California dreaming: “Let’s tax the internet!”

August 17, 2010

I want what these guys are smoking.

Desperate for revenue and unwilling to cut spending for fear of alienating their union donors, the progressives who control my beloved state’s legislature have revived a dumb idea thought dead: taxing Internet commerce. In this case, by requiring Internet merchants who advertise through California-based businesses to collect sales tax on all transactions made within the state.

It takes a special kind of dumb to come up with this, friends:

Nonetheless, those tracking the debate say that Democrats in the legislature could attempt to push it through in the coming weeks and months, playing off of widespread concern about the state’s fiscal mess and inability to cover its financial obligations.

Just this month, Americans for Tax Reform (ATR) issued a letter to California legislators noting that a vote in favor of the plan, which was rejected by Gov. Schwarzenegger last year, would be scored by the organization “as a tax increase.”

Other opponents meanwhile are speaking out against the proposal, noting that California is unlikely to in fact collect additional tax revenue, should the plan move forward.  In North Carolina, where such legislation was recently instituted, opponents say online retailers stopped advertising with in-state marketing affiliates, such as blogs and websites, rather than collecting and remitting the tax.  That example has marketing affiliates themselves arguing that were this tax increase pushed through, not only would it damage their businesses, but it would actually have a negative, as opposed to neutral or positive, impact on the state budget.

Mattias Larsson of Marina Del Rey, California, who runs the website DefinitiveDeals.com, opposes the plan, arguing that his business “will be devastated by the sales/use tax nexus bill,” and adding that he paid “well over $50,000 in California personal income tax last year”—a tax bill that could be lower in future were retailers to yank ads from his site, as has occurred in North Carolina.

Ryan Owen of Santa Monica and Savings.com meanwhile believes that in addition to threatening California’s existing revenue stream from him business, were the proposal to move forward, it would threaten jobs.  “Not only will the major merchants not collect the use tax for California, but 25,000 small businesses will suffer, hire less people and pay less income tax,” he said in a statement.

There’s also a constitutional question based on a court decision holding that a business has to have a physical presence in the state, which is the reason Dell, for example, collects tax on its Internet sales – they’re also available at the local Best Buy.

But, constitutional questions aside, this is just bad policy that will make a bad situation worse. As the examples above make clear, e-merchants who advertise through California companies will have a great incentive to switch their businesses to states that don’t force them to collect sales tax (which, don’t forget, is an added expense for the business). I’m sure low-tax Nevada, for example, which is suffering from some of the highest unemployment in the nation, would love to have the jobs.

And, back here in the Golden State, how much sense does it make to give businesses further incentives to flee the state? It’s not as if we’re flush with jobs as it is.

Californians and California businesses are taxed enough already, and there are only three real solutions to the state’s budget crisis:

  • Raise revenue by exploiting the vast resources we have. Assemblyman Chuck Devore has proposed renewed licensing for offshore drilling using safe slant-drilling technology. With over $120 billion in proven resources off the coast, royalty fees could generate tens of billions in new revenue without raising taxes.
  • Cut taxes on businesses and cut back on the bureaucratic impediments to business expansion in the permitting and environmental review processes. This would give businesses an incentive to come here, instead of leave, and to hire more people.
  • Cut spending. I know, with our legislature, it’s like asking a wino to put down the bottle. But it has to be done, absent new revenues. And, thanks to the profligate ways of the legislature and, yes, the People, who approved bond issue after bond issue, the necessary cuts will be painful. But they’re also very much needed, if this problem is ever to be fixed.

But, I don’t hold my breath in hope that Assembly and Senate Democrats will come to their senses; they’re professional legislators who see the enactment of patronage programs and the donations they get in return as their whole reason for being. Recovery will be a long, slow process of legislative and fiscal reform, unless a crash forces their hands.

Until then, California keeps doing it’s best impression of Thelma and Louise:

(Crossposted at Sister Toldjah)


So, you want a value-added tax?

July 30, 2010

Democrats and some Republicans are floating the idea of a value-added tax to help ease the crushing deficits caused by the (Social) Democrats’ massive spending binge. Before you say “Sure, why not?”, take a look at the VAT rates that would be required over the next ten years to eliminate the deficit:

(Click to enlarge)

Remember, that tax would be applied at every stage of production, from raw materials to the moment you purchase the item, and the costs would be passed along to you.  Oh, and then you’d pay state sales tax, too.

Still think it’s a good idea?

Here’s a better one. Maybe they should cut spending and borrowing, instead. Idea

RELATED: Reasons why a VAT won’t work.

(via dmataconis on Twitter)


Climate bill dead?

July 21, 2010

Politico is reporting that the Kerry-Lieberman bill to fight anthropogenic climate change (You know, the problem that doesn’t exist), which only a few days ago looked like it was heading for a vote in the Senate, may instead be dead:

The Senate climate bill has been at death’s door several times over the past year. But with the days before the August recess quickly slipping away, the case may truly be terminal now.

Senate Majority Leader Harry Reid (D-Nev.) has wanted to introduce a sweeping energy and climate bill by next week, and Reid even told POLITICO on Monday night that the package was almost ready to go.

But by Tuesday afternoon, Reid was noncommittal about when a bill would come or what it would contain.

