My thoughts on Dick Durbin’s “Internet Sales Tax” proposal:
I guess with the economy in the toilet and the growth of online retail, an Internet sales tax was inevitable. My biggest concern is less about the taxes themselves and more about the complexity of handling sales thousands for thousands of jurisdictions. This is what makes the fact that the current proposal is tied to the Streamlined Sales and Use Tax Agreement so interesting because it promises to create a single across the board online sales tax which can be applied evenly. This would certainly make things easier for online retailers and might even put some pressure on states to bring their sales taxes for brick and mortar stores into line with a national online sales tax.
While no one likes taxes, looking at it from this angle, an Internet sales tax might not be such a bad thing depending on where you live. Living in Chicago which until recently had the highest sales taxes in the nation, I tend appreciate complaints about sales taxes. But if an Internet sales tax which is significantly lower than the brick & mortar sales in most places were put into effect, I think that it would very quickly turn into a de facto national sales tax as states came under pressure from local businesses. A lot of states might wind up losing money under such a scheme. Individual citizens on the other hand might wind up paying less for milk at the grocery store and more for books at amazon.com.