I am in favor of reasonable taxes, and better spending, but I doubt that US tax burden is too high.

But in any case, my preference is to mediate taxes straightforwardly, through democratic and transparent processes. So, with that preface, which democratic body should be able to levy taxes on the internet?

So, your line of thinking would put all local business a structural disadvantage to those that are out of the area, and would eventually lead to a decline in tax revenues as internet sales increased. To me that is a bug, but to those who want to do away with civic structures, it is a feature.

Just be honest–you would like to make it difficult for governments to tax, as a way of subverting democracy.

And this “loophole” wasn’t created for the Internet. Mail order companies have never been subject to the sales taxes of the jurisdictions they shipped to.

But Tim, then you should believe that if I buy something from Amazon, I should have to pay sales taxes in Washington state, right?

The internet should not be a giant loop hole for corporations or individuals to escape paying taxes, it just transfers power from civic agencies (your local police station, library, or Art Museum) to private capital aggregations, i.e., corporations. We all lose when society is made poorer.