LITTLE ROCK — Voters in Arkansas sent a huge number of Republicans to the state legislature this past year. I’m pretty sure that they didn’t do that because they wanted them to find ways for the state to collect even more tax money from us. Some of them, especially the freshmen, are trying to cut taxes, but the sentiment is not universal.

A couple of Republican-supported bills have cropped up that will actually increase revenues to the state.

One of the bills is SB341.

It allows for charging for licenses to state Medicaid providers if the feds would reimburse them for those licenses. I have mixed feelings on that one. I concluded the bill would contribute to our federal budget problems, rather than our state problems. Because of that, our federal representatives ought to fix it. I was not as ready to castigate our statelegislators for taking the “free” money our corrupt federal government was offering.

But now one of them is at it again. Sen. Jake Files (RFort Smith) is sponsoring abill that will not technically raise taxes, but it will result in us paying more taxes nevertheless. It’s SB738, which changes collection responsibilities on internet sales taxes. It is of dubious constitutionality because it tries to make businesses in other states collect taxes for Arkansas.

Is it a tax increase?

Theoretically no, but it is in practical terms. The bottom line is that right now, while people still technically owe sales taxes for internet sales, the average person and maybe even the average legislator, does not even know how to pay them. Traditionally there has been no effort made to collect these taxes.

As such, this bill would be a de facto tax increase even if it is not a technical one.

I sympathize with brick and mortar businesses which are losing out to internet sales. Sure, they could offer internet sales, too, but this puts us in the absurd position of buying from a distance instead of locally because high taxes make it less expensive to ship than to pay a sales tax. People in Nebraska would then order their goods from a shop in Sheridan and people here would buy from someplace in Springfield.

The root problem is not collection methods. It’s government intervention in pricing that is so great that it distorts the market. This leads to a miss allocation of resources like having a good shipped in from out of state rather than buying locally.

Sales taxes in Arkansas are too high. That’s the problem, not internet sales.

The solution is to change the tax structure of this state.

We should shift away from sales taxes and more to income taxes and user fees, so long as it is done in a revenue-neutral way. Sen. Files’ bill is not revenue neutral. If the sales tax in this state were 3 percent or less, it would remove muchof the financial incentive to buy from the internet. Sen.

Files is simply attempting to use more government intervention to resolve a problem caused by government intervention in the first place.

I am not saying that it will be easy to restructure our tax code. I’m saying that it’s right. Our state constitution wisely calls for a super-majority vote in the legislature to pass a tax increase. Judges later ruled that this only applied to taxes that were in existence at the time the Constitution was enacted - and there was no sales tax at that time. Sales tax increases became the easiest to pass because they needed only a simple majority, so that’s what we got.

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Editor’s note: Mark Moore is the lead writer for an Internet blog on matters pertaining to Arkansas culture and government, Arkansas Watch, and on Tuesday nights is the host of an Internet-based radio program, Patriots on Watch. He can be reached through The Times at [email protected].

Opinion, Pages 4 on 03/09/2011