STUMP » Articles » Taxing Tuesday: Novel Concept to Politicians - Nunya » 1 October 2019, 11:09

Where Stu & MP spout off about everything.

Taxing Tuesday: Novel Concept to Politicians - Nunya  

by

1 October 2019, 11:09

As in: Nunya business.

Sanders Calls for ‘National Wealth Registry’ to Enforce New Tax

Democratic presidential candidate Senator Bernie Sanders on Tuesday rolled out his plan to levy an “extreme wealth tax” on millionaires and billionaires, which he plans to enforce through the creation of a “national wealth registry.”

….
The Vermont senator’s plan seeks to combat capital flight and other forms of tax avoidance through a “national wealth registry” and the addition of “significant additional third party reporting requirements.” The proposal calls for increased funding for the Internal Revenue Service to cover the bureaucratic costs associated with enforcing the wealth tax.

Under the plan, the IRS will be required to audit 30 percent of the top one percent’s wealth tax returns and 100 percent for billionaires.

Ok, I probably shouldn’t smear all politicians with this, but many have trouble with two big concepts:

1. That’s none of your business.

2. That’s not your stuff.

I know, if they understood that, they probably wouldn’t be in politics.

STATE SALES TAXES: HOW DO THEY WORK?

This actually is a bigger topic, as in: U.S. federalism: what the hell is it? Is it something new?

Some people into comics linked to this, which had some darkly amusing stuff in it: Steve Bissette on Selling Comics in a No-Longer-United States Of America

Before we begin: Steve Bissette is an American, and has done a bunch of business in America. He should know how things work over here. He’s 20 years older than me. He has no excuse. Yeah, yeah, you can say “but Vermont!” and point to Bernie Sanders and Howard Dean, but I don’t care. He’s on Medicare. He should know states have their own taxes.

Rich Johnson is a Brit, and seems to be about my age. I understand the U.S. is a big scary thing to Brits. It’s okay, Rich, we’re here to help.

America 2019: If you do business online or across state lines, take the time, read this post…

Saw all this coming three years ago; this was a major factor (though not the only factor) in my decision to abandon my online store and sales. (PS: I’ve scaled down the size of my sketch art so I can simply mail it in standard envelopes: a risk, but this simplifies everything considerably.)

We might as well capitulate:

  • As of October, doing business shipping overseas is going to become increasingly expensive, difficult, demanding, and impossible for many small businesses and individuals.

  • Shipping state-to-state is no picnic, either. Read on, below: sales tax collection is the new headache once you meet certain thresholds, and many states now prosecute even for minor transactions. We’re no longer the “United States of America,” this state-by-state sales tax situation is an economic shift comparable to a state-by-state Brexit based on sales tax collection and prosecution.

Here we shall stop. I will not take a deep dive into sales taxes right now.

But you may remember a little court case at the Supreme Court back in 2018:

Let’s do the serious item first — the SCOTUS ruling last week on South Dakota v. Wayfair, about imposing sales taxes on internet retail.

Now, I’ve been paying taxes on my Amazon purchases (my main online purchases) since .. just wait. Nope, didn’t pay in 1998 (that’s the earliest order they have on record for me); 1999, nope.

Okay let me do a binary search.

Fine, 2011 is when I started paying NY sales taxes for my Amazon purchases. I’ve been paying tax on a lot of internet orders for years, but Amazon is the one where I have an easily accessible record going back to 1998.

Before South Dakota v. Wayfair, in general, sales taxes could be directly imposed on internet retailers only if there was a physical presence of said retailer in the state. Amazon had offices in NY by 2011, I suppose.

Now, I shouldn’t have put that “only if” in there… it just hadn’t been fully-tested yet, and in SD vs. Wayfair, SCOTUS said: nope, not required. Tax away!

There are two parts of this, of course — some of what made these smaller players appealling, supposedly, was the lack of sales tax collected.

But you also have to consider the compliance costs. It’s not just the effect on the item price, but also that you have to send the collected taxes to each state (I don’t know how often), and provide various reporting, etc. It’s one thing if you’re a behemoth making loads of sales so that the compliance burden isn’t much, but if you’re a smaller operation, it’s going to suck up time and money just dealing with it, even if there are some software solutions.

