A bipartisan group of senators reintroduced legislation today to apply sales taxes to all Internet purchases, long a goal of state and local governments as well as traditional "bricks and mortar" retailers. The legislation would require online merchants to collect and remit sales taxes to the local authorities where the purchaser lives, reports the Washington Examiner.
Co-sponsors of the legislation include Sens. Mike Enzi, R-Wy., Lamar Alexander, R-Tenn., and Heidi Heitkamp, D-N.D. A big roadblock will be Senate majority leader Mitch McConnell, who is actually on the right side of an issue, opposes the bill.
BTW, this squeeze more money out of the consumer bill (to the degree the tax can actually be passed on to consumers) is named the Marketplace Fairness Act.
-RW
I thought tax bills could only be introduced in the House.
ReplyDeletelol
DeleteYep, that's my reading of Article I, Section 7 of the Constitution.
DeleteI thought the Republicans advertised themselves as the "lower tax" party. Guess not....
"(to the degree the tax can actually be passed on to consumetrs)"
ReplyDeletePapa John and "Passing On" by Daniel J. Sanchez
http://mises.org/blog/papa-john-and-passing
"Rothbard demonstrated in Power and Market that the notion of such “forward tax/cost shifting” is fallacious:
"“The idea that the increased cost will be passed on to the consumer by the employer is an illustration of perhaps the single most widespread fallacy on taxation: that businessmen can simply shift their higher costs forward onto the consumers in the form of higher prices. All the economic theory expounded in this book shows the error of this doctrine. For the price of a given product is set by the demand schedules of the consumers. There is nothing in higher costs or higher taxes which, per se, increases these schedules; hence, any change in selling prices, whether higher or lower, will decrease the revenues of the business involved. ..."
"... Suppose that a particularly heavy tax—of whatever type—has been laid on a specific industry: say the liquor industry. What will be the effects? As we have noted, the tax will not simply be “passed on” to the consumers. ..."
"... The long-run effect, therefore, is to decrease the supply of liquor produced, and therefore, by the law of supply and demand, to raise the price of liquor on the market. However, as we have said above, this process—this diffusion of suffering over the economy—is hardly “shifting.” For the tax is not simply “passed on”; it only permeates to the consumers through hurting the industry taxed."
In other words: The would-be central planners like to think they are changing people's preferences, but this is inconsistent with the Action Axiom, which assesses the source of all value to be the individual's subjective preferences.
The real reason people change spending habits after taxation is because their own subjective opportunity costs have been artificially raised for their otherwise higher ranked preferences.
Their preferences haven't been changed by the central planners; Roadblocks have simply been put in their way.
Which means that people have to choose the next available highest ranked preference - which is what the fact of scarcity forces us to do anyway.
Amazon wants to kill its competitors. I'm betting Amazon and Google are behind this legislation.
ReplyDeleteAmazon no longer has the lowest prices and is not as competitive as it used to be, so now it needs to go running to Big Daddy Government to figure out how to cripple its competitors.