Taxing on-line purchases undermines the fairness of why sales taxes, or any taxes for that matter, are collected in the first place. These taxes are put into law for the purpose of funding a wide variety of government programs and services. The benefits accrue to the local taxpayer. A store owner who collects a sales tax gets something in return. There is police and fire protection, roads and other governmental services that benefit both buyer and seller. Not so when a purchase is made on-line. The Internet seller derives no benefit from state and local government when such seller lives in another state.
It’s not that the Internet seller is free from paying a variety of taxes. In their home state, they are assessed with income, property, sales, user fees, permit fees, and a variety of other taxes. And they get local and state governmental services in return. Yet Democrats and Republicans alike now want to impose an additional burden of making a company selling over the internet figure out the tax rate, not just in every state, but in every country, parish, city and local taxing district in the country.
This writer has a small Louisiana-based publishing company, which takes orders from states across the country. Under this new bipartisan taxing plan, my small business will now be forced to figure up the specific sales tax in every locality from wherever we might receive an order. Figuring out and applying this myriad of tax rates, in itself, is an additional unwarranted cost to the seller, which ultimately comes out of the consumer’s pocket as well. Never mind the lack of fairness or how smart is it to add another stress to small businesses in our already over-stressed economy.
There will be no such burden on in-state businesses. Do you think your local laundry or gift shop, located just a few blocks away, but in a different taxing district, will agree to obtain your address, determine the applicable tax for each customer, then collect the tax and send it into the state? Good luck!
The big guys like Amazon and Apple can handle these additional costs. In fact, Amazon is proposing charging a fee of 2.9% on its third-party vendors just to figure up what taxes need to be collected. So this would be even more costs piled on small businesses and their customers.
Some Republicans are even suggesting that the taxes be collected and remitted by the federal government. So much for states being the “laboratories of democracy” and protecting “states rights.”
Let me tell you just how far this new bipartisan tax mania has gone. The state of Illinois is now proposing that its own citizens will be taxed when they buy from out of state sellers. So lets suppose an Illinois resident decides that he or she wants to send their own money out of state. Under the proposed plan, they must pay a tax. No, let’s call it what it is – this is not a tax — this is outright confiscation.
States across the country are facing major financial crisis. But governors and legislatures have irresponsibly piled on unsustainable pension and other borrowing obligations. A tax on Internet spending is simply a gimmick for the purpose of filling state and local coffers with no benefit to those paying and collecting such taxes. Republicans and Democrats, alike, are caving in to the allure of new revenue. And we taxpayers are the big losers.
“Read my lips: no new taxes.” George H.W. Bush
Peace and Justice