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The Marketplace Fairness Act – It’s Not Fair, but it’s an Act.

Federal and State governments don't take enough of your money - they want more.

Don't you think you can find better uses for your own money than Washington politicians?

Don’t you think you can find better uses for your own money than Washington politicians?

The Internet Sales Tax.   Nothing illustrates the ravenous nature of BigGov and its insatiable desire to destroy even the smallest remaining 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-AR)Heritage ActionScorecardRep. Steve Womack52%House Republican AverageSee Full Scorecard52%, 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 embedded interest in the maintenance and growth of government.  Some may openly declare this without fear of a backlash from their constituents.  Others must pretend to disdain massive and extravagant government while they work behind the scenes on behalf of it.

The advent of today’s Tea Party and the newly elected lawmakers affiliated with it, who won office based on frugality and limited government, suggests a pilgrimage away from the status quo, but it’s much too early to tell whether these 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 in the Tea Party Caucus, 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) whereas the House responded by passing the Permanent Internet Tax Moratorium (HR3086).   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 to 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 being reported in the Labor Department stats 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?  Fictitious unemployment reports, hide the jobless ‘recovery’.  Making matters worse by siphoning more money out of consumer’s wallets, would be lunacy.

Rep. Thomas Massie (R-KY)Heritage ActionScorecardRep. Thomas Massie76%House Republican AverageSee Full Scorecard76% (House Dist. 4Th – KY), recently spoke on the floor of Congress, outlining his objection and also wrote a protest letter to Rep. John Boehner (R-OH)Heritage ActionScorecardRep. John BoehnerN/AHouse Republican AverageSee Full ScorecardN/A and outgoing Majority Whip, Rep. Eric Cantor (R-VA)Heritage ActionScorecardRep. Eric Cantor48%House Republican AverageSee Full Scorecard48%.  What’s most interesting about the letter is the remarkable diversity of the co-signers of the letter. There are Democrats on the list!

One of them leaps off the page – Congresswoman Rep. Zoe Lofgren (D-CA)Heritage ActionScorecardRep. Zoe Lofgren10%House Democrat AverageSee Full Scorecard10%, 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.  Hi-tech in California is one of the few remaining job growth sectors.  What would be the sense in annihilating it?

Bottom line, despite the name, it has nothing to do with fairness. Internet taxation is nothing less than a partnership between federal and state government together with large retailers and the casualties will be jobs and growth.

The proponents of internet taxation argue that small businesses are exempt from this bill, but 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. We’re the real, low hanging fruit they have their sights on.

Limited government advocates’ 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 an internal threat to freedom and Natural law rights.  Instead of putting more meat on the table of this beast, Washington D.C. needs to be dragged against its will onto the ‘America’s Biggest Loser’ 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!  Turn the car around, the fat farm is in the opposite direction!

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