Internet Sales Tax Feud

[toef]

Originally Posted by Vicon

If a state can't manage it's funds to begin with, what's the point of charging taxes on something they don't normally care about? "Hey, we don't have enough money because we can't manage our funds correctly, whatever are we to do?!?" "I KNOW! Let's start charging sales tax on internet purchases from all over!!"

Not to be mean, but I think you're being irrational.

Before the internet was an option, people could pretty much only purchase goods from within their own town/city/state. The state could easily keep track of all those purchases, and collected a sales tax. Let's say they collected $50.

So now when it comes time to plan the budget for the year, they know they have $50 to spend. So they put the money toward public projects that its people care about. Ok, cool.

Now the internet comes along, and people start buying stuff online, so they can stick it to Uncle Sam, and skip out on paying sales tax. Their state now only collects $20 from the sales going on in its state.

When it comes time for budgeting, the state doesn't know what to do. They could keep the $50 budget from last year, so that everything stays the same. Or they can slash the budget down to $20, but that would involve things people don't like... laying off state employees, canceling publicly funded programs and events, etc.

The problem with tightening their fiscal belt is that the state's people will be in an uproar. If they get mugged they're going to complain a cop wasn't there to help them. If they get in a car accident they'll complain that the ambulance took too long to get there. They want all the benefits they used to have, but they don't care to realize it's not possible to fund those if the state no longer has the money to do so. They want everything the taxes are spent on, but don't want to pay the taxes. It's the whole having the cake and eating it too problem.