Government stealing more money from citizens (digital download sales tax)


moneygrubbingI am at a point where I feel that our government is stealing from the citizens. Taxes are out of control. Once upon a time, there were no taxes in the United States. Then little by little, the government started enacting tax laws. At first the taxes were just meant to pay for services that the government felt were necessary to provide to citizens. (Think military, jails, police, and the like.)

Then things gradually started spiraling out of control as politicians wanted more and more control of our lives. We have gotten to a point where our politicians are legally stealing from citizens via taxes. Why on earth should the government be permitted to take away a large chunk of my hard earned money?

There really is no justification for it. Oh sure, it’s popular in some circles to say that the “rich” should give up some of their money for the benefit of the “poor.” But is that really right? Is it really fair to take away from some and give to others? As a society, we don’t condone me breaking into someone’s bank account and taking out a bunch of the money.  That’s stealing. The money is not mine, and I have no right to it, no matter what I think of the person who owns the money and how they came to own it.

Yet we allow our government to do essentially that. They are deciding who to steal money from. And it’s not for the betterment of society as a whole. When has our government ever done something right? They haven’t. They’re essentially a case study in waste, fraud, and abuse of taxpayer money.

And now that economic times are more difficult, our government is getting even more bold, taking even more money away from citizens. Tax collections are down, and instead of trimming spending accordingly, the answer has been to make taxpayers pay more. Where exactly are the taxpayers supposed to get this extra money? Who cares! The law says they have to pay their taxes, and pay they must.

The latest act of theft is a sales tax on digital downloads. This goes into effect tomorrow in Wisconsin, making a total of 11 states that are taxing downloads of music, books, and other digital items.

Sales tax started out primarily as a tax on tangible goods, with some exceptions. The idea was to charge a tax on a finished good purchased by a user of that good. Sales tax is charged by states, and certain goods have been exempted from sales tax. For example, groceries are generally not subject to sales tax.

As time went on, some service began to be subject to sales tax. The list of taxable goods and services has continued to grow over the years as governments have wanted to take more and more money away from citizens.  There is no doubt that government spending has been out of control for a long time. It’s just that when economic times were good, it didn’t seem like such a big deal. Now that money is tight for everyone, the waste and abuse of tax dollars is much easier to see.

I love how Wisconsin defines taxable digital downloads in such a way as to almost justify this new tax:

Digital goods include versions of products that have historically been produced and transferred as articles of tangible personal property, and that are now produced and transferred electronically as digital files. In many cases, a digital good is also available for transfer as an article of tangible personal property. However, it is not necessary for a digital good to have a tangible counterpart to be considered a digital good.

Example: Recorded music has been produced and sold in the form of vinyl LPs, cassette tapes, and CDs. More recently, recorded music has been produced and sold as a digitally-encoded file which is transferred electronically to the purchaser. Recorded music transferred electronically is a digital good.

Notice that they throw in the part about these newly taxable items being previously available as “tangible personal property.” Who cares what they were? That taxable item is not the same thing as the digital download, and so the tax on digital downloads is a new tax. (And no, I don’t buy the argument that sellers of physical goods like movies on DVD are at some sort of “disadvantage” because those items have been subject to sales tax. Taxes are not supposed to be a great equalizer. Our government is not supposed to be in the business of creating equal playing fields. This new sales tax is not “necessary” to make the world of commerce fair. Any retailer who feels at a disadvantage by selling tangible goods subject to sales tax can change their business model at any time!)

Sales tax is now going to be charged on downloaded or streamed music, movies, games, books, clipart, newspapers, and television shows.

And of course, our government makes it easy to prove that their tax laws are completely arbitrary. Traditional newspapers are exempt from sales tax in Wisconsin. Digital downloads of newspapers, however, are now subject to sales tax in Wisconsin. Makes lots of sense, doesn’t it?

4 thoughts on “Government stealing more money from citizens (digital download sales tax)


    Dear Tracy,

    I will like to buy your two books through you. Ours is a small forensic firm in Nigeria. How can you render consultancy service on complex fraud Investigation . your reply please.

    Abbas Aidi

  2. Tracy,

    I agree with you 100%. I think that the government has been able to hide just how much money they waste by running a deficit. Think about it. If politicians had to balance the budget every time they proposed a new program they would have to raise taxes immediately to pay for it. A lot of people would be more concerned about all the DARE billboards on the highway if their taxes were raised every time we put a new one up. Now that the national debt is becoming frighteningly high we are raising taxes to pay for years of waste.

    I was transferred for work recently. The cost of the move was paid for by my employer and is considered taxable income by the IRS. This is ridiculous.

    There was a great podcast on recently about this very issue.

    Thanks for the great work you do.


  3. Patricia Behar

    I totally agree with you, I think we should do something, I know this situation wold’nt improve, on the contrary . Here in Miami they are building more tolls, the unemploiment rate is increasing with one exeption (IRS employees) let’s get prepared.

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