Proposal harms consumers economy
By Michael Quinn Sullivan
Published: 12-10-07
By Michael Quinn Sullivan
Published: 12-10-07
Log off your computer and hold on to your wallet efforts to raise your online taxes are heating up just in time for Christmas.Texas is about to be swarmed by advocates of the “Streamlined Sales Tax” as they hold their quarterly meeting in Dallas on December 11. They say their goal is to “simplify” sales taxes by making them “uniform” across the country.
At its most basic such uniformity would stifle the competitive creativity that allows the fifty sovereign states of the Union to each be international economic powerhouses in their own right.
The internet has allowed businesses that could not be profitable as a “store-front” because of a lack of a sustaining local market to instead thrive by reaching a critical mass online. To ask those businesses collect and remit sales taxes for every possible jurisdiction across the country would endanger an untold number of jobs and opportunities.
It would also increase the costs for consumers choosing to shop online. Not only would the bill-of-sale rise with the imposition of sales taxes but so would the prices of products for sale as business owners struggle to incorporate their cost of this new collection requirement into their bottom-line.
Roughly speaking each mom-and-pop trinket “shop” operating online would have to keep track of between 5000 and 10000 tax rates – or pay someone to do it for them. And when you consider how many different taxing jurisdictions have overlays within even a single zip-code the cost and complexity of this “streamlined” effort become even more apparent.
No matter how it is done this proposal creates more costs for consumers while creating higher barriers of entry for aspiring retail entrepreneurs.
More insidious is the way the proposal strips states of their taxing authority. The advocates of this plan demand that every state adopt specific definitions of “sales.” Unsurprisingly this inures to the benefit of the tax spenders and not the taxpayers. Streamlining our cash more quickly from our wallets is the name of this game.
The current practice of each state setting their own sales tax policies ensure that the needs of the local economy is matched with its ability compete in a global environment. By tweaking tax policies each state leverages their advantages in a way to maximize their competitive advantage with each other and the rest of the world.
To “streamline” taxes might initially bring in a few more dollars of revenue although even that is in question but would have the long-term effect of cooling our economy.
At the end of the day the proposal has nothing to do with streamlining sales taxes or improving efficiency. It’s about micro-managing the local economy of every state. Sadly this proposal is a guaranteed way to streamline us into higher taxes less competition and fewer opportunities. The proposal would turn the amazing robust diversity of the Several States into a conglomerated uninspiring mess.
When the streamliners march into Dallas let’s make sure they spend their money and then leave quickly.
Michael Quinn Sullivan is president of Texans for Fiscal Responsibility (www.EmpowerTexans.com) a non-profit advocacy group working for budget and tax reform.
