AMNESTY. Later this morning at 11:30, Heritage President Jim DeMint will host a press conference with Robert Rector, whose 2007 study on the cost of amnesty played a major role in the debate over immigration in Congress. The press conference will be streamed live. You can watch it here.
Rep. Jim Bridenstine (R-OK) has not only stated that he opposes the so-called Marketplace Fairness Act, but he has been vocal about his strong opposition to the internet sales tax and is working to spread the word. It’s essential that conservatives continue to get the word out about the internet sales tax on Twitter, Facebook, and other social media. Below is the video he made to explain why the internet sales tax is so harmful.
This tax will harm competition, burden small businesses, and punish young people where they do most of their commerce. He concludes that anybody that believes in the fairness of the marketplace should not support the wrongly named Marketplace Fairness Act.
IST. Today at 11 a.m. ET, Heritage’s Google + Hangout will cover the topic of the internet sales tax. Businessman and owner of Peace Frogs, Catesby Jones, will discuss in concrete terms how his business will be adversely affected by the internet sales tax:
“This is pure and simple a special interests bill,”Jones told the Daily Press in Hampton Roads, VA. “Let’s say I have to hire one or two people to handle the paperwork. That’s a huge percentage of my sales. This is going to be a huge barrier to entry for new businesses. They’re not going to be able to afford to deal with it. This is solely to benefit the large corporations.”
Of course, small businesses like Peace Frogs won’t be the only ones impacted. Consumers could soon be paying a whole lot more for products purchased online. The bill, which is anything but fair, would force retailers to act as tax collectors for states in which they have no voice. The tax hike on consumers could total billions of dollars annually.
“People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices,” Adam Smith, Wealth of Nations
One of the main justifications made by the proponents of the so-called Marketplace Fairness Act (S. 743) is that it remedies an unfair tax advantage that online businesses enjoy over their brick-and-mortar counterparts under current law. As a result, S. 743 has enjoyed strong support from many small retailers across the country. However, the legislation will prove to be a Trojan horse to the competitive interests of small retailers. Here is why:
- Boon to Big Business: Amazon is a key supporter of S. 743. As an online behemoth, why would Amazon support a bill that is designed to ensure that more taxes are collected for online purchases? Perhaps for the same reason Big Pharma supported Obamacare despite its inclusion of a tax on brand-name pharmaceuticals: because it means more business for them. Amazon now has a physical presence (a “nexus”) in most states, as a result of their distribution system, and is thus required to collect the sales taxes on transactions within those jurisdictions. Amazon is seeking to displace brick-and-mortar retailers by offering same day delivery, but this requires them to have a nexus in each state, meaning they will eventually have to collect sales taxes on almost all transactions. So to keep up with or eliminate their smaller online competitors who do not have a nexus in each state and therefore do not have to collect taxes on most transactions, Amazon has reversed course and thrown its support towards S. 743. Like any reasonably competitive business, Amazon’s support for S. 743 is rooted in its desires to drive out its competition (online and brick-and-mortar alike), rather than to lift them up.
Kudos to Rep. Jim Bridenstine (R-OK), who is taking action in Washington to protect small online businesses from the negative effects of the so-called Marketplace Fairness Act. In a state like Oklahoma, this is a big deal. Rep. Bridenstine explains:
The Marketplace Fairness Act is federal legislation that empowers states to reach across their borders to compel internet businesses in other states to collect and remit taxes no matter where the online retailer is located. This would enable my state, Oklahoma, to charge sales tax (in some localities as much as 10%) to a business in New Hampshire when an Oklahoman buys something online from the New Hampshire business. The New Hampshire business would have to collect and remit the tax to Oklahoma, even though New Hampshire has a sales tax rate of 0.0%.
This bill, he states, would have “multiple unintended consequences.”