Once again, the federal government is proving its gross ineptitude in dealing with technological advancements. Just as it remains embarrassingly befuddled on the topic of e-commerce taxation a decade after Amazon went public, Washington is now showing its ignorance on the subject of taxing telecommuters.
Even though an estimated 45 million people work at home--30 more in the last year alone--the government seems unable to acknowledge the trend, let alone encourage the practice because of related benefits such as reduction of traffic, pollution and road rage. It appears that, even as politicians pay lip service to the importance of the global economy, they are routinely confounded by basic issues in their own 50 states.
Blog community response:
"The refusal to hear the case, which is the second attempt to have the N.Y. state law ruled unconstitutional, means that telecommuters could potentially be taxed twice on their income--once by the state the employer is located in and again by the state they live in."
--Small Business Blog
"If you've got a team of programmer spread around the country, will your software project team members soon be facing new state income taxes? Will staffing decisions on new projects now have to consider which state tax telecommuters? Will talented programmers quit because of sudden cuts in take home pay? What about all those global teams?"
--The Art and Science of Being an I/T Architect
"It would be illegal for the telecommuters to vote in two states, but they are expected to pay income taxes to two states? What was it the Founding Fathers objected to most about the rule of England? Wasn't it taxation without representation?"