Tuesday, October 26, 2010

Tax This

Recently I received a letter from the state of California[1] informing me I needed to create a use-tax account. For those of you who aren’t familiar with a use-tax (I wasn’t), a use-tax is the sales tax you owe for anything purchased outside the state of California. Most every state in the union has laws regarding use-tax. And the use tax also includes anything purchased online.

In case we haven’t met, I’m a bit of a technology dork. I do basically all of my shopping, outside of clothes, online. I’m an Amazon Prime customer. And I will admit the biggest reason after convenience I shop online is to avoid sales tax. Or at least I thought, like I’m sure most people did, I was able to avoid sales tax by shopping online.

The reason this is becoming an issue is states are increasingly facing smaller tax revenues and it’s nearly impossible to raise taxes as that takes, well, an act of Congress. States are looking for anyway to increase cash-flow and it only makes sense for them to go after every possible resource. The problem they face is enforcement. Essentially it’s all self-reported. And attempts to go after online retailers to find out about customer’s purchase history can be challenging if not completely unsuccessful. In order for a state to have any chance of collecting anything more than a small fraction of the taxes owed to them the online retailer would need to start collecting the tax like a normal brick and mortar store. Enforcing such rules, and requiring online retailers to navigate through 40+ different sets of rules for sales tax, would border on the impossible.

Here’s what I propose instead. As the current law stands, online retailers are required to collect sales tax for any state in which they have a physical presence. Keep that law in place. But for any sale that takes place where the above condition isn’t met, the federal government should place a 5% sales tax on that sale. Since the sale would qualify as interstate commerce it is subject to federal laws. Of that 5% collected, 1% goes to the federal government, and 4% goes to the state in which the customer lives. While 4% is almost certainly less than the state would have collected normally, it’s still much more than they are currently collecting or would have any reasonable chance at collecting. The 1%, while not earthshattering, would certainly help a nation languishing in debt.

In the past I’ve always been opposed to taxing online sales as I feared a tax would discourage online commerce and kill an infant industry. Today shopping online is as commonplace as using an ATM, and a relatively small tax won’t have a noticeable effect on the industry. States, while not collecting the full amount, would still increase their income. The federal government would see a new source of income. This is a compromise that works for everyone.

[1] It’s really impossible for me to type or say the name of my state without hearing my soon-to-be former governor saying it in my head.

Thursday, October 14, 2010

Welcome Back, Fall

At least, I think so anyway.

I spend the majority of my time south of the Mason Dixon Line so my views on weather are generally skewed. Between living in San Diego and spending a good amount of time in places like Houston and Tampa my body and mind are used to moderate to hot temperatures. When I find myself somewhere with even a bit of “real weather”, like St. Louis, my body always seems surprised that it can actually get cold.

Cold, mind you, is relative. I was cold this morning – it was 45 degrees out. I know that 45 isn’t really cold. But when you’re not really expecting it and your body’s just not used to it, 45 is at least a bit chilly. In any event, this morning reminded me that it is in fact Fall.

I enjoy fall quite a bit. It means it’s football season. It means I can wear my sweaters and sport coats without having to worry about going outside in 90 degree heat when I leave whatever venue I’m visiting. It’s the lead-in to my favorite 5 weeks of the year, which stretches from Thanksgiving to New Year’s; a stretch which includes our annual Prethanksgiving Dinner, my birthday, Christmas, and of course a trip to Vegas for New Year’s.

But it also means darkness during the majority of the day. In the past it wasn’t that big of a deal, but now that I’m running[1] it makes it hard to find a time during the week when I can run during daylight. It also means I need to pack for cold weather when I travel, which is a challenge for me because A) I don’t always remember to and B) because I really don’t own the proper clothing. And of course fall is the precursor to winter, a time of year I really loathe.

For now I’m going to focus on the positive. I’m going to break out my sport coats and sweaters. I’m going to enjoy the cold crisp air in the morning. And enjoy football. Well, football played by teams other than the Chargers, anyway.

[1] I don’t think I posted this here – I finished the San Jose Half Marathon in 1:54:55, 5 minutes faster than my goal.

Friday, October 1, 2010

Do you have a blog?

Recently Abram, my baby brother, texted me asking if I still had a blog. If you’re curious, you can peruse his blog here. But I thought that was a pretty good question.

The answer? I don’t know. What I do know is I’m completely burned out on the Friday Five. Over the last 3 years I’ve done just about one a week, and it’s become a bit of a drag. Frankly, it’s become tedious.

However, ironically I do miss telling little stories about the week, and I definitely miss sharing my thoughts and opinions.[1]

So what now? Well, I’m not sure. I think going forward I’m going to try to post more just little things about life. I also think going forward I’m not going to try so hard to be perfect in every posting (outside of the Friday Five that is).

And who knows, maybe there will be the occasional Friday Five.

But for now, there is still a blog. It’s just going to change form a bit.

[1] You say pontificating, I say sharing thoughts and opinions.