Friday, May 3, 2013

Republicans Ready to Vote For States to Collect Sales Tax on Internet Sales

Recognizing That Republican Controlled States Need Revenues to Boost Services

The great thing about hypocrites is that one can always count on them to be hypocritical.  Take, for example, the issue of taxes and Republicans and the question of whether or not states can force internet sellers to collect sales tax and remit the tax to the state in which the buyer resides.  This now looks like a done deal, that Congress will give states the power to do just that.

The Marketplace Fairness Act would allow state governments to force Internet retailers to collect sales taxes from their customers and remit the proceeds to state and local governments, just as brick-and-mortar retailers have done for decades. The states would be required to provide free software that would be embedded in retail Web sites to do the calculations.

Could such legislation pass the Senate with its requirements for 60 votes?  Yep it could

The legislation cleared its final procedural hurdle Thursday evening on a bipartisan Senate vote, 63 to 30. Final Senate passage is scheduled for May 6, and that tally is likely to be even more strongly in favor. Earlier test votes won as many as 75 yeses. 

But wait, what about the opposition.

Legislation that would force Internet retailers to collect sales taxes from their customers has put antitax and small-government activists like Grover Norquist’s Americans for Tax Reform and the Heritage Foundation in an unusual position: they’re losing.

For years, conservative Republican lawmakers have been influenced heavily by the antitax activists in Washington, who have dictated outcomes and become the arbiters of what is and is not a tax increase. But on the question of Internet taxation, their voices have begun to be drowned out by the pleas of struggling retailers back home who complain that their online competitors enjoy an unfair price advantage.

Once again the media is missing the real story. Republicans have taken over a majority of the states in the last several years.  And facing re-election, these Republicans are slowly realizing that while voters say they want less government, what they really want is better schools, more efficient transportation systems and stronger law enforcement. 

So to get the money to support higher spending Republicans will support collecting sales tax on internet sales, and argue, correctly, that this is not new taxing.

Supporters of the bill include Tea Partyconservatives like Senator Ron Johnson, Republican of Wisconsin, and Republican leaders like Senator John Thune of South Dakota. They argue that the bill, which could generate as much as $24 billion in new tax revenues, is not a tax increase at all. It only ensures that taxes already owed are actually paid. Most states collect 4 to 7 percent on retail purchases.

But it will result in higher revenues for state and local governments and higher spending, since no one expects states to reduce taxes to offset the higher state revenues.  And this is good, because better education, better roads and better law enforcement increases economic growth. And as a extra benefit, all of us get to laugh at how once again conservatives go back on their principles in order to get elected and stay in office.

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