As a citizen activist, I remember how thrilled we were with the results of the 2010 election, in which the Republicans made enormous gains that were suppose to protect the free market.
Fast forward to 2013. The Senate has just approved the “Marketplace Fairness Act“, legislation that will end tax-free online shopping. The measure now goes to the House of Representatives for a vote, and lobbying both for and against the measure is expected to be intense.
Sadly, it looks like our congressional representatives will show the usual amount of backbone that we have come to expect:
The bill now heads to the House of Representatives for possible revision. TechCrunch’s sources on Capitol Hill say that broad support in the Senate makes it difficult for House members to oppose the legislation, but it may be modified to increase the threshold for businesses who have to collect online taxes, from $1M in revenue to $10M
One of the senators wanting to impose this fresh, new tax on the American public is Elizabeth Warren. Warren, who campaigned as being for the “little guy”, has managed to screw over quite a few of them with this bill (which she even co-authored).
But Warren never pretended to be a tax-hating, small government supporter. Republicans who voted “yes” on the measure once proclaimed themselves to be free market warriors to gain Tea Party support. Fire Andrea Mitchell names the 22 Republican senators who approved the legislation, and notes:
The list includes your usual gang of RINOS. John McCain, Lindsey Graham, Susan Collins, John Thune, etc. The only surprises to me of the 22 Republicans who voted in favor of the Marketplace Fairness Act aka the Internet Sales tax were Deb Fischer and John Boozman. Rob Portman was also a bit of a surprise. The rest, not so much.
Americans for Tax Reform has a fascinating generational breakdown of the vote: Every Republican (seven in total) aged 50 and under voted against the Marketplace Fairness Act; twelve of thirteen Republicans who are 55 and under voted against the Marketplace Fairness Act.
Why did these Republicans vote to raise taxes? As always, follow the money: Amazon, which once vigorously fought against internet sales tax, recently switched its position.
Now that the retailer has a massive edge in online retail, Amazon is fine with enforcing such a complex and expensive tax scheme. Nothing about the proposal has changed for Amazon specifically-they understand that this will be a very costly and burdensome proposal to obey. The difference now for Amazon is that its executives feel confident they can bear the costs while other smaller competitors cannot.
Part of the reason Amazon will now be able to dominate the internet sales market, and quash small business competitors, may hinge on software the company has now patented that will efficiently deal with the complexities of interstate sales tax record keeping:
Not only does Amazon now have an incentive to grow its business into other states but it has something that every other kid on the block wants: state and local sales tax infrastructure. It’s complicated. And expensive. And who has the money and resources to develop – and potentially market – that kind of technology? Why, Amazon, of course. And chances are, they’ve been counting on this, having already applied to patent technology (Patent 20060036504) to code items for sale for international tax purposes with many predicting a similar patent for state to state taxation waiting in the wings (they have an awfully vague patent application from April of this year allowing for price change based on customer which gives one pause). Wouldn’t it be awfully convenient if – just at the time that retailers needed this kind of technology – it turns out that exactly that was available under a patent from one of the bill’s biggest supporters?
While I will encourage everyone to contact their congressional representative to reject the House version of this measure, I sense that the deals have already been struck. I will just note that, if California’s experiences are any indication, the revenues will be less than expected.
Crony capitalist connections have been promoted, once more, by Washington politicos. I think many of my Republican friends will be looking at the 2014 slate of GOP candidates with this adage in mind: Fool me once, shame on you; fool me twice, shame on me.
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