One unique aspect of my homeschool curriculum is that students can start and manage their own online business. Students will be responsible for deciding what products or services to offer, getting the business up and running, and marketing the business’s products. Students and their families will get to keep the profits made from the business. Hopefully, participants in this program will develop a business that can either provide them with a full-time career or a way to supplement their income.
Internet commerce is the most dynamic and rapidly growing sector of the American economy. Not surprisingly, the Internet is also relatively free of taxes and regulations, although many in Washington are working to change that. For example, earlier this year the Senate passed the Marketplace Fairness Act, more accurately referred to as the national Internet sales tax act. This bill would require Internet businesses to collect sales tax for all 10,000 American jurisdictions that assess sales taxes. Internet business would thus be subject to audits from 46 states, six territories, and over 500 Native American tribal nations.
Proponents of the bill deny it will hurt small business because the bill only applies to Internet business that make over a million dollars in out-of-state revenue. However, many small Internet businesses with over a million dollars in out-of-state revenues operate on extremely thin profit margins, so even the slightest increase in expenses could put them out of businesses.
Some businesses may even try to avoid increasing their sales so as to not have to comply with the Internet sales tax. It is amazing that some of the same conservatives who rightly worry over Obamacare’s effects on job creation and economic growth want to impose new taxes on the most dynamic sector of the economy.
Proponents of the law claim that there is software that can automatically apply sales taxes. However, anyone who has ever dealt with business software knows that no program is foolproof. Any mistakes made by the software, or even errors in installing it, could result in a small business being subject to expensive and time-consuming audits.
Some say that it is a legitimate exercise of Congress’s Commerce Clause power to give state governments the authority to force out-of-state businesses to collect sales taxes. But if that were the case, why shouldn’t state governments be able to force you to pay sales taxes where you physically cross state lines to make a purchase? The Commerce Clause was intended to facilitate the free flow of goods and services across state lines, not to help states impose new burdens on out of state businesses.
The main proponents of this bill are large retailers and established Internet business. Big business can more easily afford to comply with a national Internet sales tax. In many cases, they are large enough that they already have a “physical presence” in most states and thus already have to collect state sales taxes. These businesses are seeking to manipulate the political process to disadvantage their existing and future small competitors. The Internet sales tax is a bad idea for consumers, small Internet business, and perhaps most importantly, the next generation of online entrepreneurs.
For more information about the small business program well as all other aspects of the Homeschool curriculum please go here. And to purchase a copy of my new book, The School Revolution: A New Answer for Our Broken Education System please go here.
Ron Paul is a former U.S. Congressman from Texas and the leader of the pro-liberty, pro-free market movement in the United States. His weekly column – reprinted with permission – can be found here.
16 comments
Why should I and my business, in existness for 52 years, collect and remit sales taxes while a newly formend intenet company not do so? I do business in 3 states, collect and remit in all three.
Set my mind free. Enlighten me as to the fairness of the burden of distribution between the two entities.
Rather than “woe is me” the issue, why don’t you jump on the bandwagon?
Why don’t you take your opinion out of your interpretation of the connotation of my comment and question?
Why don’t you answer my honest question? Amazon doesn’t charge tax and people say that isn’t fair because my taxes paid for the road and post office and power and blah, blah, blah. What they fail to cop to is that the truck that picked up the product from Amazon paid taxes on the gas and tires it used to move the product from the warehouse to the post office And the truck that dropped the product at the warehouse paid the same taxes and the company that made the product paid taxes on their raw materials.
Then, Amazon paid for the postage. They paid the power bill for their warehouse, and property taxes on their facility in its home base – so in fact, they are paying taxes. Your local sales taxes support you local community – Amazon’s warehouse isn’t in your local community, they or their suppliers and distributors have already paid their fare share for the use of your road when they bought fuel and use of the postal system when they bought postage at the post off etc. Why should Amazon pay for your park, they’re not hanging out in it, why should they pay for your library,
most of their minions can’t read– er, they don’t use your library.My question was an honest one – is your business one that competes directly with online vendors or are you just pissed they don’t get stuck with all the bills you do? Here’s a thought, rather than lament the fact do something about it, fight to get your taxes reduced.
A couple of things:
1) Road use taxes don’t currently generate enough revenue to maintain SC highways. They haven’t for a number of years. In fact, the SC General Assembly just last session committed General Funds to supplement the repair of highways and bridges.
2) My business competes with both traditional businesses and online businesses (increasingly so).
3) The post office ain’t self-funding, either.
4) And the property tax legislation that lowered residential property taxes some few years ago shifted the burden to our commercial real estate holdings. In fact, the sum of taxes lowered on residential holdings of our family members was exceeded in increased commercial property taxes by two-fold within 2 years of said reevaluation.
