This holiday season, I’m not going to pay any California State Sales Tax. The blood suckers in Sacramento have raised taxes to a wallet-thinning 9.25% here. I can ship my goods from New York to here for less than that!
Instead there are countless online e-tailers that I can purchase everything I want from. It hardly takes any effort at all.
I know it is just a matter of time before California (and other states) close the inter-state loophole, but until then – screw ‘em.
And when they do, they’ll just be fuelling to push online e-tailers off shore. How long will it take before amazon.mx replaces amazon.com? And you can’t tax that! Ha!
The “loophole” is merely in enforcement. California (like many states) has long had a use tax to compensate for sales tax when the retailer is out-of-state. Several years ago, California added a line for use tax on the income tax forms. That raised the visibility and awareness of the use tax, but it existed long before that.
Most people don’t bother to pay use tax, and the state doesn’t have the means to go out and catch them. Instead, the lost revenue drives further increases in taxes to make up for the loss.
I would rather have higher sales and use taxes and lower income taxes. Tax spending, not earning.
Adrian – it’s just not tractable to enforce taxes on the consumer (except for perhaps very large purchases). Heck, the state overhead of processing the tax on my individually submitted $78 purchase from Amazon would cost more than the taxes it levies! The only practical answer is to implement a scheme to tax Amazon directly for sales delivered to California. They will do this.
I’d be okay with your plan to have lower income taxes, except there is no plan in sight for that! 9.3% income + 9.25% sales is just too high.