The Internet Tax: Sen. Kenley’s Pyrrhic Victory


From news accounts, former state Sen. Luke Kenley sounds like a crazy old coot yelling at the kids to stay off his Internet.

“I’m going to celebrate today,” Kenley is quoted as saying. “I’m probably the only one that is. I’m sure all the millennials who shop online are not going to be celebrating.”

Last year, Kenley won his 15-year battle to force online retailers — most all of them, not just the ones with a physical presence in the state — to charge tax on sales to Indiana consumers. The U.S. Supreme Court, in a case from South Dakota, which has a tax-them-all law similar to Indiana’s, just ruled that such Internet sales taxes are perfectly legitimate.

That means all 50 states can start collecting untold billions owed them, and all those snot-nosed shopping scofflaws will have to start shelling out to government slush funds just like their doddering old grandparents who still shamble off to the corner drug store to fill their prescriptions.

And the shopping status quo ante will be restored and all will be right with the world. Phew.

Now, Kenley, being a paper clip-counting sort of fiscal conservative, was one of my favorite state legislators, so I hate to break this to him but millennials are not the only shoppers who have been abandoning brick-and-mortar establishments for the Internet. We geezers on the brink of decrepitude have also discovered the joys of shopping without getting up from the couch.

I don’t presume to know why millennials abandon physical spaces — who knows why these crazy kids today do anything? Maybe they’re just enthralled with the shiny new toys of the digital age. Maybe our worst fears are true, and they were born lazy.

But I know why the duffers do — the older we get, the bigger hassle it is to traipse all over town looking for a few things that are just a mouse click away. And — trust me on this — we have at least as many reasons as the young’uns to watch our pennies.

I also don’t understand what “it all means” in a macro, Big Picture way. I will leave it to others to get into the weeds and explain for the rest of us the policy implications and constitutional ramifications of Internet sales taxes.

But as a lifelong consumer, there are some things I understand on a common-sense level.

I get it that not requiring online retailers to charge the tax puts brick-and-mortar establishments required to collect them at a competitive disadvantage. I get it that forcing Internet companies to collect will put the small ones, not equipped to deal with the convoluted tax codes of multiple jurisdictions, at a competitive disadvantage. I therefore get it that no matter which way it goes, it will be unfair to somebody and there will be lots of winners and losers.

And I get it that none of this means much at all in the long run, because I also understand that there is such a thing as an inexorable force. I should — one of them is destroying the calling to which I have devoted my life.

I am not so narrow-minded as to mean merely newspapers. I refer to the much larger enterprise of which newspapers are but a small part.

While my colleagues were bemoaning the death of print, they failed to grasp — still do, in fact — that the whole mass communication model was on the verge of collapse.

Journalism as we understand it today has always gotten a free ride on the back of mass-market advertising. It was the model that made economic sense in the aftermath of the industrial revolution, getting mass-produced goods into the minds and then the homes of the mass of people. The “most important news” served to the biggest audience possible followed along.

That model doesn’t work in the digital age. Marketers today don’t seek the biggest audience, but the right audience, goods and services targeted very specifically to the people most likely to want them. Amazon now knows more about my tastes and preferences than I ever did.

“The news” is fragmenting in the same way. People scan the web sites that conform to their political prejudices and follow only the events their “friends” on Facebook do. They howl along with the mobs who denounce the Twitter Outrage of the Hour. The national conversation, if indeed there ever was one, is coming apart.

If you stop and think about it, the same inexorable force, or at least a part of it, that is changing journalism is also transforming retailing. If our youngest and oldest shoppers are moving in the same direction, that is not just a trend. It is — and please forgive the now trite use of a scientific term in a non-scientific context — a paradigm shift.

People with brick-and-mortar spaces to fill might find inducements to get us off our couches and into those spaces. It will not be to look at variations of the same stuff all the other spaces have on display.

And who charges whom what tax won’t be the slightest factor. That will just be something for paper clip-counting legislators to shake their fists at. After the paper clips are delivered to their front door.

Leo Morris, columnist for The Indiana Policy Review, is this year’s winner of the Hoosier Press Association’s award for Best Editorial Writer. Morris, as opinion editor of the Fort Wayne News-Sentinel, was named a finalist in editorial writing by the Pulitzer Prize committee. Contact him at [email protected].

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