But I can imagine sites like Etsy are thinking through how they’re going to help sellers on this matter. I have idea re: eBay. I haven’t bought things there in a while.

The thing is, I believe states are getting the bulk of the sales taxes already anyway – at least, the big states are. I can see that South Dakota, and other states which may not have such a large tax base may need to scrape up every sales tax source they can.

Now, New York has a huge tax base, of course, but they’ve also got plenty of resources to ensure compliance. And they do crack down.

But some of those smaller states have hard-ass enforcement:

Kansas just unveiled the most aggressive remote sales tax collections regime in the country, and it did so without adopting any new, post-Wayfair legislation. The new requirements, set out in a Department of Revenue notice, obligate all remote sellers with any transactions in Kansas to begin collecting and remitting sales taxes by October, no matter how small the company or how few Kansas sales they have.

Yikes.

As mentioned in the Bleeding Cool post above, there is a threshold of sales in most states before they require you to submit sales taxes. They’re not total idiots wanting to chase a single $100 sale, for instance.

Back to the Bleeding Cool post:

All my life—64+ years—the postal service has served my family, myself, everyone I know, and made it possible for me to do business in more ways than I can count. I willingly gave up my long-running mail order business two years ago because it became increasingly impossible to deal with the spiraling costs imposed by the Draconian GOP savaging of the USPS (could ANY business afford to prefund 75 years of retirement pensions—saving for persons yet unborn who might be working for them in the future? ANY business on the planet??)

Dear lord, not that bullshit again.

This time, I’m pointing to somebody else to explain: Jane the Actuary, from May — Why AOC Is (Mostly) Wrong About Post Office Pensions: An Explainer. It’s not what people think, but it involves accounting and balance sheets, and people don’t like that.

Back to Bleeding Cool:

and the forced alignment with UPS and Fed X, which drove up costs. Then, last August, quiet changes in those forced terms slid into place: we felt it in rural areas with new rules concerning addresses. This has been an active, insidious GOP campaign undercutting our well-being, our ability to do business, our ability to remain active with the rest of the world. They want the union busted, our rural post offices gone, their profiteering to either privatize forever or obliterate our mail services.

…

I cut my mail order business to essentially zero, for just this reason. The last time I had to use Fed X (customer wanted it, and was happy to pay for it), I could not f-cking believe how much it cost—there is no way on Earth I could have self-published as I did in the 1990s (with my printer in Canada) the way things are now.

I believe he’s referring to this report. Let me excerpt:

USPS’s Role in Rural Communities

As of September 30, 2017, the USPS operated about 31,000 post offices, stations, and
branches nationwide. In addition, the USPS provides services through 4,000 contract postal
units, including 476 community post offices, and 821 village post offices as well as a network
of commercial outlets.48 Village post offices and community post offices have the expressed
purpose of making postal services more accessible to rural communities. Community post
offices are contract units that provide postal services to small communities.49 Village post
offices are located within existing communities in more rural areas in different locations such
as convenience stores, libraries, and local businesses, and are operated by the management of
those locations.50

Despite the closing of many post offices in the last decade that have disproportionately
affected rural areas, the USPS continues to play a vital role in connecting urban and rural
communities in the United States.51 In 2017, the USPS delivered mail across 229,000 routes,
of which around 75,000 (33 percent) were rural routes. Among its 157 million total delivery
points in 2017, 43 million (27 percent) residential delivery points were services on rural
carrier routes in addition to 1.6 million (1 percent) rural route business delivery points.
52

I am kinda on a rural route, but not. It’s strange. I have had to explain to multiple people that the USPS will not deliver to my house. If they want to deliver to us, they have to use FedEx or UPS [DHL will also come.] There’s a boring story to this that’s mostly government bullshit, but suffice it to say we get a “free” PO Box because the USPS won’t deliver to our house.

We have to prove that we still physically live at our house every frickin year. (Oh, and something stupid did occur over this last year, where some distant bureaucrat tried to take over the documentation stuff, as opposed to the local postmaster.)

In any case, I like having my “free” PO Box. Not everybody in my neighborhood does, but whatever. One can walk less than a half mile total, there and back, to collect the non-package mail. I pick up packages on Saturday.

