A good lawyer thinks of problems. A great lawyer thinks of solutions. Add Mississippi attorney and blogger Philip Thomas to the great category.
Thomas has the brilliant idea to use a predicted tax windfall from Internet sales to fund Medicaid expansion under Obamacare. According to the Wall Street Journal:
Republican governors, eager for new revenue to ease budget strains, are dropping their longtime opposition to imposing sales taxes on online purchases, a significant political shift that could soon bring an end to tax-free sales on the Internet.
Many states oppose the expansion of Medicaid under Obamacare -- which would cover millions of uninsured working Americans -- because they say they are too broke to afford even the 10 percent contribution required under Obamacare. Even though such an expansion of medical coverage would provide a huge stimulus to the states' economies (and therefore tax revenues).
Thomas notes that Mississippi's share of this revenue is predicted by the Journal to be $303 million annually -- an amount that would go very far to help citizens of the nation's poorest state. According to Thomas, about $160 million would cover the state's share for Medicaid expansion to an additional 250,000 to 400,000 people in Mississippi.
Many of these are the "working poor" who have jobs in Walmart or nursing homes, but no hope of ever affording health insurance on their own. What governor in his right mind would turn down healthcare for his state's most vulnerable and hardworking citizens? Imagine all the lost productivity, to businesses and families, that comes from untreated illness. And imagine all the good jobs that will be created to meet their healthcare needs.
It's a no brainer. And thankfully one lawyer has the smarts to call for common sense.
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This tax is just more bad business coming out of Washington.
However "shipping charges" is simply a hidden add-on to the price.
Consider, where's the profit in books offered for a penny? The profit is in "shipping and handling".
Businesses say clearly in their fine print, that your "regular delivery" is charged at a flat rate -- the shipper will then choose the least expensive method--and quietly pocket the difference as profit. It might also be an accounting device to avoid corporate taxes. What is actually profit is tallied as an "expense". A prudent consumer should lump all costs together as "the price".
A sales tax is a pass-along, though a fair assumption is that it will affect some types of businesses far more than others.
Also, a sales tax is in effect "regressive", hurting middle to lower income people more than the wealthy. Online sales are so large that a tax would have to affect the economy. This should be of more interest to Keynesians who advocate "consumer sided" stimulus, as opposed to supply-side. Will it affect consumer spending, and therefore, commerce and therefore jobs? Would we be hurting the marginal poor more than we realize? In effect, are we cutting off the dog's tail to give him a nice piece of meat?
There should be clear answers available, were economics not so politicized.
This would be a national sales tax passed by Congress?
The tax would be "designated" to be used only for one purpose?
We would have to set up a federal agency, first for accounting, and second for enforcement to see that the money is entirely properly used?
Or would this be each state doing its own enforcing?
I understand that there have been "designated" taxes in the past, for example, designating all money used for a new toll road to be used exclusively for maintenance that is often never done -- the money instead is channeled for other things, despite the "designation".
Legally, what does "designation" mean?
More important, what are the built-in loopholes?
If enforcement is federal, we choose between Republicans who will ostentatiously regulate nothing, and Democrats who some believe, will do just a little regulation (I think even that much an open question.)
We have one party openly trashing the whole concept, and the other party and it's leader doing nothing to persuade the public of the value of it's own bill.
No question Republican and Democratic governors will grab for Federal money.
In this political climate, who on either side will enforce it's proper use?
Both legally and politically?
A very good idea for a sane culture which this is not.
In deference to your predilection as host to keep a flexible and open forum, I am happy to answer your other question to me from another thread (with a bow to Lord Whimsey) -- my former avatar, Sydney was retired to avatar heaven where he is happily pigging out on Dog Yummies.
What looked great on my pinup board doesn't reproduce well. I'll have to rework the design to accommodate 75 pixels, but unquestionably with the same colors.
Those colors have a long political history
(You raised it as question, counselor. I claim the right to a complete answer.)
If you Google the works of Toulouse-Lautrec, the grandfather of modern graphic art, you will find a magnificent poster composed of those colors. See how arresting and primal are those colors for all of us.
Red, white and black (not orange) were the colors of the Prussian federation, continued by the National Socialists -- very military.
Red, orange and black, were the colors of a southern German confederation, now the modern German flag, perhaps the whole complex history of a great people embodied in two simple statements but with meaning for all of us regardless of background.
Red (socialism) and black (anarchism) diagonally bifurcated, was the banner of the 19th century Left. Perhaps their greatest shortcoming can be summarized as a lack of orange in their thinking, again, perhaps a lesson for us today.
Also, no doubt some angry Marxist is going to point out that the red and black was the flag of syndicalists, not all leftists.
Secondly, the person making that purchase online(or mail order) was ALREADY responsible for paying the sales tax directly. Its not that the state wasn't owed the money, it's the collection mechanism thats troubling. If state XYZ can't get the people of its state to pay the sales tax then it's unlawful to ask a private company to do the bidding of the state that its not even located in.
Bottom line is that the world is so over taxed that any loophole is appreciated. It shouldn't be about taxing everything that moves until it stops moving.
Any program introduced must have enough funding. The budget needs to be controlled (no more credits, not more increase in debt ceilings, etc). No one (persons or governments or industries) should live out of their means. By the time I need assistance, all the money will be gone if we stay on this track.
This is the start to a solution. Whether or we agree with the health care bill in the first place is not a concern. We now have to figure out how to make it work while it is in place. And if the solution introduces more problems, such as less spending by the people to a variety of industries due to an increase in taxes, then we have to go in and clean up that mess.
In fact this is old news - Amazon and probably other large online retailers will be collecting sales taxes for most states very soon anyway. It's just general fund money, nothing special about it.
If you have to create a completely new tax, don't handicap yourself by tying it to something for an undetermined amount of time when you don't know what the revenues or costs will be in 10, 20, or 30 years.