Tuesday, January 13, 2009

Advice to internet shoppers: Declare the pennies on your eyes?

One of the problems with handling a recession, teetering on the brink of something worse, like we face now, is getting state-level actions to sync up with what's being done at the federal level. A big reason is that most states have to keep a balanced budget; while the feds can use deficit spending as a tool to start rebuilding an economy where unemployment and consumer confidence are in the tank, states generally don't have that option.

That fact, combined with the continued influence of anti-government/ anti-tax fetishists at the state level often means that states respond to economic crisis by killing projects that would put people to work, as well as benefits and services that are most needed: health care, unemployment benefits, education, etc. It amounts to taking away the umbrella once the rain starts.

Here's another case in point:

Shopping online can be a way to find bargains while steering clear of crowds -- and sales taxes.

But those tax breaks are starting to erode. With the recession pummeling states' budgets, their governments increasingly want to fill the gaps by collecting taxes on Internet sales, which are growing even as the economy shudders.

And that is sparking conflict with companies that do business online only and have enjoyed being able to offer sales-tax free shopping.

One of the most aggressive states, New York, is being sued by Amazon.com Inc. over a new requirement that online companies must collect taxes on shipments to New York residents, even if the companies are located elsewhere. New York's governor also wants to tax "Taxman" covers and other songs downloaded from Internet services like iTunes.

Whoa, whoa, whoa, whoa! What was that last part again? Taxing "Taxman?"

Is nothing sacred? Does no one in New York have any sense of irony left?

Okay, say it with me: One, two, three, four, one, two . . . .

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