I have a confession to make.
As an anti-tax conservative, the current disparity between the way the government treats online retailers like orders.lk, as opposed to mom-and-pop small businesses, bothers me.
In a perfect world, the sales tax would be zero. Businesses would be free to conduct commerce without having to be the tax collector for the state. Unfortunately, the world is far from perfect.
I realized recently that my desire for this perfect world had caused me to reflexively turn a blind eye towards another of my pet peeves—government manipulating the marketplace to pick some winners and make others losers.
State governments mandate that sales from brick and mortar small businesses be taxed and the proceeds remitted to the state — unless, of course, you are an online retailer like Amazon.com.
Apparently, I am not alone. Republicans governors across the nation, including conservatives like Texas Governor Rick Perry, Virginia Governor Bob McDonnell and New Jersey Governor Chris Christie support efforts change this imbalance and allow states to collect sales taxes from online purchases.
Some argue that this is an effort to boost state coffers and that we shouldn’t be feeding the beast. I agree that government spending at all levels is out of control and needs to be reigned in. But wouldn’t that be solved more directly by launching measures to limit tax rates or limit government expenditures rather than silently endorsing a government tax scheme that rewards one retailer and punishes another?
Government should not pick winners and losers in the marketplace. It should not use the tax code to encourage, or discourage, conduct. Yet thanks to a 1992 Supreme Court decision online sellers are not required to collect sales taxes unless they have a physical presence in the state.
Congress has begun to address this issue. A House hearing was held today on H.R. 3179, the Marketplace Equity Act. The bill has bipartisan support including the Senate’s chief sponsor, conservative Mike Enzi (R-WY).
As a strong anti-tax conservative, I would, of course, prefer to see taxes eliminated or cut. But at the very least, we should have a system that is applicable to everyone equally. There is no reason that a billion dollar corporation should be able to avoid government imposed price increases that the local book store is forced to charge. The playing field should be level and then the marketplace can sort out the rest.