Treat Business Equally

You won’t find a more anti-tax blog than Outside The 40.  The bottom line is the government is too big and it spends too much.  Politicians don’t need more revenue to spend.

Some conservatives oppose the Marketplace Fairness Act on those very grounds.  The Marketplace Fairness Act allows states to collect existing sales taxes for purchases made on the Internet.

Thanks to a Supreme Court decision, states can’t collect sales taxes unless a company has a “nexus” with the state.  That creates a disparity between small, neighborhood businesses and Internet retailers like Amazon.com and TigerDirect.com.  A small electronic retailer in your neighborhood has to collect and remit sales taxes but Amazon does not.  Many consumers will choose to save to money and shop online.

It’s hard enough to run a profitable small business without government imposing artificial barriers to success.

The issue of federalism is also at stake.  Whether the issue is the sales tax, immigration or medical marijuana, states should have the power to enforce their own laws without the federal government interfering.

The legislation would be better if it applied an origin-based model where sales taxes are imposed at the point of sale.

Either way, the free-rider problem must end.  Treating businesses equally should be the fundamental principle of tax policy.

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