Gov't is Making it Hard For The Little Guy Just Trying To Make Chump Change

I've been waiting for all this to happen for as long as we've had commerce on the net. But I guess as an acoustic musician I'm used to being bullied. As bad as da guv is unless you've been squeezed by the mafia there are no meaner scarier thugs than ASCAP and BMI. They are the organizations who are supposed to enforce copyrights on music and they basically offer bounties to go around and shake down venues that have live music. We had a little pizza place we played in once a month were lucky to pull min wage for 4hrs ea. One day went by and it was closed. The thugs showed up and said he owed $30,000 back royalties and he just folded and left. We used to have a monthly bluegrass jam in the local Grange Hall where we asked for donations to rent the hall and it got slapped with a royalty and went away. Even though there were no paid performances and they couldn't exactly calculate the percentage of current copyrighted material played. Do you know you are supposed to pay a royalty to sing "Happy Birthday"?

It was bad enough that as a musician your "work" is described as play, but for some reason an acoustic musician is seen as somebody who has no overhead. When I pointed out to a promoter when he wanted to pay us 1/4 what a same size quartet electric band wanted he said they have more invested. He didn't believe me when I said my mandolin cost more than the lead guitar players whole rig, guitar, amp and pedals combined. Justice is an elusive concept.
 
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Alabama may not ask for sales tax on "some" used goods, but they do ask for it on most The difference as to whether or not a sales tax is due is the number of sales. Like most sates Alabama doesn't tax the "occasional sale". I'm not sure the definition Alabama uses for 'occasional sale, but in Wisconsin it's defined as selling more than 3 items in a taxable category per year.

This definition allows a private party to sell a limited amount of personal goods, i.e. furniture, machinery, appliances, motor vehicles, etc. without being subject to taxes. On the other hand if no taxes were required on any used items it opens the door for abuse. Every sleazy business person would claim whatever they are selling was "used" and therefore not subject to taxes. Millions of dollars worth of high dollar items like motor vehicles, household goods, and machinery could be sold by commercial dealers without paying a cent of taxes.

When internet sales first came along there was a 10 year sales tax moratorium for at least 2 valid reasons. First to grow the business, and secondly because there was no good mechanism to collect the taxes. Online sales now account for nearly 15% of ALL sales across the country. In a time when every level of government is strained for funds it's only natural for them to be looking for new sources, and eliminating as many loop holes as possible. Even if the dollar amount of sales remained static since the inception of the internet that means local and state governments are collecting 15% fewer dollars than before the arrival of the internet. We all know the total amount of sales has not been static, but rather has nearly quadrupled since 2010.

In the next 5 years internet sales are expected to grow by double digit amounts. A recent survey found that 60% of ALL shopping done by Millennials is done online. If this trend continues (and it is expected to) within the next 10 years retail sales from brick and motor stores will no longer the single viable source of income for programs currently being funded by sales taxes.
 
projectnut said:
In the next 5 years internet sales are expected to grow by double digit amounts. A recent survey found that 60% of ALL shopping done by Millennials is done online. If this trend continues (and it is expected to) within the next 10 years retail sales from brick and motor stores will no longer the single viable source of income for programs currently being funded by sales taxes.
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And there's the rub.
In a lot of ways, internet sales are a great thing. Easy to price compare, read reviews, and have whatever delivered right to your home.
The problem is that many times "Brick & Mortar" stores can't compete with the large volume sellers on the net. The end result being those businesses closing their doors and going out of business.
From a purely business point of view, this makes sense, but at the local level, people now have to either order online or drive large distances to get what they want. From a tax point of view, the City, County, and State lose the taxes from that business as well. They aren't about to take less money so they raise other taxes to get it back.
They can't tax the big volume sellers, they just leave resulting in even fewer tax dollars. They pass the taxes on to the people with higher and more taxes on everything they use or do.
A large part of the problem is the tax structure. The more you make, the more you pay.
When you really think about how you are taxed and the amount, it makes you sick. They tax what you earn, what you spend, what you save, what you have, what you use, ....etc. What's the percentage now ??? 60%-70% of every dollar you earn goes to paying taxes ???

How much longer before the government takes all you have and more ??? Remember the song lyrics "I owe my sole to the company store" ???
 
It's very much more complicated for several reasons.

1. There are twice as many people on the planet as there were when I was a kid, so therefore at least twice the demand for everything as there was 50 years ago.

2. The BUSINESS tax structure in the US (worlds largest economy) enables large businesses to use revenue to get continually larger, thus feeding a self-perpetuating loop.

