Let’s Benefit No One By Taxing the Internet

Points and Figures (blog) ^ | 04-26-13 | Jeff Carter

[Valpal1]

There is a bill working it’s way through the Senate that will tax internet sales transactions. President Obama has said he endorses the bill to raise taxes and will sign it.

Before being “for” or “against” the bill using heuristics from your personal beliefs or talking points from the competing factions, it’s important to know what a government tax is.

Put simply, it’s a hurdle or roadblock. If you want less of something, tax it. Taxes make marketplaces less efficient. Taxes are also a limit to personal freedom.

Some see taxes as a revenue generator for government. But, governments can’t invest, they can only spend taxpayer money. If they don’t have the money from taxpayers to spend, then government can’t grow. This is why lower taxes lead to less government intervention into our daily personal lives. Passing an internet sales tax will cause our government to continue growing.

Right now, almost every government entity is broke. That’s because they have grown too large for the tax base that supports them. They refuse to cut the size and scope of their largesse, and refuse to bring fiscal discipline to microeconomic issues like public pensions. Gerrymandering by both political parties has made it almost impossible to unseat incumbent politicians. Passing an internet sales tax will cause budget deficits to grow, because government won’t cut their size or scope. They will get bigger, and spend the tax revenue.

That’s why this tax is working its way through the Senate. I think George Orwell might have written the title for it: The Marketplace Fairness Act.

[Valpal1]

People need to be contacting their senators and congressmen and actively opposing this bill (S.743), not just because it's a tax but because it exposes business to the machinations of 46 more taxing authorities and all the compliance costs thereof. Many states require sales tax returns to be filed monthly rather than quarterly regardless of whether you owe or not.

It's just another blow to the kneecap of businesses.

[Sherman Logan]

If they don’t have the money from taxpayers to spend, then government can’t grow.

Uhh, dude, I think there's something incomplete about your logic here.

[Valpal1]

States can’t print money like the feds can, nor can they borrow quite as endlessly.

The only way for a state government to grow is tax the money out of the economy.

[Cyber Liberty]

It doesn’t benefit “no one.” It benefits brick and mortar stores by driving up the prices for internet purchases. (And the government gets more than what it needs for expenses.)

[Valpal1]

The internet is also available for brick and mortar stores to expand their sales. Nobody is stopping them from selling in multiple channels.

And if a B&M is selling on the internet, then they are in the same boat as online only sellers, forced to collect taxes for 46 jurisdictions at their own expense and without representation.

Any possible benefit is vastly outweighed by the liabilities.

[CharlesMartelsGhost]

[Cyber Liberty]

I agree with you, in the long run this benefits nobody. The smart stores are already online. But it’s rare to see an idea with the skids as well greased as this bad one. This bill of goods was sold to the GOPe, and I think it’s to benefit brick and mortar stores...the large ones with stores in every state (which puts them at a tax disadvantage already, the states get them that way).

I think the newest investor in JC Penney, for an example, has already written the fat checks to the Congresscritters. He has a lot of experience at that.

[I want the USA back]

The internet works, so what do they do? destroy it by taxing it.