Read our lips: Grover Norquist must have left the building. The no-new-taxes mantra of Republican politicians is undergoing renovation. When finished, it will be: "No new taxes except online."
Anyone who thinks this is not going to happen needs to get out of the way to avoid being crushed by GOP heavyweights who are piling onto the idea, with New Jersey Gov. Chris Christie in the lead.
There are certain inescapable truths, after all. The sun comes up each day, it gets cold in the winter and local governments need money. It's been estimated that states and cities are "losing" $23 billion each year by not collecting tax on online sales.
Of course, that money isn't really lost, it's just staying in the pockets and bank accounts and, yes, credit lines, of everyday consumers, who are having their own little cash crunch the last few years. Protecting cash-short consumers and taxpayers gets a lot of lip service from politicians of all stripes but, forget them for a moment, the online sales tax issue has finally caught fire.
Consumers are probably OK with this, you say? After all, they want to be fair to local merchants and make sure their local governments have enough money, right?
Not really. We conducted a computerized sentiment analysis of about 940,000 consumer comments on social media and found sales taxes hitting their nadir with an 11% negative rating in October, clambering up to 27% positive in June, then plummeting to 3% in July as word of the GOP's change of heart began to get out.
Well, with states and cities declaring bankruptcy because they promised too much all those years ago, every politician recognizes that more money has to come from somewhere. Those red-light cameras can only produce so much, after all.
But there's something else at play here too. Bricks-and-mortar retailers have been doing some serious arm-twisting behind the scenes. In public, they portray themselves as the Mom and Pop Hardware Store, Grandma's Pie Shop and Uncle Al's Service Station.
But what we're really talking about here are The Home Depot, Target, Best Buy and other gargantua that like to think they would be racking up more sales if only it weren't for those cheapskate consumers buying things online to save that nasty 7% sales tax.
Lowe's, for example, complains that it has a 5% to 10% price disadvantage compared with its online rivals and, like other retailers, grumbles that consumers come into the local Lowe's to look at lawn tractors and then order one online.
Really? It wouldn't be that the undecided consumers are leaving to swing by The Home Depot or Walmart, now would it? Or that they can't get the lawn tractor into their Prius and home delivery is not exactly the easiest thing to arrange at most big box stores, although The Home Depot will be glad to rent you a truck.
But consumers will go along with paying the new tax when it's explained to them that it's really for their own good, you say? Well, Senator, maybe so but that's not what those 940,000 consumers said. If it replaced the income tax, it might be OK, but good luck with that. A larger number said it would hurt the poor and would not have much effect on closing the deficit or bringing fiscal sanity to local government. A few said it was insane.
Amazon talks, politicians listen
Be that as it may, there's another reason that it is suddenly OK to talk about raising taxes -- oops, sorry, we're not supposed to put it that way -- and that is that the biggest online retailer of them all, Amazon, has changed its tune and is now onboard with soaking its customers for local sales taxes.
It all has to do with Amazon's latest strategy to drive sales completely through the ceiling, to infinity and beyond. It is building new distribution centers closer to major population centers, striving to achieve same-day delivery.
Already, Amazon customers can get next-day delivery of most items in most parts of the country but Amazon wants to ratchet that up a notch -- offering delivery this afternoon of items ordered this morning.
The expectation is that this will be so convenient that consumers will simply curl up into a ball and remain in their dream homes indefinitely, venturing out only for urgent medical care and perhaps the occasional touring experience.
How does sales tax figure into this? Well, currently, online retailers can get by without charging sales tax as long as they don't have physical facilities in the state where a consumer lives. If Amazon wants to build distribution closer to big cities -- say in, oh, New Jersey -- it's going to wind up paying the sales tax anyway.
So, as the Amazonian mind works, it sees an opportunity to make peace with local politicians, get some givebacks for creating jobs in local communities (OK, they're warehouse jobs but hey ...) and, last but not least, forcing all of its smaller online competitors to take on the somewhat difficult task of keeping track of varying sales tax laws in the 50 states and countless cities and towns.
Who's sorry now?
Oh, and then there's this final question: Where does this leave The Home Depot, Target, Best Buy and all the other whining brick-and-mortar guys who have been crying about how unfair life is?
It leaves them facing a competitor who will still have competitive pricing, a nearly infinite selection, same-day delivery and a constantly-evolving Web site that practically lets you drive that little lawn tractor around the block, not to mention letting you read what your fellow consumers say about it.
When all those pieces fall into place, do you think consumers will still go to Lowe's to look at the lawn tractor, then buy it online. Or will they just buy it online and save the trip?
Time, as it always does, will tell. What do you think? Use the comment box below.