U.S. must consider taxing Internet sales

As the year draws to an end, Black Friday has come and gone.

Lines of shoppers were driven into a violent frenzy over discounts on the year’s hottest electronics at traditional retailers like Wal-Mart and Best Buy.

But these locations’ sales could not compare with those of e-commerce giant, Amazon.

Amazon benefited from a 17-percent increase in online consumer spending this year.

Despite the meteoric increase in e-commerce spending during the past decade, the United States has not established a simple and effective method of taxing e-commerce sales.

As the economy slowly improves, an increasing number of households will purchase holiday gifts online this year.

However, many large retailers are able to exempt themselves from state sales taxes.

That’s right, the U.S. has still not yet made a judgement on how sales from online retailers like Amazon or Ebay will be taxed.

At its current state, the tax code in many states requires citizens to claim each online purchase they made that year.

The Marketplace Fairness Act, a comprehensive bill currently stalled in the U.S. Senate, would establish a standard rule for all retailers with an online presence.

Granted, U.S. senators have had their hands full figuring out how to keep our government operating at even the most minimal level.

During a time when the U.S. can barely fund even its most basic services, it’s amazing that it has not yet explored this opportunity to increase tax revenue.

Provisions of the Marketplace Fairness Act force retailers to charge sales taxes according to the state that sales take place in. Retailers like Amazon and Overstock have done everything in their power to resist paying sales tax on purchases.

Opponents of the bill, such as the American Heritage Foundation, claim that the policy would create an “undue burden” on online retailers and small businesses.

Simplifying the online sales tax code so that both consumers and businesses are contributing their fair share for business transactions will increase tax revenue.

We can use this revenue to reduce our national budget deficit.

No burden will be placed on to massive retailers like Amazon or Overstock.

Amid the discussion of other important issues such as fiscal policy and immigration reform, the 114th Congress must pass the Marketplace Fairness Act to simplify U.S. tax policy.

Sadly, it seems unlikely that any effective change will come soon.

After a session of Congress that struggled to keep our government running, completely ignoring a source of tax revenue is completely ludicrous.

­— johnfren@indiana.edu
Follow columnist John French on Twitter @John_M_French.