President Obama Backs Harry Reid's Internet Tax Plan

April 23, 2013 -

The movement to bring State sales tax across the board to Internet retailers got an important endorsement this week as President Barack Obama "enthusiasticlly endorsed" the efforts by Senator Harry Reid (D-NEVADA) to push the Marketplace Fairness Act forward at a breakneck pace - according to The Hill. Senators advanced the bill in a 74-20 procedural vote on Monday evening, one vote less than it received in a test vote last month. Twenty-six Republicans joined Democrats in moving forward with the bill. The Senate will now begin the debate on amendments, with a full vote happening later in the week.

"We have heard overwhelmingly from governors, mayors and the business community on the need for federal legislation to level the playing field for our businesses and address sales tax fairness," White House press secretary Jay Carney said.

The legislation, backed by the National Retail Federation (who has long sought to "even the playing field" on sales tax which online retailers have enjoyed and brick and mortar retailers can not avoid), would allow states to tax online purchases.

But not everyone is so enthusiastic about the new plan to bring taxes to online retailers:eBay is asking its customers to let the Senate know they don't like the idea of adding taxes to their online purchases, and the Securities Industry and Financial Markets Association and the Financial Services Roundtable said that the measure could pave the way for financial transaction taxes on the state level, an idea that scares Wall Street.

"It’s important for Congress to explore all the possible outcomes and costs of the proposal, especially the impact on consumers," Scott Talbott, the senior vice president of public policy for the Roundtable, said in a statement. "A transaction tax on financial services products will hurt retail investors, retired Americans, and small businesses, effectively making it more expensive for them to invest and plan for the long-term. Without hearings, these implications and others will not be properly addressed."

The proposal has the support of a host of governors, including Republicans Chris Christie of New Jersey, Rick Snyder of Michigan and Bob McDonnell of Virginia, according to The Hill.

Some Senators are asking Harry Reid to slow down on this bill including Sens. Kelly Ayotte (R-N.H.), Ron Wyden (D-Ore.), Jon Tester (D-Mont.), Jeanne Shaheen (D-N.H.), Marco Rubio (R-Fla), Mike Lee (R-Utah) and Ted Cruz (R-Texas). They sent a letter to Reid on Monday urging him to delay the legislation. They warned the Senator that the bill would “erode” states’ rights and “result in crippling compliance costs on small Internet businesses.”

"At the very minimum, we believe these concerns warrant a thorough vetting of the bill through regular order," they wrote.

Sen. Max Baucus (D-Mont.), the chairman of the Finance Committee, criticized Reid for bypassing his committee, which has jurisdiction over taxes.

"This bill is not ready for debate on the Senate floor. It has not been completely thought through. It is full of unintended consequences that could seriously harm America’s small businesses," Baucus said.

Sens. Dick Durbin (D-Ill.), Lamar Alexander (R-Tenn.) and Mike Enzi (R-Wyo.) are Senate co-sponsors of the legislation.

Source: The Hill

 


Comments

Re: President Obama Backs Harry Reid's Internet Tax Plan

What a failure Obama has been, this is especially true on Social/Civil issues. Renewal of the Patriot Act, more warrentless wire survalience, failure to shutdown guantanamo bay, the horribly unconstitutional NDAA, gag orders, more wars, more torture, constant attacks on 1st, 2nd and 4th amendments, more corperate handouts, the ever expanding power of the executive branch. Any true liberal would be horrified beyond belief. In many ways he is just as bad, if not worse then Bush.

It seems the only difference between the Democrats and Republicans on social/civil issues is abortion and gay marriage. Not saying those aren't or can't be important issues BUT one can still have those things in a totalitarian dictatorship. Things like Freedom of Speech/Expression, the right to protect one's self with arms, and the right to due process under the law and the barring of cruel and unusual punishment don't exist in such states though. Not saying we are in one right now, but the ever expanding power creep of the government is getting scary.

 

Sorry for going off topic, I know this was about taxes, but it just had to be said.

"No law means no law" - Supreme Court Justice Hugo Black on the First Amendment

Re: President Obama Backs Harry Reid's Internet Tax Plan

On the topic of power creep...  Can you think of any moment in history where government or a head of government actually surrendered unnecessary powers?  

It's only going to get more out-of-hand, unfortunately so long as people have a dollar to their name, they will not revolt.  Only when they're flat broke will they fight, and when they do, the rich man will stand behind them and egg them on (thinking Beck/Limbaugh here), while simultaneously refusing to hold the line with them.  Why?  Because they'll still have something to loose.  The day you see a wealthy man pick up a gun and actively try to take on the government, that'll be the day that every facet of my life is turned on it's head.
 

Re: President Obama Backs Harry Reid's Internet Tax Plan

You know what? I agree with Zachary on all counts.

