Obama? Good, Bad or Ugly for the Internet?

Is a President Obama a good thing for the Internet? He won approximately 51% of he popular vote. Which means 49% are anti-Obama. Regardless of your political affiliation, he will be president for at least the next 4 years. Maybe 8.

He hasn’t said a great deal about the Internet, other than he favors Net Neutrality. Whatever that means.

With the economy in the doldrums, Congress will be looking not only cutting expenses, but raising new revenues, ie taxes. Even if the Congress opposes I-Taxes, the governors of the states will be pressuring Congress to approve some type of tax.

There are billions flowing through the Internet pipelines, and the governors are salivating at the thought of it. Let’s assume for a minute a tax is approved. How would it be implemented?

There’s a variety of sales taxes in the various states, ranging from 3% to 8%, with a lot of exemptions, such as food and medicines in some states. The best way, to my thinking is to pick one flat percentage, say 6%.

One question is: How do you distribute the money? By population? By need?, some other way? That argument alone will keep Congress debating for 6 months. Then, How do you collect the money? From the seller, or the buyer?

If I buy an item from the local store, say for $50, At 6%, I would pay the merchant $53, with the store remitting $3 to the state. No problem. But doing it on the Internet is much different. If the seller is going to collect the 6%, how does the merchant track this? If I buy the $50 eBook or program from you, what system do you use to satisfy the government?

And where do you send the money too? Which state, as you probably have customers in all or most of the 50 states? And what about the merchant that’s located in Canada, Mexico, China, India or Europe?

Are they exempt? If not, how to you enforce the collection. Do you really think these merchants will voluntarily submit the money to the State? Sure they will!!

There is a possibility that Congress could force the credit card industry to track and report and submit the taxes. But there would be strong objections from the banks, which pretty much control Congress. Look at the recent change in bankruptcy laws.

So that leaves collecting from the buyer. Excuse me while I try to keep from laughing too loudly. Can you imagine the buyers on the Internet report to the state, yes I bought x amount of product on the Internet, and here’s my check for x dollars. Good luck on that one.

Here’s an article that appeared in Forbes Magazine recently:

"Attention, online shoppers! This may be the last holiday season you can dodge sales taxes by buying presents on the Web. State legislators, retailers and lawyers say 2009 may be the year Internet taxes finally come to pass.

The idea, which would levy sales tax on most goods bought online, has been tossed around for nearly a decade. A perfect storm of factors, including record state budget deficits, a new Congress and continued e-commerce growth, appear likely to rekindle the issue. Experts say that
cash-strapped states view this revenue, estimated to be several billions of dollars, as money left on the table.

“States are coming up with huge deficits and looking for places to make money,” says Eric Menhart, the principal of CyberLaw, a Rockville, Md.-based law firm that concentrates on technology legal issues. “All of a sudden, Internet taxation appears a lot more viable.”

Spotting an opportunity, legislators and other proponents of Internet taxation are renewing their efforts. Scott Peterson, executive director of the Streamlined Sales Tax Governing Board, a group that oversees states’ efforts to simplify and modernize sales tax issues, says legislators from Florida, Illinois, Massachusetts, Texas and Virginia, among others, have recently contacted him about the issue.

The plan: to reintroduce legislation as early as January when the new Congress takes office. The legislative route is necessary because the Supreme Court ruled in the 1990s that states can’t require out-of-state retailers to collect sales tax on online sales. Proponents believe that making their case to Congress would be faster and more practical than wending their way through the courts."

What a nightmare this whole thing would create. I can see this taking several years to pass Congress. There would be a tremendous amount of backlash from the consumer/taxpayer/voter. And Congress knows this.
As a seller on the Internet, what happens is of significant interest to you and me.

If we sellers have to keep records of sales for the government, including names and addresses, and probably social security numbers, that would create a tremendous work load. Plus, most people will not give you their social security number. I wouldn't.

Believe me, if it means revenue for the government, they will want social security numbers. And that would be a severe damper on sales. Then we need to start worrying about hackers.

My advice to Obama, STAY OFF OF THE INTERNET! All it takes is for all of us to write our elected representatives in DC to stop any taxation legislation in Congress. Already the government has the $700 billion bailout of wall street and the banks. When do we get a ‘bailout’?

Want to know who to write to? Go to: http://www.ezgram.com/congress.cfm for your representative in your state.
Copyright 2008