Let’s ignore his motivation and be grateful to U. S. Rep. Steve Womack for the idea and maybe the courage. Womack, our new Third District congressman, introduced a bill to end the sales-tax exemption for online sales.
The bill is not likely to pass because too many in Womack’s Republican Party view it as a way to get more money into government coffers. Scores of Republican congressmen and senators signed pledges never in all their lives to vote for anything that would raise taxes or otherwise give government at any level more money to spend.
But this is a bill that ought to attract the support of conservatives and liberals alike and especially all those politicians who shed tears for the small businesses of America. This is a bill for small businesses everywhere, and big businesses, too. It provides a level playing field for retailers. Now the tax system puts local businesses at a huge disadvantage by giving a big break to online businesses like Amazon.
Yes, Womack’s motive can be faulted. Walmart is the big exponent of the legislation because Amazon and other online businesses would have to start collecting and remitting the same taxes that Wal-mart and every other local store must collect. Wal-mart, which is headquartered down the road from Womack, is his biggest backer; he’s sometimes referred to as Steve Womack (R-Walmart). But so what? In this case, Walmart’s interests just happen to coincide with the broad public interest.
Big online retailers like Amazon have removed their physical nexus in states like Arkansas that have enacted laws requiring the remitting of sales taxes so that they will not have to collect the taxes. By skipping gross-receipts taxes, its products have a competitive pricing advantage over local stores, including Walmart—a 6 to 8 percent advantage in Arkansas.
The states and local governments, not just local businesses, have an interest in passing Womack’s bill. Yes, the current Republican mantra is that government is evil and it must be starved, but most people don’t believe that. The encroachment of tax-free retailing by the online businesses has not only weakened and closed many bookstores, sporting goods, hardware and clothing stores but it has slowed or halted the natural revenue growth of the state government, cities and counties.
Sales tax revenues, the chief source of funds for cities and counties, have flattened in recent years because more and more shopping and selling have occurred online and tax free while the needs of government, for prisons, police, teachers and health care, have continued to rise.
Let Steve Womack take care of his friends and benefactors down the road at Walmart. For a change, he’s also doing the people’s business.
