The State of Indiana’s tax policy has shifted decisively in recent years toward sales taxes and away from property taxes. Think of the property tax caps and the rise in sales tax that were enacted a few years ago.

The movement by Indiana Republicans, most notably state Sen. Luke Kenley, to use tax revenue from online retail sales to replace the current revenue stream from inheritance taxes is another step in the tax progression from property to sales.

Amazon, which has three supply centers in Indiana and is building a fourth, agreed Monday to begin collecting sales tax on items sold via e-commerce to residents of Indiana beginning in 2014. That would bring an extra $20 million to state coffers, according to estimates.

If Indiana were to eliminate the state inheritance tax, it would drain about $165 million annually starting in 2020. So, the revenue increase from Amazon sales tax would cover only about 12 percent of the loss.

However, a strong movement in Indiana and across the country is pushing lawmakers to the brink of requiring all online retailers to collect sales tax. Amazon’s agreement to collect such taxes voluntarily in Indiana foreshadows the passing of such legislation.

Don’t think for one minute that the retail giant would have made the Hoosier agreement without certainty that its competitors will be collecting sales taxes in Indiana — and elsewhere — by the time 2014 rolls around.

While consumers stand to lose money when the benefit of tax-free shopping online is stripped from them, it’s only fair to brick-and-mortar retailers that their cyberspace competition plays on a level field.

Meanwhile, one can’t help but notice that the comparatively rich in Indiana — those who own property and those who claim an inheritance — are paying less and less in taxes, while consumers — whether rich, middle class or poor — are coughing up more of their hard-earned cash to the tax man.
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