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    Senate Hacks Free Market with Bipartisan Support

    Senate Hacks Free Market with Bipartisan Support

    As a citizen activist, I remember how thrilled we were with the results of the 2010 election, in which the Republicans made enormous gains that were suppose to protect the free market.

    Fast forward to 2013.  The Senate has just approved the “Marketplace Fairness Act“, legislation that will end tax-free online shopping.  The measure now goes to the House of Representatives for a vote, and lobbying both for and against the measure is expected to be intense.

    Sadly, it looks like  our congressional representatives will show the usual amount of backbone that we have come to expect:

    The bill now heads to the House of Representatives for possible revision. TechCrunch’s sources on Capitol Hill say that broad support in the Senate makes it difficult for House members to oppose the legislation, but it may be modified to increase the threshold for businesses who have to collect online taxes, from $1M in revenue to $10M

    One of the senators wanting to impose this fresh, new tax on the American public is Elizabeth Warren.  Warren, who campaigned as being for the “little guy”, has managed to screw over quite a few of them with this bill (which she even co-authored).

    But Warren never pretended to be a tax-hating, small government supporter.  Republicans who voted “yes” on the measure once proclaimed themselves to be free market warriors to gain Tea Party support.  Fire Andrea Mitchell names the 22 Republican senators who approved the legislation, and notes:

    The list includes your usual gang of RINOS. John McCain, Lindsey Graham, Susan Collins, John Thune, etc. The only surprises to me of the 22 Republicans who voted in favor of the Marketplace Fairness Act aka the Internet Sales tax were Deb Fischer and John Boozman. Rob Portman was also a bit of a surprise. The rest, not so much.

    Americans for Tax Reform has a fascinating generational breakdown of the vote: Every Republican (seven in total) aged 50 and under voted against the Marketplace Fairness Act; twelve of thirteen Republicans who are 55 and under voted against the Marketplace Fairness Act.

    Why did these Republicans vote to raise taxes? As always, follow the money: Amazon, which once vigorously fought against internet sales tax, recently switched its position.

    Now that the retailer has a massive edge in online retail, Amazon is fine with enforcing such a complex and expensive tax scheme. Nothing about the proposal has changed for Amazon specifically-they understand that this will be a very costly and burdensome proposal to obey. The difference now for Amazon is that its executives feel confident they can bear the costs while other smaller competitors cannot.

    Part of the reason Amazon will now be able to dominate the internet sales market, and quash small business competitors, may hinge on software the company has now patented that will efficiently deal with the complexities of interstate sales tax record keeping:

    Not only does Amazon now have an incentive to grow its business into other states but it has something that every other kid on the block wants: state and local sales tax infrastructure. It’s complicated. And expensive. And who has the money and resources to develop – and potentially market – that kind of technology? Why, Amazon, of course. And chances are, they’ve been counting on this, having already applied to patent technology (Patent 20060036504) to code items for sale for international tax purposes with many predicting a similar patent for state to state taxation waiting in the wings (they have an awfully vague patent application from April of this year allowing for price change based on customer which gives one pause). Wouldn’t it be awfully convenient if – just at the time that retailers needed this kind of technology – it turns out that exactly that was available under a patent from one of the bill’s biggest supporters?

    While I will encourage everyone to contact their congressional representative to reject the House version of this measure, I sense that the deals have already been struck. I will just note that, if California’s experiences are any indication, the revenues will be less than expected.

    Crony capitalist connections have been promoted, once more, by Washington politicos. I think many of my Republican friends will be looking at the 2014 slate of GOP candidates with this adage in mind: Fool me once, shame on you; fool me twice, shame on me.


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    Henry Hawkins | May 9, 2013 at 9:15 pm

    for this and other recent transgressions, Senator Burr NC just lost my support.

    In a similar situation on a smaller scale, we conservatives in NC were delighted our years of effort finally produced the big three: a GOP governor, state house, and state senate – for the first time in many, many decades. So what do we get? They are pushing a state tax reform bill which lowers individual and corporate state taxes in favor of new taxes on a hundred heretofore untaxed small business services such as tax preparers, masseuses, roofers, etc., calculated by most to be an overall tax increase.

    As a small business owner, this means that, against my will, I will be forced into serving as an unpaid tax collector for the state of NC, donating several hours per week of my time doing the accounting for them.


      ZooMaster in reply to Henry Hawkins. | May 9, 2013 at 9:37 pm

      Well, now, isn’t that interesting? Ohio is getting the exact same swill infusion. Lower income tax rates in exchange for a wildly expanded sales tax coverage. Who’s coordinating this outrage?

