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Wednesday, May 08, 2013

Why big corporations welcome regulation

Karl Denninger explains the rationale underlying the unholy alliance between big business and big government in explaining why Amazon is welcoming online sales taxes:
Amazon, for its part, has engaged in this sort of screwball deal with its distribution centers in various states, arguing that this doesn't give them nexus and thus they don't need to collect tax.  When threatened they reply with the threat to close the center and fire the employees (who are residents of the subject state) or sue, which effectively stalls the clock.  This set of tactics has "worked", because Amazon (and similar firms) are huge corporations with internal legal staffing that can fight these things and, at worst, delay the outcome driving up the costs for the states and there is virtually no chance that the company or its officers will be indicted by the states in question for tax evasion, as is the case for a small business.  The problem is that as these cases have gone on over the years it has become increasingly apparent that Amazon and these other retailers will eventually lose and be forced to both pay and collect the taxes and might be exposed to penalties, interest and retroactive tax billing for willful evasive activity.

So what Amazon appears to have decided to do is play screw the other guy by forcing them into having a "virtual" nexus that otherwise would not exist!  This is then sold to people as "fairness."

It is nothing of the sort.

Amazon could choose to have distribution centers only in no-sales-tax states.  It could then tell the rest of the states to "pound sand."  There is a long-standing US Supreme Court decision ("Quill") that they can stand behind if they take this approach and are without question in the clear in doing so.  But by doing so Amazon would have a serious problem because transit time and cost become a big problem, and since everyone wants everything right now, shipping cost is a huge expense and getting larger, and Amazon sees both cutting that cost and increasing speed of delivery as a competitive advantage (it is) they want to open distribution centers close to the people who shop.

But that leaves them with a problem because to do that they create nexus, and with nexus comes compliance costs.  Since they've become increasingly unable to avoid this and meet their business goals they now seek to use the jackboot of government to shove it down their competitors' throats!
Obviously, Amazon would prefer no sales taxes.  But if they're going to have to pay them anyhow, then it is much better for Amazon if everyone, including their competitors, is forced to deal with the compliance costs that Amazon is much better suited to pay given its size.  Large corporations can more easily afford to comply with regulations, as the employees required to do so make up a much smaller percentage of their total workforce.

This is a relatively harmless example, but it should suffice to demonstrate the absurdity of pretending that big business is the enemy of big government.

Labels:

73 Comments:

Anonymous Keep Smiling May 08, 2013 9:09 AM  

And... if you want to sell your cookies or candles or soap or whatever on the web, it will make more sense for you to use Amazon fulfillment and let them handle the paperwork, and thus give them a cut of your business.

Smart move on their part, sucks to be you.

Anonymous Gimil May 08, 2013 9:19 AM  

"This is a relatively harmless example, but it should suffice to demonstrate the absurdity of pretending that big business is the enemy of big government."

But it hardly shows they are allies or friends either.

The fact is, Amazon still has to pay taxes. They are still victims, though as you make it clear, those hurt most are on the margins. Just like income taxes hurt millionaires less than some poor schmuck who makes $75,000.

I see what you are ATTEMPTING however. But it won't work. Occupy/"anti-corporation" types will always be socialists and statists. This approach is fruitless; you'll ever get them to think otherwise. Better luck converting an atheist to Christ!

Anonymous Stilicho May 08, 2013 9:31 AM  

It comes back to mercantilism, crony capitalism, fascism, socialism, etc. It is much easier for a large company to pay a gov't to dig a protective moat for it and man the ramparts than it is to competitively develop one and protect it itself.

Anonymous Sigyn May 08, 2013 9:33 AM  

I've heard rumors of townships that have started exempting local-only transactions from sales taxes, by the way. Anyone else hear this?

Anonymous Godfrey May 08, 2013 9:41 AM  

The wealthy have been using the government to protect themselves from competition for thousands of years.

The idea of government as a "watchdog" against big business is a recently developed delusion. For most of history, government is big business.

