Today is Cyber Monday, where analysts are busy predicting online sales growth and political types use the day to advance policy remedies for the so-called “unfair” advantage held by online retailers like Amazon.
Advocates for new Internet sales taxes will cite Cyber Monday sales when claiming to defend Main Street small businesses, or to plug the massive budget holes facing states (see Michelle Quinn’s piece in POLITICO today). Like most complex policy issues, the truth is far more nuanced and the “fix” won’t be anywhere as beneficial as advocates promise.
Take for example California’s recent deal with Amazon to begin collecting sales taxes for online sales. Amazon has physical facilities in California and is therefore required to collect taxes under existing law, but tax advocates heralded the deal as a big win for small businesses losing out to online retailers. Read more