The Internet Sales Tax – More is Never Enough

Posted on May 22, 2013

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Aren’t they big enough already?

The Internet Sales Tax.   Nothing illustrates the ravenous nature of BigGov and its insatiable desire to destroy even the smallest extant vestiges of Free Enterprise in America than the effort underway to pull millions of small businesses into their net of taxation.  While the support this legislation is getting on Capitol Hill from Democrats is no particular eye-opener, it is the support from Republicans that should alert us to the hypocritical tendencies of that party.   In one breath, they pander to us about smaller government and cutting spending and taxes – but when they think our backs are turned, they make a different pledge to special interests.  “There’s a lot of political difficulty getting through the fog of it looking like a tax increase,” said Rep. Steve Womack, R-Ark., one of the main sponsors of the bill in the House.  Well, Mr. Womack – the ‘political difficulty’ stems from the fact that the Internet Sales Tax not only looks like a tax increase, it is a tax increase!

It’s important to never forget that politicians from both parties and the leadership they report to, have a core allegiance and commitment to the maintenance and growth of government.  Some can openly declare this without fear of a backlash from their constituents.  Others must pretend to disdain massive and extravagant government while they work surreptitiously on behalf of it.

The emergence of the Tea Party and the newly elected lawmakers who won office based on frugality and limited government suggests a pilgrimage away from the status quo, but it’s too early to tell whether the good intentions will form into habits.   The leadership of the Republican party finds such idealism amusing and entertaining up to a point, but sooner or later these hard charging champions of prudence and thrift, will be called in to have the facts of life spelled out to them.  That’s when we’ll find out what they are made of.

The Senate has already passed it’s version of the Internet Sales Tax, (S743) and the House is taking up HR 684.   This money grab won’t affect the big corporations in a significant way, any more than new federal regulations do.  The big boys like new regulations and taxes, because it knocks enough rungs off the ladder beneath them to make it even more impossible for start ups to compete.  The operative phrase for this is ‘barriers to entry’.  And if you know anything about the trends in legislation, you know that competition is not considered fondly by the major players in business that leverage  connections to government in order maintain their market dominance.

The effect on consumers, businesses, workers and our economy will be severe.  The initial target of this piece of legislation, dubbed by its creators as the ‘Marketplace Fairness Act’, are small and mid-sized businesses that sell and ship products across state lines.  The resulting tax burden will have an impact on consumers in an economic environment in which they are already being hit with the hidden tax of inflation.  When the spending power is reduced from $1.00 to .93 cents, there is an inevitable ripple effect on job creation, because small businesses employ the majority of workers in America.  Think about this – you are already carrying an enormous tax burden to support bloated, inefficient government that refuses to live within its means, but now they want more?

The jobs that are being reported in the Labor Department statistics are only barely keeping pace with population growth as it is.  Wait until consumers get hit with new taxes.  That’s when you will see many businesses fold, because the regulatory burden of complying with 9,600 tax jurisdictions and 46 tax states will be unsustainable.  “How can we possibly know the tax rates in [those] jurisdictions?” said Overstock.com CEO Patrick Byrne. “In one jurisdiction, cotton candy is food; in another, it’s entertainment or candy.   Anyone who has ever tried to fill out a simple tax form knows how ludicrously complex it can get.”  Target and Amazon don’t mind, of course – but do you want to have less choices and see more people out of work?  As you’ve seen in my posts about the fictitious unemployment reports, we already have a jobless ‘recovery’.  Making matters worse, would be lunacy.

Ultimately though, my chief objection to this new confiscatory scheme, is a matter of  basic philosophy.  Government has already reached the dimension where its sheer size has become a threat to your freedoms and Natural law rights.  Instead of putting more meat on the table of this beast, we need to be dragging Washington D.C. onto the ‘America’s Biggest Loser’ reality TV show.  Notice how much happier the contestants are when they lose all that weight?  In this case, imagine how much happier and prosperous you will be when the Feds lose all that weight.  This Internet Sales Tax is like dropping a person with an eating disorder off at the front door of a Vegas buffet!  Stop the insanity!

Representative Thomas Massie (House Dist. 4Th – KY), recently spoke on the floor of Congress, outlining his objection and that of his constituents to the bill.  He also wrote a protest letter to John Boehner and Eric Cantor in which he covers all the same points I cover here and I salute him in this.  What’s most interesting about the letter to me is the remarkable diversity of the co-signers of the letter. There are Democrats on the list!  One of them leaps off the page at me – Congresswoman Zoe Lofgren, as liberal a Democrat that you will find in Congress.  In her Bay Area district, she represents a large segment of Silicon Valley, which would be negatively impacted by the new taxes.  And she’s right on this one.  Hi-tech in California is one of the few remaining job growth sectors.  What would be the sense in annihilating it?

My bottom line with this bill is that it has nothing to do with fairness.   It is nothing less in reality, than a partnership agreement between federal and state government and large retailers and the casualties will be jobs and the economy.  Lest you fall prey to the argument that small businesses are exempt from this bill, I would caution you to remember that there is never a point at which BigGov has a full stomach.   It is a beast with a bottomless appetite.  They’ll start with businesses with $1 million or more in revenue, but be assured, they already have people like me, who sell on eBay for supplemental income, on their radar screens.

Now is the time to stop this in its tracks – in the House of Representatives, where they feel the sting of disapproval from constituents more acutely than in the Senate. Here is a Directory of Representatives at House.gov.  You can look up your Congressional representative and call their office.  Simple strategy – be brief and to the point.  You can tick off one or two points of opposition to HR 684, but you don’t need to.  All they need to know is that you’re against it – period.  The staffers that answer the phone in D.C. and at the home district offices are almost always trained to be polite to callers, so there’s no need to worry about someone arguing with you. They’ll usually take your message and thank you for calling and it’s that simple.  Now, go get ’em, Tiger!

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