My bigger issue is the allocation of tax money. I'm perfectly willing to give a percentage of my income to the state if regulators and politicos just stayed reasonable about it, but they're not. Spending is out of control, and our deficit is at $16 trillion with no end in sight. State and federal legislators have run their current tax revenue dry and they're hungry for more. They keep having to push, and push, to see how far they can go until they alienate even their most loyal supporters. When will it be enough? When the US defaults on its debt? 

Either way, I hope it happens sooner than later, because I'm sick of having to pay the tab for our elected leaders' incompetence and inability to stop funding their pet projects at the expense of destroying small businesses.

Re: President Obama Backs Harry Reid's Internet Tax Plan

I bet if Congressional/Presidential salary were directly linked to the debt, meaning it decreases routinely so long as the debt rises (like 10% + or - for every Trillion shaved or added), I think the problem would sort itself out.  

Either that or the politicians would become more corrupt.  But how could we tell?

Re: President Obama Backs Harry Reid's Internet Tax Plan

Well of course Obama would support the idea of stealing more money from the American people. That is his answer to everything. 

I want to add the following that I wrote on Facebook:

The bill as written is extremely unfair for online retailers, especially smaller ones with fewer resources than say Amazon. 

The main point on contention is that this bill will force ALL online retailers to comply with thousands of tax codes around the US. Brick and mortar businesses do not need to comply in the same way, they only need to concern themselves with the tax codes of the location their business is in. 

So in reality, forcing this kind of tax compliance on online retailers is simply a way to destroy small businesses who have found some success online while protecting large online retailers and businesses who do not operate online.

Re: President Obama Backs Harry Reid's Internet Tax Plan

Small business can still utilize Amazon as a storefront which makes them more likely to be on my radar.  Regardless of whether I'm made to pay that tax, I'll still likely go to Amazon for everything simply because if a product exists, I'll find it there.

Re: President Obama Backs Harry Reid's Internet Tax Plan

Amazon also takes a cut of the store's profit. Right now, they are taking up to 15% of the sale price. If they are forced to comply with every tax jurisdiction in the US, that cut will simply increase. That makes it harder for businesses to operate with  profit.

As someone who sells through Amazon currently, I don't sell in a volume enough to sell anything for less than $5. I miss out on a lot of potential sells because of that. The primary reason being that anything under $5 means I don't make a profit after amazon takes its cut ($0.99 + 15%) and after shipping the item. IF Amazon were to make me eat the compliancy cost of sales tax, I would probably have to set $10 as my price floor making it more difficult to sell through them. Of course with this tax compliancy law in play, it would be impossible for me to sell without them as well.

So in the end, you will have small retailers taking the brunt of the attack killing many of them off while ensuring the market stays dominated by a few large retailers who can comply and not take a fatal hit.

Re: President Obama Backs Harry Reid's Internet Tax Plan

In the vein that it's ludicrous to make online retailers comply with too many tax codes to count I agree.

 

However the wording about stealing from the American people, um, everyone pays taxes, and the USA has the third lowest tax rate in the world.

Re: President Obama Backs Harry Reid's Internet Tax Plan

What else are taxes but legalized theft? All it takes is a vote by a couple hundred people in office and they can take as much money as they want from those of us who earn it. What happens if I don't pay my taxes? I go to jail. That isn't much different than the protection racket that threatens to burn down my store or break my fingers if I don't pay.

Re: President Obama Backs Harry Reid's Internet Tax Plan

Lots of businesses don't pay taxes, that's what corporate loopholes are for.  If you operate under an LLC, you can write of a lot of operating expenses.  A long time ago I read "Rich Dad Poor Dad" and it was quite an eye opener with regard to tax cheats.

The irony of throwing someone in jail for not paying taxes is that they become a bigger tax burden than a non-tax payer would be.  But I suppose if there wasn't the threat of jail, none of us would pay.

I am curious what you sell on Amazon.  Got a store link?

Taxes do pay for a number of valuable services, as someone else mentioned.  I believe there are those in government who mismanage funds to accommodate some wealthy friends.  But to play devil's advocate here; we've probably all played SimCity at one point or another.  Surely you realize that balancing your budget is extremely difficult when you have to please everyone.  Zoning, Electrical Grids, Garbage Removal, Water Supply, Bridge and Road maintinance, Sewer Service, and all the whiny requests for parks, marinas and stadiums...  I'm sure in general we think the roles of government could be replaced with an RRoD Xbox, but I am certain that's not really true.  

 

To be fair, I'm not a fan of government either, I'm just saying that some taxes are necessary, and not all politicians are lazy and corrupt.  Stereotypes obviously exist for a reason, but stereotyping is obviously wrong.

Re: President Obama Backs Harry Reid's Internet Tax Plan

I sell mostly games and otehr related stuff. My store has been pretty sparse lately as I have not had a lot of time to go to yardsales and flea markets lately.

http://www.amazon.com/gp/shops/storefront/index.html?ie=UTF8&marketplaceID=ATVPDKIKX0DER&sellerID=A3OXF1OAVEDD7I

"Lots of businesses don't pay taxes, that's what corporate loopholes are for.  If you operate under an LLC, you can write of a lot of operating expenses.  A long time ago I read "Rich Dad Poor Dad" and it was quite an eye opener with regard to tax cheats."

