It is difficult to understand the world in which Michael Moritz lives regarding his position on the proposed online sales tax in the UK (“An online sales tax will be a new plague on the high street”, Opinion, May 16) .
Whether it’s convenience, saving in the use of limited time, lower prices (due in part to the absence of sales tax), or the ease of comparing prices from different retailers, consumers have been leaving stores for nearly 50 years, beginning with purchases through print catalogs to today’s digital purchases.
In my own case, I can count on 10 fingers the number of times in the last half-century that I’ve bought clothes – from socks and shoes to scarves and hats, and everything in between – in a store.
Why should governments subsidize non-store transactions by allowing these purchases to escape sales tax? Until now, taxes weren’t collected on non-store purchases mostly because the technology wasn’t in place to do so, but that’s no longer a barrier.
Today, it is only lobbyists doing their daily work that obstruct lost tax revenue.
Consumption taxation, such as the proposed sales tax applied to online purchases, is the most progressive tax designed to ensure that governments collect the necessary revenue from all consumers to pay for essential services.
Last I looked, the annual “one percenter” purchases were multiples of the purchases of middle-class consumers. Therefore, imposing a sales tax on this growing percentage of total sales – online purchases – will increase state revenue and simultaneously improve the progressivity of the tax system.
Emeritus Professor of Economics and Finance, Montclair State University
Upper Montclair, New Jersey, USA