That is an incorrect conclusion from the premise. What we need is lower total tax. This is what motivated my question.
The absence of taxation on internet hurts small businessman with brick and mortar shops. That is both unfair and unproductive (creates allocative distortions). What one needs to do is to introduce an internet tax and reduce the current tax liability. I think your conclusion is partially wrong. The solution to helping a brick and mortar business is not to impose more taxes on the users of internet commerce. Who is keeping the brick and mortar businessman from entering cyberspace? No one.
Although we do agree the current tax liability should be reduced. :)
Who is keeping the brick and mortar businessman from entering cyberspace? No one. Now,
you assume that this is a good thing, entering the cyberspace. Firstly, this is just an assumption. Secondly, this is not how economy functions and distortions appear: I did not say that that the tax will help them: it with stop what is hurting them now. Again, there is a difference.
If you disagree, that is fine, but you may want to read on the distortionary effects of taxation. In essence, it moves the capitale differently from where it would have gone in the absence of tax. The amount of tax affects the size of the capital, but the unequal taxation creates perverted incentives as to where the already reduced capital flows. The size and structure are different things.