I’m seriously questioning why we give Congress any power at all to tax us. Our forefathers engaged in a War for Independence in which one of the issues they were complaining about was a 2-3% tax! Yet, here we are today getting everything under our noses taxed, and now states are looking at taxing internet sales across state lines.
All that will do is kill pretty much the only thing that is keeping the economy moving and make it cost more to consumers.
Center for Technology and Innovation Associate Director Jessica Melugin, speaking on behalf of the Competitive Enterprise Institute, points out just how damaging this will be to small businesses, and in the end, it will be the consumer who loses.
Pointing out that our shopping experience has changed quite a bit since many people have been using online merchants for their purchases over “Mom and Pop” shops and other brick and mortar businesses. The convenience and saving money via shopping online is due in large part to the fact that those businesses simply do not have to operate under several things a brick and mortar business does.
“This is in large part because they’ve been ‘untied’ from heavy tax burdens and red tape,” says Melugin. “But government regulation and cronyism threaten to destroy this progress in the blink of an eye.”
What she is referencing is an Internet Sales Tax. What is that you ask? Melugin explains:
Imagine you sell jewelry online. You make the jewelry, advertise, pack it, and ship it by common carrier from your state, perhaps across state lines to your customers.
An Internet Sales Tax would force you to calculate, collect, and pay sales taxes for every buyer’s home state, not just where your business is. That’s right. In addition to everything else, you’d have to figure out the sales taxes for every sales tax jurisdiction that you sell in—that involves nearly 10,000 different jurisdictions. What a nightmare!
Some big companies are lobbying for an Internet Sales Tax because it gives them an advantage over small businesses.
And it gets worse. Some big companies are lobbying for an Internet Sales Tax because it gives them an advantage over small businesses. They have an army of accountants and they know you don’t. To make up for the costs, they know you’ll either have to raise prices or go out of business.
So, what is Melguin proposing? She’s calling on Congress to put a stop to states attempting to force such a thing.
“This isn’t fair,” she says. “It’s Congress’ job to regulate interstate commerce, and federal lawmakers should address this issue, not leave it up to the Supreme Court or the states.”
Can you imagine trying to keep up with all the jurisdictions and their independent sales taxes?
CEI has already dealt with this at one point in a Supreme Court case, South Dakota v Wayfair, in which they argued that according to the Constitution, a state cannot force a business to collect, calculate, or pay sales taxes if it’s not physically located in that state.
Frankly, I question how making businesses collect taxes and turn them into the state is not creating a government slave since businesses are not paid for their services rendered, but can be severely penalized if they don’t do it accurately.
An Internet Sales Tax will not only put a lot of small online businesses out of business, but it will most definitely raise your costs of goods and give you far fewer choices in the marketplace.
It won’t solve state budget issues because those are mainly a problem with unconstitutional spending, failure to budget and corruption. This would only add to all of those things.
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