Anonymous DrTorch May 08, 2013 9:44 AM  

"Keep Smiling"- Exactly. The (unregulated) internet inspired a lot of entrepreneurship, and economic growth. Regulations will continue to slow that down, and be an anchor on the entire economy.

VD- In all honesty, there are simpler examples to make your point. As usual Denninger manages to complicate a straightforward example. Institute for Justice handles cases akin to these. My family is thinking about donating to IJ.

Anonymous Roundtine May 08, 2013 10:00 AM  

The fact is, Amazon still has to pay taxes. They are still victims, though as you make it clear, those hurt most are on the margins. Just like income taxes hurt millionaires less than some poor schmuck who makes $75,000.

As the left likes to point out, if you get a return on your money, you win. Amazon may suffer, but most big businesses win far more from eliminating their competition than they lose from paying taxes. If taxes were cut, these corporations would face higher costs because they'd have competition coming from multiple angles.

There's also more to the story about Amazon opening these local fulfillment centers. They are going to do same day delivery in a lot of places and obliterate local business. Big government smiles, tax revenues are the same.

Anonymous Gimli May 08, 2013 10:00 AM  

OT - or is it?

Occupy Portland Worships Golden Bull On May Day
http://www.youtube.com/watch?v=H8uS-YQo658&feature=youtu.be

Anonymous Gimli May 08, 2013 10:10 AM  

"...but most big businesses win far more from eliminating their competition than they lose from paying taxes."

Perhaps in the short-run. But there's also opportunity costs in that taxation leads to greater market distortions. These distortions can lead to poor decisions and capital expenditures which can be deadly to a larger firm.

Plus the large firm becomes dependent on state largess, and thus must now pay to keep their privileges (e.g. lobbying/bribes).

Lastly, less competition also leads to less innovation, which the larger company could've utilized as much as a smaller one. Like I said, Big Business might suffer less. But everyone still loses from lost production.

Anonymous Sigyn May 08, 2013 10:15 AM  

That's a misrepresentation, Gimli. The "golden calf" was dressed out in corporate symbols, and the dancers had dollar signs worked into their coronets. It was apparently meant to draw a parallel between Israel longing for Egyptian slavery and America longing for corporate slavery.

They're not wrong.

Anonymous Sigyn May 08, 2013 10:16 AM  

I'm not calling you out for it, Gimli. I'm calling out the people who didn't look deeper.

Anonymous Anonymous May 08, 2013 10:19 AM  

Big government folks don't like the seemingly dis-ordered appearance of the free market system where small mom and pop businesses spring up and make a go of it(with some failing of course). At the expense of the consumer, big government wins by exercising more control via regulation while big business wins by nature of it being able to afford the costs of more regulation, while crowding out the little guys(as Vox said). It comes down to the fact that leftists really don't trust the average citizen to do what's best for themselves and their families.

Hayek has a section that discusses this in The Road to Serfdom.

Anonymous Will Best May 08, 2013 10:21 AM  

Better luck converting an atheist to Christ

This isn't all that hard, though it might require extreme circumstances. The prospect of death converts a lot of atheist. Its one thing to not believe in Christ when you are 30 and healthy, quite another when you are 65 and dying of inoperable liver cancer.

Anonymous Stilicho May 08, 2013 10:25 AM  

Plus the large firm becomes dependent on state largess, and thus must now pay to keep their privileges (e.g. lobbying/bribes).

Lastly, less competition also leads to less innovation, which the larger company could've utilized as much as a smaller one. Like I said, Big Business might suffer less. But everyone still loses from lost production.


Even so, the large company remains the relative winner and that brings many rewards to those at the top. Short term thinking dominates modern corporate governance. It also makes it simpler for the politicians: it is easier to keep track of and reward those who bribe you if there are only a few big donors who you really need to keep happy.

Anonymous Sigyn May 08, 2013 10:32 AM  

It also makes it simpler for the politicians: it is easier to keep track of and reward those who bribe you if there are only a few big donors who you really need to keep happy.

And it makes it easier to control the market, if it's divided into industrial blocs.

