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>Why should a distant seller have an 8+% cost advantage over local sellers? States don't have to have an 8+% sales tax. Some states (at least Oregon last time

>Why should a distant seller have an 8+% cost advantage over local sellers? States don't have to have an 8+% sales tax. Some states (at least Oregon last time I checked) don't have any sales tax. There are other ways to collect taxes, which, in addition to not punishing local retailers, are less regressive.

gojomo 17y ago
Without a sales tax, a state has to have higher income tax or property tax levels. Both can do more to drive away high-value industry than broad-based consumption taxes. But if a non-regressive tax system is your goal, let's analyze Amazon's loophole for its progressivity: Who benefits most from tax-free online shipping? It's definitely not the poor, who don't spend a lot on high-dollar, easy-to-ship-across-state-lines products bought with credit cards. When rich people use this loophole to save money on their books/ipods/electronics/housewares, in-state retail businesses that employ less-skilled people and pay other taxes shrink. Because the transaction base is smaller, if there is a sales tax, the rate has to be higher -- and that covers things poor people buy with cash. There might be a federalist argument for preventing individual states from compelling sales tax collection, even if states are allowed to charge a use tax or delivery fee. But there's no progressivity argument for using the tax code to favor distant online retailers over local businesses.
- rsheridan6 17y ago
  >Without a sales tax, a state has to have higher income tax or property tax levels. Both can do more to drive away high-value industry than broad-based consumption taxes. Of course you have to raise other taxes or cut spending if you do away with sales tax. TAANSTAFL. >But if a non-regressive tax system is your goal, let's analyze Amazon's loophole for its progressivity <snip> Only in the presence of state sales tax. No sales tax = no advantage for Amazon.

gojomo 17y ago

Without a sales tax, a state has to have higher income tax or property tax levels. Both can do more to drive away high-value industry than broad-based consumption taxes. But if a non-regressive tax system is your goal, let's analyze Amazon's loophole for its progressivity: Who benefits most from tax-free online shipping? It's definitely not the poor, who don't spend a lot on high-dollar, easy-to-ship-across-state-lines products bought with credit cards. When rich people use this loophole to save money on their books/ipods/electronics/housewares, in-state retail businesses that employ less-skilled people and pay other taxes shrink. Because the transaction base is smaller, if there is a sales tax, the rate has to be higher -- and that covers things poor people buy with cash. There might be a federalist argument for preventing individual states from compelling sales tax collection, even if states are allowed to charge a use tax or delivery fee. But there's no progressivity argument for using the tax code to favor distant online retailers over local businesses.

rsheridan6 17y ago
>Without a sales tax, a state has to have higher income tax or property tax levels. Both can do more to drive away high-value industry than broad-based consumption taxes. Of course you have to raise other taxes or cut spending if you do away with sales tax. TAANSTAFL. >But if a non-regressive tax system is your goal, let's analyze Amazon's loophole for its progressivity <snip> Only in the presence of state sales tax. No sales tax = no advantage for Amazon.