Fair approach to taxes

Things always get complicated when government and business become entangled.
Just ask President Obama about Solyndra.
Or, for that matter, ask Jay County officials about Omnicity.
But, like it or not, the notion of public-private partnership is here to stay.
Virtually every community uses a combination of phasing in property taxes and other government-provided inducements to lure new industry and attract new jobs. Those who don’t soon fall behind.
The question isn’t whether those partnerships should exist but how to assure they are fair both to businesses and taxpayers, who are ultimately picking up the tab.
That’s why things like tax abatement have a limited lifespan. That’s why many government incentives for business often involve training for workers or infrastructure improvements that represent something tangible for the investment.
But sometimes things get out of whack.
And that appears to be the case when it comes to Amazon’s deal with the state of Indiana.
The Internet retailing giant has established three distribution centers in the state and announced plans for a fourth. Plenty of good jobs have been created as a result in greater Indianapolis area.
But as a trade-off and inducement to bring those jobs to Indiana, the state agreed to exempt the company from collecting sales tax from its customers.
Amazon would argue, correctly, that customers who owe sales tax are supposed to keep track of their obligations and pay the state annually.
That’s the way it’s supposed to work with mail order businesses as well.
The reality, however, is that almost nobody does that.
As a result, Amazon’s brick and mortar competitors would argue, the Internet giant is able to sell the same item for less money, with the uncollected sales tax being a de facto discount.
All things being equal, a flat-screen TV selling for $400 on Amazon would cost $428 after the sales tax is included when purchased from a local retailer.
Ask the Indiana Retail Council if that’s fair, and you’ll get an earful.
On top of the fairness question, there’s a not-so-little matter of lost tax revenue.
The $28 in uncollected tax on that flat-screen TV never makes its way to the state’s coffers.
And given the state’s ongoing struggle to make ends meet, every little bit counts.
Some Indiana lawmakers are wondering if this is such a good deal.
Sen. Luke Kenley, R-Noblesville, has raised the issue and doesn’t appear likely to let it go anytime soon.
Recognizing that the question goes far beyond just Amazon and Indiana, Kenley is urging Congress to pass the Main Street Fairness Act which would put all retailers on a level playing field when it comes to sales tax collection all over the U.S.
The bill has a measure of bipartisan support, and from our vantage point it sounds like the fairest approach. — J.R.[[In-content Ad]]