Anonymous zen0 May 08, 2013 10:33 AM  

Jonah Goldberg covered this phenomenon well in Liberal Fascism.

Anonymous DT May 08, 2013 11:01 AM  

Of course the fundamental problem is having a compulsory tax system in the first place. What would politics look like if you only paid for the government services you actually used, or decided you might use in the future, and nobody could force you to do otherwise?

Anonymous Porky May 08, 2013 11:08 AM  

The business oligarchy was designed from the beginning. In the early days limited government fit the oligarchical model. But with a large population and watered down voter representation big government suits the needs of the corporate oligarch better.

Sorry libertarians. The cat is out of the bag. Always has been.

Anonymous Will Best May 08, 2013 11:14 AM  

Lastly, less competition also leads to less innovation, which the larger company could've utilized as much as a smaller one.

Statist feel that competition is irrelevant for innovation, and in fact competition is a net loss because it carries with it duplicative manufacturing, distribution, retail channels, to say nothing of unproductive shareholders, owners, and managers that don't actually do anything.

Anonymous Godfrey May 08, 2013 11:20 AM  

Capitalism dynamic and progressive. It's a threat to those on top. The elites desire a static controlled system in which they remain on top. A competitive system is a threat.

Think... bail-outs. That's all you need to know.

Anonymous Josh May 08, 2013 11:21 AM  

What would politics look like if you only paid for the government services you actually used, or decided you might use in the future, and nobody could force you to do otherwise?

We would have very little government spending, the majority of expenditures would be for roads, and the inner cities would burn.

Anonymous rycamor May 08, 2013 11:24 AM  

@Josh,

So, no downside then?

Anonymous Josh May 08, 2013 11:32 AM  

So, no downside then?

Doesn't seem to be

Blogger Brad Andrews May 08, 2013 11:32 AM  

The "problem" would be when someone was dying because they refused a "needed" government program. We get all kinds of programs shoved on us because we "need to protect the helpless."

Anonymous Porky May 08, 2013 11:57 AM  

the majority of expenditures would be for roads

Why do you need government to build you a road?

Anonymous CrazyDiamond May 08, 2013 11:59 AM  

"Everything I Want To Do Is Illegal" by Joel Salatin (a book including an essay of the same title -- the latter can be found online) talks about this a lot, in the context of farming and food production. I think some of you will find it interesting.

Anonymous Hyperphrenius May 08, 2013 12:01 PM  

Gimli May 08, 2013 10:10 AM

"...but most big businesses win far more from eliminating their competition than they lose from paying taxes."

Perhaps in the short-run. But there's also opportunity costs in that taxation leads to greater market distortions.


Yes, in absolute terms, societal wealth is decreased. In relative terms, the guys on top get a bigger share of the wealth. And perhaps they like it that way. Much like how the Kim Jongs prefer to keep their people poor and communist, as long as it keeps them on top. Or perhaps they don't realize that their regime of taxation and regulation is going to cause the wealth of their society to decline. The upper class in America gained there wealth through mendacity and manipulation of others. Logical reasoning and understanding of economics do not appear to be their strong suits.

Every law that is passed in Washington is done at the behest of lobbyists, of people with lots of money. If some businesses are victims of taxation, regulation, then it is only because other businesses have lobbied to have those taxes and regulations passed. The big government vs big business dichotomy, accepted by so many libertarians, is false. It always has been, from the time when guilds lobbied parliaments and kings for monopoly rights, and before.

The longer people keep pressing the myth of big business vs big government, the longer our system of crony capitalism will endure, the taxes and regulations will keep going up, and wealth will keep on decreasing, until the whole system fall apart.

Blogger Doom May 08, 2013 12:05 PM  

I knew this by the time I was 14. Why is it so difficult to see why regulation is a bad thing. I have hated to have to argue this point... with small business owners! Gah! I hate to see start-ups fold, but when they are politically suicidal I consider it a grace... or an impossible to avoid coup de grace.