Honestly, I think that the tax code needs to be simplified and flattened in some way. I often teeter between a flat rate tax with no exemptions and a flat national sales tax. Either one would be preferable to the gigantic mess we currently have.

"But I suppose if there wasn't the threat of jail, none of us would pay."

And yet we still have tax dodgers and off shore tax havens. When the threat of jail isn't enough to get people to pay taxes they feel are too high, perhaps a different strategy is in order.

"But to play devil's advocate here; we've probably all played SimCity at one point or another.  Surely you realize that balancing your budget is extremely difficult when you have to please everyone."

The point of balancing the budget is not to "please everyone". The Point of balancing the budget is to protect the nation from economic collapse. The easy way for the Federal Government to balance its budget is to end all programs not authorized by the US Constitution and to turn those programs over to the states and the people as the 10th Amendment states.

Re: President Obama Backs Harry Reid's Internet Tax Plan

Oh, hey!  You're in Newcastle?  I'm in OKC.  Small world!

Re: President Obama Backs Harry Reid's Internet Tax Plan

Cool. Nice to see another Oklahoman here.

Re: President Obama Backs Harry Reid's Internet Tax Plan

I'm not trying to really continue or perpetuate an argument.  But if the states have that kind of freedom, what's to prevent them from making sudden and drastic arbitrary changes that might cause people and businesses to flock to them.  This would be devastating to our whole country.  If Colorado passed a 0% tax rate on business and 0% payroll taxes, what's to stop every business, and support staff from moving to Colorado and cause the rest of the country to look like Detroit.  Then you've got the issues of building and maintaining infrastructure during such a boom.  The state would likely have to resort to an equivalent tax system just to maintain those systems.  The more people become concentrated in one area, the more I personally begin to worry about access to resources.  Then you have the citizenry paying more for things that might have been cheaper elsewhere.  So I imagine living tax free at a state level might actually cause financial burdens regardless.

Re: President Obama Backs Harry Reid's Internet Tax Plan

A lot of states, such as Texas and Florida, have no Income taxes. Other states such as Oregon have no sales tax. Each state makes up the difference in other taxes. The key is to be smart about it. One of the things those states have learned is that the more taxes you have, not the total dollar amount just the number of taxes, the less likely businesses and people will want to live there. 

Other states, such as California, are learning the hard lesson of the damage that can and will be done by having too many taxes as well as too high taxes. Businesses and people are leaving and the state is is economic collapse. It will not bode well for them.

Now, if a state has such an attractive tax climate that businesses are leaving their current homes to go there, that will be a net boom for them as those new businesses and residents bring in money through property and sales taxes, as well as user and license fees. 

If other states "look like Detroit" as a result, that is their problem and they need to figure out a way to be attractive enough to reverse that migration trend.

Re: President Obama Backs Harry Reid's Internet Tax Plan

You may not like it, but the government DOES do things you wouldn't want to live without. They handle the police and military that keep you safe, they set the laws that protect you from getting scammed as a retailer, and they manage the laws that keep your food and water safe. They keep the roads you use every day maintained. Something has to pay for all that. Not to mention every government worker from the mayor of your hometown to the guy at the DMV deserves his fair paycheck for working every day.

You may not like the decisions they make, but they're the rightful rulers of the country. Countries don't run without money, just like your business/job won't run without money coming in.

 

Re: President Obama Backs Harry Reid's Internet Tax Plan

I agree that there are a certain number of things the government can do and some that it probably should be the one responsible. I believe that those roles are clearly defined for the Federal Government in the US Constitution. Unfortunately, the Federal Government has stepped way outside those bounds and have screwed up the economy as a result.

As for the State level, there is a LOT that State Governments do that would be better off left to private citizens. But rather than try to do what is best for their citizens, state governments just want to grow and grow to no end. That is where this bill is coming from. State governments that want to grow but don't have the money to do so. So the ytry to capture more taxes from the people to pay for their bloat. I am tired of it.

Re: President Obama Backs Harry Reid's Internet Tax Plan

Why are you defending the government taking taxes? Everything you mentioned, they have enough for. How much more do you think they need? They only get more to spend more. They don't balance their budget. They exceed the deficit yearly. They spend it recklessly and for their own benefit to prop themselves up for re-election. They never read their bills that get passed. Bills are ten times bigger because there is hidden money for pet projects for various politicians. On top of this, they give countries like Pakistan and Egypt easily over a billion a year.

As for government employees, really? We balloon are government to ridiculous proportions. There is as well a lot of government programs that they won't cut for fear of losing votes. You seem out of touch.

As for President Obama, of course he is for raising taxes. That is all he cares about and yeah, he thinks it can solve all the problems in the world.

XBL/PSN Keegs79
 
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