Affiliate Marketing Blog by Shawn Collins

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I was checking in at Dave Taylor’s blog today and the headline, It’s time for an Internet Sales Tax, drew me in.

Dave sums up his argument for Internet sales taxes with the following reasons:

1. Internet businesses no longer need to be sheltered from taxation to be competitive;

2. The U.S. Government needs additional tax revenue and usage taxes are easier to accept than income taxes; and
3. Businesses with retail establishments need to stop being penalized in the online world so that they can compete effectively.

Dave asserts that “A flat tax, perhaps at the 5% rate, that applied across all in-state and interstate commerce would be the most logical, truly simplifying the tax burden while generating tens of millions of dollars in city, county, state and national revenue.”

Who wrote that, Dave Taylor or Steve Forbes?
Anyhow, I agree and disagree with Dave’s points.

As far as Internet businesses no longer needing to be sheltered from taxation to be competitive, I am on his side. Not that I don’t think pure play Internet businesses need to be sheltered to compete, because I do. Not having to charge tax is a wonderful competitive advantage. I think companies need it to stick out, but I don’t think they deserve it.

I have divided loyalties here, because I run affiliate programs with a nearly pure play (only an offline presence in California) and a retailer with dirt world stores in every state. It’s absolutely a selling proposition of the near pure play that customers get to skip sales tax.

But the company with an established brick and mortar presence overcomes (they should be trying, at least) their non-taxing rivals with great offers and efficiencies that their Internet-only competitors can’t offer.

When Dave veers into this notion that there should be taxes all around for the sake of additional tax revenue for the U.S. government, I can’t help but to vehemently disagree. This is purely ideological, but I think the last thing the federal government needs is more money to spend.

All of the pork barrel spending and wasteful bureaucracy of big government should not be rewarded by fattening the federal budget. I’d much rather see the country operate as a business and streamline their spending. But I digress.

Dave’s last point is sort of tied to his first, where he states offers that businesses with retail establishments need to stop being penalized in the online world.

Again, this is my way of thinking, too. I think if all companies were on equal footing on the Internet, the customers would win, as the companies would battle each other on value propositions to the consumer.

Therefore overall more attractive deals on the Internet vs. offline, and the affiliates referring the customer sales would win by referring more sales.

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