Green Room

The Marketplace Fairness Act and the even playing field

posted at 6:51 pm on March 21, 2012 by

We’ve written before about the Marketplace Fairness Act, which proposes to make it easier for states to collect sales tax for online sales. A serious conservative voice weighed in on the subject this week when Maine Gov. Paul LePage (R) declared his support for it.

LePage, a confrontational conservative governor who rode a wave of Tea Party support to victory in 2010, said the Marketplace Fairness Act would boost his state’s economy by helping traditional stores compete with online retailers.

“Unfortunately, a damaging inequity exists in the retail marketplace because some online retailers are not required to collect Maine sales tax, but Maine retailers are,” LePage wrote. “Not only does this hurt Maine businesses, it hurts the state. If the handcuffs on these small retailers were removed, they could compete on equal terms. They would generate mores sales, pay more sales tax to the state treasury, hire more local retailers and pump more money into local economies throughout Maine.”

As I’ve stated before, I was on the fence about this one for a long time. Even leaving aside the “taxes are bad” thing, anything which could impede online commerce just strikes a sour note with many of us. I had also considered the possibility that maybe this could be worked out at the state level, but a recent attempt in Illinois to do just that produced… nothing. But after sifting through all of the pros and cons, I have to admit that it may be time to just get it over with and do this.

The reason? Like it or not, fiscal conservatives must, at a minimum, believe in a level playing field. Equality of opportunity, not results… remember? After looking over the new Ryan Plan Part 2, I’m reminded that as we tighten our belt at the federal level, more and more things will need to be pushed back down to the states. Each of them will have to manage their budgets as they see best, and for the majority of them a state sales tax is part of their revenue stream. While it may be depressing, the feds need to provide each of them a chance to compete evenly.

The commerce clause is probably the most abused aspect of the constitution, having been used to push through laws ranging from gun control to donkeys in bathtubs. But this may be one of those rare cases where it can be fairly implied. If Washington can regulate commerce between the states, each of them should surely be able to collect legally approved sales taxes when such commerce takes place. Plus, states with no sales tax won’t have to worry about it anyway.

It may be time to just bite the bullet and pass this legislation.

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