WI governor proposes state sales tax on downloads
3/9/2005 4:05:47 PM, by Hannibal
Wisconsin's Democratic governor thinks it's not fair that tangible items get taxed while downloads, like music, ebooks, software, etc., go completely untaxed. So, he proposes to rectify the situation by having Wisconsin's 5% state sales tax apply to Internet downloads. This is kind of like that famous hoax about how the USPS wants to charge people 5 cents for e-mail messages, except it's for real. What a dumb idea.
Of course, when you look more closely at the idea, it looks even dumber:
A little-noticed provision of the Democratic governor's proposed state budget would extend the sales tax to those Internet transactions, officials said Monday. There would be no Internet sales tax police, however, because compliance would be on the honor system.
That's right: it's voluntary. In a country that can trace its origins in part to a dispute about taxes, does this man really think that people are going to voluntarily pay a tax? And what makes it even funnier is that he thinks people in Wisconsin are going to voluntarily pay. I don't know how much you know about the American Midwest, but Wisconsinites, as wonderful as they are, are some of the... uh, how to put it... most frugal people in the country. This stereotype is actually empirically verifiable by means of the Catalogue for Philanthropy's "Generosity Index." Wisconsin is the fifth up from the bottom in terms of charitable giving, falling behind four Northeastern states.
At any rate, WI is by no means the first state to look into recouping some of the tax revenue lost through online purchases. All of the other efforts to date, though, have to do with trying to tax physical goods that are bought over the Internet (see here and here, for instance). WI is the first to my knowledge to propose taxing downloads.
