The Internet sales tax bill passed in the Senate on May 6 by a vote of 69 to 27. The bill’s fate is now in the hands of the House. This tax would not promote “fairness” as its official name – the Marketplace Fairness Act – suggests. There is bipartisan opposition to the bill, but unfortunately, there is also bipartisan support for it. Ever in favor of more money coming into government coffers, President Obama has promised to sign the bill into law if it makes it to his desk.
EBay and Amazon.com – both internet giants – are split on the issue, with the former in opposition and the latter in support of the tax. They have been weighing in on the debate since before the Senate passed the bill, and continued to make remarks over Memorial Day weekend:
“This legislation … is being called the Marketplace Fairness Act, but I strongly believe it creates an unfair tax burden for small online businesses,” eBay CEO John Donahoe wrote in an email to eBay account holders on Sunday.
So why is this so contentious an issue?
The truth is, it’s really not all that confusing, and if so many people weren’t interested in more taxes and less competition, it wouldn’t be so contentious.
Heritage explains in very clear terms that the Internet tax bill would harm online businesses and consumers. Right off the bat, what must be understood is that brick-and-mortar stores are not at an “unfair” disadvantage. Comparing them to online businesses is like comparing apples and oranges.
Each successive day, the stories of the intimidation of conservative grassroots groups by the Internal Revenue Service (IRS) grow more bizarre.
Yahoo reports the IRS swiftly approved one conservative group’s non-profit application after the group applied with a “liberal-sounding name.” Breitbart revealed the IRS also targeted a “conservative Hispanic outreach group that educates Spanish-speaking and English-speaking Hispanic communities on the US Constitution.” ABC News quotes an Ohio woman who said the IRS “wanted to know what materials we had discussed at any of our book studies.”
On his Facebook page, Rep. Steve Womack (R-AR) called it a “serious abuse of government.” The only way to limit the abusive nature of government is to limit the size and scope of government.
Unfortunately, the opposite is happening under President Obama’s watch. As Heritage’s Christopher Jacobs points out, “At a time when doubts are growing about the IRS’s politically biased behavior, Obamacare grants the agency massive new authority to implement its complex and bureaucratic regime.”
Obamacare is not the only power grab for tax bureaucrats, though. Missed amongst the headlines is the so-called Marketplace Fairness Act, more commonly known as the Internet sales tax, would grant sweeping authority to tax bureaucrats in all 50 states.
Advocates of the so-called Marketplace Fairness Act (MFA), more commonly known as the Internet sales tax, claim that it would “level the playing field” for “mom-and-pop, brick-and-mortar stores.” They claim that online retailers have an “unfair” advantage and state:
If Congress is serious about supporting small businesses and creating jobs on Main Street, they should pass the Marketplace Fairness Act without hesitation.
But it is not really the small brick-and-mortar businesses that would benefit from the Internet sales tax. In fact, as we have noted, one report indicates, “physical stores remain the centerpiece of the purchase journey for many categories.” The report indicates that in 9 out of 11 categories, the “majority of consumers use physical stores for both researching and purchasing the products they want to buy.”
The Motley Fool recently posted the video below in which contributor Travis Hoium explains that big businesses like Best Buy – that sells a lot of TVs or high-end electronics – are the ones that will really benefit from the Marketplace Fairness Act and the new tax scheme it would create. In fact, Hoium says Best Buy will be the biggest winner of the Internet sales tax.
Last week, the Senate approved the so-called Marketplace Fairness Act, more commonly known as the Internet sales tax. Proponents tried to paint the vote as evidence of overwhelming support for the bill. That is simply not the case, though. As you dig deeper in to the numbers, it becomes apparent the push from big government and big government special interests was losing momentum.
On the final vote, a majority of Republicans voted against the Internet sales tax, splitting 22-21. Furthermore, the appearance of an age demographic split amongst supporters and opponents signals an uphill battle in the younger, more conservative House.
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. In the House, 79 of the 233 Republicans are age 50 or under.
Twelve of thirteen Senate Republicans age 55 and under voted against the Marketplace Fairness Act. In the House, there are 118 Republicans – more than half the conference – are age 55 or under.