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Friday, May 10, 2013

On the Internet tax


I did this over at the Tennessean.
James Kershaw writes:
“The passage of this bill would benefit every retail and wholesale business located in Tennessee,”
This assumes that the TN merchant would get the business that is now going to the Internet. Since a great deal of the business going to the Internet is based on convenience, shopping from your desk at home, and unlimited selection and ease of finding a product, this is a false assumption.  For example, does your local book store have every book available that has been written by your favorite author? Highly doubtful. And to find out you’ve got to get up and drive to the store and then find the book and then find a clerk…. Contrast that with the ease of Ebay and Amazon…want a pair of shoes???? Just look at the selection available from Zappos.
……”and increase state revenues, thus benefiting all who live here.”
This assumes that EVERYONE will benefit based on some unknown action by an unknown agency of state government. Obviously the people who pay the additional taxes will benefit only to the extent that the result of the unknown action by the unknown agency exceeds their loss in real money. In addition, even those who lose no money may not benefit because giving more money to government does not guarantee a positive outcome. In fact, given that the money could be used in ways that reduce individual freedom, giving more money to government is like giving booze to an alcoholic. In fact, there is no real proof that government is too small and needs more money to provide actually needed services.
…….”A number of Tennessee-based businesses lose sales on a daily basis to Amazon eBay, and other Internet retailers, as those entities enjoy an immediate 9.25 percent price benefit.
At this time the large retailers, who have websites, charge TN sales taxes. Last evening, using the Internet, I ordered a part for one of our appliances. I was charged for the part, for shipping and state and local sales taxes. Again, my savings was in gasoline and shoe leather not spent in driving to a local merchant to order the part. Plus, it was painless.
It is reported that the bill passed by the Senate has this limit:
But under the proposed law, states would be able to require online sellers to collect sales tax if they have sales of at least $1 million outside of states where they have physical operations.
It is rather obvious that Amazon’s opposition to this bill is based on them having warehouses located  in multiple locations. But who is supporting the bill??
I think that he majority of the support comes from small business owners who think all purchases on the Internet will be subject to the tax and this will drive customers to their doors. This is false due to the reasons stated above.  Note to small business owners. Websites are inexpensive. Get one. They are as important to your future as window displays were in the past.
The second group of supporters are those, mostly Democrats and so-called “Progressives” who have never seen a tax they didn’t like, who believe that once in place the tax can easily be increased. That is true.
I don’t know what group James Kershaw belongs. Like too many he has been allowed to spout his opinion without telling us anything that would reveal his biases."Unlimited tolerance must lead to the disappearance of tolerance. If we extend unlimited tolerance even to those who are intolerant, if we are not prepared to defend a tolerant society against the onslaught of the intolerant, then the tolerant will be destroyed, and tolerance with them." - Karl Popper “It’s the presumption that Obama knows how all these industries ought to be operating better than people who have spent their lives in those industries, and a general cockiness going back to before he was president, and the fact that he has no experience whatever in managing anything. Only someone who has never had the responsibility for managing anything could believe he could manage just about everything.” - Thomas Sowell in Reason Magazine

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