A Square Deal for the Little Guy
To listen to the language of American political campaigns, you could reasonably conclude that "big" is bad and "small" is good.
Who has too much power and influence in Washington? Of course, Big Business, Big Banks and Big Money, in general. Some on the right might make a case for Big Labor. Small, by contrast, is good. We honor Small Town values, admire the Small Farmer and, almost without dissent, claim to revere the Small Business woman and man who, we hear repeatedly, are the backbone of our national economy, who create the great majority of the nation's jobs.
Now Congress has a rare, virtually painless opportunity to prove that it really means what it has said about how much it loves American small businesses and, at the same time, to help cash-strapped state and local governments without raising taxes by a dime. The bill, appealingly, and not inaccurately, titled the Marketplace Fairness Act, would enable states, counties and towns to require big Internet retailers to charge — as every Mom-and-Pop store on Main Street already must do — the applicable sales taxes on the big Internet companies' transactions.
Think about our own experiences. To whom does the community turn to sponsor the Little League teams, to buy full-page ads in the high-school yearbooks, to help underwrite the costs of town celebrations? That's right, to the local merchants who sell shoes, shirts, basketballs and shampoo. These are the small-business people who hire our neighbors, who pay local and state taxes and, by law, collect, for our public treasuries, all the sales taxes owed.
More than 20 years ago, the Supreme Court ruled that, without congressional approval, a state could require out-of-state companies to charge that state's sales tax only if that business had a physical presence in that state, such as a warehouse, a factory or a store. This was long before the near-universal arrival of the personal computer and the explosion of Internet sales.
By not having to charge and collect state sales taxes, the Internet companies have had an unfair pricing advantage — often approaching 10 percent — over the country's "brick-and-mortar" hometown retailers. Local sales have suffered with the resulting loss of local jobs.
Lower sales and fewer jobs have meant that local and state governments, with lower revenues, have been forced to defer repairs to roads and public places. Teachers and police officers have been laid off. Community services have been curtailed.
The best estimate is that, because of the loophole and free ride given to Internet retailers, state and local governments are not collecting $23 billion that is owed to them. This is not, let me emphasize, a tax increase. It is simply leveling the playing field so that local small businesses and the citizens who own them can compete and are not unfairly exploited by rampant tax evasion that benefits big Internet retailers.
The lead Senate sponsors of the Marketplace Fairness Act (which the Senate is expected to pass in early May) are Wyoming Republican and former small-businessman Mike Enzi and Illinois Democrat and Majority Whip Dick Durbin. Support is bipartisan, and the battle looks to be in the Republican-controlled U.S. House.
There are two questions members of Congress must answer: Was it just empty rhetoric when they extolled the virtues of local small-business people? And when did widespread tax evasion become a patriotic act?
To find out more about Mark Shields and read his past columns, visit the Creators webpage at www.creators.com.
DISTRIBUTED BY CREATORS.COM
COPYRIGHT 2013 MARK SHIELDS 
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6 Comments | Post Comment
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This article isn't accurate. Online merchants DO pay taxes- on sales to the state they reside in. They are also small business owners, local merchants.
What you are asking is for those merchants to submit taxes to 45 states and a potential 9600 districts, which will put them out of business. It's equal to asking the local store to submit taxes to all of those districts when out of state visitors buy a product.
This bill is headed by companies like Wal-Mart and Home Depot, and lobbied in Washington, not by warm and fuzzy down home merchants. Do you believe that tax collection and the burden it places will suddenly help local merchants? People will buy online anyways.
As an aside, this site carries advertising. Will the writer/site be submitting taxes to any state where that ad is consumed? Or do they receive this revenue tax free? After all, analytics has come a long way.
Comment: #1
Posted by: Greg Z
Fri Apr 26, 2013 8:56 AM
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Greg Z,
So how would you propose leveling the playing field? How does the local shop, which has to pay sales tax, compete with E-Bay? Note that, under the proposal, companies with less that one million $ in sales are exempt. That keeps this from being a burden on the smallest of on-line retailers. As with all such things, the devil is in the details. The states should be required to provide software for calculating the taxes as part of the deal. It would not be reasonable to ask merchants to gather information on what is to be taxed in each locality.
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My favorite local camera store went out of business a few years ago. They had been there for 40 years. One of the salesmen told me recently of having a conversation with a local guy he remembered from the store: Guy, "I'm so sorry the store closed. I used to love to go to the store. I would go there and talk cameras for hours." Salesman, "Did you buy your cameras there?' Guy, "Oh no, I bought them on line to save the sales tax, but it was a great place to talk cameras. So sad it's gone."
