Taxing Online Purchases

Did you know that online purchases are exempt from sales tax?

That might sound like a good thing, but here’s Ezra Klein explaining how this actually hurts lower income folks the most:

And as they say on the infomercials, that’s not all! This is making an already regressive tax even more regressive. Sales taxes hit low-income residents hardest because they spend a higher percentage of their income. And online purchasing is more common among the affluent than among the cash-strapped. So you’ve got fewer affluent people paying sales taxes, which means more states with big holes in their budgets. And what do states do when they’ve got a big hole in their budget? raise the sales tax, of course. And who’s left paying that increased sales tax? Lower-income consumers, mainly.