The latest argument from those who oppose sales taxes on Internet purchases is that it's "taxation without representation." Where did this counterfactual meme come from, and how do we kill it?
A typical example is an op-ed in Wednesday's Wall Street Journal by Sen. Jim DeMint (R-S.C.), whose anti-tax fervor seems to have clouded his ability to reason. He argues that requiring online merchants to collect and remit sales taxes just like their brick-and-mortar brethren would violate the "bedrock principle" that "citizens should not be taxed by governments in which they have no political voice."
I'm fond of that principle too, but it's irrelevant to online sales taxes.
At issue here is how to enforce state laws that require buyers to pay taxes on the items they purchase. Purchases made locally are taxed at the point of sale. Those made out of state are taxed when the buyer pays income taxes. Technically, the latter are "use" taxes, not "sales" taxes, and not every state imposes them.
Just to be clear here, the buyer is the one paying the tax; the online retailer is merely remitting it after collecting it from the buyer. And under the Marketplace Fairness Act pending in the Senate and the Marketplace Equity Act in the House, the amount and terms of the tax would be set by the buyer's home state. In other words, the buyer would be paying taxes to the state where the buyer votes.