Your examples are of the way it used to work in SC before the idiots that are now in Columbia decided we could maintain 2013 government on 1913 revenue streams.
The same could be said of your taxes – they aren’t sufficient to handle the amount of government resources your business eats up. Amazon ain’t using your parks, street lights. libraries, police department or even your roads. FedEx and UPS are, and guess what, they pay taxes too.
I buy local when I can afford to, when I need it right now, when the price is comparable, when I need your expertise, when I want to try it on – but you’ll never convince me that anyone makes better duck boots than LL Bean, I’ve worn them for so long that I know what size I need – there isn’t an LL Bean store within 500 miles of Columbia. Why should they pay for my local services – they’ve already paid untold taxes on producing, marketing and shipping the boots?
As a matter of fact, Amazon uses all of the above. And they received “fee in lieu” and other tax considerations when they located just 5 miles from where I now sit.
Also, I just one hour ago remitted $6.30 to Eddie Bauer for sales tax on an order they are shipping. I don’t think their computer has much trouble remitting the tax back to SC.
My computer with 3 key strokes per state per month remits those that our business collects. It ain’t hard.
The same cold be said for the taxes you pay, there’s no way you pay enough taxes to cover the police, fire, water, power, paving, sidewalks, libraries etc.
I buy local when I need something right now, when I need your expertise, when the price is the same or even slightly more, when I want to try it on first …
All that said, LL Bean makes the best duck boots in the world hands down – I know what size I need and the color and the height. Funny thing though, there ain’t an LL Bean within 500 miles – why should they pay for our parks or police – they’re paying for their own in Freeport, and they paid tax on their raw materials and the workers who made the boots and the shipping…
Your business is most likely a brick-and-mortar store than can handle sales taxes easily at the point of sale. Quite the apple compared the oranges of online retailers that sell to consumers in every state in the country.
Besidse, the whole “I’m taxed so they should be taxed too” thing doesn’t move me too much.
Ron Paul is the totally superfluous, legislatively un- accomplished former U.S. Congressman from Texas and the leader of the pro-liberty, pro-goofy idea, pro-free market movement in the United States. His weekly column has unbelievably had cogent thoughts in it for the last two weeks and can be found lining bird cages, wrapping fish and pinned to the bulletin boards of his 26,345
sycophantser followers – reprinted with permission for reasons no one is really sure of.Will, you did it again, you left out the important parts of “Dr. Paul’s” by-line – no worries, I fixed it for you.
Man, I must be off my meds or maybe Paul is finally taking some – two weeks in a row the old codger has come up with a useful viewpoint – now if only someone other than the “Paulinistas” were paying any attention…
In the case of Amazon and eBay, who allow people to sell stuff through their site and take a small cut for themselves in return, I’m sure it would bring some businesses to forgo buying the software and just sell their product through them. Running software to calculate sales taxes for you still puts some liability on you, having Amazon do the entire process for you doesn’t.
Yes, Ron, but the internet sales tax is fair.
Those who don’t want to pay are maggots on their brick and mortar competitors, their fellow citizens and the states they live in.
You just want a special break for yourself…like when you make millions from pro-militia and racist newsletters that bear your name, but when the shit hits the fan, you deny your involvement.
The only break I’m willing to give internet sales, i.e., e-mail order ‘catalogs’ is to require that they pay only state sales taxes and leave out extras that localities might add on.
The Internet is the new “wheel” that has put many of the manual laborers out of business. It sucks for the mom and pop stores but it’s a bonus for the consumer, who now has extra money left over to spend on a nice dinner or to pay someone to cut their lawn.
So, Ron Paul’s homeschool curriculum teaches that it’s smart to avoid paying taxes that fund state government.
Paul has devolved from Libertarian to Anarchist.
Internet sales tax IS unfair to online sellers. Suppose a FL seller sells goods to all 50 states + US territories. This seller will be subject to compliance to 45 states + DC + PR + other territories + Indian tribes which mean 45+ monthly tax filing. This seller will also be subject to random audits by any of these 45+ government entity.
If you believe this is fair, then how would you feel if Canadian government passes a law that any US seller, who does not have physical presence in Canada and sells goods to Canadians, must collect and remit Canadian sales tax on behalf of Canadian government? Do you think that’s fair? How about all 100+ countries passing a similar law?
Also, a software can help with tax complexities, but it does not solve tax complexities. Just because there are dozens of software to file federal income tax, it does not mean that businesses can get rid of their CPAs and start using any of those software.
Proponents say that the software will be free. There is no such thing as free lunch. Either the software is paid by Internet sales tax lobbyists, such as Amazon, Best Buy, Foot Locker, or Walmart, or it is paid by the state (which comes from taxpayers).