Ebay CEO Fighting for His Customers: What He's Not Saying
Ebay CEO John Donahue is fighting against legislation that would put his mom and pop customers at a great disadvantage. The federal government wants to "assist" states in collecting sales tax on internet transactions. The way things work now, if your business is only located in one state, and you sell to someone outside that state, you don't have to charge sales tax. Typically businesses in this position are small businesses. Businesses like Amazon, however, with multiple locations, do have to charge sales tax no matter where the buyer is located. Donahue explains:
In any case, there's a bigger issue here that concerns me.
It strikes me that the federal government, by getting involved, will have access to all sorts of data on you and me - what we buy, how much we spend, where we spend it, etc. - that, frankly, I wouldn't want them to have. It's a matter of privacy, isn't it? Do you want the federal government to have all this information?
(See last week's post about how our private lives are no longer private.)
If you're not sure about this, then think about how software can slice and dice such data and create profiles of individuals. Companies use this sort of software and create profiles all the time. Web browsers (e.g., Google) use it to help their paid advertisers target their users and more effectively spend their advertising dollars. But what will the federal government do with such data?
You might imagine that they could create profiles too. And those profiles may help them "target" you.
For example, if you buy lots of luxury goods, and they compare these purchases with the income you report when you file your taxes, maybe they figure you're not reporting all your income and they audit you. I'm not saying you're hiding anything. The point is, depending on how they program their software, they may come up with you as someone to be audited.
That's bad enough, but it's more of a nuisance if they, let's say, decide to search for people who buy guns and ammo online. We all know the federal government's been trying to impose increased "gun control" legislation lately. And we all know that despite the recent defeat in the Senate of gun control legislation, that effort will not cease.
While anyone can find out who holds a gun permit using the Freedom of Information act, that won't tell you what exactly the gun owner has in his or her possession. Who knows what sort of mischief a government bureaucracy might concoct with such information?
So maybe you're an advocate of strict gun control and would like to see the federal government create mischief for gun owners. Okay, then how about you use your imagination here. Remember the government wouldn't just know about guns and ammo purchases: they would know about any and every purchase: books, personal items (I'm being delicate here), collectibles (especially those with much value), etc. Someone working in a government bureaucracy would have such information available to satisfy not only their personal curiosity (maybe someone you know) but also could propose some "program" to their boss that would promise to raise significant revenue for the government - something that could advance their career.
For example, let's say you have an interesting coin or stamp collection. You started collecting when you were a kid. It's a hobby, but over the years, the collection has increased in value. Would you want the government taxing that collection each and every year? They could if you had bought the items online (as many people do these days) and they had a record of every purchase. And let's say you sold the items privately, but they started taxing you because they had you on record as owning the collection: then you'd have to prove you sold the items. You'd have to reveal to whom you sold the item. The chain extends on and on. You're trapped in a bureaucratic nightmare. And this could apply to any sort of collection.
Just remember this: governments in the West are in financial trouble. They will do anything and everything to prevent things from getting worse - everything except cutting their spending. So they'll be looking for more things to tax. It's not rocket science. If it seems unlikely to you, remember that 100 years ago, when the current income tax was established, most people thought (because they were told this) that it would only apply to "the rich."
Are you starting to get the picture?
Today small businesses that operate online are responsible for collecting sales taxes on purchases made in the state where they are located. That is fair. But the proposed bill would require them to collect sales taxes on behalf of every state where they make a sale. That would make it difficult, if not impossible, for them to succeed.I sympathize with Donahue here. He's protecting all those ebay users who make up his customer base. I can also, in a way, understand why Amazon supports the legislation, since it feels that for certain items sold by small businesses, the competition is unfair if the small business isn't required to charge sales tax. Notice I said I understand, not sympathize.
In any case, there's a bigger issue here that concerns me.
It strikes me that the federal government, by getting involved, will have access to all sorts of data on you and me - what we buy, how much we spend, where we spend it, etc. - that, frankly, I wouldn't want them to have. It's a matter of privacy, isn't it? Do you want the federal government to have all this information?
(See last week's post about how our private lives are no longer private.)
If you're not sure about this, then think about how software can slice and dice such data and create profiles of individuals. Companies use this sort of software and create profiles all the time. Web browsers (e.g., Google) use it to help their paid advertisers target their users and more effectively spend their advertising dollars. But what will the federal government do with such data?
You might imagine that they could create profiles too. And those profiles may help them "target" you.
For example, if you buy lots of luxury goods, and they compare these purchases with the income you report when you file your taxes, maybe they figure you're not reporting all your income and they audit you. I'm not saying you're hiding anything. The point is, depending on how they program their software, they may come up with you as someone to be audited.
That's bad enough, but it's more of a nuisance if they, let's say, decide to search for people who buy guns and ammo online. We all know the federal government's been trying to impose increased "gun control" legislation lately. And we all know that despite the recent defeat in the Senate of gun control legislation, that effort will not cease.
While anyone can find out who holds a gun permit using the Freedom of Information act, that won't tell you what exactly the gun owner has in his or her possession. Who knows what sort of mischief a government bureaucracy might concoct with such information?
So maybe you're an advocate of strict gun control and would like to see the federal government create mischief for gun owners. Okay, then how about you use your imagination here. Remember the government wouldn't just know about guns and ammo purchases: they would know about any and every purchase: books, personal items (I'm being delicate here), collectibles (especially those with much value), etc. Someone working in a government bureaucracy would have such information available to satisfy not only their personal curiosity (maybe someone you know) but also could propose some "program" to their boss that would promise to raise significant revenue for the government - something that could advance their career.
For example, let's say you have an interesting coin or stamp collection. You started collecting when you were a kid. It's a hobby, but over the years, the collection has increased in value. Would you want the government taxing that collection each and every year? They could if you had bought the items online (as many people do these days) and they had a record of every purchase. And let's say you sold the items privately, but they started taxing you because they had you on record as owning the collection: then you'd have to prove you sold the items. You'd have to reveal to whom you sold the item. The chain extends on and on. You're trapped in a bureaucratic nightmare. And this could apply to any sort of collection.
Just remember this: governments in the West are in financial trouble. They will do anything and everything to prevent things from getting worse - everything except cutting their spending. So they'll be looking for more things to tax. It's not rocket science. If it seems unlikely to you, remember that 100 years ago, when the current income tax was established, most people thought (because they were told this) that it would only apply to "the rich."
Are you starting to get the picture?
Comments