Thursday, August 2, 2012

Amazon Joins Walmart in Push for Online Sales Tax

Timothy Carney explains:
Congressmen in both parties want you to pay more taxes on your online purchases, and once again, big business is lobbying for bigger government, which would hurt Mom and Pop.

Online sales taxes have been a battlefield for lobbying titans for years, pitting Walmart and the rest of the brick-and-mortar retail lobby against Amazon and other online retailers. But now Amazon has changed its business model and also its lobbying position, joining the rest of the retail giants in calling on Congress to aid states in collecting sales tax from online sales.
Here's Carney on why Amazon is pro-internet tax:
The bipartisan lobbying effort has yielded fruit this year in the "Marketplace Fairness Act." Under this bill, if you buy something online, you pay a sales tax. Retailers, meanwhile, will have to collect sales taxes for every state where they have customers, even if the retailer has no physical presence there.

This is often how tax legislation gets passed: powerful interests hire revolving-door lobbyists to push for taxes on their clients' competitors. For over a decade, such online sales-tax bills have faltered in Congress, largely because they had a powerful opponent in Amazon.

But this year, Amazon switched teams, joining Walmart on the pro-tax side -- not out of some newfound concern for "marketplace fairness," but because Amazon's business model is changing in such a way that now Amazon stands to benefit from this tax.

In order to provide faster shipping, Amazon is building warehouses throughout the country. These warehouses constitute a "physical presence," which requires them to collect sales taxes, in any event. So, if Amazon is going to have to collect sales taxes under the existing "physical presence" doctrine, it may as well try to expand online sales taxes to whack its smaller competitors who don't have a 50-state network of giant warehouses.
The entire Carney analysis is here.


  1. Not that these are the biggest abuses in the system, but does one need a more obvious example of:

    1) When it comes to the interests of big business as opposed to small business or the individual, Washington knows only one tune.

    2) Big business hates competition, and Washington accommodates by passing laws limiting competition.

  2. It is such a shame to see this happen, as Lew Rockeell has pointed out many times, is a giant of capitalism that truly serves the highest needs of the customer.

    Nothing good can come of Amazon making a deal with the devil, as Tibor Machan pointed out in his article 'Business vs Business':

    "That business people do not realize how dear a price they are paying for the relief government gives them indicates that they are no less savvy concerning the relationship between politics and business than are academic left wingers who advocate out and out socialism. Marx was wrong–people in business are in fact insufficiently self-interested!"

  3. I may have just made my final Amazon purchase, ever.

  4. In the end Amazon is just following the capitalist mantra. The reality is that as long as the government can be influenced by anything other than its constituents the government will be a problem. Voting with your money goes a lot farther in the US than voting with your voice.

  5. Basic Human Action.

    The only solution is to make the government powerless, which seems impossible. The politicians (and the president is a politician) have no interest in reducing their power (save the few Ron Paul, Amash, etc.).

  6. Has anyone else here noticed how silent LRC is on this topic?