The Marketplace Fairness Act – Redefining “Fairness” to Favor Large Retailers
4th August 2012
In recent weeks, there’s been a flurry of articles written on the proposed Marketplace Fairness Act. The Marketplace Fairness Act is a “bipartisan” proposal that would require out-of-state retailers to collect taxes on items sold in states where they have no physical presence. It’s supposed to level the playing field for all involved. Actually, its just a boon for big box retailers who can’t compete in today’s marketplace.
Big business regards the government as a friend, not an enemy, because lobbying can get legislation that, while nominally affecting all players, favors the big guys who can afford the price of compliance better than the little guys. (This is why Warren Buffet doesn’t mind high taxes. However much he pays, your Friendly Local Wannabe Rich Guy winds up worse off.)
What the Act will do is typical of such laws. It will disregard decades of Supreme Court precedent and allow Congress to redefine the playing field thus picking new winners and losers. If you’re having trouble figuring out whom the winners will be, just look at those lobbying for the Act. Generally, it’s the large retailer that’s already nationwide, gets large volume discounts from vendors and that can afford to spend $250k on a tax calculation engine to handle the complex calculations and support a complete tax department to handle the compliance burden and the unions that organize them. But wait, isn’t there a free service to calculate the tax for the retailers? As my Dad says, you get what you pay for.
There are approximately 7,500 state and local tax jurisdictions and the logic required to determine what type of tax and how much to collect is obscene. To say that a retailer with over $500,000 in revenue can comply is insane.
Unfortunately for the local government leeches, the Constitution puts ‘commerce among the several states’ in the hands of the Federal government, which is why interstate shippers have been successful so far in resisting local leech demands to collect state sales and use taxes, and why a Federal law — such as this one — is demanded by those whom it will profit.
August 6th, 2012 at 11:21
So you’re saying that the only thing that gives the little guys a competative advantage is the fact that they can evade collecting sales tax? How is that ‘fair’?