It’s Valentines Day, so Senator Durbin (D-IL) presented a box of chocolates to his colleagues in Congress – in the form of his latest iteration of the Marketplace Fairness Act. But bite into any of the chocolates in this legislation, and you’ll taste only stale rhetoric that fails to deliver on promised simplifications.
The main thing you need to know about the new Marketplace Fairness Act is that it is the same as the old Marketplace Fairness Act — including the same false promises and flaws. In the few weeks since the last Congress wisely declined to enact new Internet sales taxes, supporters have done nothing to make their scheme more appealing to businesses and consumers who’ll have to pay the taxes.
The legislation introduced today sweeps aside the decade-long “Streamlined Sales Tax” project that sought to simplify thousands of conflicting state and local tax systems. Instead, this bill would create an expensive and onerous new tax regime for any business that uses the Internet or catalogs to reach customers around the country. Read more
‘[dropcap1]T[/dropcap1]is the season for reason, it seems, as lawmakers have stepped back from the brink of a deeply flawed Internet sales tax that threatened online consumers and sellers while promising very little revenue to states.
Last month, despite an 11th-hour lobbying drive by state governments and big box retailers, the Senate wisely declined to attach the ironically named “Marketplace Fairness Act” to a must-pass Defense authorization bill. But while this battle was won, the war goes on, as proponents of the tax are rallying their forces for a legislative push in 2013.
What is increasingly clear is that supporters of the tax have zero interest in actually fixing the impossible patchwork of state sales taxes. Instead, advocates have done the political calculus and determined that states are hungry enough for revenue that they’ll grasp at anything that generates it, especially if it can be sold as something other than a new tax. Read more
Today is Cyber Monday, where analysts are busy predicting online sales growth and political types use the day to advance policy remedies for the so-called “unfair” advantage held by online retailers like Amazon.
Advocates for new Internet sales taxes will cite Cyber Monday sales when claiming to defend Main Street small businesses, or to plug the massive budget holes facing states (see Michelle Quinn’s piece in POLITICO today). Like most complex policy issues, the truth is far more nuanced and the “fix” won’t be anywhere as beneficial as advocates promise.
Take for example California’s recent deal with Amazon to begin collecting sales taxes for online sales. Amazon has physical facilities in California and is therefore required to collect taxes under existing law, but tax advocates heralded the deal as a big win for small businesses losing out to online retailers. Read more
Congress may have gone home to campaign, but that hasn’t stopped bad internet bills and regulations from threatening to stifle innovation and limit online choices.
To highlight some of the gravest – and most imminent – legislative and regulatory threats to e-commerce, NetChoice today unveiled a special edition of the Internet Advocates Watchlist for Ugly Laws (iAWFUL).
This latest iAWFUL focuses on measures that pose an imminent threat to the internet in 2012, ones that lawmakers want to jam through legislatures, or rules already in effect and in dire need of repeal and redress. Read more
As Congress continues to wrestle with the idea of unleashing sales tax collectors across state borders, a lot of buzzwords are recycled. All of them attempt to make a huge and complex tax system look as if it’s benign and beneficial.
But nothing could be further from the truth. In my testimony today before the House Judiciary Committee, I described why proposals like the Marketplace Equity Act will do far more harm than good and act as a drag on online commerce.