The current state of taxation is silly–the whole bit about having to charge sales tax if you have a physical presence in a state defintely discriminates against brick & mortar businesses. But a state does not and should not have the authority to charge tax on a company not doing business in their state. When I buy something online, the transaction is taking place on the server wherever that is, so my state has no claim to tax the transaction. And the federal government already collects too much taxes as it is, and has no business collecting sales tax for the states. Then again, why should they let the Constitution get in the way of squeezing every last penny out of us.

The other thing is that everyone thinks the internet is somehow this big loophole for taxation–but catalog orders follow the same rules and are a much much larger (though shrinking) amount than internet sales.

If the states or feds decide to tax internet sales, the companies will all just move their servers offshore and probably take jobs with them. People who purchase onlne tend to be extremely cost sensitive and will buy from the cheapest place they can find. If one supplier charges X and another charges X plus 5% tax, who are you going to buy from? The net effect is that it will be counter productive to charge taxes on internet sales and will result in lower tax revenues.

The respresentatives feel like they’re getting ripped off, huh?

The problem with an internet tax is that consumers are easily going to notice that they have to pay that extra tax on every purchase, but unless the tax has a specific purpose, they will never notice any benefit. Put a lock on that tax towards say, education, and I’d be willing to consider that it has some benefit outside of more money in the government’s pocket for them to burn. Otherwise, it’s just going to breed contempt with the taxpayers.

I didn’t actually read the article.