Comment: #2
Posted by: Mark
Fri Apr 26, 2013 11:01 PM
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Re: Mark Who says the 'playing field needs to be leveled'? The obsession with collecting taxes on everything we think, do and say is out of control. King George didn't get it, our politicians don't get it and it seems you don't get it, either.
Comment: #3
Posted by: David Henricks
Sat Apr 27, 2013 3:38 PM
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When I buy a new computer (or whatever), I put my old one on eBay where someone gets a nice bargain and I recover part of my expense. There is no way I'm going to get a business license, file with the states' governments, and try to collect sales taxes for states all over the country. Now, I'll just stick my used item in the attic. I guess that's why WalMart is so anxious to get this bill passed.
Comment: #4
Posted by: Mike Ohr
Sun Apr 28, 2013 7:35 AM
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David,
What King George didn't get was the "without representation" bit. If you don't like your local sales tax, vote for a different way to pay for your local services. If your local community says no sales tax, then, lucky you, you don't have to pay a cent, at least to buy stuff. If there is to be a sales tax, it should be levied as fairly as possible. Are you willing to crush local business so you can dodge the taxes YOUR local and/or state REPRESENTATIVES (Take that, King George!) voted to charge?
When are we, as a nation, going to stop following Leona Hemsley's advise that "Taxes are for the little people.", as we assume that we are not one of those "little people"?
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Mike Ohr,
Good news! You can support this law without fear of being stuck with an attic full of old PCs. Since the first million dollars in sales is still exempt, I suspect that this will not effect your recycling activities a whole lot. In fact, this will be a plus for very small on-line retailers, such as yourself, since they will still have a tax advantage over Walmart as well as Amazon.
Comment: #5
Posted by: Mark
Sun Apr 28, 2013 10:19 PM
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Re: David Henricks;... We pay far more of taxes by percentage that our revolutionary forefathers, and yet do not rebel, though we have ever less representation...
Could it be that taxation was never the issue then, but the use of them??? When America was growing rich on the triangle trade in rum, sugar, and slaves that was unregulated and so, mostly tax exempt; Americans did not demand regulation or the taxes that would have made that trade unprofitable, but sought instead a country where free enterprise could be king...They got it; but when every productive activity has the value and profit sucked out of it by banks and middle men who are not taxed on principal, then the government finds it must pull in its horns, and tax the only people who cannot afford the lobby against taxation: The little guy...
Sir; the colonies little benefitted from the 7 years war, our French Indian War; but they were forced to bear the expense... It was because war which is a failure of government and of foreign policy is so destructive of economies and wasteful of wealth... Those with the power of government simply passed on the cost to those unable to resist...That is what the rich do here, and you help, on principal... They have the power of government, the power to influence government, and to buy elections... Why people who have the power to chart the course of government and the money to buy their own vision of reality cannot pay taxes is no mystery... It is people who have been taxed to the limit for what they want and do not want who make tax evasion for the rich possible...
No body wants justice, and no one wants tax justice... Any system of justice that was based upon ability to pay would rob me blind...On the other hand, a system of taxation that forced those who most benefitted from government to pay for their benefits at a just rate would also put pressure on wealth to be productive or be returned to the commonwealth... Where I live, huge tracts of land sit idle year after year, and decade after decade... They are prime real estate, and only two facts keep them useless and in the hands of the rich: The income tax has made property a shelter for wealth and an article of speculation... And the income tax has kept people poor and working harder for less, and because they have so little must borrow to gain anything, and make another rich in the process of gaining any advantage... If you look you can see it is the people's money that is being loaned to them to make them both poor and productive while the rich use our money to grow rich and unproductive...
The common fact of all revolutions in modern times has been the bankruptcy of the government, and ours is bankrupt, morally and financially...You support that situation, when if you supported fair taxation that would result from fair representation; the government could carry on for a time...There are too many contradictions in the constitution to make it work for ever, but if the parties, as the slaves of the rich, had not got hold of the process of government then it would be in better shape than today...
What would you do with power over a bully that could do nothing to you??? You would do as the rich have done and take everything and every body to keep some one just as bad from getting it first... It does not matter what their morality tells them they should do.. Even long term self interest has no effect upon them... They have the opportunity to steal everyone's lunch money; and they do it thinking the whole structure of government and society will endure any amount of abuse and deprivation... They are wrong, and revolutions are made out of that wrong...
Thanks.... Sweeney
Comment: #6
Posted by: James A, Sweeney
Wed May 1, 2013 4:54 AM
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