The Wall Street Journal editorial board was entirely correct yesterday when they said, "Republicans have spent the last year cutting taxes and regulations, which hasn't been easy. But now some Members of Congress want to blunt their handiwork by passing an online sales tax. Yes, they actually believe this would be good policy and politics."
Despite the talk of possibly attaching it to must-pass funding legislation and the rhetoric about the bill itself, consumers will experience the Remote Transactions Parity Act (RTPA) as a sales tax increase. If the bill becomes law, more of their purchases will be subject to sales taxes and the downward pressure on sales taxes among states will be reduced, so rates and bases in all the states are likely to go up in the longer term.
Removing the Incentive to Keep Taxes Low