unFair to Innovation

Senator Mike Enzi (R-Wyoming) has introduced legislation that would require that online and catalog purchases be subject to a sales tax. Called the "Sales Tax Fairness and Simplification Act", the legislation would create a uniform tax rate that online and catalog retailers would be required to collect and dispense to the government. Personally, I'm disappointed that a Republican would support such legislation, and with Democrats in control of the Congress it's very likely that this will become law.

From my reading, the bill will serve two primary purposes. The first generally is to promote "fairness". The second is, in my opinion, for the sole purpose of increasing goverment revenue.

Regarding the so-called "fairness", I would hardly consider this legislation "fair". In fact, I would consider this proposition somewhat unfair to those who have invested in technology and have used innovation to create success--the very principals that have made America the economic leader of the world. The internet brought about great wealth and prosperity for America in the 90s as many people utilized new technology to fill new markets. I think the government should maintain policies that encourage these types of pursuits rather than stifling them. In effect, this legislation would harm those who have innovated, all in the name of government income.

In support of his legislation, Sen. Enzi states, on his website, that if "electronic commerce continues to grow as predicted, other taxes, such as income or property taxes, will have to be increased to offset the lost revenue to state and local governments." I have difficulty believing this statement, considering last month the IRS realized record tax income concomitant with decreased taxation!

So far this year, tax revenues total $1.505 trillion, an increase of 11.2 percent over the same period last year. That figure includes $383.6 billion collected in April, the largest monthly tax collection on record

Time and time again we see decreased taxation leading to economic prosperity. As a Republican I would expect Sen. Enzi to understand this.

Cross-Posted at The Gentle Cricket and