Anonymous scoobius dubious May 08, 2013 12:07 PM  

"The "golden calf" was dressed out in corporate symbols, and the dancers had dollar signs worked into their coronets. It was apparently meant to draw a parallel between Israel longing for Egyptian slavery and America longing for corporate slavery. ...They're not wrong."

Au contraire, ma soeur. People are ALWAYS wrong, and substantially so, no matter what their position, whenever they resort to tacky street theater as a substitute for genuine analysis and realistic praxis. Oh, look! Here comes Peter Schumann and the Bread and Puppet Theater! Here comes the San Francisco Mime Troupe! Here comes the Onion, and Jon Stewart, and the Tea Party, and Occupy My Arse! I bet THEY'LL have an incisive analysis, what with their giant papier-mache puppets and jokes and Sesame Street world-view. Brecht was fundamentally wrong in his theory. (Being a cynic, he knew it, too.) You can make a lot of noise and have a lot of fun and win a short-term gambit that way, but ultimately it's a childish strategy. The only time it ever worked was with the Baby Boomers, because the numbers of intellectual and literal children were just SO overwhelming. But even they got betrayed pretty quickly, and pretty roundly, because they didn't see it coming.

Look at the protests leading up to the Iraq war. All these people marching around and yelling were good little "War Is Bad" leftists, and loyal Democrat voters, and yet the war could not have been sold and passed without the co-operation of the Jewish-owned Democratic party (to say nothing of the Jewish neo-con architects). And so, the good little Jew-puppets did and voted as they were bid to do, the war was somehow mysteriously instigated nevertheless, the Iraqis sustained massive casualties and the loss of their entire government, army, and infrastructure, they were plunged into utter chaos, and to no coherent purpose; the USA suffered plenty of gentile casualties and achieved nothing; the official war aims of the alleged United States had not yet been achieved, but the war aims of the Jews most certainly had been, and what happened next? What happened almost immediately, right after the Jews got what they wanted, but the US was still in a quagmire? The left turned on a dime, after having helped advocate the war, and began to blame the evil WASPs Bush and Cheney for the whole thing. And then, after CNN and the NYT had been complicit in the startup, we saw the whole good ship Titanic turn right around, and Bush and Cheney have been the evil vampires ever since. Where are all those neo-cons? Oh, I don't know, that whole thing's a non-starter.

What did the dopey old-left puppet-marchers in the streets achieve? NOTHING. What did the Jewish string-pullers in DC achieve? Everything they wanted, and then they stuck the bill, and the blame, on the goyim. Perfectly executed.

Watch and learn.

Anonymous Josh May 08, 2013 12:12 PM  

Why do you need government to build you a road?

Your reading comprehension is terrible, little piggy.

This was the question:

What would politics look like if you only paid for the government services you actually used, or decided you might use in the future, and nobody could force you to do otherwise?

Given this question, it's obvious why the majority of expenditures would be for roads under the system described. However, for your benefit, I'll elaborate. Roads are one of the few government services actually used by an overwhelming majority of the people. So that's the one thing people would likely choose to spend money on and use. Fire departments and sewage might be another. Welfare would not, because the people on welfare can't pay for it, and the people paying for it don't use it.

The question posed was not "who should build the roads."

I find your lack of chili disturbing.

Anonymous Stilicho May 08, 2013 12:17 PM  

It will be interesting to watch the growth and development of black markets in the U.S. as people start to avoid the system. And avoid it they will: on one hand you have Democrats who want to raise taxes on damned near everything in order to maximize revenue and on the other we have Republicans who want to lower rates in order to maximize revenue. Maximizing theft from the citizens is not a legitimate function of government regardless of how one wishes to achieve it. Historically, the inherent 20% of GDP limit on taxes appears to be the point where the people find ways of avoiding or mitigating their tax burdens by one means or another. In order to preserve the current order, the government will have to steal more than that historical 20%, but that may not be possible.

