A Good Tax

Yes, I think this tax will help States and the nation:

As a rule of thumb, it’s best to be skeptical of politicians and journalists who describe their pet policy preferences as “common sense.” Unless it involves renaming a post office, pretty much any piece of legislation that gets brewed up in Washington will, by necessity, involve tough trade-offs between values and interest groups. 

But there are exceptions, and today, I’d like to cautiously suggest Congress has hit on one. The Senate is preparing to vote on a bill that would finally let states make online retailers collect sales taxes. Majority Leader Harry Reid has cued up a vote, and the measure is expected to have more than enough support to clear a filibuster.

So far as big pieces of legislation that will impact billions of dollars in commerce go, this bill might be the closest you’ll get to a no-brainer.  Thanks to a 1992 Supreme Court decision, Quill v. North Dakota, states today can’t force merchants to collect sales taxes unless they have a physical presence, such as a store or office, within their borders. Those tax dollars are still very much owed, but it’s up to the shopper to pay them as part of their state return. Of course, almost nobody ever does. The upshot is that a ruling made back when Lands End catalogues were still at the cutting edge of retail has given online stores a leg up on their brick and mortar competition, while costing states a bundle of tax revenue — anywhere from around $12 billion to $23 billion annually, depending on the estimate.