Thursday, October 25, 2012

The Amazon Tax

Living next to a bookstore, she still gets it cheaper from a bookseller 3000 miles away.

Legislation is afoot to make every one of you in the US pay local sales tax (in my case 9.75%) on anything that you buy on the internet from out of state merchants. This is called the Amazon Tax because it is targeting the first and most successful e-commerce site, Amazon. The federal law would require online merchants to collect the tax from the customer and remit it to the state where the customer lives.

Advocates for this outragious Tax Increase argue that state law already provides for "use tax" and imposes it on their residents. Trouble is and has been that the use tax has been unenforceable and of no effect. In other words, nobody bothers with it because the state hasn't tried to collect it before. Well, they will try to collect it now, and everyone needs to oppose this HUGE defacto tax increase.

Why oppose it? Sales Taxes are raised to support local government for the services that are provided to the merchants, businesses, retailers, everyone with a cash register in town. Police protection, fire department services, fire inspection, health department inspection for food and chemical purveyors, investigation and apprehension of shoplifters, paper-hangers, embezzlers, armed robbers, burglars, arsonists, product adulterers, handicap parking offenders, traffic control and street maintenance, plowing, sewers, telephone poles, potable water, tornado sirens, ambulance service, local courthouse, prosecutors, jail, public defenders, dog catchers, parking facilities, bus stops and routes, need I go on? A ton of services from the village, county, or state to help the merchants and their customers.

The out-of-state supplier gets none of those services or benefits. None. The sales tax is not "earned" by the local tax authority and is not deserved.

This is similar to the injustice of the IRS collecting taxes, at the same rate, from all Americans whether or not they live overseas. Why should an American living overseas have to pay federal taxes? No other nation does this. Their citizens living overseas are not benefitting from their Department of Transportation infrastructure, the FAA, the FBI, the Army Corps of Engineers, NOAA, EPA, DOE, DOA, NLRB, FTC, BOM, BIA, DoD, AFL-CIO, FCC, FDA, HHS, etc., etc. The IRS wants to be paid, but no other agency will deliver you anything. Is this just? Is this equitable? Is this fair? Is this even American?

So, look, some of these politicians who have supported this Amazon Tax have signed the Grover Norquest pledge to not raise taxes. They'll argue that this does not raise taxes because the taxes are "already due" under state law.

No. The taxes are not now being paid or collected under state law so it is the most actual, tangible, and impactful tax increase. It takes money out of your pocket that is not being taken today. It creates hundreds of new government employees to administer and enforce. It removes money from the economy that can be spent on goods and services.

It is bad, bad, bad, BAD!

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