Comment by Nasrudith | Hacker News Reader

Comment by Nasrudith | Hacker News Reader

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There are two against it on fairness grounds I can see but your mileage may vary on practically and definitions of fairness.

One is that they don't use the infrastructure in the state. Shippers are either already taxed for their use if private or self funding government in the case of UPS.

The second is a more slippery taxation without representation which also gets into all sorts of semantic issues with who is really being taxed the in state residents or the out of state residents.

Really the tax infrastructure is in drastic need of modernization and streamlining. It may step on a lot of toes but I could see forcing online sales tax into a federal fixed rate with redistributed fixed percentages as worth it. Say 5% rate nationally and of that 1/3rd each to the buyer's state and the seller's state and 1/6th to each municipality respectively with it defaulting to the state if it is unincorporated. It would even actually fit in interstate commerce domain nicely.

> One is that they don't use the infrastructure in the state.

This is one way of looking at things, but I think sales tax is much closer to a tax on consumers than on businesses. Or at least is intended as a tax on consumers to fund their state infrastructure, often because imposing an income tax is impossible (e.g. Washington State constitution) or just politically unpalatable.

Normalising taxes is basically impossible in an environment where sales taxes are a meaningful part of a government's budget.

Do the consumers pay the tax to the federal government? No? Then it's not a tax on them, but on the businesses that pay the tax. Business's can choose to charge consumers directly for this, but for online retailers that means additional complexity in the checkout and billing process.

On the other hand, local businesses are paying other types of taxes anyway (such as property taxes) and they're actually employing local people--so there's almost an argument that local businesses should be paying less sales tax rather than more. And then you're almost in why have a sales tax at all territory given that they're mostly regressive.

There's certainly a good argument for a flat national sales tax but that doesn't really fit with federalism and, anyway, good luck getting New Hampshire and New York to agree on a number.

On the other hand, having local businesses pay less sales tax would be dangerously close to interstate tariffs.

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