Best Argument: Yes
Audience Favored: Yes (64%)
We're better off without it
The first thing I'd like to say is that our readers truly added value to this discussion, contributing salient points that neither Larry nor I covered. A big shout-out goes to all of you for making this into a really meaningful roundtable discussion.
I disagree with Larry. We shouldn’t tax our populace and further damage our economy because of some misdirected desire to be “fair”. We also can’t give all little kids ponies, and we all don’t grow up to be princes and princesses. Life isn’t fair. Forcing fairness down everyone’s throats also isn’t fair.
This is really a two-part question. The first is whether to tax at all, and the second is how that tax process would be implemented. It's clear the Internet has been a transforming factor in our economy and encouraging Internet growth is good for all of us in the long term. But that growth is taking money out of the system as well, at the expense of already revenue-starved states.
If -- and this is a nigh-impossible if -- if Internet sales tax was consistent, universal, and easily manageable (none of which are government strengths), then it might make sense to implement it. But since there's virtually no chance that any sort of interstate Internet tax will be done with an eye to best practices before best politics, I contend we're better off without an Internet sales tax.
It's about fairness
Many people seem to have a romantic notion of the Internet as existing outside of political boundaries. In a physical sense this may be the case, but in reality it is used and run by people who live and work in particular countries and states. These people and the companies they work for have to be subject to laws and by the same reasoning need to pay the taxes that people in the physical world do.
David's responses emphasize overall economic concerns over any sense of justice. His constitutional concerns seem misplaced to me. The federal government need not mandate anything to effect a more fair tax regime, but it might very well be authorized to do so as a regulation of interstate commerce.
For me this issue is all about fairness, and it's not fair that e-commerce is often preferentially taxed. There may be many good libertarian and pro-growth arguments for keeping taxes low and simple. There are no good arguments for taxing brick and mortar commerce but not e-commerce. My esteemed opponent has basically avoided the fairness issue.
If I had to declare a winner of this debate, I'd give it to the audience comments, which were insightful. Frankly, I see both sides of this equation; but on the basis of pure debate, David beat Larry with his arguments. The Internet isn't going to be tax free so here's to hoping there's some logical framework that's set up.