The Marketplace Fairness Act Is Anything But Fair to the Taxpayer
The internet tax is formally named the “Marketplace Fairness Act”. The only entity for whom the fairness applies is the government who wrote the legislation.
Proponents of the bill continue to cite a study done last year by the National Conference of State Legislatures. This body politic estimated that $23.3 billion in lost revenue exists because of out-of-state and internet retailers are exempted. Such a line of thinking is the same type of logic that calls a reduction in the planned-for-increase in a government budget line a “budget cut”.
The idea of “lost revenue” is nonsense. Lost revenue does not exist in this case for the simple fact that every state in America (except for one) requires a balanced budget. No state accounts for lost potential revenue as a line their budget; the state only accounts for exactly what it requires in order to carry on its government functions. No revenue is lost in this realm because no tax exists there in the first place. If we are to buy into the rhetoric, then anything that has yet to be taxed is “potential lost revenue” for the government.
Governor McDonnell understood this logic and used it as a means to push his transportation bill. Calling it “lost revenue” meant that he didn’t have to call it its inverse: “a new- found tax”. Yes, that is all this Marketplace Fairness Act is — something else that government has figured out a way to tax. Here in Virginia, Gov. McDonnell estimated that if we could find a way to tax all those internet and out-of-state sales, the government could have $1 billion in five years for roads! Isn’t that “fair” for everyone?
Everyone except those businesses who now have to deal with the voluminous amount of paperwork compliance that will be required by the government.
And the joke is really on online retailers with regard to Virginia. Thanks to Governor McDonnell, they’ll be taxed to pay for our roads — which they won’t even use … being online and out-of-state. It’s like Obama’s budget this spring where he proposes a new tax on smokers to pay for universal preschool.
Perhaps the most cruel thing about this bill is the timing. Already small businesses are being strangulated by Obamacare rules, regs, and taxes that will be full-fledged by 2014. Compounding the difficulty by throwing the “Marketplace Fairness Act” into the mix, and expecting businesses to properly maintain records for 9600+ taxing jurisdictions, is egregious.
Though the Senate has passed the legislation, the House has yet to vote on it. Let’s hope our Virginia Congressmen will have some commonsense to oppose it.