In the beginning, there was nothing. Then, Al Gore created the internet; and soon there were entire businesses using the interwebs for commerce and profit. We really should have known that it was only a matter of time until DC insiders tried to squeeze a little more tax revenue out of that particular free-market innovation.
The Market Place Fairness Act (AKA: Small Internet-Business Death Sentence) is making a comeback. After Harry Reid managed to pass the punitive tax bill through the Democrat controlled Senate, some Beltway wonks are now trying to resurrect support for it in the US House. And, sadly, the sales pitch for bigger government is getting an audience from traditionally conservative groups. Alleged defenders of limited government have, apparently, gotten on the “tax internet businesses” bandwagon.
Nathan Mehrens, president of Americans for Limited Government, wrote a lengthy op-ed about stopping government from picking winners and losers (by hiking taxes on millions of small internet-based businesses). Heck, even Art Laffer has stumped for burdening internet retailers with sales tax collection requirements.
I know, I know… Why should Amazon, or Ebay, get away without paying tax while Mom and Pop’s little shop has to shell out money to the state, county, city, and municipality, right? Well, for starters, that’s a pretty flawed question. Online retailers already pay taxes for the jurisdictions in which they have a physical presence. The Market Place Fairness Act, however, would stipulate that online retailers collect sales taxes for the local jurisdictions of their customer’s residence.
Now, if we’re talking about “leveling the playing field”, I would like someone to explain to me how this piece of legislation does that. What is “fair” about making online retailers comply with up to 10,000 local tax codes? Can you imagine the chaos at the cash register if your local grocery store was forced to collect taxes for the local government indicated by the address listed on your driver’s license?