Would the Marketplace Fairness Act lead to… less taxes?

posted at 4:01 pm on June 8, 2013 by Jazz Shaw

Ever since the MFA passed the Senate by a rather convincing margin there has been more than a little unrest among the ranks of conservatives. This was a given from day one, since we’re talking about taxes here. But even assuming that it makes it all the way to the President’s desk for a signature, could the new law actually result in tax relief, rather than additional tax burdens? That sounds like a tough sell, but there are more than a few traditional conservative voices making that case. Here are a few of them.

Scott Walker:

Wisconsin Gov. Scott Walker (R) promised on Wednesday to lower state income taxes if Congress approves online sales tax legislation.

In a letter to the state’s members of Congress, Walker said the Wisconsin Department of Revenue estimates that the online sales tax bill would bring in $95 million in additional state revenue every year.

Jeb Bush:

“It seems to me there has to be a way to tax sales done online in the same way that sales are taxed in brick and mortar establishments,” Bush wrote to Scott. “My guess is that there would be hundreds of millions of dollars that then could be used to reduce taxes to fulfill campaign promises.”

Ohio’s Republican State Legislature:

“… has already passed a law declaring that passage of the Marketplace Fairness Act will mean a reduced overall sales tax rate.”

And, of course, this may all be an exercise in Sturm und Drang over nothing, as the usual voices across the street have yet to be heard from.

Marketplace Fairness Act Won’t Pass Says House Judiciary Chairman

In an interview with Roanoke, VA NBC affiliate WSLS10, Representative Bob Goodlatte says it’s unlikely the Marketplace Fairness Act will pass in the House. The act would require online businesses to collect sales tax even in states where they don’t have a physical presence.

Having been following this from the beginning, I see a number of reasons why this may not be as much of a reason for conservatives to raise a hot fuss as some opponents have been saying. First, as noted at the last link, this measure involves the word “tax” so its odds in the House were never great, though there have been rumors of a lot of pressure from big donors in the business community and a ground game to “save the mom and pop shops.” Second, even if it does pass and get signed into law, the way the bill is written implies that it’s still just an option for the states, so they would still have to act to implement it. The most conservative ones won’t.

And finally, even where it did wind up being implemented, it sounds like the conservative state leaders above will use it as a tool to lower taxes across the board, sticking to the idea of locking future revenue gains into corresponding tax cuts to stimulate growth. If we’re going to start lumping Scott Walker in with tax and spend liberals, the argument has pretty much spun off the end of the silly scale anyway.


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Mind numbingly ignorant. Give politicians another avenue to raise taxes and in the long run, taxes will go up. Let’s be real people.

WordsMatter on June 9, 2013 at 9:12 AM

Personally, I think the whole thing is nothing more than a precursor to a VAT.

Once they have this in place, it will only take a flick of a switch to add a 15% VAT to the process for online and brick & mortar purchases.

Robert Jensen on June 9, 2013 at 10:42 AM

Is this a joke?

MitchFlorida on June 9, 2013 at 10:43 AM

How can government meddling lead to “Marketplace Fairness “?

Rio Linda Refugee on June 9, 2013 at 11:02 AM

Coming from a state that has no sales (or income) tax, what bugs me is if i make a purchase, say from barnes and noble, here in NH and then mail it to California I pay no sales tax, but if I buy the same item online and have it mailed to California, even though the billing address is New Hampshire I get hit with California sales taxes…this is already happe ing…what kind of chaos if this bill passes with city and/or county taxes included?

As someone from a state who manages to have a very high quality of living without a sales/income tax, I really don’t feel like paying for other states money needs.

NHElle on June 9, 2013 at 11:04 AM

Any potential law that has the word “fair” in it will be unfair. George Orwell kinda nailed it a long time ago.

Ceteris Paribus on June 9, 2013 at 11:05 AM

This legislation used the excuse that online retailers have an unfair advantage over brick and mortar stores because the online retailers don’t have to collect sales taxes.

Not True.

Brick and mortar stores have a tremendous advantage:
1. They don’t have to charge shipping and handling.
2. Customers don’t have to wait.
3. Customers don’t have to pay to ship it back if a return is necessary.
4. Customers can see, hold, try on, etc. the merchandise before they buy.

The second issue here is the US Constitution. Article 2 Section 9 Paragraph 5 states: “No Tax or Duty shall be laid on Articles exported from any State. ”

If you ship your product across state lines it is unconstitutional for any tax or duty to be charged.

People who don’t pay sales taxes on merchandise they buy across state lines are not tax cheats, the states are the tax cheats for attempting to charge such a tax.

The Rock on June 9, 2013 at 11:10 AM

suckers…

equanimous on June 9, 2013 at 11:32 AM

My state has already adopted this. We don’t have a state income tax.

The Rock on June 9, 2013 at 11:10 AM

In TN, if you buy a car from an individual or out of state, you don’t pay sales tax at the time of purchase, but you DO pay TN sales tax when you register your car in TN.

ladyingray on June 9, 2013 at 12:09 PM

My state has already adopted this. We don’t have a state income tax.

