Voluntary Trade is the Fuel for the Economy

I just became a bigger fan of eBay.

They just sent an email out to customers where I live about pending action to impose additional regulatory hardship and taxes on internet purchases based on the state of residence of the purchaser – regardless of whether the seller has a presence in the state.

The subject line of their email:

“Dan:  Oppose Harmful Internet Tax Legislation In Washington State”

eBay email from the Government Relations Team (sad that one is even necessary)

Hi Dan:

The Washington State Legislature is threatening to impose new Internet sales tax burdens on you by penalizing small businesses and your favorite online marketplaces.

A tax proposal introduced by leaders in the Washington State House of Representatives would require retailers and online marketplaces to impose Washington sales tax for any transactions involving Washington buyers, including all out-of-state purchases from even the smallest businesses, artisans and consumers. The alternative? Disclose private information about Washington state buyers and their purchases from online retailers and marketplaces to the Washington Department of Revenue.

Here’s why you should care:

This is a drastic departure from current law. It threatens to increase costs to everyone in Washington who takes advantage of the Internet to buy from small businesses, artisans and even other consumers, undermining the very business model that allows online marketplaces to provide low-cost services and opportunities to Washingtonians.

It jeopardizes your privacy by compelling businesses to turn over information on your Internet purchases to the state – information such as your name, retailer’s name, your billing address, shipping address, and the amount of your purchases.

Other states will follow suit, subjecting Washington-based small businesses and marketplaces to the jurisdiction of tax departments in other states. Imagine every small business—and even the most casual seller in Washington—being subject to audits and tax enforcement by every tax-hungry state and local taxing authority across the country.

For years, eBay has pushed government to eliminate harmful tax burdens for small businesses and consumers – and now we need your help. If you agree that this is bad Internet tax legislation, tell your state legislators.

Participation is easy—just fill out the simple form on our eBay Main Street website. Let your state legislators know that you oppose harmful tax laws that stifle business growth and harm Washington consumers.

Sincerely,
The eBay Government Relations Team


Imposing such a tax would benefit the large players (as most regulations and taxes do) as they can use the compliance costs as a bludgeon against smaller competitors.

Dealing with state, county, municipal and other taxes based on geographical location is already challenging so that entire departments and services are required to manage the process – which of course only the larger businesses can afford (which is exactly why they support measures like this, and even the minimum wage).  It’s like throwing something across the path of somebody running behind you like we see in all those foot-chase scenes in movies.

Voluntary trade is mutually advantageous in the ex ante sense.  Both parties to a trade expect to benefit from making the transaction.  However, when a third-party interrupts and interferes by imposing additional regulations and tax – which has little to no benefit to one part, and harm to another – you are causing a net loss.

Related, from the Simon Black email today:

“Both the Fed and Census Bureau, for example, tell us that over 80% of businesses in the US are “nonemployer” companies, i.e. businesses which only employ one person (the owner), and often provide his/her primary source of income.

Yet according to the Federal Reserve, only 35% of these small businesses are profitable. Most are operating at a loss.

In other words, only 35% of the companies which make up 80% of American businesses are profitable.

You’re probably already doing the arithmetic– this means that a whopping 72% of all US businesses are NOT profitable. “

It’s HARD enough to provide value AND make a profit as a small business – the proposed actions of additional regulatory burdens and conscription (they are forcing these businesses to act as their agent in extorting money from you) on top of the additional theft will only make the situation worse than it would be otherwise.

Further, this is just one state, but once they do it – many more will follow suit.

It’s about to go exponential.

 Disgusting.

Here is the rest of the Simon Black email if you want more context:  https://www.sovereignman.com/trends/record-wealth-in-america-72-of-us-businesses-are-not-profitable-21989/

Another thought – these idiot politicians are looking at the dollar value of the online sales from out of state and thinking “we’re losing SO MUCH revenue”. And that if they just slap on this tax, they will receive that amount.

Wrong.

https://www.actualanarchy.com/quotes

People’s value scales play a role and if the cost of everything they purchase goes up 10%, they will purchase less of those things online.

Not to mention the destructive forces at play that will destroy many of the very providers of such products and services.

And they say private business is short-sighted.

If you can’t tell, I’m hoppin’ mad about this.

And here is a great lecture by Rothbard – hoppin’ mad a mere 12 seconds into this one:

The result of this will be fewer options, higher prices, and not nearly the increase in tax revenue (theft) the political class would anticipate holding for other factors.  Eliminating voluntary choice is NEVER the right answer.

/RANT


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One Reply to “Voluntary Trade is the Fuel for the Economy”

  1. Good rant! I like your analogy of the guy throwing things behind him to slow pursuers. Could have used more swearing, but that’s my personal taste.

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