The halcyon days of tax-free Internet shopping will, if Rep. Bill Delahunt gets his way, soon be coming to an abrupt end.I personally think this is a bad idea. While traditional retail locations may feel they are at an unfair advantage with online stores like Amazon.com, they forget to consider the cost of shipping into the price of the item (although many retailers do offer free shipping if you make certain qualifying purchases).
Delahunt, a Massachusetts Democrat, introduced a bill on Thursday that would rewrite the ground rules for Internet and mail order sales by eliminating the option for many Americans to shop over the Internet without paying state sales taxes.
At the moment, Americans who shop over the Internet from out-of-state vendors usually aren't required to pay sales taxes. Californians buying books from Amazon.com or cameras from Manhattan's B&H Photo, for example, won't be required to cough up the sales taxes that they would if shopping at a local mall.
I also believe that it is a bad idea to try and create new tax revenue to fill existing budget gaps because eventually states will overspend and be back in the same situation. Just look at the housing bubble - local tax bases jumped but intsead of keeping budgets the same and saving the extra cash, local governments funneled the money into numerous pet projects and when the housing market went bust, municipalities were scrambling to fund their stuff.
I also think that once you allow states to tax goods purchased in one state from another you open the door for more unnecessary regulation. I would imagine taxing the internet would allow the federal government to evoke the Commerce Clause in the constitution and step in...