Governors Group: Marketplace Fairness Act not a violation of tax pledge

posted at 8:31 am on April 27, 2013 by Jazz Shaw

The Marketplace Fairness Act (which we’ve been talking about here since 2011) has passed another hurdle in Congress, but the debate continues. As we’ve covered at length, the idea involves the “T-word” so people immediately get up on their hind legs about it on the conservative side of the aisle. But does it violate the elected officials’ oath for “no new taxes” if they support it? The National Governors Association says no.

The National Governors Association has a message for Grover Norquist and Americans for Tax Reform: The online sales tax bill on the Senate floor does not violate ATR’s no-tax pledge.

The NGA, which backs the sales tax bill, noted in a Thursday statement that the Congressional Budget Office had ruled that the Marketplace Fairness Act had no impact on federal revenues.

The group also said that the anti-tax pledge that the ATR administers – and the vast majority of congressional Republicans have signed – calls on lawmakers to oppose marginal rate increases or the net reduction of tax credits and deductions.

“Marketplace Fairness does neither. It is not a new tax or a tax increase,” the NGA said in its statement. “It clearly does not violate the pledge. In fact, the American for Tax Reform themselves admitted to leadership of the National Governors Association that this was not a violation. To say anything else is disingenuous.

As I’ve said in the past, I’ve been on the fence on this one since the beginning, but I’ve never signed on with the knee-jerk reaction that simply because the proposal involves taxation it’s a bad thing by default. Nobody likes taxes… that’s a given. But this still strikes me as an adjustment of something that’s already part of the fabric of extant society. States have to raise money to accomplish the basic services which voters actually expect and are entitled to, right down to infrastructure demands. The entire idea of not taxing internet sales was always intended as a temporary shield which would allow the emerging (and widely distrusted) idea of online commerce to take hold.

That’s no longer a worry. E-commerce is now part of the essential fabric of American capitalism. But there are still plenty of local merchants in every location who are doing business, providing jobs and helping to structure communities. Giving the new kid on the block a perpetual thumb on the scale by not having to charge taxes which the state has agreed to collect anyway isn’t exactly “fair” if you think about it. We all love free stuff and saving money, but at the end of the day, somebody has to pay the bills. I’m just not sure this is an automatic no vote for conservatives.


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