Battling Studies About State Revenue From Online Taxes

from the lots-of-money-or-not-so-much? dept

There have been plenty of arguments going back and forth over whether or not online transactions should be taxed. Right now, it seems the general feeling is that these taxes will come about – mainly because the states have been so bad about managing their own budgets that they need the increased revenue. While that doesn’t seem like a reasonable justification for increased taxes (we can’t manage within our budget, so pay us more!), a new study has come out suggesting that if states did require collection of taxes from online transactions they wouldn’t get as much as they’re hoping for. Basically, everyone arguing in favor of the taxes points to a study from a few years back that says states are losing out on $45 billion in taxes. The new study says that the researchers who did the original study have no idea what they’re talking about, and the actual number is more like $3.2 billion. They claim the original study was double counting a lot of taxes that are already collected. The folks from the original study don’t like being second-guessed, apparently, and struck back, saying that the new study completely misses portions of the online economy. Both studies seem to come from biased sources, so the fact that their can be an over 10X difference in estimates shows just how useless most of this research is, anyway.

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