We’re all for fairness, right? So who could possibly be against something called the “Marketplace Fairness Act”? If I’m in favor of free markets and everybody playing by the same rules, should I be for such a bill? Unfortunately, many small businesses have bought into the notion that the new internet tax bill before the US Senate will somehow help them by “evening the playing field”; forcing online retailers to collect sales tax the same way brick and mortar stores do. I’m curious how many of those supportive of the bill have actually read it.
Online retailers are much like the catalog sellers of the past. Back in 1992, in the Supreme Court case of Quill vs North Dakota, the Supreme Court rightly found that a state cannot force out-of-state catalog businesses to collect sales taxes for them. Although the federal government has the power to “regulate” interstate commerce, the commerce clause was put in place to keep states from applying taxes and regulations on out of state businesses. The Marketplace Fairness Act does just that; requiring retailers to collect taxes for states they do not operate in, clearly violating state sovereignty.
Far from evening the playing field, this bill places an enormous burden on small online retailers. The bill is aimed at internet giants like Amazon, but the majority of retailers are NOT Amazon, and can not easily absorb the costs associated with collecting taxes for 10,000 different taxing jurisdictions. The law is simply unworkable, and the costs are unimaginable for small online sellers. A woman who sells arts and crafts online should not be put out of business so that “brick and mortar” stores can compete with Amazon.
The tax is not just laid on consumers. It costs businesses a lot of money to worry about paying taxes; hiring accountants, lawyers, etc. and going through different audits for each of the 10,000 taxing jurisdictions. Come on! The sales tax is more than a tax on consumers; it is a tax on businesses. In this case, out of state businesses – and that is called taxation without representation.
In fact, the unknown reason behind this bill is not that it will help small brick and mortar stores compete with Amazon, but that it will hurt small online retailers and help Amazon. That’s right – guess who is supporting the bill – Amazon! That is because Amazon can absorb the costs associated with the Marketplace Fairness Act, but their smaller online competitors can’t.
The bill will likely not help traditional sellers anyway. If brick and mortar stores believe that the sole reason people shop online is because of sales taxes (or the lack thereof), they need a reality check. Better selection – better prices – more convenient. Unfortunately, many small business owners favor this bill because they think it will “hurt their competition”. In reality, it doesn’t, and will help big online retailers push small online retailers out of the market. The way to win the race isn’t by slowing the other guy down; its by speeding yourself up. Passing laws to hurt the competition is called crony capitalism, folks.
Perhaps the worst thing about this bill is all the people only looking out for themselves. Regardless of who the bill “helps” or “hurts”, (because it is clear that it is anything but “fair”), first ask – does this bill help the country as a whole? Is this a good thing for business, or a bad thing? Will this help government grow, or shrink? Will people end up paying more in taxes or less, and have less disposable income or more? The point of having different taxes for different places is competition – but this system does away with that. If states want to compete with online sales, they should do away with their sales tax altogether.
There is a supposed $11 billion in sales taxes left out there uncollected because of internet sales. When this bill becomes law, as it likely will, that means that $11 billion will leave the private sector, and end up in the hands of politicians and bureaucrats, where it will be spent much less wisely than it would have been otherwise. Call it fairness, but this bill forces consumers to pay, which means less money all around. When the government takes a piece of the pie, it hurts online and traditional retailers alike.
The bill is one more way that Congress can avoid actual tax reform. By pandering to various groups, in this case the National Retail Federation, politicians make promises and try to help this guy or that guy. The right thing to do is lower taxes all around, let people keep more of their money, and lower the burden of doing business. Unlike the Marketplace Fairness Act, this would help ALL businesses, regardless of where their customers find them.
Economist Thomas Sowell once said, “No one will really understand politics until they understand that politicians are not trying to solve our problems. They are trying to solve their own problems – of which getting elected and re-elected are number one and number two. Whatever is number three is far behind.” It is time to recognize this and throw crummy politicians our of office, and especially out of powerful positions – Speaker of the House, for instance.
But Sowell isn’t alone. There are countless great conservative, libertarian, and classical liberal minds that have gone from one end of the spectrum to the other – John Locke, Friedrich Hayek, and (if I’m not mistaken) even Adam Smith, just to name a few. The transformation these men went through can be inspirational. A man who once thought the only way to achieve prosperity was through authoritarian rule (Locke) is now considered the father of classical liberalism.
At the same time, Federal Reserve Chairman, Ben Bernanke, is set to keep up with QE3 (Quantitative Easing 3) until unemployment recedes to 6.5%. This means he’ll be printing $85 billion each month, used to buy up government bonds, and flood the market with cheap money. The problem, of course, is that printing money actually does make the rest of money cheaper – when you have more of something it is worth less. If someone said that Bernanke was printing a trillion dollars a year, there would be a scare, but because we divided it up by 12 months – to a measly $85 billion – it doesn’t sound so bad. Continue on, Benny.
This will be an interesting week in the realm of “same sex marriage” and “marriage equality” as the Supreme Court takes up two major cases. First – California’s Proposition 8, which defines marriage as the union of one man and one woman, and then the Defense of Marriage Act (DOMA) which restricts federal benefits for same-sex couples legally married in their respective states. I haven’t written much on this issue, and with good reason – its a complicated one, and the more I think about it, the more I feel like saying, “Why is the federal government even involved in this issue?”
Two weeks ago I was proud as I watched bits and pieces of Rand Paul’s 13 hour filibuster. There was a live video feed on Fox News much of the day, #StandwithRand and #RandPaul2016 tweets were popping up all over Twitter, and Facebook was ripe with Rand Paul quotes from the Senate floor. Apparently, all this earned Rand some national attention. Charles Krauthammer said that because of the filibuster Rand would be remembered. He was officially on the big stage.
They say that you should never discuss politics or religion in polite company. I’m not sure who said this, or exactly what they meant by it. (I know there’s an old Peanuts special that said something along those lines, though. The Great Pumpkin, I believe it was.) Why even have religion or politics if not to discuss? I love learning about politics and religion, but spreading the message is the true joy in these areas. I know when to hold my tongue and when to let loose, and it can occur in polite or less-than-polite company.
The Republican party, currently America’s “opposition” party, has an interesting journey ahead of it. The GOP is at a crossroads. One path take the party towards the Republican establishment; moderate Washington elites. The other takes the party to middle America; the Tea Party, conservaties, and libertarians. One journey is set to be led by George W Bush advisor, Karl Rove. The other is to be led by no one. Just as there is no “leader” of the Tea Party, there is no leader of the movement to kick GOP pretty-boys out of office and replace them with constitutional conservatives.
The Republicans who opposed Reagan in the 1976 and 1980 Republican primaries are the same ones who oppose Tea Party candidates today. The “Grand Old Party” is just that – old. The American people are seeking something different from Barack Obama, but Mitt Romney didn’t really offer that. He made no play for evangelical voters. He made no play for Tea Party voters. He made no play for gun owners. Romney’s message was simple – Obama is failing on the economy, and I’m a rich businessman, so I must know more than he does. Is this an emotional argument that is going to get people out to vote in droves? The polls say tell the story.
Because these Americans have something at stake (their guns) they tend to be more informed about the issue, and they tend to be more involved with the issue. The NRA, America’s largest gun-rights organization, has gained hundreds of thousands of members in the last couple of months. These members are both young and old, rich and poor, black and white; but they all have one thing in common – the value they place in the 2nd amendment. Just last weekend, pro-gun rallies were held at