When will politicians and lawyers (although I repeat myself) understand that merchants, either online or brick and mortar, do not pay sales taxes except on the business to business transactions they initiate?
Consumers pay sales taxes. And American consumers pay massive amounts of taxes including hundreds of billions in sales taxes on a vast array of goods, and services. To state the obvious, Americans, in general, and Californian’s in particular, are over-taxed, not under-taxed. And governments at every level, federal, state, and local, are spending record amounts of taxes on salaries, benefits, programs, and services. Many of which are notoriously rife with waste, fraud, and abuse.
In the Supreme Court’s majority opinion today in South Dakota vs Wayfair (an unfortunate majority to say the least), it is suggested the existing sales tax collection regime “costs” states $33 billion a year in “in collected sales taxes”. This once again implies these “uncollected” dollars belong to state governments. They don’t! These so-called uncollected taxes belong to the people who earned the money in the first place. The money belongs to the American worker, investor, producer…and yes, the American consumer. I.e., we the people. The money Americans earn by working hard belongs to them, not the government. This is continually lost on politicians and the tax and spend lobby from sea to shining sea.
Moreover, to now require online merchants to comply with over 12,000 separate and independent tax jurisdictions in order to do business on the internet, which is what this decision does, is to deal a devastating blow to small web-based businesses nationwide that already have razor-thin profit margins. And, ultimately, all this will do is raise prices on millions of American consumers who shop online, rather than at a brick and mortar business. It also gives a competitive edge to all of these yesterday’s economy brick and mortar businesses because they will now have the advantage of not being forced to comply with 12,000 tax jurisdictions including the expensive software programs required to do that.
Today’s opinion is wrong on many levels…but perhaps what it does most of all is once again further blur the lines of the separation of powers written so carefully into our Constitution. Men and women in black robes, who serve for life, with little or no accountability to voters, shouldn’t be making tax law. That is the job of Congress. Remarkably, Justice Roberts of all people, understood this truth in his dissenting opinion. How Thomas, Alito, and Gorsuch missed this is anyone’s guess.