Republicans support tax avoidance

US Republicans have never met a tax bill they can support. (They do support means-tests, which are hidden taxes that fall heavily on the disabled, retirees and the working poor.)

Although the Republican party is close to business and has policy priorities that closely match those of the US’s biggest companies, the internet sales tax is one area where retailers garner more support from Democrats.

Retailers say they want to create a “level playing field” where their online rivals bear the same sales taxes as bricks-and-mortar peers. Sales tax is collected at state and local level and generally falls in the range of 5 per cent to 10 per cent of a product’s price.

Many conservatives – who exert a powerful influence on House Republican leaders – have complained that the bill amounts to a new tax and would expand states’ authority by enabling them to collect tax via online businesses in other jurisdictions.

Barney Jopson, “Republicans signal demise of internet sales tax bill“, Financial Times, 11 November 2014.

Bricks-and-mortar retailers such as Walmart and Target have long called for reform of federal legislation that prohibits states from taxing most online purchases. Surprisingly, e-commerce giant Amazon also supports the bill because it would stop states “from singling it out as a target for tax collection”.

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