Sacramento Bee editorial: “This is about updating the tax system”

Sacramento Bee Editorial

Sacramento Bee Editorial

Pia Lopez, editorial writer at the Sacramento Bee, wrote an excellent piece in favor of requiring online-only retailers to collect sales tax. In fact, it was so well-written we wish we wrote it. The premise of her essay is that sales tax policy “is antiquated. It hasn’t kept pace with changes in the economy—for example, the shift from the production and consumption of goods to services and from in-store sales to online sales.” This antiquated policy has caused the following unintended consequences:

1.  An unfair price advantage to online-only retailers (over bricks-and-mortar and bricks-and-clicks retailers)

2.  An erosion of the tax base that pays for government services

Her conclusion? “Broadening the sales tax base to include online sales—and services, too—should allow California to reduce its sales tax rate, while still providing one-third of general fund revenue. That’s a more fair tax system.”

This editorial feature was called “Head to Head,” and an opposing view was presented by Ben Boychuk, managing editor of the Heartland Institute’s School Reform News. You can, and should, read Ben’s essay here. However, in our opinion, it was a pretty weak rebuttal—that affiliate legislation will result in lost business for California websites that earn affiliate income (though we agree to a point). His conclusion is that the state “should consider expanding the tax base by lowering individual and corporate tax rates, backing away from the sky-high 9.75 percent sales tax, and easing the regulatory burden.”

This debate is not about whether you should be taxed, why you should be taxed, or at what rate you should be taxed; that debate takes place at every election when you choose your local representatives and weigh-in on various ballot initiatives to authorize funding for services in your community. The debate is over the fairest and most efficient way to collect those taxes.

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