My town is the lowest-density town in Westchester, and we have two fairly small post offices. I don’t know if it would cut much costs for the USPS to cut that down to one post office. We’re not all that rural, really.

But I can imagine the guy living in Vermont may find his closest post office 20+ miles away. Well, living in a low density community does have its downsides, dude. Should the USPS be subsidizing your high-cost lifestyle?

Anyway, the bitchery over his shipping costs is just plain odd, as commenters mention:

General Tekno

The sales tax thing puzzles me a little. Is it that hard?

I guess I look at it from the POV of how up here, online sales tax has been a thing for ages.

Michael Makuch

I don’t get it. Why doesn’t he just pass the cost of shipping to his customers?

I don’t get it, either. I pay plenty for shipping with all sorts of companies. I don’t know what’s supposed to make him special.

Yes, I tend to pay less for shipping because I’m an Amazon Prime member (and I buy a bunch of Amazon stuff), but I find more & more of my Amazon usage is digital only, with no shipping costs involved. Hmmm. Ain’t that a thing.

Discussing this story with a few friends, one pointed out this classic New Yorker article: Tax Me If You Can from 2012.

I actually discussed some of this stuff when I went shopping at a high-end boutique in Manhattan, and the lady was talking about how people have the stuff shipped to CT or NJ or wherever… but they really live in NY. I told the sales lady is that I had factored the sales tax in when I budgeted my purchases for that day. (Probably fastest sale she ever made)

But this is the part I remember from the New Yorker piece:

Since New York City tax laws don’t apply to people who are deemed to be nonresidents, even if they own a residence in the city and work there, [Julian H. Robertson, Jr.] was allowed to spend no more than half a year—a hundred and eighty-three days—in New York City. This exile was self-imposed. If he had paid New York City tax, which in the top bracket reaches a rate of 3.6 per cent of taxable income, he could have spent as much time in the city as he wished. In 1998 and 1999, when his wife, Josephine, was being treated for cancer in New York City, that is what he did.

But in 2000 Robertson was determined to stay outside the city for at least a hundred and eighty-two days, and thereby avoid New York City income tax. As a New York State Division of Tax Appeals tribunal subsequently put it, his focus intensified “as the year progressed and the number of remaining available days diminished.”

This was nearly a full-time job. One of Robertson’s assistants, Julie Depperschmidt, scheduled his appointments and maintained a contemporaneous computerized record of his whereabouts, carefully distinguishing between “NYC days” and “non NYC days.” Different colored boxes indicated confirmed and anticipated non-New York City days. Whenever the combined number fell below a hundred and eighty-three, she advised him to add more non-New York City days to his schedule. She said that she reminded him “ad nauseam” about what he needed to do to reach a hundred and eighty-two non-New York City days.

There’s more at the link. I know that Rush Limbaugh stopped doing any paid work at all in New York City (he still does charity appearances) because he’s a Florida resident, and NY always gave him a bunch of shit. So they lost a nice, juicy revenue source because they got piggy.

I used to pay the NYC income tax. They even hit me with a commuter tax for a little bit when I was working in Manhattan, and living in Westchester.

Now I live in Westchester and work in Connecticut. Truly, I have the worst of both worlds.

TAX STORIES

I thank the Democrats for boosting those of us in the finance industry, especially those of us specializing in tax-advantaged strategies! Or needing cleverness to legally avoid the taxes!

It definitely keeps my salary up.

TAX TWEETS

Because Russia. Or Ukraine. Or they need to spend more time on other bullshit stories.

Eh, throw it on the pile. I’m sure nothing bad will happen to Democrats, right?

How about think “publicly disclosing Hunter Biden’s personal tax returns” and see if that appeals to you. If it does, fine. How about auditing the Obamas after Barack left office? Sound good?

I think there’s really not much there there, but, by all means, be in wonderment about keeping years’ worth of private tax returns private.


Related Posts
Taxing Tuesday: Using Taxes as Standing to Sue over the Student Loan Forgiveness
Taxing Tuesday: Let's Get Rid of Tax Withholding
Taxing Tuesday: the Governor of Illinois Talks Taxes (and Meep Does Her Taxes)
| Main |