State and local governments are engaged in an unseemly gold
rush, pushing for a new Internet sales-tax regime that would empower them to
wring revenues from businesses and individuals far outside their jurisdictions.
They seek to overturn the foundational American presumption against taxation
without representation, and they do so abetted by parasitical business interests
that seek to use the tax code to hobble their more nimble online competitors.
When the taxman and the National Retail Federation are on the same side of an
issue, there is mischief afoot.
We already
have explained our opposition to this bill, and we reiterate that opposition
here. Particularly vexing is the fact that this bill, which would in effect
grant global tax jurisdiction to each and every one of the thousands of local
taxing authorities that exist in this country, cleared the Senate on the support
of Republicans such as Wyoming’s Mike Enzi and Tennessee’s Lamar Alexander.
Historically, sales taxes have been imposed and collected at the
point of sale by tax authorities with jurisdiction in that particular location.
This arrangement has the important effect of making local tax authorities
directly accountable for their decisions: If a township should impose an
unreasonable sales-tax hike, then the local businesses to which that matters
most have an opportunity to respond, either through the political process or by
the expedient of packing up and moving to a new location with more reasonable
taxes. Tax competition is a salubrious thing for cities, for states, and for the
country at large.
But the tax collectors do not much care for it: Taxing authorities
in such high-tax locales as Philadelphia and Maryland’s D.C. suburbs resent the
fact that consumers make the drive to Delaware for high-priced purchases. In
most places, consumers are supposed to pay an equivalent “use tax” on
out-of-state purchases, but those laws are difficult or impossible to enforce in
many cases. Senator Enzi’s solution is to enable this boneheaded system by
forcibly deputizing online retailers, from corporate giants such as Amazon to
your uncle’s car-parts business, as a tax collector beholden to each and every
one of the country’s 9,600 or so taxing jurisdictions.
With everybody taxing everybody else, the natural inclination of
state and local tax authorities will be to seek uniformity across jurisdictions
– does anybody think that uniformity will gravitate toward the low-tax end of
the spectrum? This bill in fact empowers local authorities to establish
multijurisdictional “compacts” to homogenize tax rates and practices. In the
private sector, that is called a price-fixing cartel, and it is, generally
speaking, illegal.
The sensible solution is to treat online retailers exactly like
any other business: Subject to collecting and remitting sales taxes for the
jurisdiction in which they are physically present. To the extent that there is
any role for the federal government in this issue, it would be in establishing
rules (if necessary) for determining who has jurisdiction over sales involving
retailers with multiple physical locations. But we would remind Senator Enzi —
and any House Republican thinking of backing this bill — that it is the role of
the federal government to enable interstate commerce, not to facilitate an
unholy alliance between big business and big government. There was a time when
Republicans were clear on that.
Senator Ron Wyden, a left-wing Democrat from Oregon, rightly
called this bill “a targeted strike against the digital economy.” We wonder if
it has occurred to the GOP that if it has any chance of recruiting new
supporters from the younger generations, among whom it is notably lagging, then
its best bet is likely to be among young entrepreneurs, aspiring entrepreneurs,
and small-business operators — traditional Republican constituencies that are
very much attached to the online economy. If the Republican party cannot be
counted on to be on the side of economic innovation and entrepreneurship, then
what does it have to recommend itself?
It is unfortunate that so many Senate Republicans helped the grievously
misnamed Marketplace Fairness Act get this far. The bill deserves to be publicly
strangled by House conservatives.http://www.nationalreview.com/article/346567/misnamed-marketplace-fairness-act
No comments:
Post a Comment