Patrick and Delahunt searching for new taxes.

(Paging Barbara Anderson…Paging Barbara Anderson… – promoted by garrett3000)

So our esteemed Governor has a new idea; increase taxes.  Well, it is not actually new to Deval, rather it is new to where he wants to apply it.  Deval Patrick is pushing the state legislature to pass a revised Internet sales tax that would allow the Massachusetts Department of Revenue to collect sales tax from businesses that are not located in Massachusetts, but do business with customers in Massachusetts.  Currently the state collects sales tax on only the items sold to Massachusetts residents by Internet retailers that are located in Massachusetts.  For instance, an Internet retailer located in California that sells to Massachusetts residents does not currently pay Massachusetts sales tax, but will in the future.  Also, Internet retailers that are located in Massachusetts that sell to California residents do not pay a California sales tax on those items.  Under the new system they will.  

Let’s put aside the fact that our own Brad Jones, who once opposed the idea, now seems to like the idea and can’t understand how that might be an increase in taxes.  Congressman William Delahunt wants to copy the idea and institute it on a national level forcing all Internet retailers to collect all state sales taxes.  Ugh!  Delahunt states:

“This will protect Massachusetts businesses that are disadvantaged by the current system,” Delahunt said. “Small- and medium-sized businesses need this in order to compete with large sellers from out of state” that aren’t required to collect and remit sales taxes.

Delahunt’s twisted logic: Massachusetts businesses are at a disadvantage because they pay a state sales tax and others do not.  The way to remedy that situation – tax every business.  In other words make everyone equally disadvantaged.  Doesn’t it seem more logical to remove the state sales tax and thus remove the ‘disadvantage’ instead of the adding more disadvantage?

Here is the problem – Massachusetts has suffered with a state implemented sales tax for a long time.  The businesses located in Massachusetts are being crippled by the fact that customers want to pay less and are willing to travel to out of state retailers to avoid the cost of the sales tax.  We know this because of the large number of retailers located just over the border in ‘sales tax free’ New Hampshire.  We also know this by the large increase in shopping on the tax free holidays that occur once a year.  Customers dislike the tax so much that they seek alternative ways to avoid the tax.  Another way shoppers have found to avoid the tax was to shop online.  Now the state wants to stop that as well.

Further imagine that you are a single mom with a simple Internet retail business.  (I use this example because I have a good friend in this situation)  As it stands today she can handle the business because she pays sales tax on only the items she sells to Massachusetts residents.  Under the new Patrick/Delahunt scenarios she will have to maintain a database of all sales and to which state those sales were made so she can pay the corresponding sales tax.  She will need to know each state’s sales tax percent and work to mail separate sales tax checks to each state’s corresponding Department of Revenue – or face fines and penalties.  In a nutshell – my friend would be out of business.  That is an impossible task to ask of someone trying to operate a small Internet retail business while juggling the affairs of three children by herself.

Deval Patrick was elected, in part, because he spoke of finding new ways to simplify the startup and maintenance of small businesses.  He has done nothing to help those small businesses since taking office and now he wants to add further expense and restrictions to the process of earning a living in Massachusetts.  A lot of people are using the Internet to subsidize their modest incomes by selling things on an Internet retail site.  Many of those people are retired and on a fixed income – or – low income people trying to find a new way to keep their heads above water.  Deval Patrick doesn’t care and is more concerned about pumping up state revenues than offering people real opportunity in the free market system.  That, I think, is too bad.

Read the story from the Boston Globe here: http://www.boston.com/business…

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