Proposals for collecting internet sales taxes continue to reveal their ugly head. Individual states have imposed them but the siren call is for federal regulations that will require other states to collect them, or other schemes to obtain such revenue for bloated government budgets. Proponents, including establishment Republicans, insist on the usual justification that internet sales companies that do not collect such taxes are getting a competitive advantage compared to mom and pop and brick and mortar retail stores.
What follows is a response we made in another publication to those conservatives who claim that fairness requires an internet sales tax. For the record, we support consumption based taxes as a replacement for income taxes. However, as long as the income tax exists we should not be adding tax burdens to citizens.
Why Oppose Internet Sales Taxes, Whether State or Federally Inspired
They are not about fairness – they are about more money. Internet sales tax proposals are typically not coupled with reductions in sales tax rates so it is a money grab. First and foremost internet sales taxes are a money grab by entities that already tax enough but refuse to reduce programs and expenditures first. That includes Iowa. And as a nation we are simply and fundamentally taxed enough already. Big box retailers and Amazon support it because they already pay it by law or agreement because of their physical presence in most or all states. They see it as a move to cut out their competition from small to medium online retailers who may have only one or two locations and depend on LTL distribution and fulfillment mechanisms. Follow the money.
Support for online sales taxes is not about equalizing the burden on small retailers at the local level, the mega retailers and Amazon care not a twit about them. It is about constant and relentless increases in market share or burdening competition. But always keep in mind that it is the final consumer that pays all taxes, one way or another.
No local retailer is unfairly or fundamentally hurt by online retailers because to buy from them entails shipping costs that are more than sales taxes. Buying a four dollar widget online because it is not available at Joe’s hardware because Joe does not choose to stock it does not punish Joe more than his inventory decisions. It usually costs the buyer more than it would at Joe’s because of individualized shipping and handling. It is bought online because of availability.
It is not unfair in that there are no barriers to entry for the mom and pops to get into it themselves. Which many of them do. However, online sales taxes will cost consumers in money and personal productivity and convenience but will not help small retailers. There are more reasons to oppose it as well, including but not limited to the implications of taxation without representation, compliance costs and extending the ability of governments, either fifty different ones or the federal government to control and burden the economy. Who seriously believes that the power to tax is not the primary vehicle used by governments to control, often under that guise? R Mall
