Monday, July 16, 2012

5% Internet Tax Will Cost You At Least 10%

Now the inept, incomptent politicians want to force a 5% sales tax on all online purchases, even if you live in a state with no sales tax. They try to tell you, "Hey, it's only 5%." Bull!

Consider the reality (which politicians never bother to do) --- company A buys supplies online. Their costs go up 5%, so they have to increase the costs to their customers accordingly. In some cases, those customers are other businesses. Since the cost to Company B has gone up 5% PLUS the new 5% tax on THEIR purchase, their cost is up 10%, which must be passed on to the customer. Now the customer has to pay that 10% cost increase PLUS the 5% tax on HIS purchase.

In most cases, your prices could rise 10%, but in some cases where the product you buy passes through several vendors (resellers) before being sold to you, the price increase could be much more than 10%

Take my own business, for example. I buy 100% of my supplies and equipment online. Most of those vendors are resellers, so they had to pay the 5% tax and they pass that increase - plus my own 5% tax - onto my price. So I will pay 10% more in many cases. So, I will need to increase the price of my products by 10%. And on top of that 10% increase, I will still have to tack on the 5% sales tax. So, my customers will be paying about 15% more for my stuff.

I don't like that one bit. But neither can I do anything about it.

And if our politicians don't have a clue as to the damage this will do to the weak economy, then we need to replace them with people whose I.Q. is at least as high as the number of fingers on their hands.


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