The 21st Century Stamp Act



Stamp Act

In 1765, the British Parliament approved the Stamp Act for the American Colonies on many printed materials including newspapers, legal documents, and decks of cards. The British Government thought it was reasonable to apply taxes for the American Colonies to cover the cost of the French and Indian War which was (after all) fought for their security. The result was widespread dissatisfaction with a direct tax levied without their consent. In addition, including legal documents and decks of cards insured that both lawyers and sailors were among those who were very upset about the act.  The act ended up being repealed but not before it set in motion, tensions that would lead to Revolution.

In 1773, Parliament approved the Tea Act in what corporate gurus would cheerfully call a “Win Win” situation. It taxed tea, but the Tea was surplus from the East India Company that would be cheaper than what they were paying for tea without tax. And of course, the result of that was that the tea was dumped in Boston harbor by angry colonists.

I couldn’t help recalling these two incidents when thinking of the Senate’s overwhelming 74-23 vote to allow states to force online merchant to become their tax collectors on Internet commerce. We’re told often enough that this is a matter of “fairness” to brick and mortar stores.  And even perhaps, more reasonably, that the exemption of tax on e-commerce has been around for 20 years and was initially meant to allow it to get off the ground.

That may be, but like the Tea Tax and Stamp Acts, the measures are not popular with the people. The reason we’re a country is because an out of touch government decided to try and tax people in a way that was odious to them in the name of “fairness.” And just like the Stamp Act, passage of the Internet Sales Tax could lead to widespread disaffection that crosses political lines.

If passed, the bill is unlikely to save any local businesses as out of date business models are a bigger problem than competition from those who don’t charge sales tax. However, it may lead to major job losses-among members of Congress.

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