Hacker News Reader

Comment by 8ytecoder | Hacker News Reader

There are some really insane and conflicting local, state and federal laws in the US when it comes to running a business and especially if it's retail. It's easier to ignore for most small and medium business until there's an audit. Personally, I find the whole sales tax situation to be borderline insane. I understand the need for local governments to have a revenue source - I totally do. However, it would make it easier for businesses to comply and local governments to maximise tax collection if they simply all get together and have one collection agency at the federal level which then splits the revenue according to place of sale and sends it back.

View on HN

By contrast Australia has GST (goods and services tax - 10% universal sales tax on almost everything except a few “essentials” exceptions like fresh food, some basic utilities? But is generally only paid by consumers - businesses claim back the GST that they pay ) which is collected federally. And all our tax is handled by one federal agency.

Generally speaking all prices listed are GST inclusive at least for consumers and store fronts. You pay what the price sticker says.

Where it breaks down for us is that GST revenue is split on a determined percentage per state that is unrelated to where it’s collected. There is some sense to that but it also causes problems as there is a strong imbalance which is argued about.

On a related note we do have a 5% payroll tax on all salaries in businesses paying over some figure I think $2m/year. This apparently goes to the relevant state and is one of our little inconsistencies left compared to what is on the whole quite a good federally administered system by one agency. One tax return. One tax rate.

Canada has a Harmonized Sales Tax which covers both provincial and federal taxes, it works wonders and saves hundreds of millions of dollars a year in useless bureaucracy. Canada supports this suggestion. ;)

You have the risk that such revenue is divided unevenly based on other criteria. Taxes should be ideally local: being global makes it easier for low tax revenue places get money from high tax revenue areas.

Not to mention that competition lowers taxes for sure.

Reply on news.ycombinator.com