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Milk Money Is Soooo 1980’s…

December 21, 2010

Hey, nice new e-book you got there.  I bet you’re downloading all sorts of new books to that thingy instead of buying those old paper deals.  Well, hand over some of that action to me — your state government.

Unlike the federal government, state and county governments are required to balance their budgets. The federal stimulus program helped bridge the gap for many municipalities in 2010, but that money is essentially gone now, and one of the easiest ways to make up for shortfalls will be a bigger tax on the gadgets more people are using, says Shawn DuBravac, chief economist at the Consumer Electronics Association. One example: When you buy an e-book for that new Kindle — 1.3 million e-readers are expected to be sold this holiday season, according to Forrester Research — don’t be surprised if you’re taxed not just by the state you live in, but also by the state where the server that you’re downloading from is located. A buyer living in New Jersey who purchases a $10 e-book housed on a server in Texas might pay $1.52 in taxes (7% sales tax in N.J.; 8.25% in Texas).

Purchasing an e-book is magic to most people anyway.  You set up your nice little account and forget about it as you pull down title after title… same as online music.  So you see the fees, but that doesn’t mean you really care, because you’re not forking over the cash as they steal it from you, just later when you pay the bill.  The extra taxes could push the e-book above the price of a regular paper book, says the article.

The article also highlights the potential of extra taxes on cell phones (which are already incredibly high) and potentially cable.  Cell phone taxes would replace the land-line taxes — which are also high but declining as people punt on land lines.  I like this line from the cable bill section: “A small increase won’t cause a customer to cancel cable — and most people don’t notice the bigger charges on their bill…”

Well, that’s wonderful.  Let’s just hide the taxes in small increments so that people don’t notice.  I’d get into the frog-boiling analogy, but it would just bother me more.  But that’s what’s happening.  The states and municipalities are just cranking up the heat a liiiiittle bit, hoping that nobody notices and jumps out of the post.

So keep your milk money safe, and watch out for the bullies.  They’re out for more, and clustering into groups of friends isn’t going to help.

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