Could the Marketplace Fairness Act actually work in Rhode Island?

posted at 1:01 pm on January 18, 2014 by Jazz Shaw

Last edited at 1:30 ET since the state in question was Rhode Island, not Maryland, and I apparently need more coffee in the mornings. Jazz

Last year we had a series of hotly debated discussions regarding the possible implementation of the Marketplace Fairness Act, which could result in states collecting sales tax on internet sales. These were highly informative (including for yours truly) and highlighted a lot of potential problems with the legislation, as well as the benefits touted by supporters. One of the seemingly obvious objections to the bill came in response to a claim widely touted by those supporting it. It was said that allowing states to recoup allegedly lost revenue from internet sales would free up space in state budgets to lower – or at least not raise – other taxes and spur growth. The obvious response was along the lines of saying that this was a lovely dream, but it would require state governments to actually carry through and do it rather than simply pocketing the cash in the state’s coffers and find new ways to spend it.

I certainly had to agree that this was a good point, particularly given the record most government entities have racked up on spending. But in Rhode Island, there may be a glimmer of hope that this could actually work.

Pointing to no increases in “any broad based taxes” as one of the highlights of his FY15 budget proposal, Governor Chafee touted that “when Congress enacts the Marketplace Fairness Act”, the budget directs revenue to reduce the State’s corporate tax to 6.0 percent, and eliminate the sales tax on non-manufacturers’ gas and electricity.

Providence City Council President – and potential Mayoral candidate Michael Solomon, said “I think the Governor’s commitment to education and increase in funding is good not only for Providence, and the whole state. However, I would have liked to see more aid to city and towns, take the burden off property owners; tax relief. It was nice to see his commitment to eliminating the sales tax on commercial businesses for gas and electric.”

Of course, this is just the Governor’s proposed budget. It holds no real power unless the legislature decides to take up the matter and pass it into law. But assuming it actually happens, it would represent at least a minor victory for people arguing in favor of the MFA.

The Governor’s proposal also sparked some interesting responses from opponents, leading to the unusual situation of having Democrats arguing not about how much to raise taxes, but which ones to cut.

Rep. Jan P. Malik, D-Warren, who chairs a commission that is looking at reducing or eliminating the state sales tax, said he was disappointed that Chafee focused instead on the corporate tax.

The state chapter of the National Federation of Independent Businesses said it, too, was “mostly disappointed” by the address.

“Governor Chafee’s proposals nibble around the edges without ever addressing the real problems in this state and that’s disappointing to the small-business owners who were hoping for some direction,” said Bill Vernon, state director of the National Federation of Independent Business.

At first glance there’s something a bit ironic about wanting to eliminate the state sales tax by collecting internet sales taxes, but seeing the debate focus on which taxes to cut should be a positive sign. And it’s a debate worth having in Rhode Island. Cutting taxes for residents is undoubtedly a popular idea, and it puts more money in people’s pockets to spend and invest, boosting the economy. But reducing taxes on businesses spurs overall growth and hopefully leads to more jobs and additional employers being attracted to the state.

Either way it’s a win, but we’ll have to wait and see if they carry through on these plans. And that’s assuming that the MFA is signed into law in the first place.


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Maryland?

palarson on January 18, 2014 at 1:06 PM

Ummmm…..wrong state, Jazz.

rockmom on January 18, 2014 at 1:08 PM

“Fair” and “Fairness” need to be abolished from the first world lexicon pronto.

Murphy9 on January 18, 2014 at 1:09 PM

Could a tax actually work? What does that mean? Could the government taking (more) money from citizens “work”?

Oh, Jazz… you just wouldnt be “you” without trying to justify a new tax somehow.

Jeddite on January 18, 2014 at 1:13 PM

Last time I checked a map, Providence was in Rhode Island.

Gator Country on January 18, 2014 at 1:14 PM

Since we’ve referenced the wrong state, this could so not work in Maryland where Democrats have a never ending list of “unmet needs.”

Douger on January 18, 2014 at 1:17 PM

Yeah, fix all the references to Maryland. Although nothing in Maryland would work.

22044 on January 18, 2014 at 1:17 PM

It will be mighty cold in hell when a democrat controlled entity cuts taxes.

jukin3 on January 18, 2014 at 1:19 PM

From the state that taxes it’s citizens on rain water collection

RdLake on January 18, 2014 at 1:19 PM

This is an article about Rhode Island, not Maryland.

Jim_B on January 18, 2014 at 1:20 PM

It will be mighty cold in hell when a democrat controlled entity cuts taxes.

It’ll be an even colder day when Maryland Democrats won’t spend every penny available.

