Even if Republicans spent the last year on cutting regulations and taxes, with a little help from President Trump, we just got word that a number of GOP congressmen now want to nullify Trump’s tax cuts by passing an online sales tax. And they seem to believe that pushing an internet sales tax is actually good policy, now with the midterms right around the corner.
South Dakota Rep. Kristi Noem supported by a large faction of House Republicans is pushing for a piece of legislation to be attached to the omnibus spending bill. The respective legislation is co-sponsored by 50 House GOP members and it would allow states to collect sales tax over internet transactions from remote online retailers. The bill would allow 12,000 jurisdictions to, let me quote: “conscript out-of-state retailers into collecting sales and use taxes from their customers.”
However, online sales make for less than ten percent of all US retail sales, and just a tiny fraction is currently untaxed. It looks like Republicans are trying really hard to lose the House come this Fall’s midterm elections. Those who identify as Republicans and support an internet sales tax, are either RINOs, Democrats or not Republicans.
As online retail continues to grow, states and their local governments that see a continued drop in sales tax revenue will continue to seek to raise taxes on production. This is exactly bass-ackwards to what we should be doing. In fact, we should reduce taxes on production and replace them with more consumption tax. The US needs to shift to a producing nation and away from being a consuming nation.
Reduce taxes on production and it helps US firms compete globally on price. Tax consumption instead and it helps cause more US people to save rather than spend up to their eyeballs in Chinese debt. I also think Amazon needs to get hit, they are the worst employer, greedy, treat vendors bad, compete for less price by trying not to pay tax, treat employees bad, for tech employees they compensate mostly with stock so if it ever goes down they get wiped, they sell B-stock, fake stuff and Chinese plastic mostly and mistreat american and local vendors.
So we should reduce tax on the “makers” and do more consumption tax. It’s regressive, but maybe if more people started paying in to taxes they would understand where tax money comes from and ask for less free stuff.
Chief Justice John Marshall said it best in McCullouch v. Maryland (17 US 327 – 1819):
“An unlimited power to tax involves, necessarily, a power to destroy.”
It’s funny how truly correct — and prescient — these early Supreme Court cases were … and how brilliantly they were decided. These early Justices literally put the flesh and muscles onto the skeleton that is the Constitution of the United States.
Anyone operating a multi-state business understands the administrative and financial hardship this will have on small businesses. They will have to file and pay sales taxes on varied schedules. Since taxes vary per jurisdiction, they will have to hire a company to administer the sales tax issue. Further, they will probably have to pay income taxes to these states.