The internet may look like the most successful sector of the economy to you and me. To your typical Democrat, however, it looks like an untapped tax resource.
The greedy taxman has been eyeing the internet for years, eager to permit all sorts of taxing authorities to get their hands on a free and thriving sector of the economy and make it as sluggish as the rest of our economy.
Fortunately, the Internet Tax Freedom Act was extended in Congress’ omnibus spending bill—but only until October and only with a price exacted by Senator Harry Reid and his taxing party. The Wall Street Journal observes:
Senate Majority Leader Harry Reid (D., Nev.) and a bipartisan group of tax collectors had been holding the Internet Tax Freedom Act captive and preventing an extension from receiving a vote on the Senate floor. In return for allowing this popular law to live, the Senate hostage takers demanded the enactment of a separate bill called the Marketplace Fairness Act. This measure would give America’s 9,600 taxing jurisdictions new powers to reach outside their borders and force distant online sellers to collect their sales taxes, even though the Web merchants have no political representation in the taxing jurisdictions.
There would be little fairness in such a marketplace, because the bill would place burdens on Web merchants that have never been applied to brick-and-mortar stores. Such burdens include forcing an online seller that has a physical presence in a single state to answer to 50 state auditors and hundreds of tribal governments, not to mention tax collectors in all U.S. territories and possessions offshore. This bureaucratic festival has now been avoided for this year, despite a late lobbying blitz by state legislators.
To prevent future hostage-taking, Congress should enact a clean, permanent extension of the Internet Tax Freedom Act when legislators return in January.