As Black Friday gave way to Cyber Monday, the familiar complaints from physical retailers about the perils of online competition once more began to surface. At issue is the way internet sales, or more specifically remote sales, are taxed, with many retailers calling for new legislation to empower states to collect more taxes from online sellers.
Discussions about the proposed internet sales tax usually devolve rather quickly into accusations that one side is simply selfish: they want to shop online tax free, and they don’t care about a level playing field for brick-and-mortar stores. The American lust for low prices, they argue, is trumping notions of fairness and equity. Hence, the Marketplace Fairness Act and its similar derivative, the Remote Transactions Parity Act.
Don’t be fooled by the words “fairness” and “parity” in the titles of these bills. While useful as a marketing tool, this language is wildly inaccurate. Far from creating tax equality, this legislation would grant unprecedented new taxing powers to the states.
This is where the claims of greediness on the part of consumers fall apart. Opposition to the Internet sales tax is not about the money, although that’s part of it. More broadly, it’s about keeping government power within its proper limits.