Tax Machine Blog™

The Internet Sales Tax

The “Internet Sales Tax” is back in the news.

The House is discussing “fixing” the Marketplace Fairness Act (aka the Internet Sales Tax) by collecting sales tax for the state of the seller, not the state of the buyer. This would lead to a race to the bottom on sales taxes around the country. So, for example, online sellers would move to Alaska if their states don’t lower their sales taxes.

I’m kind of OK with that. I am just surprised that the House GOP wants to set in motion what is in effect a tax cut for those Americans who live paycheck to paycheck. If someone spends everything they make, they’re paying a higher percent of their income in sales tax. And if the critics of the measure are right, then this “poison pill” proposed by the GOP would lead to lower sales taxes everywhere.

What do you think? Let me know in the comments below.