OK, for all the people that berated me about pointing out that Paul Ryan is no conservative, here's another little tidbit of information to go along with his unbalanced budget, lack of following the enumerated powers of the Constitution and support of adoption by homosexuals. In an email to The Hill, Ryan writes concerning the Marketplace Fairness Act (MFA), "I think the legitimate concern is can it be used to do other forms of taxation or retroactive taxation? You have got to make sure it doesn't do that. I don't think the Senate bill is written in a tight enough way to do that. So I'd like to think there's a way to address this inequity without giving the government power to expand taxing authority beyond that intent."
While Ryan doesn't support the Senate's version of the internet tax bill, at least that's what his mouth says, he uses the "old saw" of the Leftists and says that taxing online purchases would level the playing field (whenever you hear that line, it's usually dead wrong) for brick-and-mortar stores that also collect sales tax.
The problem? There are a ton of logic problems with this statement. Do brick-and-mortar store pay to ship products to customers? Why isn't Ryan dealing with that? Oh that's right, don't bother him with the facts.
More importantly, this is a constitutional problem. Article 1, Section 9 of the US Constitution reads:
"No Tax or Duty shall be laid on Articles exported from any State."
Most online products are shipped out of state. While there are some that do sell within their own state, those are already supposed to be accounted for in state sales tax. Running my own online business I encountered that, so I know it is the case, at least here in South Carolina.
So, no Mr. Ryan, there is no "way to address this inequity without giving the government power to expand taxing authority beyond that intent." Because you don't have any authority to tax like this. In the same manner I talk to gun grabbers, both Democrat and Republicans, who don't seem to understand "shall not be infringed" in the Second Amendment, I get the same vibe here. Mr. Ryan, what part of "No tax or duty shall be laid on Articles exported from any State" do you and your colleagues not understand? I thought you claimed to be a "small government" guy? I suppose that is the rhetoric needed to keep your seat.
This is the problem with politicians in Washington. They ignore the Constitution so they can get their hands in everything.
Online companies pay things like shipping to customers that most brick-and-mortar stores don't. Brick-and-mortar stores pay other things that online stores don't. In fact, many brick-and-mortar stores have online businesses as well, so why would they want to pay more taxes? It boggles the mind how the reasoning works here, especially for Amazon and Wal-mart, who are a strong supporters of internet sales tax.
Senator Ted Cruz (R-TX), actually puts forth rationale thinking. He writes:
Currently, online sellers collect sales taxes based on their physical location. The MFA, however, would fundamentally change how businesses collect those taxes. Instead, it would require online retailers to charge taxes based on the consumer's location or where the product is ultimately consumed. That's like your grocery store quizzing you on where you're going to eat those apples or Hallmark asking where you're going to send that Christmas card. The compliance burdens associated with charging taxes based on the consumer's location are mind-numbingly complicated.
Consider this: Online and catalogue retailers with gross sales of $1 million -- a level that is mom & pop size in many places -- will be forced to collect sales taxes for the country's 9,600 state and local tax jurisdictions. Just as Obamacare punishes small business with taxes and regulations for employing more than 50 people, this legislation would punish small businesses for making more than $1 million in sales. For many businesses it may be more beneficial to make less money than to keep track of all the different taxes.
Small and medium-size businesses would be subjected to monthly or quarterly tax returns to all 46 states who collect sales tax; in addition, one amendment likely to be added to the bill would also include all 565 federally recognized Indian tribes in the definition of "state," so businesses would need to collect applicable taxes for them, too.
As if that wasn't enough, each of the nearly 10,000 jurisdictions gets to have its own tax rates and sales tax holidays with thresholds and caps. Each state can give sellers their own "tax app" and it's up to the seller to pay for integration into their in-house systems for ordering, fulfillment, and accounting.
Cruz also points out that because the states continue to have their own audit, forms, tax base and definitions, it could subject the online seller to dozens or even hundreds of audits each year.
"So, how is this fair?" says Cruz. "After all, brick and mortar stores aren't subjected to all these rules. And, how is it fair for a Texas business to collect taxes to support California Gov. Jerry Brown's big spending?...Make no mistake: Big business supports this bill because it will drive smaller competitors off the Internet and out of business."
However, this is the thing that always bothers me that very few people point out. The brick-and-mortar stores are tax collectors for the state, yet they get no pay for collecting and sending those taxes in, yet they can be fined and the owners even face jail time if they get those taxes wrong. Instead of fighting to rid themselves of slavery to the state or the federal government, they seek to bring new slaves onto the plantation of the federal government by supporting internet sales tax.
This is the same problem I pointed out with Ryan's running mate Mitt Romney. He complained about 47% of people not paying income taxes, but in his talk it was though he was in favor of the idea that everyone should be paying income taxes. I say, we should be promoting that no one be paying income taxes. We find a way to be fair across the board and we demand that the government stick to spending only on the things we've set boundaries for them to spend on. If the federal government can't do that, then we need to abolish it and go back to the Articles of Confederation and have our government completely local, which probably is the best idea to begin with.
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