3. All forms of government regulation lag behind the advances of business development because governments have fewer resources and more internal controls than business.

4. Consumers are, always have been, and always will be primarily motivated by perceived value (their opinion of the value of a product to them), rather than the overall impact to society, environment or local economy.

I could go on but I won't because I'm not an economist and don't want to get into a political discussion. I would just encourage everyone to pay attention to their choices and how they effect the world around us.

Cheers,

1ohn
 
My biggest issue, is there is no oversite to the online tax collection. When I owned a brick and mortar store, I had to have a license from the city, county, and the state to collect taxes. I was subject to an audit at any time, by any one of them. You could bet that if anyone found any issues, then I would get a visit from one of the others very soon. Even though I never had any issues, it was strongly suggested that I use an accounting firm, and they would not audit me. What is there to stop these online sellers from collecting the tax, and pocketing it? With no oversite, this only puts the online store in a better advantage, as he can sell it even cheaper, and make more by pocketing the extra tax collected. Even a big place like Ebay, can easily be collecting the tax, and then reproorting and forwarding 1% less to each state, and make a ton, and never have to worry about getting caught.

As of yet, I think the online stores do not have to collect the city, and county taxes, so they still have that advantage.
 
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Hi everyone, thanks for keeping this on topic, i.e. on the government and taxes - and keeping politics out of it. This has been an informative thread and I've appreciated the different takes on taxation that have been offered up here.

On the topic of how much we pay in total taxes...I read a study once that said in the U.S. that the average taxpayer is taxed at a TOTAL rate of approx. 50% and this includes government fees, (e.g. DMV registration fees that aren't called a tax but sure does smell like one.)

That was probably ten years ago when I read that. I would say for myself, I don't keep track of sales tax, gas tax, city tax, hotel taxes, etc., - so 50% feels a smidge on the high side for me. And I would also say that because I've earned more over time, I'm paying more overall tax but I'm not sure my overall tax rate is much higher than it was say 10-20 years ago.

Vermont charges a progressive tax on internet sales and it is based on income. The choice on the form is something like this: "Did you pay tax on internet purchases this year?" If not, then you are on the hook for X based on your income. I think the highest sales tax they nail you for on internet sales is $200 when you file. Vermont sales tax is 6%.

Again, no hard numbers to go by here just anecdotal experience - and I am in a heavily taxed state in Vermont - so. take all of this with a grain of salt.
On the other hand, I wouldn't be surprised if my total tax is higher than 50% and I've just adjusted because that is what people do - adapt to their environment.
 
Superburban said:
With no oversite, this only puts the online store in a better advantage, as he can sell it even cheaper, and make more by pocketing the extra tax collected.
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Sorry, but this just isn't happening with large sites like eBay or Amazon. The tax collection industry is alive and well at all state levels and large reputable businesses don't screw around with the governments money. Are mistakes made? Yup. But skimming? No way. If anything I could see individual operators or small businesses trying to get away with this for a short period of time but they won't and in fact don't.
 
vtcnc said:
On the topic of how much we pay in total taxes...I read a study once that said in the U.S. that the average taxpayer is taxed at a TOTAL rate of approx. 50% and this includes government fees, (e.g. DMV registration fees that aren't called a tax but sure does smell like one.)
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It is difficult/impossible to come up with a hard and fast percentage as it's different for each individual based on lifestyle, location, spending habits, etc.
Don't forget about the hidden taxes like "Inflation" which IS a tax. The easiest way I saw to understand this was this example:
Say you have $10,000 in savings. That $10K has a certain buying power, i.e. will buy a certain number of items and/or services.
If inflation is 3%, that means the cost of those same items/services went up 3% while your savings stayed at $10K.
So basically, your $10K just turned into $9,700. In essence, the government just reached into your mattress and pull out $300.

If you think about it, you are being punished for saving your money.
"How dare you save your money, we can't tax it if you're saving it. Of course you can invest it and avoid the Inflation tax and we get more taxes if you make more money investing."
"Of course if you lose it making bad investment or the market crashes, too bad. We still get our cut from whomever got your money and you can only write off a small percentage of what you lost.
Welcome to the BIG Casino."
 
One of the strangest things I heard that now makes perfect sense is that you should spend your change rather than saving it up in a cookie jar. Any currency that you willingly take out of circulation (even just a penny) is like giving a loan to the government.

1ohn
 
Some times you need to go outside, take a deep breath and yell an obscenity. You feel better and you startled your neighbors. I did that indoors at Yokota AB once, heard a tool hit the ground accompanied by much mumbling. Made my day.
 
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