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The Big Squeeze…States looking to Internet Sales Tax for Revenue

September 18, 2010 1 comment

With more and more state governments going into the red, they are looking to the internet for generating additional revenue streams.  NBC has an article on the matter with one paragraph that I think sums up the mentality of government and why it is our best interest to limit it’s size.  That paragraph is below (emphasis mine):

Sales taxes or similar levies have always been in place on most online purchases in most states. But they are almost never paid. And with their budgets in crisis, states are more determined than ever to get their share.

This is so typical of government in thinking that your money, your tax dollars are theirs. What they fail to understand is that the lack of sales tax is one of the main reasons why consumers look to the internet for purchases. When the government discourages that, you will see a drop in the activity online and the smaller, independent businesses will be the first to feel the effects.

I would suggest that rather than looking at taxing to close and budgetary gaps in the state governments, they should first look at how they can trim down size and reduce the cost of government. But hey, that is just a little too much common sense for the government.