Anonymous Stilicho May 08, 2013 12:20 PM  

I find your lack of chili disturbing.

http://www.food.com/recipe/pork-chili-151464?layout=desktop

Anonymous Porky May 08, 2013 12:28 PM  

Josh: "Given this question, it's obvious why the majority of expenditures would be for roads under the system described. However, for your benefit, I'll elaborate. Roads are one of the few government services actually used by an overwhelming majority of the people."

Bold emphasis mine to remind you what you actually said, and thenI'll repeat the question. Why do you need the government to build you a road?

You are operating under the assumption that roads are a government service. I think that's a very foolish assumption, exacerbated by some very foolish reasoning on your part (the idea that 'most people use it so government should be involved in it').

Anonymous Stilicho May 08, 2013 12:31 PM  

You are operating under the assumption that roads are a government service.

Most are. Whether they should be is a different matter.

Anonymous Porky May 08, 2013 12:40 PM  

Most are. Whether they should be is a different matter.

We're talking about a hypothetical situation where people can pay only for the services they use. Given that hypothetical I ask why anyone who is given the chance to build the road for themselves would foolishly ask a government bureaucracy to do it.

(Not sure why it's such a hard question to answer. No, actually I am very sure. )

Anonymous rycamor May 08, 2013 12:42 PM  

Porky, is/ought is one of those basic conflations which ruin civilized discourse. You must try to resist this tendency toward wilful obtuseness.

Anonymous Gx1080 May 08, 2013 12:44 PM  

Under all the hypocrisy and lies, all Statists want a Neo-Feudalist state, with them at the top and worshipped as demigods.

And all of them support their clientist model, where only those "connected" get to thrive, everybody else gets told to fuck off.

Anonymous Porky May 08, 2013 12:48 PM  

Josh: Fire departments and sewage might be another.

Again, in the US most firefighters are volunteers. Do you really expect that if you suddenly gave people the right to opt out of paying for fire services that they would suddenly reverse course and go running to big daddy for help?

And sewage? I would have gladly built the sewers myself rather than let my corrupt city council do it.

You're thinking like a good little government lap dog. Think more like someone who has just been freed from the bonds of taxation without representation - which currently explains why roads, sewers and fire departments cost 10's of times what they should.

Blogger Dan Hewitt May 08, 2013 12:54 PM  

Brad DeLong posted an old essay on his site today, that explores why corporations have grown so huge despite from their economic inefficiencies (internal transactions that are insulated from the market). It’s somewhat long, but worth reading in its entirety (if not just for the irony of watching DeLong sound like Mises).

http://delong.typepad.com/sdj/2013/05/brad-delong-1997-the-corporation-as-a-command-economy.html

The corporation in America is valuable to the government because it can be called upon to do more than its own private purely economic tasks. From the perspective of the modern government, the corporation is the government's principal tax collector. The corporation collects the government's income and sales taxes for it. Withholding for income taxes and point-of-sale collection for sales taxes make the paying of taxes largely automatic. The government would have an infinitely more difficult time collecting anything if it had to deal with each individual for his or her entire tax bill either for income or for sales taxes.

Indeed, there is no one that the Internal Revenue Service fears more than the independent contractor: the person who does not work for a corporation, and with whom the government must deal directly in order to collect taxes. So the IRS tries as hard as it can to force independent contractors into being someone's employees. It desperately wants collecting, withholding, and monitoring compliance with the tax law can be their employers' job--and not the IRS's.

Anonymous Porky May 08, 2013 12:54 PM  

rycamor: Porky, is/ought is one of those basic conflations which ruin civilized discourse. You must try to resist this tendency toward wilful obtuseness.
I'm not saying "is" or "ought". I'm saying that given the hypothetical people would not do what Josh says they'd do.

If we're going to explore a hypothetical about being freed from taxation let's explore it. I understand people have been conditioned to automatically look to Uncle Sugar Daddy for everything but if taxation were suddenly made voluntary roads would be the LAST thing people would be sending their cash to Uncle Sam for.

Anonymous Porky May 08, 2013 1:06 PM  

Socratic query is wasted on imbeciles and the butthurt.

