I think this ruling we can put paid to the notion that a conservative court does not believe in legislating from the bench. The recent Epic Systems v. Lewis and now this put paid to that notion.
The constitution is explicit that taxing power resides with congress (Section 8. Clause 1). It should have been congress that made this decision and, in this case, the court should have deferred to that.
If you want to say liberal courts have legislated from the bench and they were ok with that then fine. The point is conservatives no longer have any high ground on this (if they ever did). It is now up there with conservatives being the party of fiscal responsibility and caring about deficits and caring about families and caring about veterans and caring about senior citizens going on the trash heap of their supposed principles.
For a long time I’ve thought that online sales shouldn’t have some kind of backdoor way of skipping the sales tax. It just never made sense.
It’s news to me that Trump is in favor of patching this loophole. Hearing that makes me like the idea less, but for no reason involving the issue itself.
It’s certainly true that sales tax is an example of a tax that is anti-progressive, because it hits expenditures at the same rate for all people, and poor people’s expenditure is a much higher fraction of their income. I believe we people with more available money should carry more of the load, because economic inequality is generally bad for society.
It’s a question of rich versus poor, per se. But ethnicity and wealth are, unfortunately, highly correlated, making this a racial issue too. Whether many of the people driving sales tax law are consciously practicing racial discrimination, I don’t know. But if you want to legislate based on outcomes without requiring proof of intention, I think you have to care about the anti-progressive nature of sales taxes.
Anyway, I agree completely with the OP, my good friend asahi. I also agree with Trump on this narrowly defined issue because he’s agreeing with everyone who bothers to consider the effect on state economies if we exempt the growing online commerce market from sales taxes (I’m not confident Trump even bothered to do that, he probably just heard someone say it).
Sales taxes are very fair, you pay what you spend, everyone pays the same rate no matter how rich or poor. If states are lacking that revenue they’ll have to raise the money in some way which is likely to be less fair. Everybody pays attention to sales tax to some degree because of our wonderfully perverse manner of listing pre-tax prices. We all know it costs more than because of the tax, and when sales tax rates go up we see the direct relationship every time we spend money and the politicians hear about it right away. Income taxes increases, new fees, etc. are just not noticed so quickly by so many people and it’s a perfect opportunity for states to grab more money with little accountability.
So as I suggested in the other thread this should be a simpler process, the sellers take in taxes and pay them to their own state and itemize the amount in each of the buyer’s states. The seller’s state then takes care of distributing the collected taxes to the other states. The problem of municipality sales taxes was mentioned by someone and those really have to be excluded from this rule, it’s a state’s internal problem, not one that should be mandated by the federal government. It’s probably not all that difficult to keep track of those localities with a computer, which every online seller will have. The whole thing could be some kind of web service that each state must maintain in for seller’s to use, but it should be the state’s responsibility to make that a practical process.
Nobody wants to pay taxes but we will always end up paying them one way or another. The free lunch was a mistake to begin with.
His legal reasoning is pretty sound, however I disagree that a single sale is enough contact under International Shoe to subject the seller to a variety of tax laws. I know that isn’t the case presented, but his reasoning would seem to allow it.
Second, I disagree with his hand waving away of stare decisis. He seemed to like it very much in Planned Parenthood v. Casey (not trying to get into an abortion debate) when in that case you had 20 years of mandatory legal nationwide abortion. The only thing that would change is that in some states there would not be legal abortion going forward.
In this instance, you have 50 years of precedent that a half a trillion dollar industry has been built around. The fact that more people are selling in interstate commerce is even MORE reason to adhere to stare decisis because settled expectations have built around it. Customers based their purchases on it, small businesses have created web portals to purchase things, and state governments have based their tax systems on it. If it is time to change the status quo, then the political branches, who are free to use a scalpel, should be the ones to change it.
Kennedy cites no reason why the rule is unworkable or cannot be fairly applied except to say that poor, poor South Dakota is losing all of this revenue and declared an “emergency.” Nothing requires an interstate system to allow a state to base its revenue stream on one method of taxation.
Your analysis is, in this case, wrong. The simple fact that Congress has the power to tax does NOT mean states don’t have the power to tax, either. Nor can it be argued that the states do not have the power to tax anything in interstate commerce (else, especially given the reach that clause now has, states would effectively be unable to have sales taxes at all). So there is no inherent reason in the Constitution that Congress had the say here. Indeed, the whole QUESTION before the Court is whether or not the Constitution requires that the issue be left to federal control. To say that the answer to that question should be left to the federal government’s legislative body is a bit circular. :dubious:
The problem with the Chief Justice’s analysis is that it ignores precisely the conundrum I presented: that you cannot let Congress define what the federal power is. If you leave it to Congress, all that does is allow Congress to pre-empt the states. It doesn’t let Congress delegate something to the states they already have constitutionally.
Congress, though, has plenary power to regulate interstate commerce. It is beyond dispute that if I have a widget for sale here in West Virginia, advertise it online, and a guy from South Dakota expresses interest, we communicate through email, agree on a price, and I ship it to him through an interstate carrier and he pays me through an interstate banking system…that is all interstate commerce.
If Congress regulates that, it is not defining its own power; it already has the power to regulate that transaction.
But why? They don’t receive the same services that the local brick-and-mortar stores do.
Local government services like police & fire protection, building inspections, maintaining local streets so customers & employees can get to the store, etc. The online store doesn’t receive any benefit from these activities of the local government, and neither does it impose any costs onto that local government. So why should they be involved financially?
They are engaged in commerce in that state. Sales taxes aren’t tied to particular uses of the money either. And the shippers definitely take advantage of the infrastructure in any state they ship to, those trucks are driving on their roads and polluting their air. The physical presence concept was just an excuse to avoid dealing with what used to be a minor problem in collecting out of state sales tax. The states are now taxing their citizens for all their retail commerce, it’s not a tax on the sellers.