The Rock on June 9, 2013 at 11:10 AM

In TN, if you buy a car from an individual or out of state, you don’t pay sales tax at the time of purchase, but you DO pay TN sales tax when you register your car in TN.

ladyingray on June 9, 2013 at 12:09 PM

Yeah, I moved to TX because of “low” taxes. Then I discovered TX’ exorbitant sales and property taxes. TN was another consideration prior to the move and it sounds like more of the same. They get you one way or another.

Ceteris Paribus on June 9, 2013 at 12:19 PM

market place fairness act

was this not the name in Atlas Shrugged for the law passed to steal more money from companies?

huntingmoose on June 9, 2013 at 12:25 PM

SBABG on June 9, 2013 at 12:33 AM

Minor point of order – it’s a tax collected for the state in which the purchaser resides, not a tax collected for the state in which the seller resides. Since it’s designed to be passed along to the seller, if it is truly a dollar-for-dollar replacement, there is no net change.

Of course, there are the issues of how the income tax relief happens (the Rats and RINOS will turn it into a massive welfare program if they allow it at all, while conservative Pubbies will do so at a lower ratio) and who buys how much out-of-state merchandise.

Steve Eggleston on June 9, 2013 at 12:26 PM

Perhaps we need a branch of the ‘taxed enough already’ (tea) party that advocates ‘taxed too much already’ (ttma).

Ceteris Paribus on June 9, 2013 at 12:35 PM

More taxes to fund more big government programs.

nazo311 on June 9, 2013 at 12:40 PM

The second issue here is the US Constitution. Article 2 I Section 9 Paragraph 5 states: “No Tax or Duty shall be laid on Articles exported from any State. ”

If you ship your product across state lines it is unconstitutional for any tax or duty to be charged.

People who don’t pay sales taxes on merchandise they buy across state lines are not tax cheats, the states are the tax cheats for attempting to charge such a tax.

The Rock on June 9, 2013 at 11:10 AM

That is a prohibition on Congress, just as every other part of Article I Section 9 is (BTW, there is no Article II Section 9). The relevant portion regarding the states is Article I Section 10 Paragraph 2:

No State shall, without the Consent of the Congress, lay any Imposts or Duties on Imports or Exports, except what may be absolutely necessary for executing its inspection Laws: and the net Produce of all Duties and Imposts, laid by any State on Imports or Exports, shall be for the Use of the Treasury of the United States; and all such Laws shall be subject to the Revision and Control of the Congress.

Where the Constitutional problem would lie with the Marketplace “Fairness” Act is where the money is going. It would first have to be filtered through DC, specifically the Treasury.

Moreover, it is functionally an import tax as it is being collected for the benefit of the state in which the purchaser lives. Of course, unlike an import tax, it collected from the exporter/seller, which is expected to pass it along to the importer/buyer.

How states have been getting around all that is by declaring the current scheme a “use” tax. Of course, that is also generally collected from (or more correctly, not reported by) the buyer.

Steve Eggleston on June 9, 2013 at 12:42 PM

Minor grammatical correction – “Of course, unlike an import tax, it would be collected from the exporter/seller…”.

Steve Eggleston on June 9, 2013 at 12:44 PM

market place fairness act

was this not the name in Atlas Shrugged for the law passed to steal more money from companies?

The Market Place Fairness Act steals money from individuals. The Orwellian word ‘fairness’ should be a clue to you. Big companies just pass the added cost on to us. Small companies will go bankrupt. That is the progressive/fascist plan. They want a few big companies that they can totally control. This is a part of how they want to totally control you. Don’t buy from Amazon (they support this). Buy from eBay (they oppose this).

Ceteris Paribus on June 9, 2013 at 12:49 PM

One other things to watch out for is that the Big Retail Lobby is behind this bill and they say it’s necessary, too, because they get “showroomed” (people look at products in their stores and then buy online). But it’s a big lie. both pricewaterhouse coopers and bizrate recently did scientifically conducted polls about this and found that only 2% of people have *ever* gone to look at a product in store to try it out and then bought it online. However, 23% of them say that they use online stores for all their research and then go into retail stores to purchase products (reverse showrooming). Don’t be misled, behind this bill is an attempt by Dick Durbin to lock up Big Retail as a democratic money source.

http://www.politico.com/story/2013/04/dick-durbin-looking-to-become-retailers-bff-90801.html

Conservatives are complete suckers if they support this.

SBABG on June 9, 2013 at 1:08 PM

Conservatives are complete suckers if they support this.

SBABG on June 9, 2013 at 1:08 PM

Yeah, an additional tax. Whoo hoo!

Ceteris Paribus on June 9, 2013 at 1:13 PM

Can anyone cite any instance where a government has reduced any existing tax based on the implementation of a new type of tax? Please don’t cite examples from tiny communities (they don’t count in the big picture).

