The US tax code.
Actually, I think that the regulations are a big problem, too.
2 thoughts on “The Chief Threat To US Competitiveness”
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The US tax code.
Actually, I think that the regulations are a big problem, too.
Comments are closed.
The problem is that there are a vast number of sales taxes, depending on location. It’s not just by state, but municipality. And taxes can vary by good (food is often taxed at a different rate, for example). There’s no simple way to determine which tax district an address is in either. I gather from the rhetoric about a “flatter, fairer, simpler tax code”, that the author wishes to reduce sales tax complexity as well. But the federal government is constitutionally prohibited from having jurisdiction over state and local tax codes.
My view is that a simple approach would be for the state and local governments to register their sales taxes with the federal government (say at a public corporation whose control is shared between the states and the federal government), in the process meeting some minimal standard (no other strings being attached). So if you live in a location that meets the standard and is registered, then internet/mail sellers are required to pay taxes to a standard proxy who sends the appropriate funds to the appropriate entities. Else you cannot be required to pay taxes on interstate transactions.
There would also be a database of sales taxes by mailable address that would be maintained by someone. So that businesses wouldn’t have to work to get the sales taxes information they need. Just put in the address, type of goods shipped, and get the sales tax owed.