Anonymous Stilicho May 08, 2013 1:14 PM  

But if they're going to have to pay them anyhow, then it is much better for Amazon if everyone, including their competitors, is forced to deal with the compliance costs that Amazon is much better suited to pay given its size.

One tax to rule them all, one tax to find them; one tax to bring them all and in the darkness bind them.

Anonymous Stilicho May 08, 2013 1:15 PM  

Socratic query is wasted on imbeciles and the butthurt.

Why do you believe that?

Anonymous Porky May 08, 2013 1:23 PM  

Why do you believe that?

I don't know. I read it on a fortune cookie or something.

Anonymous Stilicho May 08, 2013 1:31 PM  

I don't know. I read it on a fortune cookie or something.

I see what you mean.

Anonymous Porky May 08, 2013 1:33 PM  

Do you?

Anonymous Josh May 08, 2013 1:50 PM  

I'm saying that given the hypothetical people would not do what Josh says they'd do.

History proves otherwise.

Anonymous DonReynolds May 08, 2013 2:11 PM  

There was a useful discussion yesterday about that bill, the important point being that the interstate sales tax bill passed by the Senate specifically EXEMPTS those firms that sell online ONLY. The thrust of this bill is to tax those online retail sales that would otherwise be taxed in the retail store owned by the same firm. Amazon may be very much in favor of this bill, if they do not have any retail stores, and only sell online. This effectively shields them from the sales tax enforcement efforts of all fifty states. They should be delighted.

Anonymous DonReynolds May 08, 2013 2:13 PM  

Correction................

There was a useful discussion yesterday about that bill, the important point being that the internet sales tax bill passed by the Senate specifically EXEMPTS those firms that sell online ONLY. The thrust of this bill is to tax those online retail sales that would otherwise be taxed in the retail store owned by the same firm. Amazon may be very much in favor of this bill, if they do not have any retail stores, and only sell online. This effectively shields them from the sales tax enforcement efforts of all fifty states. They should be delighted.

Anonymous Porky May 08, 2013 2:14 PM  

History proves otherwise.

Cite?

Anonymous Josh May 08, 2013 2:28 PM  

Cite?

The history of the united states, for one.

Anonymous Porky May 08, 2013 2:40 PM  

The history of the united states, for one.

Cite?

Blogger James Dixon May 08, 2013 2:44 PM  

> I've heard rumors of townships that have started exempting local-only transactions from sales taxes, by the way. Anyone else hear this?

Since most sales taxes are set at the state level, and most states don't allow for independent townships, I'd consider it possible but unlikely to hold up in court.

> History proves otherwise.

OK< I'll be pedantic for a moment. History demonstrates otherwise. That's not quite the same thing as proves.

Anonymous Stilicho May 08, 2013 2:47 PM  

Since most sales taxes are set at the state level, and most states don't allow for independent townships, I'd consider it possible but unlikely to hold up in court.

Many municipalities have their own sales taxes that are in addition to state sales taxes. Those local taxes could be the ones in question.

Anonymous Josh May 08, 2013 3:00 PM  

Cite?

Henry Clay's American System. Also basically the unimpeded increase in the size of government throughout the last two hundred plus years.

Blogger James Dixon May 08, 2013 3:02 PM  

> Those local taxes could be the ones in question.

That shouldn't require any special exemption, should it? They have full control of their local taxes, except that the level they are allowed to impose may be set at the state level. There's also the problem of exactly how they define local-only transactions. How do they know where my to go order at McDonald's is actually going to be eaten?

Anonymous Josh May 08, 2013 3:08 PM  

OK< I'll be pedantic for a moment. History demonstrates otherwise. That's not quite the same thing as proves.

I standard corrected. History demonstrates otherwise.

Anonymous Porky May 08, 2013 3:19 PM  

Henry Clay's American System. Also basically the unimpeded increase in the size of government throughout the last two hundred plus years.

Sorry. That's not even close to an example of voluntary taxation.

Just retract and be done with your nonsense.


