Ecommerce and Retail

Rant: The US Government Will Destroy Internet Commerce

The economy is in shambles in the United States. With record spending, the wealth gap continues to increase, poverty is climbing, the number of citizens dependent upon unemployment, food stamps, disability or welfare is at record levels. There’s only one sector of the American economy that’s thriving – with well-paid jobs, many job openings, tons of investment funding, and growing sales. That sector is the Internet.

With big big box retailers suffering and the government spending money on studies in duck genitalia, the future of the ecommerce boom is looking bleak as the Senate just approved a bill on an Internet Sales tax. So… the one portion of the economy that’s not suffering is now going to finally join every other area of the economy that’s been helped by the federal government.

If this bill is passed, it’s the beginning of the end of the prosperity our Internet free market system has provided us for the last 20 years. Big box billionaire retailers who have owned, controlled and managed the pricing and distribution of goods and services are now losing their grip to the Internet… and they’re crying foul. They’re the ones leading the way in pressuring our leaders to tax the Internet.

Everyone is Open to Compete on the Internet

They should be ashamed. Think about it… they’re nothing but a distribution point that adds to the overhead of the cost of goods before we get them. I’m confident if you looked back in history that retailers cried unfair when the Sears Catalog made its way to the doorsteps of consumers and they could now have access to affordable products and goods via direct mail. Every big box retailer had the funds and the opportunity to shift their business to the Internet. If they failed to do so, they should deal with the consequences.

Local Companies Should Pay Local Taxes

Having a local big box retailer adds expense to the local community – from the transportation costs, traffic costs, police and medical costs, to the utility costs… including water, electric and waste disposal. State and local sales taxes offset those costs to the local region. It’s a system that makes sense. If I make a purchase online, it costs my local community nothing. Transportation is paid for by the shipping company and gasoline taxes. There’s no need for traffic lights, no shoplifting arrests, no waste disposal, no need for additional utilities… nada.

Retailers aren’t Losing Business because of Local Taxes

There are benefits of buying at the local retailer… I can drive home with the goods, I can try the clothing on, I can have them install equipment, I can get product support from them, or I can exchange the purchase without delay. I often shop at the local retailer – but much less than I used to. The Internet has become more convenient. I don’t shop online because I don’t pay taxes there… I shop online because I can do it from my phone in a matter of minutes. No driving, no parking, no waiting in line, no searching endless rows of products, no snarky customer service people, or pushy ones, or disinterested ones, or no help altogether.

Opening the Pandora Box of Local Taxes

The tax foundation lists over 9,600 local sales tax regions. Imagine every ecommerce site now has to program to 9,600 different local taxes that are constantly changing. Every mobile application needs rebuilt to program in 9,600 different tax rules. Ecommerce providers will need to file taxes in every locality they do business in. It’s nuts.

Local Taxation will Kill Entrepreneurship

Say goodbye to every small business on the web who can’t incur the overhead associated with these costs. Sure… new solutions will evolve, new businesses who manage the tax filings for you. But the cost will be added on to every product you buy – in addition to the new sales tax. The only commerce sites left will be the big boys that can afford the costs and started this mess in the first place. Small businesses and entrepreneurs screwed.

Will this make the playing field fair between retailers and ecommerce? There’s nothing fair about it. The last sector of the American economy that’s thriving will now join everyone else in layoffs, lack of investment, and going out of business sales. Along with the big box retailers that were already heading that direction.

One comment

  1. 1

Leave a Reply