Former South Carolina Senator Jim DeMint just resigned from the Senate to become head of the Heritage Foundation. I read his book Saving Freedom and understood better why he was a Tea Party favorite. He certainly was one of mine.
Consider the absurdity of such a law. When a customer buys a product in a store, does the cashier ask for the customer’s home address? Of course not. The store simply charges the state and local sales taxes applicable for its physical location, no questions asked.
His argument is that this is a form of “taxation without representation” – that retailers would be forced to act as tax collectors for states in which they have no voice.
He blames it on politicians in the various states looking, as always, for more revenue:
Politicians want this bill passed to raise new tax revenue for broken state governments facing budget shortfalls. But legislators in state capitals don’t want to make the hard decisions to cut spending or raise taxes on their constituents—they fear the voter backlash. So they’d like their allies in Washington to make it legal for them to tax people who can’t vote against them.
And just what would the states do with this increased revenue stream? Here’s Heritage’s best guess:
The Internet sales tax would increase the amount of tax dollars millions of Americans pay, encourage states to increase the size and scope of their governments, favor some states over others in granting federal authority, and discourage free-market competition in interstate commerce.
Neither DeMint or Heritage say anything about the inherent advantage the internet currently gives to online retailers over brick-and-mortar retailers, but I do know one thing: more taxes are the last thing anyone needs.