SCOTT MOONEYHAM: Elaborate Schemes And Taxing Fairness
What do you suppose would happen if the state of North Carolina decided that it was no longer the responsibility of store owners to collect sales taxes?
Instead, you, the consumer, would be required to self-report how much stuff you bought and how much tax you owed. And those fine folks at the state Department of Revenue would have no way of knowing, short of your honest accounting, how much stuff you really bought and how much tax you really owed.
Do you think the $5 billion in state sales taxes collected each year might drop a bit, leaving less money to run schools and prisons?
Well, that exact system is in place when it comes to purchases over the Internet.
Whether you know it or not, you owe taxes on those Internet purchases. A single line on the North Carolina income tax form is dedicated to taxes owed for out-of-state catalogue and Internet purchases.
For a number of years, North Carolina and other states have been preparing for the day when Internet retailers would begin collecting the taxes in the same way that brick-and-mortar retailers collect sales taxes.
States have been making their tax rules more uniform through something called the Streamlined Sales Tax Project. The hope is that by making the rules easier for Internet retailers to understand, Congress will put federal legislation in place to force retailers to comply.
Just one problem. So far, Congress hasn't been very cooperative. When you print the money and can run up unlimited deficits, you tend to be a bit obtuse about the revenue requirements and responsibilities of people who actually have to balance their budgets.
A chorus from the right attacking the states' efforts as a tax grab apparently has been more persuasive than any arguments from those states.
"You're talking about an elaborate scheme to try to avoid responsibility for taxation," Jim Harper of the conservative Cato Institute said recently in The Carolina Journal, a publication of the John Locke Foundation.
No doubt, elected officials in states across the country would like to have the hundreds of millions of dollars generated by Internet sales taxes pour into their tax coffers. No doubt, most of those same officials probably wish to avoid publicly supporting any new taxes.
But an "elaborate scheme"? It's no more elaborate than longstanding tax law. In fact, that's what it is: an attempt to enforce existing law.
If the Cato Institute or others want to endorse doing away with all state sales taxes, then have at it. If conservatives believe that state government in North Carolina can survive with a quarter of its budget gone, then make that argument. If they support some substitute tax, name it.
Otherwise, the argument is disingenuous.
We have a sales tax. As long as we have it, that tax should be enforced evenly and fairly, even if technology changes how we consume.
Scott Mooneyham writes for Capitol Press Association. Contact him at email@example.com
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