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Don't Let an Online Sales Tax Hike Creep into Omnibus Spending Bill

With the siren song of the omnibus spending bill calling, members of Congress would be wise to resist pressures to include increases in online sales taxes in the fiscal 2018 spending bill. To do otherwise would be inconsistent with the popular tax cut recently enacted and may mean meeting an unpleasant political fate in the fall. 

Big retail (including the now sales tax-collecting Amazon) would love the advantages the tax plan would give them over small online sellers, but a September 2017 Rasmussen Reports survey found that 66% of American adults oppose a remote sales tax. Only 21% support the idea and 13% are undecided. With regard to the latter group, past polling revealed that the more people learn about the tax plan, the less they like it. A 2013 Gallup poll found the idea to be particularly unpopular with younger voters and that the majority of Americans across nearly all key groups oppose an Internet sales tax expansion.

Proposed legislation to expand sales tax collection on purchases made over the Internet is many things: bad public policy, a threat to downward tax pressure, an unprecedented expansion of power to state governments, a small business killer, and, indirectly, the subject of a Supreme Court case this term. But perhaps the most important thing for legislators to know about this very complex issue is that their constituents will experience the policy as a tax hike. And they won’t like it.

>> Read more in the CEI Web Memo “Why Internet Sales Taxes Bolster Bigger Government: A Primer on Leading Proposals and their Political Prospects.”