      Paul in reply to Henry Hawkins. | May 10, 2013 at 2:05 am

      You aren’t the only one, Henry. I left the Republican party after 33 years just last week for similar reasons.

      snopercod in reply to Henry Hawkins. | May 10, 2013 at 7:05 am

      “Fool me once, shame on you; fool me twice, shame on me” perfectly describes me relationship with Burr. Four years ago when I was with the Asheville Tea Party, the leaders refused to support him. Mostly they opposed him due to the massive amount of “earmarks” he stuck into various bills. I thought opposing a fairly good conservative because he had a weakness for pork-barrel spending – mostly on defense projects – was crazy and I argued with them.

      Now I feel like such a fool because the Tea Party was right and I was wrong. Not only did Burr vote to tax Internet sales, he was one of only sixteen republicans (lower case intentional) to vote to move the gun control bill forward in congress (ditto). Burr voted with other notable conservatives like Susan Collins, Lindsey Graham, and John McCain.

      He also voted to send twenty F-16s to the Muslim Brotherhood in Egypt, if you can believe that.

      Richard Burr has gone over to the dark side. I’m so done with him.

    My representation in the House in Washington is Joe Kennedy III.

    So… Not really gonna waste time on a phone call. Going to spend time dismantling the Democrat machine that keeps him in power.

    Come see:

    IrateNate | May 9, 2013 at 9:26 pm

    Honestly, who comes up with these names? “Marketplace Fairness” – are you kidding me? I shop online because of the convenience. Sure, most purchases are tax-free, but that is usually offset by shipping charges.

    Of course, I still have a choice where I shop. I can now drive all over town (in Houston, it takes 45 minutes to drive from one side to the other – on a Sunday morning) wasting my time and gas to find out they don’t have the model I wanted in stock, or the color, or size, etc.

    Or I can go online, find exactly what I want, compare prices for the best deal, and have it delivered to my front door.

    Gee, I wonder if that extra tax will put me back in the B&M stores…Fairness, shmairness – it’s all about the money, and everyone knows it.

      Paul in reply to IrateNate. | May 10, 2013 at 2:05 am

      Ayn Rand would be proud of the government’s ability to euphemize (euthanize?) their language in bills.

      snopercod in reply to IrateNate. | May 10, 2013 at 7:14 am

      I live out in the sticks and depend upon online shopping because the “stuff” I need isn’t available within an hour’s drive. With gas prices like they are, it literally costs me $20 in gas to drive to the “big city” and back. Just this week, for example, I needed some black electrical receptacles and wallplates for a project I’m working on. The nearest electrical distributor to me is probably 30 miles away and it’s doubtful they even stocked them. I ordered them online and had them on my doorstep in two days.

      The rich city folks in congress just don’t get it.

      Anytime that a piece of legislation has the words “fairness”, “protection”, “affordable”, “safety”, etc., in the title, you can bet the farm that it will have the opposite effect or no effect.

    GrumpyOne | May 9, 2013 at 9:28 pm

    Guv’ment programs for free stuff are the root cause of this evil of uncontrolled tax increases no matter what form they take.

    You can count true conservatives on less than three digits that have the public’s interest in mind which is not good. Only by replacing the offenders with true reformers will we see a turn of events.

    Could 2014 be a turning point???

    ZooMaster | May 9, 2013 at 9:40 pm

    One small quibble with Ms. Eastman’s original post, though. Internet shopping has not been free in Ohio. If the retailer does not collect the sales tax on an item, the Ohio buyer is responsible for reporting the transaction and paying the Ohio Use Tax on the transaction. Use tax rate = sales tax rate. Sigh… No freebies here!

      m87 in reply to ZooMaster. | May 10, 2013 at 12:27 am

      This is true in Texas as well. Of course, virtually nobody pays the use tax–probably because virtually no Texan knows there even is such a thing (and because Texas has no personal income tax, and so no annual return that could also ask about products purchased without paying sales tax).

      That said, I don’t see what’s so terrible about this bill. In effect, it’s federal deregulation to permit states to enforce their taxes–which enforcement has to this point been hindered by the so-called dormant commerce clause. If you don’t want internet sales by remote vendors taxed, lobby your state government–don’t rely on federal power to block states’ power in this regard.

        Sanddog in reply to m87. | May 10, 2013 at 12:44 am

        States can already enforce their taxes by going after their residents who shop online. That would be highly unpopular, not to mention costly, so instead, they beg the congress to allow them to force business owners from different states to become their unpaid tax collectors.

        Gee, you’d think the only reason for our existence is to remit taxes to the feds and the states.

          Henry Hawkins in reply to Sanddog. | May 10, 2013 at 4:18 pm

          That’s exactly right. If taxing the people directly is politically risky, you tax insurance companies, power companies, etc., who then have to pass on those costs to the people. The pols get the money, while the companies get the blame. It’s political gold.

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