Analyzing the Real Impact of Taxing E-Commerce

sashae writes: "We've heard a lot over the last couple of months about the gigantic dollar-figure sales the net has been generating, that the US Gov't has missed out on taxing. American Outlook magazine has an article about the true impact of Internet sales on taxes that the states would normally collect. "

Comments

IANAL, but I AM an economist

[nels_tomlinson]

I haven't run any numbers on this myself, but that fellow's arguments look sensible. Wholesale isn't taxed anywhere in the U.S., the value of the transactions which are taxable will certainly fall if a tax is imposed, and so on. I think his basic point is sound: attempts to tax e-commerce will fail, and do far more harm than good in the process.

Another poster, above, pointed out the obvious: the solution is to eliminate sales taxes on the local merchants,too! That levels the playing field in a sane fashion. This is a solution that both ends of the political spectrum should like. Liberals are supposed to be against the sales tax because it's regressive. Conservatives are supposed to be against it because it puts a disproportionate burden on small business, and because it is economically inefficient. We need to make it clear to all who will listen that this is an opportunity to get rid of sales taxes everywhere. How to replace the revenue? Let each state figure that out for themselves. At least one will probably come up with a good idea.