Ceteris Paribus on June 9, 2013 at 1:21 PM

Can anyone cite any instance where a government has reduced any existing tax based on the implementation of a new type of tax? Please don’t cite examples from tiny communities (they don’t count in the big picture).

Ceteris Paribus on June 9, 2013 at 1:21 PM

We now live in an age where the pols can publicly say that they have lowered taxes…even if they hadn’t. Even if these lies came out of
Republicans’ mouths, and the Leftard press exposed them, who would know? Most Americans are comfortably numb and uninformed anyway.

Dr. ZhivBlago on June 9, 2013 at 2:31 PM

Ceteris Paribus on June 9, 2013 at 12:19 PM

property taxes aren’t that bad in this area…

ladyingray on June 9, 2013 at 2:38 PM

Big companies just pass the added cost on to us. Small companies will go bankrupt. That is the progressive/fascist plan. They want a few big companies that they can totally control. This is a part of how they want to totally control you. Don’t buy from Amazon (they support this). Buy from eBay (they oppose this).

You betcha! BiogGuv and BigComany what to corner the market on control and work together toward that end. The big companies like the plan because, of course,they hate competition and its a stumbling block to small companies, up and coming and threats to the likes of Amazon.com, which don’t want to potentially lose their place and profits to a now smaller business that might offer the next big thing in online innovation that could diminish Amazon.com, et al.

hawkeye54 on June 9, 2013 at 3:08 PM

You betcha! BiogGuv and BigComany what to corner the market on control and work together toward that end. The big companies like the plan because, of course,they hate competition and its a stumbling block to small companies, up and coming and threats to the likes of Amazon.com, which don’t want to potentially lose their place and profits to a now smaller business that might offer the next big thing in online innovation that could diminish Amazon.com, et al.

hawkeye54 on June 9, 2013 at 3:08 PM

Yes, the ongoing advance of crony capitalism is not helping the free enterprise system. In fact, I’d say that true free enterprise on a large scale has been slowly dying for at least 100 years.

There is a lot to say about large companies efficiently managing resources and reducing redundancy, but then you’re looking at Corporatism.

In the end, the version of the system that is best suited to work will be the one that takes over. We can apply Darwin here I think.

Dr. ZhivBlago on June 9, 2013 at 6:00 PM

It’s fewer taxes…

Nutstuyu on June 9, 2013 at 8:02 PM

It’s fewer taxes…

Nutstuyu on June 9, 2013 at 8:02 PM

Not exactly. The use taxes you don’t pay now would still apply to online/mail-order purchases from small outfits deemed by Congress as “too small” to be required to be every sales-taxing-authority’s middleman, as well as anything you buy from a low/no-sales-tax area and bring back home.

Steve Eggleston on June 9, 2013 at 8:17 PM

Wanna know why republicans are so eager to raise taxes on online sales transactions? It’s simply because most of the folks who shop online belong to the lower and middle class. Any measure to raise taxes on those groups is always welcome by the GOP.

HotAirLib on June 8, 2013 at 4:40 PM

You’re an idiot. 46 Dem’s, 21 Rep’s and 2 Ind’s voted for this. 22 Rep’s, 5 Dem’s voted NO with 2 Dem’s and 2 Rep’s not voting.

RickB on June 8, 2013 at 5:00 PM

Using HAL’s logic, I guess that means that more than TWICE AS MANY DEMOCRATS as Republicans hate the lower and middle class!

Libs are such odd un-natural creatures… they refuse to think, they repeat everything they’re fed, and they will happily follow their masters over a cliff.

dominigan on June 9, 2013 at 9:42 PM

In the end, the version of the system that is best suited to work will be the one that takes over. We can apply Darwin here I think.

Dr. ZhivBlago on June 9, 2013 at 6:00 PM

“Work” being interpreted as “game the system well enough to survive and grow”. Darwin may well apply, but to whose benefit?

AesopFan on June 9, 2013 at 9:49 PM

“If we’re going to start lumping Scott Walker in with tax and spend liberals, the argument has pretty much spun off the end of the silly scale anyway.”

I’m sure Scott Walker is telling the truth. But unless Wisconsin has elected Walker to be Supreme Ruler For Life, then his promise is moot once his term has ended. And then the next governor will raise taxes, because they can.

GalosGann on June 10, 2013 at 10:38 AM

Lamar Alexander is getting absolutely excoriated for voting for this atrocity. He was on thin ice to begin with but I have talked to people who have voted Republican in every election since they began voting and they aren’t going to pull the lever for him anymore.

I skipped pulling the lever for him myself the last time around and just didn’t vote in the senate race. TN can do better and deserves better.

You might not think it is bad to pass this while someone like Scott Walker is your governor, just like the Patriot Act wasn’t too bad while Bush was president. But once someone less trustworthy gets in office you are doomed. You NEVER cede power or resources to the government and expect anything good to come from it.

Voluble on June 10, 2013 at 11:40 AM

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