Monday, November 28, 2011

Too Much Tax - Make It Simple

tax on stores that allow you to roll you own tobacco

I recently read an article about tax issues on stores in the northeast that allow customers to use machines and roll their own cigarettes.  I am not a smoker.  I actually really dislike smoking.  But that has nothing to do with this issue.  My problem is how complicated our tax system is in the US and how we are literally taxed on everything.

The article was describing a major issue of how these stores were taxed. Currently they sell raw tobacco and the customer uses a machine to roll the cigarettes.  This is taxed significantly less than manufactured cigarettes so there is a significant savings for the customer.  I believe the state wanted to change how it was taxed because they feel like the state is being cheated out of revenue.

The company argues that the taxes should not be changed for them because the customer really is producing their own, they just provide the means to do it.  The store also argued they were a niche industry and few customers are willing to take the time it takes to make your own just to save a few bucks. By taxing the store at the rate of manufactured cigarettes, they would not be able to compete.

Regardless of the fact that I hate smoking, I also dislike taxes.  I understand we need taxes for certain things.  We do need government in order to maintain our military, maintain our roads, provide police and fire services, and many more things.  But the system is extremely flawed and out of control when it comes to taxes or the fact that our government does not have to truly operate on a balanced budget like normal people or businesses.

While reading the article, I was reminded of how difficult government can make it for small businesses to operate.  Again, I understand certain needs, but there are too many government workers and people that don't understand the choking effect government can have on business.

I don't know what it will take in the future to bring about effective changes.  Part of me thinks there isn't any hope for real change.  The machine is too big to change.  Just like our auto industry was too big to fail (that's a whole different post).  But I really do hope we can make progress in the future and create a government that helps the people rather than sucks the life out of them so that others don't have to work. 

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