Apparently, it just doesn’t matter if it’s Republicans or Democrats in charge. When it comes to small government fiscal philosophy, neither party cares to even pretend to be out to defend us from rising consumer costs, and both parties seem hell bent on taxing us into oblivion.
Many Americans have fled the world of “real life,” shopping for favorite online retailers where they can make many of their purchases tax free, all while shopping around for the best price without ever leaving the comfort of their homes. However, in recent years the liberals (mostly Democrats) have begun pushing for goods purchased from online retailers to be taxed just like they would be at physical, real world stores. At first, Republicans put up token resistance to these attempts (after all, most of them still have to pretend to be fiscal conservatives), but now that pretense is gone, and many Republicans have joined with the Democrats in calling for an online retail tax.
Only the most conservative members of Congress have stood tall against the now “bipartisan” effort by Congress to force online shoppers to pay local sales taxes on all purchases. The once dead, now revitalized, Marketplace Fairness Act (MFA) is cosponsored by Senators Mike Enzi (R-WY), Lamar Alexander (R-TN), Dick Durbin (D-IL) and Heidi Heitkamp (D-ND), and it threatens to throw the world of online retail shopping into disarray.
Here’s the most basic problem with the MFA – it would force EVERY online retailer to collect LOCAL sales taxes. That means that mom and pop online retailers in Iowa will have to figure out how much Joe Consumer from Georgia owes in taxes when he purchases $3 worth of tchotchke, and how much Jane Consumer from New Jersey owes when she purchases $900 worth of food stuff from them. This may not seem like a big deal, but you have to remember that every state has a different sales tax and thousands of localities across the country also have different rates as well, making it nigh impossible for a small time Internet operation to do the math to make this all work.
However, the big “brick and mortar” companies all seem to support the MFA – here’s their argument…
In a press release, the International Council of Shopping Centers applauded the bill’s introduction, saying the MFA “will get the government out of the way, restore the free market, and close the loophole that has given an unfair advantage to online-only sellers like eBay and Overstock for over a decade.”
ICSC contends that “a ‘sale is a sale’ regardless of whether the purchase takes place on Main Street, at shopping centers, or over the Internet,” but says the current system fails to recognize that, giving online purchases privileged tax treatment that is not available to physical retailers.
Betsy Laird, senior vice president of Global Public Policy for ICSC, claimed that brick-and-mortar retailers “are fed up” with competing against online competitors who have “a de facto government subsidy,” as well as with the “higher property taxes and unnecessarily high sales taxes” that states impose to make up for the revenue they are unable to collect from Internet commerce.
This is outright nonsense.
Stores like Walmart, Target, K-Mart, Big Lots, Sears, etc. etc. etc. are all complaining that they are put at a disadvantage because the online retailers are given a de facto government subsidy. It’s enough to make me weep – these poor stores that have been closing mom and pop brick and mortar retailers all over the country for years are worried that they will be forced to close by these tiny stores with only an online presence.
They also argue that the MFA will “restore” free market principles to the retail world! It may be one of the funniest bits of ridiculousness that I’ve ever heard…
Think of the sheer incongruity! They are arguing that more government interference (TAXES) will be better for the free market. I would laugh if it weren’t so likely that the MFA will actually become law in the coming months.
The R Street Institute, a free-market think tank, argues that, “far from a ‘loophole’ intended to advantage the Internet,” the so-called physical presence standard is a necessary protection for both online sellers and taxpayers.
Whereas physical retailers only need to comply with the rules and regulations of the states in which they do business, the group explains, the MFA would “[force] remote retailers to determine the appropriate rules and regulations in as many as 46 different states with sales taxes, and then collect and remit sales tax for that distant authority.”
In addition, R Street says the MFA “would countenance an enormous expansion in state tax-collection authority,” thereby exposing consumers to “harassment by out-of-state collectors.” The existing arrangement, the group asserts, is “grounded in a bedrock foundational principle of tax policy: [that] states must not be allowed to extend their taxation and regulatory authorities beyond their borders.”
The MFA is bad news. It’s bad news for the economy and it’s bad news for Americans who have been suffering through a terrible economy for years. It seems that every time we come close to making life better for ourselves, the government steps in and makes things worse… again. Call you representatives and tell them to vote against the MFA. It’s bad for you, it’s bad for me, and it’s bad for America.