Court of USA TODAY Rules e-Tax Constitutional
Today's USA TODAY opinion page sounded more like it was written by a politician than an editorial writer. Citing a boom in internet sales over the past decade, USA Today called for taxing internet transactions. The primary justification: "Hard-pressed states could use the money to reduce budget deficits."
The paper completely dismissed a 1992 U.S. Supreme Court ruling that such taxation is a clear violation of the dormant commerce clause and unconstitutional given the burden of tracking nearly 8,000 tax districts that aren't aligned with zip codes and change constantly. But, the Court of USA TODAY ruled instead that "it's hard to imagine that today's software wizards couldn't figure out a solution." Yes, they probably could, but the potential for "software wizards" to figure this out in the future doesn't make it any less of a current constitutional violation in some states. And even after they do figure it out, the service would come with a hefty price tag - one that brick-and-mortar retailers wouldn't have to pay.
Most proponents of the tax (including the New York Times and Pittsburgh Post-Gazette) have argued that it’s a question of fairness; that online retailers should collect because brick-and-mortar stores have to as well. This ignores the fact that brick-and-mortar retailers have to collect one tax, while online retailers would have to collect nearly 8,000 taxes at multiple rates (including combinations of state, county, and city taxes). That's not very fair either. Further, as an opposing view op-ed points out, states already have "use tax" laws on the books to require purchasers to remit the tax themselves. Just because a state has enforcement problems doesn't make forcing out-of-state retailers collect thousands of different taxes any less unfair.
So, what's the real justification for taxing internet sales? As USA TODAY put it: “Internet sales have skyrocketed, from $27 billion in 2000 to $133.6 billion last year.” That said, their entire editorial could have been summed up by one famous Willie Sutton quote. When asked why he robbed banks, Sutton simply replied "because that's where the money is."
For more information, visit www.StopETaxes.com.