Effects of the Internet Sales Tax

Posted: August 26, 2013 by ShortTimer in Democrats, Economic freedom, Economics, free markets, Government, Ruling Class, Tax, taxes, Unintended Consequences

We’ve talked about the push for an internet sales tax before, and some effects it’s going to have.  And now we’re seeing some more of those effects:

From the Miami Herald, about KC MO:

KANSAS CITY, Mo. — Online retailer Amazon is severing ties with its online associates in Missouri because of a new state law that subjects their transactions to sales taxes.

Amazon Associates write blogs or product reviews then link to Amazon.com, and collect commissions — between 4 percent and 8.5 percent — if people use that link to buy something on Amazon’s site.

Amazon is blaming a new Missouri new law that takes effect next week subjecting those online transactions to sales taxes for its decision to sever the ties, the Kansas City Star (http://is.gd/X0XZdE ) reported.

It’s worth noting that Amazon is for a federal internet sales tax, because it will be used to crush competitors.  Here they don’t like it because it bothers them.

The end result is that small internet companies are destroyed, the taxes that the government wants to wring out of the citizen vanish with the companies, and peoples’ livelihoods are harmed.  Those same citizens who owned the now dead companies now have less to spend in their own communities, and won’t pay state sales taxes or income taxes on income they no longer earn.  The community is now poorer.

From the Fiscal Times:

The Internet sales tax is hitting consumers like me in the gut – literally.

As someone interested in keeping my weight down (who isn’t), I order a supply of low-calorie pre-packaged meals from a food-and-lifestyle website – and have it delivered each month without so much as a keystroke if there’s no change to my existing order.

The company is based in Maryland, but that’s been irrelevant. The convenience of receiving the order at home in New York without thinking about how far the food travels has been hard to beat.

Recently, however, this polite but scary note hit my in-box – and by the way, when companies are this polite in an email you know it’s not good news:

“We wanted to take this opportunity to let you know that we will begin collecting and remitting sales and use taxes on all Internet sales where applicable as of September 1, 2013. The sales tax will be visible during checkout as part of the overall breakdown…

“Our decision to join other major Internet sellers in the collection of and remittance of sales and use taxes is in response to the growing instances of states legislatures and revenue agencies seeking the enforcement of Internet sales tax. We expect to see more measures enacted aimed at enforcement of sales and use tax collection.

He basically sums it up by saying he probably won’t be buying from the same company, since he’ll be paying more.  And he may simply change his buying habits altogether, and he wonders what kinds of taxes he’ll have to pay on that.

Well, the answer is screw you, citizen, because the government will wring every last dime out of you so it can fund more perpetual Democrat voters on the welfare plantation and buy them new Obamaphones.  You being free to choose what you like is a problem, because they need that money to fund their bigger and bigger governments, and you need to be nudged into the slot they want you in.  The Ruling Class will do as it pleases, and it will do as it pleases to you.

Elections have consequences, and the power to tax is the power to destroy.

From the KC MO story:

Amazon’s email to its associates in the state called the new law unconstitutional. LaFaver said the legislature did not hear from the company when the bill was being debated.

If you understand how the market works, then you know that raising taxes creates a cost on businesses.  Those costs will be passed on to customers.  In the meantime, the businesses may have to eat the cost until they can shift it to their customer base (which will shrink as a result of higher prices), and many businesses simply don’t want to deal with that.

Amazon previously said it was in favor of a national sales tax, but that’s because it’s used there as a barrier to competition that will crush their smaller competitors that can’t afford to comply with new rules.  Amazon can slowly creep towards monopoly by having the government crush its competition with regulations.  That’s cronyism.

Here, Amazon looked at the increased costs in one market and decided to cut off some business partners because that’s what the bottom line favored.

Of course Democrat LaFaver couldn’t possibly have forseen that an increase in taxes would result in harm to businesses.  He’s a Democrat, and therefore can’t understand that actions in the marketplace by government have consequences.  He seems to think you can just raise taxes and more money will magically appear.  But the private sector doesn’t have Ben Bernanke and can’t run on IOUs.

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