A Fair Tax That Really Is One
Paul Greenberg

Who says bipartisan cooperation is a thing of the past in Washington? It can be revived in a good cause.

Steve Womack, a Republican congressman from Rogers, Ark., has decided to co-sponsor the Marketplace Equity Act of 2011 with Jackie Speier, a Democrat from San Francisco. Their common objective: simple justice and fair competition. You don't have to share political or economic interests to recognize that fair is fair.

Why should Walmart have to collect sales taxes from its customers while those same customers, after checking out some item at one of its Supercenters, can use an app to order it? Sales-tax free.

The same argument can be made on behalf of the little guy -- the corner grocer or neighborhood drug store. If there are any of those left.

The owner of a small business in Arkansas -- he runs a sporting-goods store in Benton, Ark. -- was doubtless speaking for a lot of others across the country when he testified before Congress not long ago:

"I'm a small retailer ... and we all have been hurt, in one way or another, by Internet sales. The fact is, Internet sales have affected our business and affected most of the businesses in our state." His concluding plea: "All we're asking for is a leveling of the playing field...." This bill could provide it at last.

You don't have to live in Arkansas, aka Walmart Country, to favor making online giants like Amazon collect sales taxes the same way other retailers have to.

Put this issue in personal terms instead of covering it with legal complications and macroeconomic jargon, and it's clear enough what ought to be done:

If a store in town has to collect the sales tax, so should online companies.

The brick-and-mortar retailer not only loses the sale when the playing field is about as level as the Ozark Mountains, but state and local governments lose out, too. And they're the ones that pay for schools and roads and cops and firefighters and all the other public services in a town and across a state.

One study (sponsored by the University of Tennessee) estimates that the country's state and local governments will lose out on $23.3 billion in tax revenue because of this Grand Canyon-sized loophole in the country's tax structure.

That impressive sum represents a lot of teachers unhired and potholes unfilled and basic services in general unprovided.

It's not just small businesses that suffer when online retailers get favored treatment but We the People.

The case for plugging this loophole in the tax structure has only grown greater as the Internet has grown.

The question of whether to tax online sales isn't unlike the old one of whether to collect tariffs on imported goods. The answer depends on what stage a country's economy has reached -- whether its industries are still developing and in need of protection from foreign competition, or whether they're strong enough to stand on their own and compete in a free market.

This little baby called the Internet grew up some time ago. It's become a computerized colossus, and it doesn't need this free ride any more.

Whether chain store or local institution, superstore or mom-and-pop, the businesses that have to collect sales taxes are growing tired of great big competitors who don't.

Why should online outfits get away with something that others, often little companies, can't?

It's time Amazon and online giants like it paid their fair share when it comes to sales taxes. There's a lot of talk these days about a Fair Tax; this really would be one.