Should there be internet sale tax
The increased usage of the internet has brought the heated debate on the introduction of internet sales tax since many people can now purchase goods within the comfort of their homes. The absence of internet sales tax has made the online goods be cheaper leading to the increased number of online shoppers. This has led to the question, should there be internet sale tax? The main purpose of the essay is to determine whether there should be introduction of internet sales tax with the build up on the thesis statement, Absence of internet sales tax will decrease the government services to the community.
Most of the government services to the community rely on the money raised from the tax. This means that the decrease tax revenues amount will affect government operation. It is also vital to consider that most of the tax revenues arise from the purchase and selling of goods within the country. Consequently, the sale and purchase of goods through the internet have a considerable influence on the amount of tax revenues that the government collects. Most of the local consumers have now turned to online shopping because of the realization that it is tax-free. The essence of cheapness has even contributed to the increased number of businesses operating online because of increased customers’ attraction. This means that the continued tax-free online shopping will decrease the government revenue since many of people will go for the internet shopping. This will disrupt the budget plan of the government leading to the reduction of the vital services that the government offers to the public. Some of the vital services that would undergo disruption include education, salaries to the public workers and general production. The government will have to look for other ways of raising revenue since the sales tax revenue will have decreased
The government will have to offset the disrupted revenue because of the need of ensuring that it maintains the offering of services to the public. The only options existing, for the government, will be to cut down on their spending or go for new revenue. The public will be the ones to suffer this complication since the government would have to acquire the taxes in other ways. For instance, the government would consider increasing the income tax thereby reducing on the amount that an individual earns. The possibility of the government adjusting the tax administering system implies that the absence of internet sales tax would bear more negative effects than the perceived positive consequences. Even though, many of the online shoppers may feel that the introduction of internet sales may introduce a new taxation form, the introduction would be crucial in order for the government to maintain its attachment to the people. The online and offline purchase are the same since both involves exchange of money no matter the place of transaction.
It is true that the absence of internet sales tax will decrease the government services to the community. The absence will make the government loose the vital sales tax since many would have turned to internet shopping. Consequently, I support the view that there should be an introduction of internet sales tax in order for the government to maintain their services to the people. The main drawback to the introduction of internet sales tax arises in the situation where purchases occur across the borders. However, this can be settled through requiring that tax payment be done at the state residence of the purchaser.
Reference
United States. (2006). The internet sales tax: Headaches ahead for small business? : hearing before the Subcommittee on Regulatory Reform and Oversight of the Committee on Small Business, House of Representatives, One Hundred Ninth Congress, second session, Washington, DC, February 8, 2006. Washington: U.S. G.P.O.
