If you saw my speech to Capitol Hill staff on the topic, you know I’m strongly opposed to schemes that would allow greedy state politicians to impose taxes on online sales that occur outside their borders.
I reiterated these sentiments in a debate that was posted today by U.S. News & World Report. Here’s some of what I wrote.
The debate over the so-called Marketplace Fairness Act is not about a level playing field. It is an attempt by politicians to grab more tax revenue to facilitate bigger government. …they want to create an elaborate and intrusive system to force out-of-state merchants to act as tax collectors. …To understand why this is a radical step, imagine if you took a trip to Las Vegas and played blackjack, but then got arrested when you returned home because your state doesn’t allow gambling. That would be an outrage because a state only has sovereign power to enforce laws (good ones or bad ones) on things that take place within its borders. And it would be equally outrageous if state governments tried to force Las Vegas casinos to discriminate against non-Nevada residents.
I also explain why this type of system is bad news for reasons other than fiscal policy.
This legislation also has very troubling implications for privacy. It can only work by creating a massive database that matches online purchases with the state and local sales tax rates for every consumer. I don’t know about you, but I’m not confident that this type of untested system will be secure. We’ve already seen major leaks of confidential data from both government and private companies. This database will be a magnet for identity thieves and other hackers looking for credit card information.
If you agree, feel free to give me an “up” vote on this U.S. News page featuring all the debate participants.
Otherwise I may have to cry and sulk, like I did after Richard Epstein and I lost the Keynesian stimulus debate in New York City (you can click here to see why we should have prevailed!).