficult it will be for internet merchants to track all the freakin’ state sales taxes they are suppose to collect. For example, a small merchant in Oregon will need to know the sales tax rates and what they apply to for every stinkin’ state in the union. Then, the poor guy will have to fill-out a shitload of forms every quarter to comply with the various state sales tax laws. What a nightmare!

      1. Obviously you have absolutely no experience running a small business. Even if you have customers, government paperwork will kill you. And if you don’t fill out the correct form and submit it on time to the correct address, you are screwed.

        So unless you have completed a stack of 1099-Misc forms in January, don’t talk about stuff you are ignorant about.

      2. Spoken by someone who has obviously NEVER dealt with e-commerce software, never filed a State Sales Tax report, and never maintained said e-commerce software. I’m a democrat myself, and I think this is a stupid idea because the purpose of sales taxes is to provide services to the local jurisdiction. If you do not have a physical presence, you should not be required to collect revenue for them.

        Sales and property taxes are probably the most regressive ways to raise government revenue. Corporations like GE, BOA, etc., have a lot of property and interests being protected by the US, its military, and other government-provided services. It is rotten to the core that they can get all of these services without paying taxes for them. The big banks have screwed up millions of lives, and have not had to pay for their crappy decisions, and were in fact bailed out by the people they are screwing over.

      3. What a dumb comment. You obviously think that all you need to know is what the local sales tax rate is – well, how about paying the sales taxes? Quarterly and year-end reporting? How does that burden a small business which has to send out filings to 300 counties, cities, and other municipalities across the county? All of whom have their own filing requirements?

        This was never about whether the taxes should be paid; it was about the huge problem of online merchants being able to pay the sales taxes and municipalities to monitor/collect it.

  10. Internet sales require the state and local taxes to be paid if the seller has a physical presence in the buyers state. That is why Apple has has to charge taxes on their online sales. That will not change. What this sounds like is even if the seller has no presence, you will still have to pay your local taxes on the sale.

    Will the proposed taxes be on Internet sales only, or will they be on all interstate sales? I can say sharp vendors looking at this closely, and figuring how to avoid. Create you order online, but confirm over a toll free telephone number. Or find everything you want online, and they produce a document of all the item numbers that you want, for entry into their automated telephone system.

    Many people will go to great lengths to avoid paying taxes, and I’m sure some vendors will move to assist that avoidance.

  11. OH NO!!!!

    Will we have to pay for E-Mail? It is unfair to the USPS since they have to pay to deliver. why not charge for… Say a group of 40 for one cent! Maybe 2 cents will buy you a hundred. Hey, why not call it anti-spammer law. Then the spammers get to pay and all you have to do is pay a few cents. Worth it?

    Good angle to snow over business. Once they have it all services will be taxed and limited.

    They spend, our “leaders”, and we are enslaved to more taxes to foreign countries to improve their life. Sucks!!!

    Open one door and many others will be kicked in!

    1. Actually, I think having to pay for email is an EXCELLENT idea. It WOULD put most spammers out of business (of course, they’ll probably figure out how to game the system and charge innocent users). 1/10 of a penny per email seems about right…

      1. What a STUPID idea! It wouldn’t deter anyone from sending out spam, because they would find a way around it. Besides, you already pay taxes on your bandwidth.

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