Is Dick Durbin Stupid, Ignorant, or Just Lying to His Constituents?
Senator Dick Durbin is pushing for passage of a federal law allowing individual states to impose sales tax levies on any internet sales made to citizens of those respective states. Those taxes would be identical to the taxes that would be paid if you or I went to a local store and purchased the identical item.
The good senator, who was the senior senator from Illinois while Barack Obama was the (occasional) junior senator from Illinois, said in February 2012 on the floor of the United States Senate:
Why should out-of-state companies that sell their products online have an unfair advantage over Main Street bricks-and-mortar businesses? Out-of-state companies that aren't paying their fair share of taxes are sticking Illinois residents and businesses with the tab.
As admittedly clever as the wording is, it seems clear that Senator Durbin is either (a) abysmally ignorant, (b) kind of dumb, or (c) lying to the very people who elected him.
Just think about the first sentence that comes out of his mouth: "Why should out-of-state companies that sell their products online have an unfair advantage over Main Street bricks-and-mortar businesses?" Apparently, the good senator is clueless as to the proximate cause of this perceived unfair advantage. He doesn't explain why it's unfair (a classic Democrat technique); he simply states as a basic assumption that it is. Of course, it is completely clear to anyone who has ever walked into any store in America where the local government has imposed a sales tax what the problem is. If you buy locally, then obviously the cost of local taxes is something to be avoided if at all possible. And since internet businesses rarely collect sales taxes, that's a competitive advantage for them.
But Senator Durbin either fails to recognize or misunderstands that this particular "unfairness" has been imposed by the very government he represents. If Illinois (or any other state, for that matter) had never imposed a sales tax, where would the disadvantage be for local businesses? How can anyone not recognize this?
It's sort of like being shot and then having the gunman ask you, "Why are you bleeding?" It makes you want to beat him senseless for shooting you, and then (after he is healed up) beat him senseless again for asking such an idiotic question.
The second sentence offers a special that many retailers offer on a regular basis -- Buy One, get Two Free! Three idiocies for the price of one! Now, who says that politicians don't understand how business operates?
Out-of-state companies that aren't paying their fair share of taxes are sticking Illinois residents and businesses with the tab.
Let's all remember that Senator Durbin is speaking specifically about sales taxes. At no time has any company doing business in Illinois, whether local or internet, ever paid sales taxes. Ever. Local companies collect sales taxes, but they do not pay sales taxes. Those people whom Durbin claims to be so very worried about, Illinois residents, are the ones who actually have to pay the tax, regardless of whether it has been collected via the internet or by the local supermarket.
In essence, this is a way for Illinois to raise taxes on its residents even higher, while allowing the state legislature and the governor to semi-truthfully claim that it's not their fault that taxes are going up. They will say, "Blame Washington. They made us do it!"
The second idiocy is the claim that internet companies don't "pay their fair share." Really, Senator? I know that Democrats seem to have a strand of DNA that is absent from most humans which results in overuse of the phrase "fair share," but in this case, the appeal to fairly sharing is totally inaccurate.
Having been a financial controller for 30 years or so, I can assure you that every company, no matter where it is located, actually does pay a fair share -- in state income taxes on its profits. Every company must file a state income tax return in every state in which it (a) sells, (b) has employees, or (c) has inventory or other assets located. And the local state taxing authorities get observably cranky if they don't get their money. So internet companies actually do pay their fair share, Senator.
And finally, perhaps Senator Durbin could explain something so that all of us understand it more clearly. Durbin's final shot across the bow of the good ship Private Enterprise is the claim that these internet businesses are "sticking Illinois residents and businesses with the tab."
It would be helpful, Senator, if you could explain exactly what that means. What is the "tab" actually for? If these companies are located in Arizona, California, or Florida, exactly what drain on the resources of Illinois is happening? Do you think that these companies expect an Illinois police officer to respond to a 911 call? Do you think that they expect to see fire trucks from Chicago if their warehouses catch fire? Are you under the impression that Illinois teachers are commuting to any of those states to educate kids whose parents work for the internet retailer? Exactly what "tab" are you talking about?
I certainly can't speak for the other 300 million or more Americans who have to listen to such drivel, but I will confess to a feeling that I have been insulted when I hear any elected official mouth this type of nonsense. If Dick Durbin thinks that anyone will buy this hogwash, then he is classifying us as semi-literate, mentally challenged wards of the state, and all that's missing from him is the promise of a lollipop if we behave.
I must, however, congratulate the good senator. In only 37 words, he has managed to fit in five -- that's five -- separate idiocies. Perhaps he should notify the folks at the Guinness Book of Records.
Jim Yardley is a retired financial controller for a variety of manufacturing firms, a Vietnam veteran, and an independent voter. Jim blogs at http://jimyardley.wordpress.com, or he can be contacted directly at email@example.com.