“We’re going to make a decision in the near future,” Reid said, describing plans for a Democratic caucus on the issue Thursday. “We’re really not at a point where I can determine what I think is the best for the caucus and the country at this stage.”

Key advocates for legislation to cap greenhouse gases emitted by power plants are pleading for more time as they try to cut a deal with the industry, but it’s time that Reid doesn’t have as he races to finish other Senate business — including the confirmation vote on Supreme Court nominee Elena Kagan — while girding for a bruising midterm election.

Meanwhile, swing-vote Democrats and Republicans are still clinging to the fence, if not saying no outright. And President Barack Obama has yet to deploy the kind of whip operation his allies think is necessary if the bill has any chance of notching 60 votes.

“The clock is our biggest enemy,” Sen. John Kerry (D-Mass.) told reporters Tuesday, shortly after a meeting with several major electric utility industry CEOs who asked for a delay in the floor debate. “Some people know that. We have to figure out what is doable in this short span of time. That’s the test, and we’re going to take a look at that.”

The article goes on to detail the problems: comprehensive regulation was too difficult to get through thanks to political and business opposition, so the bill was scaled back to “just” the electrical industry. (Which would mean your rates would still skyrocket.) But the utilities want concessions the environmentalists hate, and coal-state senators (coal being a fuel for power plants) complain their constituents would be hurt disproportionately. With all these obstacles to get past in the short time left in the legislative session, and with the prospect of a greatly reduced majority in the Senate and the very possible loss of the House after the next election, not to mention the reluctance of some vulnerable senators to further annoy their already angry voters, there doesn’t seem much likelihood this or any version of cap and tax going through this year or next.

Lucky for us.

(via Watt’s Up With That)

RELATED: Senator Kerry (D-Botox) says his bill is not dead yet.


Only in a Progressive’s imagination

July 2, 2010

Only in the Hopium-dream economics of a (Social) Democrat could the idea that unemployment checks are a “job creator” sound reasonable.

Enter Speaker of the House Nancy Pelosi:

I’m now convinced: the (Social) Democratic leadership are refugees from Wonderland.

Via Dan Mitchell, who provides an earlier video of his explaining why Pelosi’s Keynesian economics just don’t work:

November can’t come fast enough.  Praying

LINKS: More from Sister Toldjah.


Dumb Crooks of the Month, international edition

April 1, 2010

An important safety tip for all would-be pirates: it is perhaps not conducive to your long-term (or even short term) career success and personal well-being to shoot at a US Navy warship when you’re in a skiff.

Compare and contrast.

American Navy frigate USS Nicholas:

Representative Somali pirates in skiff:

We used to call this “evolution in action.”

(via The Jawa Report)


Begging to pay too much

March 1, 2010

The latest bright idea out of the Lightworker administration is a doozy: the awarding of government contracts based on who pays their workers more. Oh go on

No, I’m not kidding. Surprise

Watch as liberal Dave Madland (a fitting name if there ever was one) tries to defend this hair-brained idea and Dan Mitchell of the Cato Institute makes clear just how stupid it is. (And I don’t think the hostess was convinced, either.)

This is like making Pentagon procurement practices official policy.

(via Mitchell’s blog, International Liberty)


Epic National Security Fail in the making

January 3, 2010

So, you barely avoided a devastating terror attack in the skies over Detroit and you learned the plan had a strong connection to Yemen and al Qaeda. An earlier terrorist attack that you didn’t avoid, the Ft. Hood Massacre, also had a strong connection to Yemen and al Qaeda. Yemen is widely regarded as a haven for Islamic terrorism, and the al Qaeda branch there is considered a rising star in that salafist organization. The Yemeni government, while claiming to be an ally, plays a double game and cooperates with al Qaeda. Yemenis released from Guantanamo have been known to rejoin the jihad in Yemen. Things have become so dangerous there that you and the British have closed your embassies.

So, what do you, President Barack Obama, do in the face of this and other evidence?

Why, what else but insist you will carry out your plans to close Gitmo and return even more Yemenis to Yemen?

Genius!

White House: No matter what, we’re sending Gitmo prisoners back to Yemen

As Susan notes below, a bipartisan group of lawmakers is urging the Obama White House not to go forward with plans to send a number of Yemeni terrorists now being held in the Guantanamo Bay detention facility back to their home country. But the Obama White House insists it will continue to send those Gitmo inmates to Yemen — a country now recognized as a hotbed of terrorism so dangerous that the U.S. has decided to close its embassy there.

On Fox News Sunday, top White House counterterrorism adviser John Brennan said the administration “absolutely” intends to keep sending Guantanamo prisoners to Yemen. The administration has sent seven detainees to the country, Brennan said, with six of those sent in December. “Several of those detainees were put into Yemeni custody right away,” Brennan said. He did not elaborate on how many is “several” or where the other Guantanamo inmates sent to Yemen might be today. But he said the U.S. has faith in Yemen to handle the situation. “We’ve had close dialogue with the Yemeni government about the expectations that we have as far as what they’re supposed to do when these detainees go back,” Brennan said.

You mean like all the other al Qaeda prisoners they’ve kept under lock and key, Mr. Brennan? Past performance does not inspire confidence, regardless of your reassurances.

It’s Smart Power the Hundred Acre Wood foreign policy in action.

LINKS: More from Fausta.