Rant on Taxes

Starting today, internet purchases made by New Yorkers from non-New York State retailers, such as Amazon.com, will be subject to state sales tax. As one who buys a fair amount of stuff online, primarily books and CDs, I can’t say that I am thrilled by the addition of 8% to each of my purchases. I suppose that it does level the metaphorical playing field somewhat, but please don’t tell me that this is a boon to local retailers. In the 12 years I have lived in Rochester, Borders and Barnes and Nobles has systematically squeezed every independent book and CD seller out of existence. All this will do is take more money from consumers.

I can understand the purpose of a sales tax if you are selling something in New York State. Presumably, as a local retailer you benefit from a host of local goods and services, and you should pay for the privilege, though of course that cost is just passed along to the consumer. But an out of state retailer gets no services from New York State, and the state does not provide any of the transportation costs for the item, which is either sent by the US post office or via a private carrier. So basically we are being taxed simply for the privilege of living in New York State, and New York State does nothing for this additional money except collect the tax.

Now I don’t want to sound too peevish. I know, someone has to pay taxes, revenue is down, because real estate values are plummeting, the stock market is not having a good year, the price of gas is way up, and New York State, like every state, is facing a budget crisis. And at least when New York State collects the money, even if its frittered away on boondoggles, it’s not a subvention for an evil and criminal war in Iraq.

But it seems to me, if we need tax revenue, let’s just raise taxes. And this is something that contemporary governments just refuse to do. They will sneakily raise your assessments, so your property tax goes up even if the tax rate stays the same, and even if, as in Rochester, house prices have been going downward. (The whole metaphysics and arbitrariness of assessments, is a subject, that if I were a conservative, would be the subject of many angry posts.) And they can raise user fees, past the point where anyone is going to use the item in question. (I am sure the new additional $1.50 tax on every pack of cigarettes, raising the price to $7.00 a pack, will in the end be revenue neutral, but there is no interest group more voiceless these days than smokers, except perhaps for pedophiles, though they say that Obama is a secret smoker and perhaps he can do something about this.)

Speaking of Obama, it seems to me that is the essential problem with small tax increases, like out of state sales taxes. If we are going to get this government back on track, end irresponsible deficits, institute national health insurance, we are going to have to raise taxes, and not in a half-assed way like New York State did, just penalizing book addicts and nicotine addicts. We will have to seriously increase the income tax, institute a national value added tax, eliminate the mortgage deduction, or something big like that. (I don’t want a flat tax, I want a sharp tax.) So little tax increases just postpone the day of reckoning, and give the illusion that we are doing something.

So to return to the sales tax on out of state internet purchases, its not the money, but the principle of the thing. Its too small to make a real difference. We have to get used to big taxes that everyone will grumble about. Obviously, the tax we should really levy at this time is a $3 a gallon tax on gasoline, to help with the transition from an internal combustion economy, and discourage excessive car use. Oh why don't we postpone the out of state sales tax until Paterson is ready to suggest a new tax that will make everyone suffer equally? That, after all, is the true meaning of democracy.