What's Fair About an Internet Sales Tax?
You have probably heard and/or seen the scuttlebutt about Congress trying to push through an Internet sales tax,
ostensibly in order to level the playing field for brick and mortar businesses versus online businesses. You can be sure the effort has nothing
to do with fairness and everything to do with politicians' insatiable appetite for tax money. They have been salivating
over the possibility of reaping that new revenue source for years.
The plan is to require online sales from out-of-state buyers to have sales
tax collected and remitted to the appropriate state revenue department. Local businesses are per the claim disadvantaged
because they must collect their home state's sales tax, which supposedly causes buyers to prefer Internet vendors
in order to avoid such taxes.
As one who has purchased many items over the Internet in the last 15 years, I can't think of many times when avoiding
sales tax was the prime motivation for my decision. It was usually because either the item I wanted was not available
from a nearby store or the price was far better. Except for sellers like Amazon who offer free shipping on many
items, most online businesses charge for
shipping, which has gotten quite expensive in the last few years (along with everything else, BTW). Shipping
costs can easily make a local purchase more advantageous. Many of larger
retailers like Best Buy and Staples offer better prices online than in the local store, so most people go where
the best overall deal can be had.
My home state,
Pennsylvania, began a couple years ago requiring Amazon and some other online businesses to collect sales tax on
residents' purchases, so there is clearly no advantage for me from a tax perspective. My motivation now is purely that of
convenience and price. Most of what I order from Amazon arrives within two business days, even with the free shipping
items, so why would I pay $40 for an inkjet color cartridge refill at the local Staples store when I can order it for $25-$30 online
with no shipping charge? The salespeople at Staples are nice, but I don't long for their companionship enough to pay more than I have
to. I do still use their services, though, for making copies and printing out model airplane plans.
Since a large
percentage of local businesses both large and small also operate online stores for making sales, they can
sell to out-of-state customers without collecting sales tax. The businesses' state
of residence still gets to collect income tax from the proprietor's net profits even if not the sales tax, but that's not enough. No amount
of profit from someone else's labor is ever enough, remember. Without an ever-increasing supply of money and goodies
to hand out to constituents (usually of low or no productivity), they lose power.
So, if the politicians, who of course are only looking out for the little
guy, get their way and force every Internet sale to have tax collected on it, does that finally "level the playing field"
for local businesses?
No, not at all.
Suppose their Platonic paradise of Internet taxing works out
exactly as planned
so that every online purchase made has tax collected and remitted to the buyer's home state. At that point the brick and mortar
businesses have the advantage over out-of-state buyers because they are not required to determine a walk-in customer's
state of origin and subsequently collect/remit the sales tax for/to that other state. It is quite common for residents of a state
like Tennessee that has a 10% sales tax to drive to a neighboring state to pay only a 5%-7% sales tax. According
to law the buyer is required to voluntarily pay the difference to Tennessee, but how often do you think that happens?
Answer: Almost never.
If the Internet tax law is enacted, the next conquest of the benevolent lawmakers
will be to correct the situation I just described. Then, at last, all the world will be right and our
will have earned their rightful places as kings and queens over the huddled masses (you and me) -
gods so to speak, as rulers of yore considered themselves. Heretofore the People were still strong enough to resist their
legislative manipulations and usurpations. The current majority
of Sheeple don't have the fortitude, I'm ashamed to say They will keep quiet in order to assure their reliable
supply of freebies, wantonly traded for personal freedom, are not interrupted.
- Kirt Blattenberger
What's Fair About an Internet Sales Tax?
These items are an archive of past Topical Smorgasbord items that have appeared on the RF Cafe homepage. In keeping with the "cafe"
genre, these tidbits of information are truly a smorgasbord of topics. They all pertain to topics that are related to the general engineering
and science theme of RF Cafe. Note: There is also a huge collection of my 'Factoids' (aka 'Kirt's Cogitations') that might interest you as well.
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