Doyle and taxes

This is a topic that Joseph has already touched on, but there was a corner item in the business section of Friday's Wisconsin State Journal that caught my eye. It starts:

Wisconsin's sales tax laws have cost Lands' End both sales and jobs, an executive of the Dodgeville apparel company told the Legislature's Joint Finance Committee on Thursday.

Sounds okay so far, pending specifics.

Karl Dahlen, vice president and senior legal officer of Lands' End, was one of several Wisconsin retailers urging support for a proposal in Gov. Doyle's budget that would make it easier for the state to collect sales tax on mail-order and Internet purchases from other states.

What the newspaper is referring to, but is not doing a very good job of explaining, is Doyle's proposal to tax in-state residents for out-of-state purchases. It is not an effort to collect taxes on "purchases [originating] from other states," which is one way of reading that vague sentence.

Now, already I'm having difficulty reconciling just these two paragraphs. The first paragraph declared that there was a problem for Lands' End because of the state's tax collections. How, exactly, would expanding the state's tax collection powers assist Lands' End?

Customers have said they've taken their business to other companies because of the sales tax Lands' End has collected, Dahlen told lawmakers. That has led to "a loss of tens of millions of dollars of revenue in our direct-to-consumer business," he said in a statement.

So instead of asking for relief from onerous sales taxes so that local customers can help grow the business, this corporate clown asks for the scope of taxation to be expanded. Dahlen is either a shill, a moron, or extremely cynical, because he neglects to consider the entirely predictable course of Doyle's new tax initiative. Is there anyone above the age of thirty who is so naive as to think that if Doyle can actually pull this off, that no other governors would jump at adding this revenue stream in their own states? Dahlen thinks Lands' End is losing business now, because of sales tax on one state's customers? How much business will they lose when forty-five other states begin taxing their residents on Lands' End purchases? And how is it that Lands' End had managed to expand and prosper for the last forty years, but now suddenly needs the state to step in?

What Governor Doyle is asking for, and what Dahlen is supporting, is very much like a tariff. And when the states realize that they can collect these "tariffs" without Congress moving to stop them, we will have a form of interstate protectionism. The Constitution grants Congress the power to regulate interstate commerce in Article 1, Section 8, and the Supreme Court of the United States has many times considered and often curtailed efforts by states to either export their tax burdens (e.g., Louisiana's "First-Use Tax," Maryland v. Louisiana, 1981) or erect trade barriers (Bellas Hess v. Illinois, 1967). I especially appreciate these lines from Justice Stewart:

The very purpose of the Commerce Clause was to ensure a national economy free from such unjustifiable local entanglements. Under the Constitution, this is a domain where Congress alone has the power of regulation and control.

And who, pray tell, has benefited from interstate free trade? Consider this University of Missouri law school commentary:

In Quill Corporation v North Dakota (1992), the Court looked at a North Dakota "use" tax applied to sales by out-of-state corporations (primarily catalog companies such as L. L. Bean and Land's End) to North Dakota residents.

(Emphasis mine). The Court struck down the North Dakota "use tax."