Blogger republicanmother May 08, 2013 3:20 PM  

Amazon is so big, that they have standing sweetheart deals with all the big carriers. Smaller online stores have a harder time competing with Amazon's free shipping, especially when they can't offer it and their customers will have to pay sales tax on top of it.

Frederic C. Howe's playbook always pays off: Make society work for you - a government regulation can be worth more than a gold mine. Use government to shut down your competition.

Anonymous Anonymous May 08, 2013 3:34 PM  

old white guy says..... as someone who was a small business owner I can attest to the fact that the big guy with with deep pockets can comply with and also fight regulation where I could not and as a result I had to close my business.

Anonymous Josh May 08, 2013 3:34 PM  

Sorry. That's not even close to an example of voluntary taxation.

Just retract and be done with your nonsense.


What nonsense? Governments expand because, generally, the people being governed want the government to provide more government services. You can argue about what they should want the government to do or not do, or whether they should even want a government in the first place. That's not the discussion we're having, although you're rather determined to drag it there.

Anonymous Josh May 08, 2013 3:36 PM  

And little pig, what about all those ballot measures to raise taxes (usually wheel, property, or sales) that pass?

Blogger RobertT May 08, 2013 3:47 PM  

What I found interesting about this is that KD came down on the side of big brother and ever higher tax burden. He must dislike Amazon as much as he dislikes Apple. The drive for additional tax revenues from unique and untested places by the states is growing stronger and stranger every year. Many of the things that used to be unconstitutional is not unconstitutional any longer. Internet sales tax is low lying fruit in this game, but consumers end up paying sales tax and they think whole thing is bull****.

One additional point, the reason big corporations like regulation is because it stifles competition. The big corporations have divided up the pie between them and they really don't mess with each other's markets. They don't have to worry too much about competition because the barriers are too high, regulation among them. Every big company has tons of lobbyists and is thick with politicians. Plus insider trading is legal for federal office holders. You connect the dots. The earlier post about conspiracy fits in right about here ...

Anonymous Porky May 08, 2013 3:56 PM  

What nonsense? Governments expand because, generally, the people being governed want the government to provide more government services.

Now you've changed the hypothetical. It wasn't about the poor asking the rich to pay for a school or a freeway. It was about everybody paying only for what they want to pay for and use.

And little pig, what about all those ballot measures to raise taxes (usually wheel, property, or sales) that pass?

Poor people asking the rich to pay. It has nothing to do with the question.

Anonymous Josh May 08, 2013 4:04 PM  

It was about everybody paying only forwhat they want to pay for and use.

Which is why I said roads. Because everyone uses roads. People might be anarchist by nature, but they've certainly been conditioned to believe that you need government for [insert here]. The issue isn't whether the government should provide infrastructure. It's what would government look like if people paid for services they use. Currently most of the people use roads and other infrastructure like sewers. Which are currently considered to be government services. So, they would most likely continue to use those services and paY taxes to maintain them. Either you're being deliberately obtuse and pedantic or your reading comprehension is below Asher and tad levels. Or both.

Poor people asking the rich to pay. It has nothing to do with the question.

So the poor don't drive cars or purchase goods and services?

Anonymous Porky May 08, 2013 4:25 PM  

Currently most of the people use roads and other infrastructure like sewers. Which are currently considered to be government services.

Never heard of a privately funded, privately built, privately owned toll road? They're all over the place.

Now imagine an across the board highway tax refund. You think people will be sending their checks back to the government begging for road maintenance? Or do you think they'll take their huge check and pay a few tolls?

Currently most of the people use roads and other infrastructure like sewers. Which are currently considered to be government services. Either you're being deliberately obtuse and pedantic or your reading comprehension is below Asher and tad levels. Or both.

No sir. There are private freeways, private sewers, private water treatment plants etc. etc all over the this great nation.

You are ignorant and you've been conditioned to believe that these are things that only Big Uncle Sugar provides. It's not the case.

And given a proper choice, people will probably keep their money to spend as they wish. In this country the choice is usually between rich people paying for stuff or rich people paying for stuff, and that choice is usually made by poor people.

