State lawmakers are already dreaming up new spending programs which they can create with additional revenue from an Internet sales tax, claims Sen. Rand Paul.
“Rather than reform and prioritize their state budgets, governors are looking to the federal government to take more money out of the wallets of their state’s hard-working citizens,” the Kentucky Republican wrote in a Washington Times op-ed piece. “Americans are already struggling as a result of higher federal taxes, but some seek to soak the taxpayer at the state level as well.”
The Senate this week will vote on a bill greatly expanding the ability of states to collect sales taxes on online purchases. Under current law, states can collect sales taxes from retailers only if they have a physical presence in the state — a store, warehouse, or office.
The new bill, the Marketplace Fairness Act — which has the support of the White House — would allow states to collect taxes even if the retailer does not have a physical presence in the state.
“State politicians are already fantasizing about all the new spending programs they can create using these additional taxpayer dollars,” wrote Paul. “The last thing we need is more taxes for the purpose of implementing more government.”
The bill is fiercely opposed by fiscal conservatives and limited-government advocates. A coalition of anti-tax groups, including the Heritage Foundation and Americans for Tax Reform, has sent letters to members of Congress urging them to vote against the bill.
“In practice, MFA would allow state governments and auditors to reach across their borders to tax citizens who have no recourse,” Americans for Tax Reform President Grover Norquist wrote.
Paul said big companies should be lobbying the government for less regulation for all businesses if they really wanted to create a fairer marketplace, rather than working with government to harm competitors. He said businesses should gain customers by providing better products and services than their competitors, not by using government to gain an advantage.
“I ask my colleagues on Capitol Hill to reject any attempt at passing a national Internet Tax Mandate,” he writes. “Supporters of the bill have the backing of large corporations, expensive lobbyists and even bankrupt state governments, so it is up to us to stand up for small businesses, taxpayers and consumers.”
Critics of the bill also point at the speed at which the legislation is moving through the Senate.
The Wall Street Journal editorialized on Monday that the bill — which would fundamentally change interstate commerce — was introduced last Tuesday, and its text only became available on the Library of Congress website over the weekend.
“And you thought Obamacare was jammed through Nancy Pelosi’s Democratic House in a hurry,” the paper said.
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