Your Tax Code At Work
Amazing but true: The Tennessean actually published this story explaining how the Tennessee General Assembly has put in place an onerous system of taxation and regulation designed solely to protect the business interests of wine and liquor industry middlemen, while harming the economic interests of millions of average Tennessee residents. The system - protected by generous contributions given to legislators by lobbyists for the middlemen - drives up prices you must pay for wine and other alcoholic beverages while limiting your choices and your freedom to buy direct from out-of-state wineries.

Tennessee is one of about three dozen states that prohibit out-of-state wineries from shipping direct to retail customers in Tennessee. Such protectionist laws in all likelihood violate the Commerce Clause of the U.S. Constitution, which forbids states from regulating interstate commerce. Such protectionist laws involving the sale of wine are also among the laws hampering the growth of e-commerce - and costing U.S. consumers an estimated $15 billion a year in higher prices for such things as wine, real estate, cars and caskets, according to the Progressive Policy Institute.

The Federal Trade Commission recently announced it will investigate such laws. E-Commerce Times reports here the FTC study whether individual states' legislative and regulatory actions are hampering the growth of e-commerce, and will host a three-day workshop in October where representatives of several industries that face such regulations and restrictions can state their case. Giga Information Group analyst Andrew Bartels told E-Commerce Times that the FTC will learn of "a patchwork of specific state laws governing industries, particularly those like alcohol sales and real estate" that are "undoubtedly a hindrance to interstate commerce." Other industries likely to be looked at by the FTC: online wine sales, online real estate, online automobile sales, online education, healthcare, pharmaceutical sales and online casket sales.

Any legitimate study of Tennessee's tax code with an eye toward positive reform would include a plan to end the regulations that have made Tennessee's wine and liquor wholesalers a government-protected cartel, and open the market so that Tennesseans can benefit from more choice and rational pricing.