So the poor don't drive cars or purchase goods and services?

Do you reeally think that's what I just said, Mr. Reading Comprehension?














Anonymous DonReynolds May 08, 2013 4:28 PM  

One unmentioned point about sales taxes, unlike so many other taxes, can be exported to citizens of other states and jurisdictions. A state with all its major cities along or near the state line, like Tennessee, knows that a good portion of the sales tax burden is paid by citizens in adjacent states. This is another reason why government loves tourism. The jobs are pretty crummy in tourism, but the "hamburger" tax (hotel and restaurant additional sales tax) can be pretty significant.

Anonymous WaterBoy May 08, 2013 4:37 PM  

"That shouldn't require any special exemption, should it? They have full control of their local taxes, except that the level they are allowed to impose may be set at the state level. There's also the problem of exactly how they define local-only transactions. How do they know where my to go order at McDonald's is actually going to be eaten?"

I believe Mr. Dixon has the right of it; if the city has a sales tax¹, it typically only applies to local transactions in the first place. But there could be instances in which they could exempt some local transactions but not others.

To illustrate: there are four transactions where S(eller) and B(uyer) reside I(nside city limits) or O(utside city limits) that may or may not be subject to local sales tax. These are:
A) SI + BI = sales tax
B) SI + BO = no sales tax²
C) SO + BI = sales tax³
D) SO + BO = no sales tax

It may be that situation A is being temporarily exempted, while C is not.

¹ It should be kept in mind that sales tax is actually sales and use tax in most cases, and also applies to things purchased outside of the jurisdiction but brought into the jurisdiction for use.
² It is usually incumbent on the Buyer to seek reimbursement of city sales tax automatically collected by the Seller, but is sometimes possible to be exempted from paying in the first place by proving outside residency.
³ As noted in footnote 1, the requirement to pay a sales & use tax on a Buyer living inside the city limits is not alleviated by buying from outside. It just won't be automatically assessed by the Seller.

Anonymous Outlaw X May 08, 2013 9:33 PM  

Call them the Elite or whatever you will, but when all of it is broken down in simple terms is the Banking elite trying destroy the Nation State and the liberty of the people though momentary subjugation. As it has always has been.

Anonymous Porky, Pig of Wisdom May 08, 2013 11:42 PM  

Either you're being deliberately obtuse and pedantic or your reading comprehension is below Asher and tad levels. Or both.

No, the explanation is much simpler. You made two critical errors in judgement. 1, you ignored what I said and assumed that you knew what I was thinking - almost always an epic fail. And 2, you mistook an honest Socratic query to be some kind of opinionated soap box speech when it was nothing of the sort - a mistake that Vox is constantly reminding you about. You fail to even recognize dialectic and automatically assume the rhetorical defense.

For my part, I'll be sure to only address you with rhetoric from now on.

Anonymous Toby Temple May 09, 2013 3:27 AM  

We would have very little government spending, the majority of expenditures would be for roads, and the inner cities would burn.

I think the majority of the government expenditures will be on the military/defense.

Roads can be funded by the private sector.

Anonymous Stilicho May 09, 2013 8:19 AM  

Sorry it took so long to get back to you, James. Work intruded.

That shouldn't require any special exemption, should it?

Well, yes. The tax applies to most transactions, including ones between locals. I don't know what you mean by "special" exemption, but an exemption would be required.

They have full control of their local taxes, except that the level they are allowed to impose may be set at the state level. There's also the problem of exactly how they define local-only transactions. How do they know where my to go order at McDonald's is actually going to be eaten?

Who knows, ID/proof of residence perhaps? Remember this was something cooked up in the bowels of gov't, so one should not expect it to be a wise plan, or even practical. Someone can say he DID something for his constituents though, and that's what really matters, right?

Blogger James Dixon May 09, 2013 8:58 AM  

> Remember this was something cooked up in the bowels of gov't

True. I keep forgetting that the government loves to complicate things, even when there's no objective gain from doing so. :(

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