Douger on January 18, 2014 at 1:21 PM

Why are you for raising taxes Jazz? I point you to Neil Cavutos monologue about the insanity of giving these people more and more money.

jawkneemusic on January 18, 2014 at 1:22 PM

OT – superb read from kingsjester

Schadenfreude on January 18, 2014 at 1:23 PM

BTW, Jazz, are you somehow related to Senator Mike Enzi (R-WY)? You sure seem to enjoy trying to justify the Marketplace “Fairness” Act any way you can.

Serious question, please respond.

Jeddite on January 18, 2014 at 1:28 PM

Oh, sure. You’re all really helpful pointing out that it’s Rhode Island now. Where were you at 5:30 this morning when I was trying to read about it?

Fixed.

/oops

Jazz Shaw on January 18, 2014 at 1:33 PM

Jeddite on January 18, 2014 at 1:28 PM

Since it’s been covered endlessly (and linked here) that I’m not “justifying” or supporting it, but found it worth looking into, we’re not going to go through it all again here. Just read the earlier articles.

Jazz Shaw on January 18, 2014 at 1:36 PM

Since it’s been covered endlessly (and linked here) that I’m not “justifying” or supporting it, but found it worth looking into, we’re not going to go through it all again here. Just read the earlier articles.

Jazz Shaw on January 18, 2014 at 1:36 PM

I have, Jazz, that’s how I knew to make a comment that you’re the one member of the HotGas staff that seems to really, really, really like the Marketplace “Fairness” Act.

Jeddite on January 18, 2014 at 1:40 PM

I thought to myself, “that sure looks like the moron known as Lincoln Chaffee.”

Jazz, to paraphrase Sarah Palin, “If you didn’t have low standards, you wouldn’t have any at all.”

While Salem keeps you on is a miracle; perhaps it’s just to insult HA readers.

bw222 on January 18, 2014 at 1:47 PM

OT… but it is her birthday.

Is Obama marriage on the rocks? Ugly fights after Mandela funeral selfie, and rumors of Presidential affair(s)

thatsafactjack on January 18, 2014 at 1:56 PM

They’re getting a divorce sometime in 2017.
Great link, “Jack”. :)

22044 on January 18, 2014 at 2:03 PM

22044 on January 18, 2014 at 2:03 PM

Good afternoon, 22044. :)

Thanks. Just doing my bit. I think a Presidential divorce would seriously impact that nation, and the elections. Hillary, for instance, would be seriously impacted by such a revelation. :)

thatsafactjack on January 18, 2014 at 2:07 PM

So, the last time the state sales tax in Rhode Island was raised, was the stated reason “lack of revenue due to the inability to collect tax on internet sales”?

Just a guess, but I have my doubts.

Furthermore, a new revenue source available to state legislators translating into reduced taxes elsewhere for residents would require… wait… I’ve heard of it. I think it’s called… “fiscal restraint”, or “fiscal responsibility”. Something like that. I think it’s Latin. Or maybe Greek. No. Definitely not Greek. Anyway. I think it’s a thing, but I don’t think it’s germane to these United States.

BKeyser on January 18, 2014 at 2:19 PM

I don’t get it, why would Rhode Island want to reduce taxes when it could use the extra revenue to guarantee $40 million loans to video game companies instead?

Lawdawg86 on January 18, 2014 at 2:19 PM

OT… but it is her birthday.

Is Obama marriage on the rocks? Ugly fights after Mandela funeral selfie, and rumors of Presidential affair(s)

thatsafactjack on January 18, 2014 at 1:56 PM

ABC suggests you do something for Moochelle today:

My suggestions:

1) Travel to Hawaii for a month on someone’s stolen credit card

2) Go over to your neighbor’s house and tell them what they should be feeding their kids for dinner tonight

And, remember those NSA people spying on you …. they are your friends and neighbors.

bw222 on January 18, 2014 at 2:23 PM

Senator Jeff Sessions: The House Is The Last Line Of Defense For American Workers And The House Must Ignore The Big Business Amnesty Lobbies

THIS is why the tweaks to problems of labor and jobs mean nothing until congress forces this administration to ENFORCE THE LAW and STAND UP FOR AMERICAN CITIZENS AND LEGAL IMMIGRANTS in the face of big business donors and pro-amnesty advocates conniving.

Note that Senator Sessions said “… their plan “doubles the flow of immigrant workers, adds another 30 million new permanent residents to compete for every job, and guarantees illegal immigration will continue permanently in the future.”

Don’t be fooled. Amnesty and doubling or tripling legal immigration ( visas for foreign labor) would devastate what remains of America’s working class.

208 CEO’s demand AMNESTY and increased visas for “lower skilled labor”

Deal with this… then we can talk about ‘Marketplace Fairness’.

thatsafactjack on January 18, 2014 at 2:25 PM

OT… but it is her birthday.

Is Obama marriage on the rocks? Ugly fights after Mandela funeral selfie, and rumors of Presidential affair(s)

thatsafactjack on January 18, 2014 at 1:56 PM

On behalf of all the HA posters, thank you for hijacking this absolutely boring thread.

bw222 on January 18, 2014 at 2:26 PM

bw222 on January 18, 2014 at 2:23 PM

I think she’s going to have plastic surgery/botox/restalyne before she leaves the White House and stick us with the majority of the tab for that, too.

When a woman in her position says “I wouldn’t rule out plastic surgery and botox. A woman should be able to do anything she wants.” You can pretty much bet she’s already had some work done and plans to have more.

thatsafactjack on January 18, 2014 at 2:28 PM

On behalf of all the HA posters, thank you for hijacking this absolutely boring thread.

bw222 on January 18, 2014 at 2:26 PM

I literally lol’d at that :)

22044 on January 18, 2014 at 2:30 PM

Before I read this post, can someone tell me if its Jazz’ usual “Lets Raise Taxes!!” Editorial?

If it is, I’d like to ask why he’s posting the same lame BS here month after month and when is he going to stop?

MTF on January 18, 2014 at 2:31 PM

bw222 on January 18, 2014 at 2:26 PM

lol!

thatsafactjack on January 18, 2014 at 2:31 PM

If the stooges in DC pass this Marketplace bill, will we get some future tax cuts in 2024 to ease the pain. Why sure we will.

Kissmygrits on January 18, 2014 at 2:47 PM

Either way it’s a win, but we’ll have to wait and see if they carry through on these plans. And that’s assuming that the MFA is signed into law in the first place.

Bait and switch Jazz, Bait and switch.

WryTrvllr on January 18, 2014 at 2:51 PM

Either way it’s a win, but we’ll have to wait and see if they carry through on these plans. And that’s assuming that the MFA is signed into law in the first place.

Bait and switch Jazz, Bait and switch.

WryTrvllr on January 18, 2014 at 2:51 PM

1986 Reagan amnesty for 3 million.

“We promise, just this one time, then we enforce”

Whatever. Bait and Switch 2 is amnesty, Bait and Switch 3 is Internet taxes.

Difficultas_Est_Imperium on January 18, 2014 at 3:50 PM

If I am taxed on something that I wasn’t taxed on before, it’s raising taxes on me. The federal government has NO business whatsoever telling businesses which states they have to collect taxes for. Period. To even be discussing this is just putting lipstick on a pig.

gryphon202 on January 18, 2014 at 5:29 PM

OT… but it is her birthday.

Is Obama marriage on the rocks? Ugly fights after Mandela funeral selfie, and rumors of Presidential affair(s)

thatsafactjack on January 18, 2014 at 1:56 PM

…thanks Jackie…good link!

KOOLAID2 on January 18, 2014 at 7:09 PM

Be it enacted that each of the several states shall send on the 2nd Tuesday of each January a tribute of 6% of gross state revenue of the previous fiscal year to the Treasury department. No apportionment of the tribute between the states shall be made.

BobMbx on January 18, 2014 at 8:34 PM

States in which these big internet sellers are located should get busy making the case that if anyone is due the sales tax it is them.

After all, if I make a purchase in another state I pay their sales tax rather than that of my own so why should the same rule not apply for internet purchases?

Nomas on January 19, 2014 at 8:55 AM

Keep government out of the internet. Once they get foot in the door, the door is open.

Wade on January 19, 2014 at 11:58 AM

What is Martinez’ position on illegal alien amnesty/legalization? If she is strong against amnesty, I would look very favorably on her.

cdog0613 on January 20, 2014 at 5:31 PM

What is Martinez’ position on illegal alien amnesty/legalization? If she is strong against amnesty, I would look very favorably on her.

saasxcascas

cdog0613 on January 20, 2014 at 5:32 PM

What is Martinez’ position on illegal alien amnesty/legalization? If she is strong against amnesty, I would look very favorably on her.

She’s wisely hedged on it. But something tells me her ultimate stance will not be satisfactory.

http://hotair.com/archives/2013/02/07/susana-martinez-theres-a-lot-of-space-between-amnesty-and-deportations/

cdog0613 on January 20, 2014 at 5:34 PM

What is Martinez’ position on illegal alien amnesty/legalization? If she is strong against amnesty, I would look very favorably on her.

She’s wisely hedged on it. But something tells me her ultimate stance will not be satisfactory.

http://hotair.com/archives/2013/02/07/susana-martinez-theres-a-lot-of-space-between-amnesty-and-deportations/

cdog0613 on January 20, 2014 at 5:34 PM