May 14, 2013 10:00:54 AM
OXFORD -- When Joseph and Mary donkeyed up and headed for Bethlehem, they knew the reason. It was to visit the tax man and pay up.
It was an arduous journey, especially for an expectant mom, but Caesar Augustus didn't care. The Romans were an occupying force, not interested in their popularity and not worried about being re-elected.
Fast forward 2,000 or so years to our democracy and to our lawmakers. Those who impose taxes have become increasingly deft at obtaining cash for the public purse. It's an art.
Whether Mississippians should be charged state sales tax on all their online purchases or just some of them (as they are now) is what brings this topic to mind.
Legally, the reality has been that State A can't require an individual or business in State B to collect taxes for State A, unless Congress says so.
The practical issue is that when the tax man can't hide, the people tend to become vocal. When people become vocal, lawmakers become, well, nervous.
Now there are all sorts of arguments for and against allowing states to collect taxes on Internet sales. It is certainly not a new topic. Congress has been dithering over the issue off and on since Amazon.com sold its first John Grisham novel through the convenience of cyberspace.
The position of the states who want and need the money has merit. Had Grisham's book been bought at a local store, Mississippi would have imposed a 7 percent surcharge. The states lose money on every Internet purchase when the tax is not collected.
This position of local merchants has merit. They're losing sales to those who can sell tax-free.
The position of the distant merchants has merit. Why should they be forced to collect and pay over to states so much as a penny? They are not availing themselves of any state services and the sale, itself, did not even occur in Mississippi.
Now, some cybersellers have long been collecting and paying over sales taxes. It was cumbersome at first, very confusing with all the different rates and exemptions state-to-state -- but most people who shop online now expect to pay the same taxes they would pay on an in-person purchase right where they live. This predates the Internet; some of the old catalog companies -- especially those with brick and mortar stores -- collected for states and still do.
The challenge (or problem, depending on one's perspective) is collecting taxes on interstate sales between individuals.
Transactions conducted through eBay or Craig's List or any one of hundreds of other web services are person to person. They mirror a classified ad in the newspaper to sell a sofa. When a buyer shows up with $50, should the seller collect sales tax?
Legally, the answer is yes. "Casual sales" are not exempt in Mississippi. But as a practical matter, it's just not done. It's not because the state doesn't want or need the money. It's because there's no entry point for the tax man, no set of books for the tax man to review and say, "Aha!"
Mississippians, like all Americans, pay a lot of taxes. It is not original to observe that our governments would be transformed -- and a heck of a lot more people would vote -- if we all received our full pay, then immediately had to write checks for the money that is now withheld for state and federal income taxes, Medicare and Social Security. If our house payments didn't include an escrow for property taxes, our interest in local government might rise, too.
That's why Congress had been so circumspect about taxing person-to-person sales, pretty much avoiding that arena altogether.
But think about it when folks start batting around the notion of what's "fair" in these conversations. When we buy a loaf of bread, we pay sales tax. But a Mississippian could pay $10,000 to a Louisiana resident who was tired of an all-terrain vehicle and the sale would pass under the taxation radar. Is that fair? If it's not, what could be done to change it?
Lawmakers are careful. They want everybody treated the same. They know the people value even-handedness. But it's safer for them to let the taxman stay -- or appear to stay -- in the background. They like to collect taxes without us noticing. If there's too much intrusion, the people get, well, jumpy.
Ask any Roman you meet.