Let us start at the beginning. In 1992, Quill vs North Dakota was a case that came before the U.S. Supreme Court. Quill was a mail order company and did not have a physical presence in North Dakota. Consumers in North Dakota were ordering things from Quill and not having to pay sales tax. Anytime a citizen doesn't pay tax on something, it makes the bureaucrats gnash their teeth. The state of North Dakota felt that they were missing out. A lawsuit ensued, no pun intended, and the Supreme Court took their quill in hand, pun intended, and ruled in favor of Quill. The court decided that the fact that the Quill corporation was not benefiting from State and Local services. They ruled that physical presence was required in order to levy local and state taxes.
Politicians in Washington DC and State capitols ever since have been trying to work around this decision. There is money to be had, and of course the government needs more revenue for more things you and I don't need or want. They have now come up with the Marketplace Fairness Act. What Democrat liberal politician has come up with this? Oh no my friends, it is a Republican in the Senate who is sponsoring this. Senator Mike Enzi is the culprit. Sad isn't it? That your own folks who shake your hands, and kiss your babies are the ones that are trying to stab you in the back.
Of course, the talking points for the bill are typical. That the online retailers have a unfair advantage over the brick and mortar stores. When they say brick and mortar stars, they want you to think of a mom and pops store that sells antiques. What they really mean is Walmart, Target, etc. Not that these mega stores are contributing to their campaigns or lobbying them. That simply isn't done in Washington.
They will also say that it would give State and Local governments more revenue so they can keep your other taxes low. They will say that the money will go to roads and bridges. They will then play the political version of a royal flush, education. You can't possibly begrudge a little more money for that DVD player or NFL jersey. After all it is going to little Susie, so she can get an IPad. It;s amazing government all the great things government taxes us for, but they never seem to get fixed.
The picture these politicians paint is of course what than it actually is. Here is a quote from the Heritage Action report.
"This legislation is premised on the misassumption that all Internet sales skirt taxation. A significant number of electronic purchases are already being taxed—not only because many retailers collect taxes from online customers in their home state, but because many also have a presence in multiple states, and impose taxes in each. As Heritage Foundation Senior Research Fellow James Gattuso noted:
Now there is an exemption. If you are a online retailer that generates less than a million dollars in revenue, than you are exempt from the law. You will hear that this tax is punishing the big mean money grubbers at Amazon, Ebay, etc. This is the kind of class warfare rhetoric I expect from Sen. Elizabeth Warren, not from Senator Mike Enzi, or even Congresswoman Renee Ellmers.Using 2008 data, one study found that 17 of the 20 largest online sellers—ranging from Office Depot to Apple—had retail stores or other facilities nationwide, and collected taxes in all or almost all 46 states that impose sales taxes. Even Amazon.com collects taxes for nine states, representing close to 40 percent of all U.S. residents. It is expected to soon be collecting taxes for many more, as it expands its physical distribution network throughout the country."
Here is a list of bullet points on why I do not support the bill, and would encourage you to oppose it as well:
1. The Bill punishes small businesses- The bill puts a magic exemption for a million in revenue. This is a smoke screen. All business owners and common sense thinkers know that revenue is not profit. Just because these stores make over a million dollars in revenue does not mean that they are large retailers. It could be a small family run online store. Many of these smaller online stores are run online because the folks lack the capital to build a brick and mortar store. This bill mean that smaller retailers will now be subject to over "10,000 jurisdictions and 46 state tax authorities". This will result in less capital in the market. Less money for new hires and jobs. Higher prices on consumers. This is anything but fair.
2. It is a tax- Once a tax is enacted, it never goes away. This bill sets a exemption on businesses making a million dollars or more in revenue, but how soon till that threshold comes down. Eventually it will be $750,000. Then it will be down to $500,000. Then it will be down to $250,000. You get the picture. Government will use this tax to take more money out of the private sector, your pocket, and into the state coffers.
3. Now is not the time for this debate- The business sector, or realville for those of us in it, is under attack. We are having to deal with a sluggish economy. We have regulations that hinder our time and drain our profits. We have less money to hire workers. We have to deal with Obamacare. We have to deal with already high taxes. Now is not the time for this debate. We need to address the regulatory framework. We need real tax reform. We need to repeal Obamacare. This bill is still a bad bill, but it is more garbage, piled on to the people of America. Now is not the time.
This bill needs to be defeated. Now is not the time to raise taxes on small businesses or large retailers. We need to reduce taxes and reduce spending. This is a cheap ploy to get more revenue and not to look at the real issue. Government never wants to cut spending. They always want to look at the revenue side of the balance sheet, not the spending side. This bill ,regardless of who sponsors it, must be defeated.
It has already passed the Senate and is in the House, awaiting approval. It will probably come up in this upcoming session. We must stop this unfair, tax and spend, piece of legislation before it is too late. Please call your Congressional Representative in the US House and tell them to vote no on the Marketplace Fairness Act.
If you live in Moore County you can call Rep. Renee Ellmers at 202-225-4531.
Helpful documents and links: