Congress wants to make you pay sales tax on your online purchases. Washington Post reporter Abha Bhattarai has written an article on this in which she quotes seven people — six sales-tax supporters and only one sales-tax opponent. You could chalk this up to pro-tax bias, but I think it’s much more informative to see the article as a reflection of the imbalance in the broader policy debate.
On one side you have plenty of interest groups that stand to benefit from the tax hike. First the Post quotes four people who stand to gain competitive advantage from the tax (1) the head of the retail-industry lobby that mostly represents brick-and-mortar stores, (2) the top lobbyist for Amazon which would benefit from this tax hike, as I explained in my column, (3) a hardware store owner, (4) a bookstore owner. Second, the Post quotes two people who generally lobby for governments to have more revenue.
What about the anti-tax side? The standard media narrative is that wealth special interests, rich people, and big business furiously lobby against tax hikes. Not so much. All the Post could find was one lobby group, representing smaller online retailers, who oppose it for competitive reasons.
But there’s a huge — giant — class of people not represented in this article: taxpayers who don’t like paying more for stuff they buy. That group just isn’t as organized, informed, or motivated by this issue as are the groups that benefit from the tax. If the reporter spoke to the average online shopper, the shopper would probably be pretty ignorant of existing law and the proposed bill — in part because the cost, maybe $100 a year in sales tax, is probably smaller than the cost of organizing an opposition campaign.
Call it concentrated benefit and diffuse costs. Such is typically the case when special interests want bigger government in the form of taxes, regulations, subsidies, and mandates.