By now you have heard about how the Senate has approved a measure to consider debate on a new Internet Sales tax (aka the Marketplace Fairness Act) that would effect all online stores. Some companies, such as Amazon are already collecting this tax, as they have a physical or nexus presence in most of the 50 states, something we have already seen with most very large internet companies.
The basic argument these Pro-Tax supporters are using is that when purchasing out of state, internet companies have an unfair advantage over brick and mortar stores because they do not charge state sales tax, and therefore can offer the same product for less. State law makers also look at this as "lost tax revenue".
The Marketplace Fairness Act proposal is an absolutely terrible idea for the following reasons:
1. Compared to traditional Mail-Order that we have known and loved as a country for 100 years, this IS a new tax. Yes, there was a time there were no state sales taxes at all. Do not believe any senator when he or she says "this is not a new tax". It is, they are just do not respect our intelligences enough to realize we know when we are being lied to.
2. It is a logistical nightmare. Small internet businesses do not have the time or resources to follow, collect, report and pay, 50 different state tax laws. It puts an unfair burden on those who run internet businesses.
3. For some reason, no one hears the online retailers complaining about brick and mortar stores having an unfair advantage of being local and convenient. An equally compelling argument can be made that because they have a local, physical presence, that they have an unfair advantage for the matters of immediacy. If you need something right away, you aren't going to buy it on the internet. The government needs to stay out of free markets and just let businesses compete.
This is the government meddling with free markets, something that is becoming more and more common in our day. This concept in and of itself is the erosion of freedom.
4. Some states do not have a state sales tax. This would require businesses in those states to track, collect, report and pay sales taxes for out of state orders. Completely ridiculous idea.
5. There is a vast majority of items for sale on the internet that are not and could not be available in physical stores. Internet Downloads for example. Why in the world should virtual product vendors be punished for the "fair equality" of physical store owners who do not even carry compatible or similar products? ( Greed)
6. What is to happen now on out of country purchases? How many of those countries are going to be reporting state sales taxes to each of the US states require it? Zero. What the new bill essentially does is gives an unfair advantages to foreign on-line stores, as they will not be collecting these fees.
In the end, this is just politicians slowly chipping away at our freedoms and trying to regulate free markets (a terrible concept in itself).
Remember when Obamacare was "not a tax" and the Supreme Court then concluded "it is a tax" and now we are all starting to pay for it. Not only is the Marketplace Fairness Act gaining traction, it will probably pass in the Senate, and the President has already endorsed it. If it passes the Senate, the only the House will stand in the way of this terrible bill from being passed.
Let your Senators and Representatives know you are against the Marketplace Fairness Act.
Forbes Article on Marketplace Fairness Act