Online Retailers and Taxes

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The Trump administration is looking at forcing online retailers to pay the same taxes that their brick-and-mortar competitors must pay.

The Trump administration on Monday urged the Supreme Court to expand states’ authority to collect sales tax on internet transactions, joining a chorus of state officials seeking to overrule a 1992 precedent exempting many online retailers from having to add taxes to a consumer’s final price.

This is a mistake.

  1. This question is a political matter, not a legal/judicial one. If the administration thinks online retailers should pay the same taxes as brick and mortar retailers, then they should offer a bill to Congress (and State governors to their State legislatures) that fills in any gaps in existing statutes that allow online retailers to not pay. Judges cannot make law, as Art I, Section 1, makes clear—even if this is honored egregiously in the breach.
  2. If governments are worried that online retailers are competing unfairly by not paying the same taxes as their brick-and-mortar competitors, the far better solution is to lower the taxes charged the brick-and-mortar companies so they can compete. After all, that’s what was done with the Federal corporate tax rates, both for domestic consumption and to improve competitiveness with foreign competitors, and it’s working quite well.

Or So He Says

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Delta Air Lines CEO Ed Bastian claims his company’s decision to cut ties with the National Rifle Association to the extent it will no longer offer discounts for NRA members was apolitical.

While Delta’s intent was to remain neutral, some elected officials in Georgia tied our decision to a pending jet fuel tax exemption, threatening to eliminate it unless we reversed course. Our decision was not made for economic gain and our values are not for sale[.]

Of course.

Bastian maintains that in cutting its affiliation with the pro-gun rights group, Delta tried to remove itself from the gun control debate.

Never mind that Delta was never in the gun control debate until it chose to enter it with this move.

Bastian also claims that the company is “reevaluating the group discounts” it offers to members of other organizations that are “politically divisive.”

Sure.  Two things about that, though.  Delta actually has stopped the discounts for NRA members; it’s only “evaluating” that move for other groups.  And: Bastian has chosen, so far at least, to decline to offer his criteria that define “politically divisive.”

I won’t be flying Delta anytime soon.  Or United Airlines, which is perpetrating a similar boycott.  I will be using FedEx, which says that while it disagrees with the NRA on some questions, it won’t discriminate against any of its customers over political beliefs.

Peace in our Time

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Republic of Korea’s envoy trip to northern Korea has produced a Baby Kim promise to play nice with the RoK and to talk with us about nuclear weapons.

North Korean leader Kim Jong Un promised to not use nuclear or conventional weapons against South Korea and expressed willingness to hold talks with the United States on denuclearization, Seoul said on Tuesday after a rare two-day visit to Pyongyang.

The Hermit Kingdom added that it’s willing to give up its nuclear weapons if military threats against North Korea subsides….

RoK National Security Director Chung Eui-yong said after his safe return to Seoul

The North side clearly affirmed its commitment to the denuclearization of the Korean Peninsula and said it would have no reason to possess nuclear weapons should the safety of its regime be guaranteed and military threats against North Korea removed[.]

We believe Baby Kim because he’s never lied to us before, and northern Korea always kept its past commitments to stop their nuclear weapons programs and never attacked RoK assets and islands without provocation.  Nor have they ever threatened Japan (which just happens to be an ally of ours) by flying ICBMs over its home islands.

Too, with northern Korea as close as it is to getting nuclear warheads onto its missiles, this…promise…from Baby Kim couldn’t possibly be just another attempt at distraction until they finish the task.  Not at all.

No, everything’s jake.

The Russian Attitude Toward Rule of Law

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And the value of any contract with Russia.  These are demonstrated by Russian behavior regarding Russian natural gas flowing through Ukraine to western Europe.

Having won an arbitration dispute with Russian-controlled Gazprom over natural gas shipments to Ukraine, Gazprom and the Kremlin decided not to honor the ruling or the commitment:

Russia is tearing up its contracts to supply Ukraine with natural gas, sparking another stand-off between Moscow and Kiev and raising fears of new gas supply shortages across Europe during the winter.

In response,

European Commission Vice President Maros Sefcovic warned Friday that the situation raised “concerns not only for the direct supply of natural gas to Ukraine but possibly also for the transit of gas to the EU.”

Maybe he also should think about the wisdom of supporting the Russian pipeline across the Baltic Sea to Europe. Flows in that pipe will be just as fragile and vulnerable as the flows through the trans-Ukraine pipe. Russia is just setting up an additional weapon to use against the EU with it.

An Economic Misunderstanding

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In the wake of Georgia’s decision to halt special tax treatment for Delta Air Lines, Inc, over the company’s decision to cut ties with the NRA, Fox News economics pundit Neil Cavuto asked whether the State’s action “was an example of government interfering in the free market”.

This misunderstands what’s happening.  The government interference in the free market was the State’s gerrymandering its tax code to give special treatment to a particular company.  Stopping a particular special treatment is a step back from that government’s interference, not an extension of it.