What if when cars were invented someone had said, “There should be higher taxes and fees and fines for the cottage industries that exist around cars (manufacturing, oil and gas, mining, etc.), and there should be subsidies and tax breaks and incentives for the cottage industries that exist around horses (blacksmiths, traders, breeders, trainers, farmers, etc.) After all, it’s not ‘fair’ that these good, hard working people are being put out of work by this new technology. These cars have an “unfair advantage.”
These questions come to mind as I consider the growing effort to levy sales taxes on internet transactions. In my own state of TN, they are trying to collect sales taxes on all back sales that Amazon.com has done in TN.
Where does this effort to raise taxes come from?
Proponents say we need these taxes because huge online retailers like Amazon have an “unfair advantage” in the market place since they are able to avoid significant state taxes, thanks to the Interstate Commerce Clause, (whose fault is that, btw? Maybe if sales taxes weren’t so high in the first place, it wouldn’t be such an advantage?)
But the idea that we need to raise taxes to make things “fair” is stupid.
First of all, the two sales channels (online and retail) are not equal, so they can never be fair. Like all other humans, I like instant gratification. Therefore the biggest hurdle that online retailers have in closing a sale is the delivery time of their goods. Brick and mortar stores have an “unfair advantage” in that they can deliver a product to a customer instantly. As soon as the transaction is complete, the customer has the item in their possession. Furthermore, brick and mortar stores have the “unfair advantage” of allowing potential customers to handle and inspect the item in person before they buy. So instant gratification and pre-purchase evaluation are both tremendous “unfair advantages” that brick and mortar stores have over online stores. Where is the commensurate tax for that?
But we are getting away from the point…
Since I like instant gratification, if I can buy something at the local store that I can also get online, I’ll go buy it at the store, since I would rather have it instantly, than wait a few days or even weeks to get it. And I’m sure there are many other people like me out there.
Where do you buy your groceries, Amazon.com or the local supermarket? Why?
Get this, Congress and left wing douche-bags – The only things I buy online are things that local retailers don’t carry and won’t sell.
While it is also true that there are many people who will buy things online that they could buy at a local store to avoid the tax, there is nothing wrong with that. That is their right and their freedom to do that. It’s not “unfair.” And no one is “losing” tax revenue. The government still ends up making money of that transaction.
The point is that leveraging new technology to build a better mousetrap or have a better business model or position in the marketplace is not an “unfair advantage.” It’s called progress.