Needham and Cruz on Internet Tax 2

An Internet Tax Would Anger Americans and Alienate Young People

Last week, a gathering of conservative lawmakers and conservative groups including Heritage Action’s CEO Michael Needham discussed why the misnamed Marketplace Fairness Act, better known as the Internet sales tax (IST), is a terrible idea and should not even be considered by the House.  This conservative position was amplified by a fresh Gallup poll showing an overwhelming majority of Americans (57% to 39%) would vote against an Internet sales tax.

As you dig into that data even further, you quickly notice 18-29 years old are against the IST by a margin of 73-27. Gallup notes in their analysis that “If Republicans in the House oppose the Internet sales tax bill, that may help the GOP’s appeal to younger Americans, a key demographic in the party’s plan to build support before the 2014 and 2016 elections.”

At the press conference on Tuesday, our CEO Mike Needham and Senator Ted Cruz (R-TX) spent time highlighting a generational gap that Heritage Action noted from the Senate approval of the Internet sales tax in May.  All seven Republican Senators age 50 and under voted against the Marketplace Fairness Act: Kelly Ayotte (R-NH), 44; Ted Cruz (R-TX), 42; Jeff Flake (R-AZ), 50; Mike Lee (R-UT), 41; Rand Paul (R-KY), 50; Marco Rubio (R-FL), 41; Tim Scott (R-SC), 47. 

Also, it should be noted that more Republicans in the Senate voted against the IST, and there was a stark difference in their average Heritage Action scores.  Proponents of the IST score an average of 57% versus opponents who scored an average of 80%. A final note is that twelve of thirteen Senate Republicans age 55 and under voted against the IST. In the House, there are 118 Republicans – more than half the conference – are age 55 or under. Of the 66 current cosponsors of the Marketplace Fairness Act in the House, 24 of them are Republicans with a Heritage Action scorecard average of 57%.

Senator Cruz noted in his remarks after the press conference a similar point:

“Every single Republican under the age of 50 voted against this bill in the U.S. Senate, and I think it has a great deal to do with being part of the Internet age. There is a lot of discussion about social media…and you look at the younger elected officials, who this isn’t, you know I remember a former elected official who referred to the internet as the ‘internets.’ You know, there is a breakdown of those who appreciate the incredible freedom, the entrepreneurial oasis that the internet represents and I think we need to give a special solicitude – we should not be messing with the internet. The idea that a bunch of politicians, Democrats and Republicans, would jump in bed with a bunch of corporate lobbyists in Washington and all get together to put new taxes new burdens on the internet and shut down small businesses I think is absolutely crazy.” 

Furthermore, as The Heritage Foundation’s James Gattuso noted in an in-depth piece on the Internet sales tax this week, “The MFA would violate the principles of federalism, imposing ‘regulation without representation,’ because retailers would be subject to burdens imposed by states in which they have no presence or political voice.”

These details and more should give members of the House of Representatives long pause before considering any action that would allow state tax authorities to reach across state lines to require online retailers to collect sales taxes for them.

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