internet sales tax

The Lame Duck Threat Online Consumers and Small Businesses Should Fear

Heritage Action Internet Sales Tax

It’s 2014, and American consumers are increasingly making purchases online. This trend shows no signs of changing. But Senate Majority Leader Harry Reid (D-NV) and his ideological allies are scheming to throw a wrench in the works. Online shoppers who enjoy the benefits of tax free online shopping may no longer be able to do that if Sen. Reid gets his way. Small online businesses are currently taxed on sales only where they have a physical presence and therefore political representation. If the Internet sales tax becomes law, they will no longer have that freedom, which is a violation of federalism.

Reid announced in September that he will do whatever it takes to pass an Internet sales tax bill, the misleadingly named the Marketplace Fairness Act (MFA), after the midterm election.  The bill would place burdensome regulations on small online businesses and would entail a massive expansion of state taxing authority. Because only 35 percent of Americans support Internet sales tax legislation, he plans to attach it to a very popular ban on Internet use taxes known as the Internet Tax Freedom Act (ITFA).

Congress should permanently ban Internet taxes to protect innovation and online access for Americans

The Internet has been suffering a series of blows as of late.

Year-old reports of extensive Internet surveillance techniques carried out by the National Security Agency along with pushes from crony senators wanting to difficult our Internet shopping experience have been concerning the most observant amongst us.

Rep. Bob Goodlatte (R-VA) has introduced a bill proposing to institute a permanent ban on state and local taxation of Internet access and other discriminatory taxes. The Permanent Internet Tax Freedom Act, or H.R. 3086, would protect constituents from government taxation, according to Americans for Tax Reform President Grover Norquist.

In order to ensure taxpayers are protected, House members are being urged by Norquist, Digital Liberty’s Executive Director Katie McAuliffe, and the National Taxpayers Union to cosponsor and vote yes on this bill.

By making these restrictions permanent, lawmakers would also ensure businesses and consumers are permanently protected.

The unrestricted and competitive nature of the digital environment makes it one of the most relevant for those seeking to innovate today. Imposing restrictive taxes on online shopping should be considered a form of punishment.

The burdensome taxation would only accomplish what punishments usually accomplish overtime: absolutely nothing, especially because the kind of taxes some lawmakers would like to see imposed on consumers would not be later directed towards improving Internet services.

The Specter of Internet Taxation

As the U.S. Postal Service closes 53 processing plants to trim $2 billion from its bloated budget, government officials - who earlier floated ideas to suspend Saturday service - look for other ideas to balance their budget. While USPS handles 40 percent of all the mail delivered in the world, it lost $15.9 billion last year with revenues of $65 billion. What’s more, its unfunded pension liabilities are nearly $50 billion.

Instead of privatizing the postal service - which would allow it to compete with FedEx and UPS, who seem to be able to make profits even up against a subsidized postal service - a California city councilman is proposing a tax on email as a fix:

Berkeley City Councilman Gordon Wozniak brought up taxing emails during a recent council meeting. He suggested the money collected, which would be part of a wider-reaching Internet tax, could be used in Berkeley’s case to save the local post office.

“There should be something like a bit tax,” he said during the March 5 meeting. “I mean, a bit tax could be a cent per gigabit and they would make, probably, billions of dollars a year.”

Plus, he said, there should be a “very tiny tax on email.”

Bob McDonnell’s Tax Hike Ends 2016 Bid Before It Starts

Bob McDonnell

Back in 2010, Virginia Gov. Bob McDonnell was thought to be the next big conservative star. After Barack Obama carried 6-point in there in 2008, many believed the Commonwealth was slipping away from Republicans. McDonnell, however, was able to restore hope for the GOP in 2009 when he defeated Creigh Deeds in the gubernatorial election.

McDonnell immediately became a key Republican spokesman. He gave the GOP’s response to the State of the Union address in 2010 and signed legislation — the Virginia Healthcare Freedom Act — that sought to nullify ObamaCare. Despite taking on President Obama in a purple state, McDonnell managed to maintain a 62% approval rating deep into 2011 and was one of the names most frequently mentioned to run alongside Mitt Romney in the 2012 election cycle.

There has been dissatisfaction with McDonnell from conservatives for some time, though much of this is related to how he has handled social issues. But McDonnell lit a flame under fiscal conservatives last month when he proposed an overhaul to Virginia’s transportation tax.

Rand Paul and Ted Cruz to Harry Reid: Stop playing games with the bipartisan Internet Tax Freedom Act

There’s a little bit of good news out of the Senate. Well, at least for now. The upper chamber will move on a short-term extension of the Internet Tax Freedom Act to keep state and local governments from taxing access to the World Wide Web:

Senate Democrats are gearing up to pass a short-term extension of a moratorium on Internet access taxes, according to aides and K Street officials.

The Internet Tax Freedom Act expires on Nov. 1, and Democratic leaders are pushing to extend the moratorium through 2014.

A vote on the short-term extension could come as soon as next week, or when lawmakers return to Capitol Hill after their August break, a Democratic aide said Wednesday.

The bad news, however, is that supporters of the so-called “Marketplace Fairness Act,” the Internet sales tax, are still going to try to attach the measure to the extension of the Internet Tax Freedom Act (ITFA) after the mid-term election. Check out the Orwellian-style doublespeak from this Internet sales tax crony:

Outside supporters of the Marketplace Fairness Act insisted Wednesday that the short-term Internet access measure wasn’t a setback. Lawmakers have little interest in telecom companies potentially noticing rate increases shortly before November’s election.

