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Friday, July 18, 2008
Just Making a Point
STINGRAY makes one pretty well. (Here.).
Yes, I know that even if every reader we get today tells Google of their folly absolutely nothing will happen. People still need to be reminded though.
On a slightly tangential front, I’ve been exercised more-or-less over the past however-many years over a manifest injustice—a problem of overweening statism opposed by ... pretty much nothing at all. I’m talking about the extra-legal, unconstitutional collection of state sales taxes on interstate transactions.
“Eh?" you say.
Think Internet tax.
Used ta be, if you were in the fortunate position of living near the boundary between two states, you could game the several and various states’ restrictions on free commerce.
For example, here on the Ohio-Kentucky line, sales taxes are higher in Ohio, but automobile licenses are more expensive in Kentucky. Cigarettes and booze are cheaper in Kentucky, but… well… cigarettes and booze are cheaper in Kentucky. So you see a lot of Ohio plates in the parking lot at Kentucky booze stores (which are quite prosperous at the south end of all the bridges across the Ohio), and on the residential streets of Northern Kentucky.
And, if you bought something on one state or another, you paid the relevant and requisite sales tax. With a shrug and a whattareyagonnado.
And businesses on the border made a practice of collecting sale tax on large enough transactions with citizens in the neighboring state. Gaming the system, of course. Shipping to Ohio? “Do you have a billing address somewhere else? Like… Illinois? Or California?”
And quite rightly, too.
Then. Came. The. Internet.
And we discovered we could order books from Amazon (in Seattle, Washington), have them shipped from somewhere nearby (in my case, there’s an Amazon warehouse somewhere near Lexington, Kentucky), and NOT PAY SALES TAX.
Wonder of wonders, miracle of miracles! A way to escape the Greedy Hand of Government.
But, trust me, the Greedy Handers took notice. And they sought “relief.” Those out-of-state sales were denying them their rightful due, they claimed. Never mind that it isn’t their rightful due. They tried to get national standard legislation (read: the states conspired against the interests of their citizens) allowing them to collect sales tax on interstate transactions.
They even managed to get a camel’s nose under the tent flap. Earlier, in the case of catalog and mail-order sales, they argued—and won—that, if a business has a “presence” in a state, then it must collect sales tax on behalf of that state—at least, in the case of shipments to addresses in that state—even if the shipment (and the goods shipped) originated in another state. That is, they managed to get an exception—a wedge, if you will—that allowed them to collect sales taxes on interstate transactions.
And, because businesses are in business to make money, not fritter it away defending civil rights, they knuckled under. “We have a store in your town, so we must collect sales tax on a transaction with you, even though we are shipping from our headquarters half a continent away, as though you had walked into that store in your town and bought our goods over the counter.”
Even though, in reality, the situation was more analogous to my walking into their store in their home state and bought their goods over the counter, carrying it home—across state lines—under my arm.
…
A slight digression, here. After the Revolution, and before the ratification of the Constitution, the newborn United States operated under the Articles of Confederation (q.v.). Among the myriad flaws of that system was this: there were barriers to trade between the several former colonies which made up the (small-"c") confederacy. If you wanted to take a business trip between, say, Maryland and Delaware, you might have to pass through Customs. STATE Customs.
After all, the basis for the United States was that what was being united were states—independent, sovereign political entitites. They had the right to manager the import and export of goods, the collection of duties, tarriffs, and excises, the definition of contraband, and so-forth. Right?
This was soon seen to be a bug in the system.
…
Accordingly, a provision was put into the Constitution to vitiate the invidious and internecine practice. It may be found in Article I, Section 9. It reads (in part):
No tax or duty shall be laid on articles exported from any state.
(Bear in mind that the original theory of the U.S. was that the States were sovereign entities and the Federal Government was their creature—theirs and the People’s.)
Now, this is in Article I, which deals with Congress. One may therefore be forgiven for assuming the limitation is placed on Congress alone. Possibly true, although I would point to the absolute nature of the phrasing. Elsewhere in the Constitution—most notably in the First Amendment—Congress is limited directly and exclusively: “Congress shall make no law...”. But here, the sentence (and it is a complete sentence, not a mere clause) makes no special reference to Congress. In other words, the prohibition is absolute. Neither Congress, nor any other actor may lay a tax or duty on articles (goods) exported from any state.
