The Internet Sales Tax: Taxation Without Representation

Written by Gary North on May 8, 2013 via The Tea Party Economist

Supporters of this tax argue that this tax is not a new tax. Not  only is it a new tax, it is a grotesque tax: a violation of the principle, “no  taxation without representation.”

Republicans in the Senate voted for this tax, all in the name of  a fantasy: “It really is not a new tax.” On the contrary, it really is a new  tax. I hope Republicans in the House of Representatives will see this, and will  vote against H.R. 684, the so-called Marketplace  Fairness Act. This proposed tax is unfair in a way that few other taxes  are.

Let us consider a real-world situation. I have subscribers who  live outside the United States. For all I know, they live in jurisdictions in  which there are sales taxes. I deliver information to them in digital form. They  presumably do not pay a sales tax on whatever they have paid to me to become  subscribers. I see no way for a foreign government to impose a sales tax on a  digital transaction that takes place between someone inside the government’s  jurisdiction and someone outside its jurisdiction.


Let us assume that I am contacted by that foreign government. I am told by  email that it is my responsibility to collect the sales tax from the resident of  that nation. Therefore, I am informed, the government is requiring me to find  out what the rate of taxation is in that nation, and to immediately remit that  tax to the government. What should I tell the government?

I will not respond to the government. I will act as though I never heard from  the government. How is that government going to prove that I ever got the  message, that the message did not go into my junk file? Why create problems? I  do not think the government can do anything to enforce the claim.

But what if it is a really serious government? What if the government is so  serious that it wants to make me the poster child for businesses dealing with  residents of that nation? What if that nation sends over a squad of goons, and  the goons threaten to arrest me? What if the goons have the power to do this?  Should I pay the tax? I think I would pay the tax. I do not want to be kidnapped  by goons, hauled to a foreign country, tried for tax evasion, possibly sent to  jail, and leave my subscribers and family without access to me or my  information.

You may say that this is impossible. It is not impossible. It is simply  expensive. The government could do this. There were times in the past when the  Soviet Union did do this kind of thing, although not on issues of sales taxes. A  government that wanted to enforce a sales tax on me could do so at some  price. What protects me is the fact that the price is too high. Also, the  United States government does not look favorably on foreign governments that  send agents into the United States to kidnap tax evaders. It is a matter of  turf. It is a matter of jurisdiction. It is a matter of the defense of the  jurisdiction of the federal government against interlopers, not any big  commitment to my freedom as an individual. The feds want to get tax money out of  me. They does not want to share this revenue with foreign governments.

I receive no benefit from that foreign government. I have neither a judicial  covenant nor an economic contract with that foreign government. If that foreign  government wants to tax the individual who bought a subscription from me, that  is between the buyer and that foreign government. It has nothing to do with me.  I am not under its jurisdiction, and therefore I should not be used as an unpaid  tax collector for that foreign government.

We are talking here about invisible lines called borders. They are  judicially relevant lines. They establish the limits of the jurisdictions of  civil governments. Civil governments defend their jurisdictions, which means  they defend their citizens. If their citizens remain inside the borders of a  particular government, the government feels required to defend its citizens from  invasion by other governments, because such an invasion is ultimately an  invasion of a particular government. It is a matter of turf. It is a matter of  competing jurisdictions.

If this is logical so far, then I want to extend the same line of  argumentation to invisible borders between states, meaning jurisdictions within  the United States. If the logic that I presented so far applies accurately to  borders between nations, then the same logic applies to borders between  states.


If I commit a crime while I reside in my state, and the victim resides in  another state, then the other state has the right to call for my extradition to  be tried where the crime took place. Maybe I am a digital bank robber. I have  robbed a bank in another state, but I never entered the jurisdiction of that  state. Then it is a matter between states. It is a jurisdictional dispute.

If a foreign state wants to impose a penalty on me, because I have committed  a crime, it can go through the procedure of extradition. That is an expensive  procedure. The cost of that procedure protects me. But it also protects you.

(For the rest of my article, click the link.)

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About Land & Livestock Interntional, Inc.

Land and Livestock International, Inc. is a leading agribusiness management firm providing a complete line of services to the range livestock industry. We believe that private property is the foundation of America. Private property and free markets go hand in hand—without property there is no freedom. We also believe that free markets, not government intervention, hold the key to natural resource conservation and environmental preservation. No government bureaucrat can (or will) understand and treat the land with as much respect as its owner. The bureaucrat simply does not have the same motives as does the owner of a capital interest in the property. Our specialty is the working livestock ranch simply because there are so many very good reasons for owning such a property. We provide educational, management and consulting services with a focus on ecologically and financially sustainable land management that will enhance natural processes (water and mineral cycles, energy flow and community dynamics) while enhancing profits and steadily building wealth.
This entry was posted in Austrian Economic Theory, One World Government, Taxation, Totalitarianism, Tyrany and tagged , , , , , , , . Bookmark the permalink.

2 Responses to The Internet Sales Tax: Taxation Without Representation

  1. Gunny G says:

    Reblogged this on THE NEW GUNNY G BLOG, ETC. ! and commented:
    GyG !!!!!!!!!!!!!!!!!!!!!!!!!


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