The debate over Internet sales taxes, when all distractions are stripped away, isn’t about the Internet or taxes. It is about federalism. Confusion over what federalism means explains the conservative division the debate has created.
The immediate question is whether to support or oppose a bill to make it easier for states to tax sales made over the Internet. A lot of conservatives just need to hear the word “tax” to know they’re against it. Others say that fairness and federalism both counsel in favor of letting states tax Internet sales the same way they tax sales in stores. Many conservative economists who support the bill add that taxing Internet sales would make the economy more efficient.
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