A Tax is a Tax is a Tax

It was perplexing last week to hear a conservative commentator express modest enthusiasm for an Internet sales tax. Governor Walker, who has no part in the eventual decision, indicated he’d use the revenue to cut income taxes if Congress turns Internet merchants into tax collectors.

More income tax reductions would be good. But there’s more to consider.

First, remember Wisconsin has a sales tax solely because it was sold a half-century ago as a way to relieve other taxes. There’s nothing unique to Wisconsin in the fact that creating or increasing one tax to relieve another produces not tax relief, but more and higher taxes.

A second objection, we’ve mentioned before: An Internet sales tax is recognized as unworkable unless 9,000-plus U.S. taxing jurisdictions simplify and harmonize tax policies. Here, “simplify” means “increase rates,” unless, for example, the City of Chicago might consider imposing fewer and lower taxes in order to “harmonize” with Wyoming.

And finally the biggest objection, that being taxation without representation: Every customer of an Internet business would become subject to taxes enacted by officials of other states and localities who owe them no accountability.  It’s one thing to drive across the state line and pay seven different and unfamiliar taxes because you decided voluntarily to have dinner in Chicago. It’s quite another to have Chicago alderpersons reach across the line and take money out of your pocket.

It’s easy to fall for the argument that an Internet tax would “level the playing field” and make things fair for brick and mortar merchants. The truth is it would make the playing field profoundly uneven by facilitating “the power to destroy”—as Daniel Webster characterized the power to tax—to an unprecedented degree.

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About Wisconsin Club for Growth
The Club for Growth is a national network of over 40,000 men and women, from all walks of life, who believe that prosperity and opportunity come through economic freedom. Wisconsin Club for Growth, Inc. is dedicated to informing, educating and rallying citizens of Wisconsin to embrace and enact policies that lead to sustained economic growth, limited government, and minimal taxation. Wisconsin Club for Growth can and will have an enormous impact on the direction of our state. Wisconsin Club for Growth believes that effective lobbying is done at all stages of the budget cycle, including when our leaders make public promises and can be encouraged to support policies that spur economic growth. Wisconsin Club for Growth believes we must support pro-growth policies and encourage public officials with backbones to remain truly committed to making our economy and our state stronger. Wisconsin Club for Growth believes our leaders must stand up to the tax and spend mentality in Madison and work tirelessly to cut taxes and unleash the power of the free-market.

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