By Nicholas Deleon
The second most senior Democrat in the U.S. Senate, Dick Durbin, will propose a new scheme that would force online retailers like Amazon (NASDAQ:AMZN) and iTunes to collect local taxes for each and every transaction. He’s expected to make the proposal the day after Tax Day, and it’s expected to be controversial within two seconds of having been announced.
You already know the story. Durbin, from Illinois, complained in February that out-of-state businesses (again, like Amazon and iTunes) were essentially freeloading off the taxes that local brick-and-mortar stores pay. Why should Amazon be able to sell you a Blu-ray disc without having to collect tax, but if you were to buy that same disc from the local Walmart? Exactly.
That’s the argument you’ll be seeing (and have been seeing), at least.
(I’m in New York, so I already pay sales tax on all my Amazon orders.)
Cnet kindly reminds us how convoluted this country’s tax structure can be. You can expect to pay sales tax on bottled soda in New Jersey, but not on bottled water, even cookies. A mink handbag is taxed in Rhode Island, but not a mink fur coat. It’s a big mess, in other words.
How well a new taxes scheme would get over in Congress remains to be seen. I can’t imagine too many Republicans coming out in favor of new taxes, but who knows?
What we’d probably need, more than anything else, is as close to a total re-write of the country’s tax code in order to bring it into the 21st century—just as we need a complete overhaul of copyright law. What are the odds of that happening?