By Paul Weiser
We've seen, over the last decade, mounting collusion between federal and state governments to tax previously tax-free interstate sales. This has come about through advances in technology and simple greed.
Until recently, it was understood that sales tax was a state prerogative. The traditional system ran, federal government supported by customs duties, states by sales and franchise taxes, localities by property tax. When the federal government found itself unable to pursue all its desires (including Marxist assault on wealth) it obtained an income tax, in which it was followed by the more avaricious and mineral-poor states once federal rates grew high enough that a percentage was worth taking. Localities followed the same course, adding to state sales tax.
But sales tax stops at the state line: hence, on mail- order forms, "(seller's state) residents add 4% sales tax" since only when both buyer and seller were in the same state did their transaction lack interstate scope. Interstate was federal, and the federal government leveled the playing field among states - as the Constitution mandates - by allowing no state to tax business even partially in another.
Two factors led the governments to revisit this sensible provision: first, the great increase in interstate sales resulting from the Internet, which also involves business with multiple operating locations; second, that some states advance novel theories to let them collect tax on interstate sales. The question became, since the buyer pays sales tax but the seller collects it, where is the transaction? Greedy states ignore the Constitutional third answer (neither, it's interstate) and lobby Congress to evade the Constitution.
To the extent Congress honors state special pleading, it has inclined toward abrogating its Constitutional responsibility. At least this answers the question about who pays the tax: the buyer. You can tell because he's the one being robbed.
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