But there’s more! Since Congress has the exclusive authority to regulate interstate commerce, any interference in same by the States may be seen as unlawful, ultra vires, and ipsos factos unconstitutional.
Which says to me that all the weasel-wording about stores and locations and “presences” is just that—weasel-wording—and it contradicts the clear text of the Constitution. NO tax or duty shall be laid on articles...
That is to say that the prohibition follows the articles (the goods), and not the presence of a business within the boundaries of a given state.
It may be obvious at this point, that this has probably been argued somewhere in some Federal venue and that the decision has come down on the side of “reasonability” or “compelling state interest”—in direct contravention to the spirit and letter of our founding. It seems reasonable to the statists in the black robes that We the People should be taxed without let, and the States—severally and individually—should be granted the license to tax our transactions without respect to the lawful relief the people should seek from their burden.
This practice must stop.
Now, there are myriad possible objections. The people and merchants may object that the cost of fighting the practice is all out of proportion to the possible benefit. When somebody says, “It’s the principle of the thing,” it’s usually the money. When they say, “It’s the money,” it’s the money. What I think everybody misses is that the principle is the money, and the principle in the money is that the states need to be brought to heel.
There may also be those who argue that “export” means “to leave the country,” which it may, though not exclusively. “Export” is rooted in Latin and only means “carry out(ward).” As in direction, not as in accomplishment. But that ignores the fact that the States are suppposed to be sovereign—little countries of their own—the doctrine of incorporation notwithstanding, and in this case, “export” can only mean something leaves the state—whether for another of the States, or for some foreign country is immaterial.
And, on the states’ side, they will argue that such a—scorn quotes—“loophole” will be exploited to the detriment of their various treasuries. To which I argue, “That is not a bug; that is a feature.” It seems impossible to limit government spending by attacking the spending side. The only hope we have is to attack the revenue side. If that doesn’t cut the leviathan down to size, then all we’re left is violent revolution, and we’re better off knowing than guessing that to be the case.
And I would say to the states, “Let it be a challenge to you.” As folks never tire of reminding Us the People, when life hands you lemons, make lemonade. If you can’t collect taxes on transactions made in other states, provide incentives for people to do business within the boundaries of your state, rather than disincentives for same, as you do now, with your grabby taxation policies. I’ll bet that, if you do, your revenues will increase, while the burden on each individual citizen and transaction will lessen. ‘Tis ever thus.
So, how, you say, can this be brought about? And what does this have to do with the quote from Stingray?
Well, I propose a letter-writing campaign. A death of a billion cuts. And it may not have the desired effect—right away. Consider it to be the pebble which starts the avalanche. And consider that something needs to be said.
Every time you are charged sales tax on an interstate transaction, tell the merchant, your congresscritter, the state taxation authority, the state attorney general (in BOTH states), the Federal Trade Commission, and anybody else you can think of or find an address for. (I think email would do just fine. We want to make this as easy as possible for YOU, and rely on the volume of the protest to get the point across.)
Simply state that, on such-and-such date, so-and-so merchant, acting as agent for the State of Bumfuck, in violation of Article I, Section 9, infringing upon the exclusive power of Congress to regulate interstate commerce, did collect unlawfully a sales tax of $d,oll,ars.cents.
Please spread this idea as far and wide as you can. Also, post here and on your own blogs any hints to make the process easier (how to make recipient lists in various email clients, for example). The easier it is to do, the more people will do it. Also, any contact information for relevant authorities should be disseminated far and wide.
And, above all, be polite. You’ll get farther will good behavior and reasoned argument than you will with a leftist tantrum.
Cross-posted at BabyTrollBlog
Comments
It’s worse than you thought, but then, isn’t it always. Some time back agents of New York State staked out a mall 30 miles into Pennsylvania, recording NYS license plate numbers. NYS then sent notices demanding a list of what they bought with instructions on how to calculate and remit the NY State sales tax.
The justification was one of tax avoidance.
The protests were loud enough that the idea was dropped but I’ve been told the border counties have a slightly higher state income tax schedule to make up for the, ahem - lost revenue.
Ol’ Remus
Posted by Ol' Remus on 07/19/2008 at 09:55 PM
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