New Internet Tax Looting Scheme

MAY 5, 2011

By JOHN SEILER

It just never stops. Never, never, never.

The attacks on California taxpayers by the Looting Government Class (LGC) just keep coming. The latest:

SACRAMENTO (CBS13) – With California deep in debt, a controversial plan has emerged that calls for private vendors to monitor what you buy on the Internet.

The Board of Equalization (BOE) says it could raise a billion dollars a year in previously uncollected use taxes, but critics call it haunting to hire “Internet Police.”

Tax Farming

There’s actually a name for using private firms to grab taxes from people and businesses. It’s called “tax farming.” And as much as I usually like privatization, “tax farming” is a hideous idea. Taxing should be a government operation because, when you have a complaint, at least you can talk to an elected representative. Sometimes they even listen. You might vote them out of office.

But with “tax farming,” the private company’s sole interest is to grab your money. They’re like bill collectors on steroids. In other countries, tax farming has led to revolutions, the worst being the French Revolution of 1789. That’s the one with the guillotines, in case you slept through history class.

As Wikipedia correctly writes:

The key flaw in the tax farming system is the tension between the state, which seeks a long-term source of taxation revenue, and the tax farmers, who seek to make a profit on their investment in as short a time as possible. As a result tax-farmers often abuse the taxpayers in various ways, tending them to switch their economic activity from strategic long-term projects to short-term revenue generation. A common abuse by tax farmers is the undervaluation of goods received in lieu of taxes, allowing the tax-farmer to re-sell the goods to create a second profit source. Such abuses stifle economic growth by restricting the ability of the tradesman to reinvest in his business, thereby limiting the quantity of taxes generated over the long-term.

And here’s Wikipedia on tax farming sparking the French Revolution:

The Ferme générale, with its colossal fortune, appeared to encapsulate the perversion of the political and social system. People blamed the injustices and the annoyances on the company, which actually arose from the complexity of the tax system, the brutality of the guards of the troops and the brutal repression of fraud and smuggling. The gabelle was the most unpopular of the taxes.

The Ferme générale [tax farm] was thus one of the institutions of Ancien Régime which were most highly criticized during the French Revolution and were depicted as birds of prey and tyrants; the Girondist Antoine Français de Nantes, for one, made an early reputation for himself attacking this prominent target. The Ferme générale was suppressed in 1790. The fermiers-générals paid the price at the scaffold: 28 former members of the consortium were guillotined on 8 May 1794, including the “father of chemistry” Antoine Lavoisier, whose laboratory experiments had been supported from his administration of the Ferme générale; his wife the chemist Marie-Anne Pierrette Paulze, who escaped the guillotine, was herself the daughter of a fermier génèral.

“It’s Like Big Brother”

Switching back to today, here’s what one business woman told CBS about the proposal for a high-tech version of tax farming:

One of those critics is Monique Bell, who started My Kid Sister Clothing Company, three years ago in Stockton.

“If you wear it, we sell it,” Bell told CBS 13 inside her Stockton home.

Bell is the owner of My Kid Sister Clothing Company, an Internet portal that allows her customers to find clothes for kids – and the whole family at a discount. She’s concerned by the BOE plan – a staff proposal to identify Internet buyers who use her site and others, to purchase things from out-of-state vendors.

“I think it’s like Big Brother. It’s definitely very chilling,” said Bell. The Internet entrepreneur told CBS 13, “I think our customers are just going to stop buying from us. We’re going to see a dramatic drop in sales.”

Is there nothing the tax looters in California will not stoop to in grabbing as much of the hard-working taxpayers’ production as possible to fund the government union special interests, where workers are fed massive pay, perks and pensions?

Nevada Here They Come

No wonder people and businesses keep streaming out of California. A comment by “CB,” posted after Katy Grimes’ article, “Air Quality Bill Stinks Up Capitol Hearing,” reads:

So thankful I was smart enough to move my business to Las Vegas last year, and somehow with the grace of God I was able to sell my home in So Cal and move my family out here last month.

What difference does it make? My employees take home more of their paycheck, and I don’t have the concern that the state is coming to my home in the middle of the night to shake me down for more money…

I took my 2 million dollar company and my 15 jobs out of the state…and now I done with state income taxes, corporate taxes, inflated workman’s comp and a whole host of other “interferences” that I no longer have to worry about.

But don’t worry, thanks to all the money I’m saving, I’m going to be one of those lucky folks who get to VISIT California and leave all the crazy behind after I spend a couple of weeks on the beach when it gets hot here in Vegas.

The last profitable, non-state supported company take the flag and wave when you pass our way.

After that, a comment from “Gerry” reads:

I’m leaving!

And after that, another comment reads:

I left already!

 

 

 

 

 

 

 

 

 

 

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  1. David from Oceanside
    David from Oceanside 5 May, 2011, 06:05

    I believe the “Crash Tax” that many cities charge for emergency services at car accidents is privately managed as well.

    Reply this comment
  2. Tom B
    Tom B 6 May, 2011, 08:10

    California plans to stay on the bottom of the Chief Executives list of worst states to do business in. Sentor (state) Steinberg along with Desaulnier, Hancock, Hernadez, Kehoe, Liu, and Wolk voted on 4May 2011 to re refer SB 653 to the Committee on Appropriations. SB 653 is the sales and use tax law that will authorize local governments to impose taxes on everything. The state DMV, FTB, and SBE will be required to collect any taxes imposed by local governments.

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