Republican Governors Seeking Online Sales Tax
Instead of doing the hard work of cutting spending to line up with revenues, a handful of governors are now looking for the easy way out: taxing. Let’s forget the fact that higher taxes lead to less revenue (just ask California and Maryland), and assume that these states will magically bring in more revenue.
The Heritage Foundation’s David Addington explains what taxing online sales would result in:
- Impose undue state burdens on interstate commerce;
- Cause American businesses and individuals to pay much more to states in taxes;
- Discourage states from cutting the size, scope and cost of state governments, and;
- Discourage free-market competition
The reasoning behind the online sales tax is usually justified as a way to help “Main Street.” However, this is just another example of government picking winners and losers in the market. In the free market, consumers decide where and how they shop, and are free to find the best deal, which forces businesses to compete with one another in order to acquire such purchases.
But when government gets involved, those who are unwilling to compete in the free market are given advantages, by way of forcing their competitors to increase their prices, instead of the original business decreasing their costs.
As with most government schemes, the ultimate losers are the consumers.