Ladies and gentlemen, how are you? A majority of people know that online merchants pay taxes in some states while others are still debating the issue. The reasons for or against collecting taxes for the online retailers differs widely. I believe, it is fair for all businesses to pay taxes and; therefore, the online retailers have no option other than to pay taxes.
In 2011, Lloyd Miler, a leading business columnist with the Wall Street Journal highlighted the views of various stakeholders on the same. The 1992 U.S. Supreme Court ruling stated that online retailers did not need to collect sales taxes in the states they did not have a physical presence. The decision gave online merchants unfair advantage over the brick and mortar investments. Fundamentally, the government collects taxes to provide public services to residents. Among the public services offered include security, roads, hospitals, legal, and schools. Ladies and gentlemen, online retailers, sent their goods through the infrastructure built and repaired by the states, the merchants, as well as the shoppers, enjoy legal services, and security from the states. If they do not pay taxes, then who should pay for the services provided by the states? The brick and mortar investors should not pay taxes for service provision while the online merchants enjoy profits without contributing to the development of the country. In fact, ladies and gentlemen, Miller noted that each year up to $10 billion online taxes is not collected. The figure can significantly improve the infrastructure of the states.
You all know that the states have since requested for the overturning of the Supreme Court ruling. Richard Rubin, one of the leading Wall Street Journal economists, on February 23, 2016, indicated that some of the states had got impatient with the Congress to enact laws allowing taxation of online sales. Due to the delay, some of the states have since imposed the taxes themselves stressing on the urgency of the matter. Rubin, quoting Deb Peters-South Dakota senator, noted that the inaction of the Congress has been disadvantageous to the local businesses. Taxing the brick and mortar investments alone amounts to discrimination by the state agencies leading to an unfair marketplace.
Pricing of commodities depends on among other things the cost of the operations of the businesses. Taxes tend to increase the cost of operation making the investors transfers them to the end-users of the goods and services. Although the customers want low prices of the products, the associated costs such as losing jobs because of edging out of the market the brick and mortar are significant. The shareholders of these investments would make losses in the long term because the traffic towards their investments is declining rapidly due to the discriminatory business environment. As a result, they may close down the shops. Shay Matthew, the President, and CEO of the National Retail Federation share similar sentiments that the Congress was hurting local retailers by making them compete with an unfair built-in price advantage arising by not collecting online sales taxes.
I believe that the best practice in taxation entails fairness in the broadest base possible. Many economists agree with the above propositions on taxing online sales. Besides, it is the duty of the Congress to enact laws controlling national businesses. Therefore, the inaction or action of the Congress can have far-reaching effects on the investments. From this point of view, it is fair for all the laws to subject investors to same taxation rules. The impact of the inaction of the government could be adverse because of reduced revenues among the states and job losses. It is not late to do the right thing. Tax online retailers. Thank you all, God bless you.
Works cited
Miller Lloyd. Should States Require Online Retailers To Collect Sales Tax? The Wall Street Journal November 15, 2011. Accessed on March 10, 2016. Available at <http://www.wsj.com/articles/SB10001424052970204528204577007511298359048>
Rubin Richard. States Set Up Fight Over Web Sales Tax. The Wall Street Journal February 23, 2016. Accessed on March 10, 2016. Available at <http://www.wsj.com/articles/states- seek-new-ways-to-tax-online-sales-1456262265>
Shay, Mathew. Tax Internet Sales for Fairness, Federalism. The Wall Street Journal January 7, 2016. Accessed on March 10, 2016 from <http://www.wsj.com/articles/tax-internet-sales- for-fairness-federalism-1452196464>
