Tuesday, April 23, 2013

Marketplace Fairness Act...nice name...BAD idea!

Some ideas are just bad timing, and some ideas are just plain bad. The Internet sales-tax legislation being rushed to the Senate floor, the so-called Marketplace Fairness Act, has the dubious distinction of being both. Right now, businesses collect sales tax in states where they have a physical presence. That makes sense: if you are a retailer in Texas, you collect taxes there. But under this legislation, that same Texas business would be forced to pay sales tax to 45 other state tax authorities across the country. Supporters claim this isn’t a new tax. Please tell those hundreds of thousands of businesses, many of them small with part-time accountants, that would start filing taxes with 46 different states that this isn’t a new tax burden. (Four states have no sales tax.) They’ll laugh in your face and then cry in their hands. Why this is bad timing? Those businesses have been pummeled by the worst economy since the Great Depression. Now, as they are only gradually getting back on their feet, Congress is poised to impose new burdens on them. Do we really want state tax collectors from New York demanding payments and audits from a business in Nebraska? Under this proposal, state tax bureaucrats will be able to go after businesses across the country to audit them for payment of taxes plus penalties and interest. Americans don’t buy into this plan. By a 2-to-1 margin, likely voters in a recent Zogby Analytics poll said shifting this tax-collecting responsibility to businesses would be burdensome on companies. Yet the Senate is rushing forward with this plan having completely skipped the committee process, where tough questions may have been asked perhaps including some from Sen. Max Baucus, Montana Democrat and chairman of the Senate Finance Committee, who has warned that business would have to keep track of “thousands” of different tax codes to do online business and that the new tax scheme is “unprecedented.”