May 23, 2009 Larry Waters

Taxation of all Internet Sales: I told you so!

Back on September 26th, 2008, I wrote a brilliant article on what came to be known as the PACT Act. This article, entitled Cigarettes, Snus, ALL Tobacco (except cigars): Internet Purchases to be Banned in the United States?, focused on Rep. Weiner (D-NY) and his attempt to prohibit delivery of all tobacco products (except cigars) to American consumers.

The caveat was that IF the delivery driver could establish the recipient was of legal age (through a new free government database) AND ensure “all applicable State and Federal taxes were collected”, then tobacco products could be delivered.

In my stunning and insightful conclusion, I revealed that tobacco was the means to an end, not the true purpose of PACT. The True purpose was to ensure sales tax was collected on ALL Internet purchases.

It’s eight months later, the names of the bills have been changed since expiring in the 110th Congress, but have been resurrected in the 111th.

This article, Tax-Free Internet Shopping may be at an End, by Declan McCullugh for cnet News, validates my theory.

I take no joy in this nor should any American. Taxation of all Internet purchases will only serve to depress Internet sales universally. Many small and home-based Internet sites will be unable to afford the mechanisms necessary to collect and transfer sales tax money to all 50 States. They will go out of business.

Since the greedy State Governments are basing their Internet tax receipts on current and previous year total Internet sales, they will spend that money before realizing much less is coming in than before. Their solution will be to raise the tax on Internet purchases, further depressing Internet sales.

With a pack of Marlboro cigarettes currently costing, after tax, $9.50 in New York City, or as much as $12.00 a pack in downtown Chicago, is it any wonder smokers have turned to the Internet, Indian reservations, and other means to obtain cigarettes?

Taxing everything purchased on the internet from toys to clothes to electronics and yes, to tobacco, will further depress the American Economy at the worst possible time.

It will also create an incredibly huge black market economy where no taxes are paid. Ironically (or typically) the PACT Act’s justification is based on stopping the so-called terrorist black market in cigarettes! Instead of putting out a candle, PACT will start a six-alarm fire the likes of which this country has never seen.

Once again, Washington creates more problems then currently exist. Who pays for that? We do; the American citizen.

California, facing a $24BB budget shortfall this year, is eliminating child health-care programs, welfare programs, firing teachers, and making other draconian slashes to the budget to stay solvent. People are calling for a revision to the California State Constitution outlining just what the State’s true responsibility is to the citizens. Many call this long overdue.

Unfortunately for the rest of us, President Obama seems intent; even fixated, on exponentially increasing so-called entitlement programs, nationalizing the banks and the automotive industry, and creating a National Health Care Program we can’t afford.

America has the best and most sophisticated health care system on the planet. Mr. Obama prefers we model ourselves after the failed systems of Canada and the EU where people wait 9 months for an MRI. Is it any wonder the wealthy in those counties come to the United States for treatment of their personal ills?

Is health care reform needed? Absolutely. Eliminate the massive amounts of paperwork and bureaucratic road-blocks facing doctors and hospitals today is the first, very needed step.

Reducing all this and the massive amount of people in the Government to the individual doctor’s office necessary to comply with this insane bureaucracy will slash health care costs and insurance premiums. Sadly, that is not the path President Obama is taking us down.

Buckle up, America. Bad as the economy is, the road’s about to take yet another sharp turn down-hill as the budget deficit will continue to rise through the trillions of dollars.

A nation founded on Taxation without Representation is now collapsing because of Taxation without Representation. Big Government only serves itself now. Big Government’s survival is all that matters. The people will just be dragged along for the ride.

Snusing as America Crumbles,