“No long-term extension of ITFA will occur without MFA because it’s important to keep the Internet tax-free and protect local jobs,” the Marketplace Fairness Coalition said.

There was a huge win for the Internet yesterday, but now crony senators are pushing the Obama-backed online sales tax again

Fresh off a victory in the House of Representatives to keep the Internet access tax-free and promote innovation online, consumers may now have to brace for another push in the Senate for the so-called “Marketplace Fairness Act,” a crony measure backed by brick-and-mortar retailers that would allow states to impose online sales taxes:

Senate supporters believe they have a perfect vehicle [for the online sales tax bill]: the Internet Tax Freedom Act, a relatively uncontroversial measure, which sailed through the House on Tuesday, that would extend a long-standing ban on state and local taxes on Internet access.

“Why wouldn’t we?” Sen. Mike Enzi (R-Wyo.), a longtime supporter of online sales tax legislation, said when asked if he planned to attach the Marketplace Fairness Act to the bill. “They’re a perfect fit.”

Enzi and several other senators released their new bill on Tuesday, which would attach the online sales tax measure to a 10-year extension of the Internet freedom bill. The House passed a permanent version of the online access bill on Tuesday.

North Carolina voters hate the Obama-backed Internet sales tax, but Kay Hagan supports it anyway

North Carolinians aren’t all that fond of the proposed Marketplace Fairness Act, the Orwellian name given to the Internet sales tax. A recent poll conducted on behalf of the National Taxpayers Union and the R Street Institute found that an overwhelming 70 percent of likely Tar Heel State voters oppose the measure:

The poll, based on a telephone survey of 400 North Carolinians likely to vote in the 2014 general election, showed that 70 percent of respondents oppose the legislation, known as the Marketplace Fairness Act. Opponents say the measure would force online businesses to line the pockets of other states and face scrutiny from out-of-state auditors, while supporters of the bill contend that it levels the playing field between online and brick-and-mortar retailers.

“Across the board, there is surprisingly large opposition to changing the law to impose a sort of Internet sales tax collection burden,” said Andrew Moylan, executive director and senior fellow at the R Street Institute.
[…]
The push against the legislation comes mostly from political conservatives, but Pete Sepp, executive vice president of the National Taxpayers Union, said the poll reveals opposition to the bill from voters of varying political backgrounds and consumer habits.

“Not only those who shop online were concerned about this issue, but those who hardly ever shop online at all,” Sepp said at a Tuesday news conference. “They understand that what this amounts to is a massive expansion of tax enforcement power.”

Today in Liberty: Trey Gowdy destroys Lois Lerner, Republicans push Internet sales tax again

“How selfish soever man may be supposed, there are evidently some principles in his nature, which interest him in the fortune of others, and render their happiness necessary to him, though he derives nothing from it except the pleasure of seeing it.” — Adam Smith

— KathLOLn SebLOLus: In case you haven’t heard, our dear Health and Human Services secretary has called it quits. Sebelius recently submitted to her resignation to President Obama, apparently in early March. He’s expected to, at some point today, appoint OMB Director Sylvia Burwell to succeed Sebelius.

Today in Liberty: Republicans win in FL-13, Obama’s approval rating hits new low

“There can be no faith in government if our highest offices are excused from scrutiny - they should be setting the example of transparency.” — Edward Snowden

— Republicans hold on to FL-13: Though most political analysts had given Democrats a slight edge in the special election, David Jolly (R-FL) defeated Alex Sink (D-FL) last night in Florida’s Thirteenth Congressional District. This was the race Roll Call said that “Democrats can’t afford to lose.” Sink outraised and outspent Jolly. Even when outside groups are accounted for, Sink had an advantage. While it’s true that the GOP had control of the district for many years, it had been trending Democratic. President Obama, for example, won FL-13 in 2008 and 2012. Most Republicans are saying that this race was a referendum on Obamacare, and they’re right. That’s where Jolly staked his claim, while Sink wanted to “fix” the law. Though a close race, as every suspected it would be, voters in FL-13 rejected Obamacare. We’ll have more on the 2014 implications a little later today.

House to hold hearings on Internet sales tax

The issue seems to be dead going into 2014, but some House Republicans — those who seem determined to find a way to raise taxes — are planning to hold hearings on the Internet sales tax early this year:

House Judiciary Committee Bob Goodlatte plans to hold a hearing in the first half of the year to explore online sales tax legislation, advocates say.

Proponents of an Internet sales tax bill, such as major retailers, are holding out hope for action in the House in 2014 despite the opposition of many conservatives and the skeptical stance of Speaker John Boehner (R-Ohio).

Supporters and opponents of online sales tax proposals are focusing their lobbying energy on Goodlatte (R-Va.), who has released a set of seven principles that an online sales tax bill would have to meet in order to be considered by his committee.

“House Judiciary has a busy schedule,” but Goodlatte has plans to hold a hearing on Internet sales taxes in the first half of the year, according to Steve DelBianco, executive director of NetChoice, which represents Facebook, Yahoo and online sales tax critic eBay.

High-powered lobbyists representing the interests of large brick-and-mortar retailers were able to ram the Internet sales tax through the Senate last May through the Orwellian-sounding Marketplace Fairness Act.


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