The Infinite Money Glitch: How the Government Gets Paid Every Time Something Changes Hands

Here's a thing. Someone bought a new guitar amp in 2018. Paid full price. Paid sales tax. Six years later it got listed on Reverb. A second person bought it. Used. Pre-owned. Previously taxed. And paid sales tax again.

Same guitar. No new value created. No factory, no raw materials, no labor. Just a box moving from one address to another.

The government got paid twice.

This Is Not a Glitch. This Is the Design.

Sales tax is structured as a transaction tax, not a possession tax. Every time something is sold, that sale is a new taxable event. It does not matter that the item was already taxed. The transaction itself is what triggers the obligation.

Which sounds reasonable, until you follow it to its conclusion.

A car rolls off the lot in 2010. Sales tax collected. That car sells again in 2015. Again in 2019. Again in 2023. The same vehicle, taxed four separate times. Built once, from materials that were also taxed, using labor that was income-taxed, shipped on roads paid for by gas taxes.

The revenue stream does not end. It just follows the object.

The Secondhand Market Used to Be a Tax Loophole. They Fixed That.

For most of the internet's existence, buying used goods online meant no sales tax. Sellers were individuals. Platforms were not collecting. States had no mechanism to enforce it. The secondhand market was one of the few places working people could buy things at something close to a fair price.

Then came South Dakota v. Wayfair in 2018. The Supreme Court ruled that states could require online sellers to collect sales tax even without a physical presence in that state. By 2021, platforms like eBay, Reverb, and Mercari became "marketplace facilitators" under state law, required to collect and remit sales tax automatically.

You no longer have to be a business to have sales tax collected on what you sell. You can be a person selling a ten-year-old guitar, and the platform adds 7, 8, 9 percent to the transaction without asking anyone's permission.

The used goods tax exemption that working people benefited from quietly disappeared. No vote. No announcement. The platforms just started collecting.

Who Actually Gets Hurt

Sales tax is regressive by design. Same percentage from everyone, which means a much larger share of a lower-income person's budget.

And the people buying used goods are not people with money to spare. They are the person who cannot afford a new car. The musician buying secondhand gear because new costs three times as much. The family furnishing a house at an estate sale.

Meanwhile, wealthy buyers have structures. Trusts. LLCs. States with no sales tax. Accountants who know how to route transactions. The person buying a $40,000 boat does not navigate sales tax the same way the person buying a $400 used amp does.

Is Any of This Illegal?

No. Every layer of this is legal. States have broad authority to tax transactions. The Supreme Court expanded that authority online. Platforms comply. Buyers pay because it is baked into checkout before they notice.

The gap between legal and fair is exactly where the government has learned to operate most comfortably.

There is no political will to change it because sales tax revenue funds things politicians want to fund without having to raise income taxes or explain where the money comes from. Every used guitar that changes hands, every secondhand car, every estate sale processed through a platform is a quiet revenue event that nobody campaigns on and nobody debates.

The glitch is not a bug. The glitch is the whole system.

Stay Frustrated.