AFP’s Phillips: Internet Tax Plan ‘a Nightmare’

Friday, 26 Apr 2013 02:48 PM

By Melanie Batley and Kathleen Walter






Americans for Prosperity, the lobby group for limited government and low taxes, is calling for lawmakers in the House to oppose bipartisan legislation that would allow state governments to collect online sales taxes from businesses outside their borders.

In an interview with Newsmax TV, Tim Phillips, president of Americans for Prosperity, called the Marketplace Fairness Act a “regulatory nightmare,” saying that taxes on Internet transactions are bad for customers who would face higher prices on products across the board.

“It’s just a big, fat, new revenue stream to build bigger government which is not a good idea,” Phillips said.

“Whenever you give government bureaucrats another opportunity to extract money from the private sector, they start coming up with devious ways to expand it, to make it more encroaching on people’s dollars, and it’s not a good thing,” he said.

Phillips said the bill was a “misguided effort” on the part of both Republicans and Democrats.

“In the end, they’re going to be hurting a lot of just small businesses that sell maybe $1.2-$1.3 million online a year. And now they’re suddenly going to have to figure out how to comply with sales tax laws in 30 or 40 states,” he said. “It’s going to be really tough for them.”

Though the bill is expected to pass in the Senate, the group, founded by billionaire brothers Charles and David Koch, plans to lobby members on both sides of the aisle to oppose its passage in the House.

“There are some Republicans supporting this, which are misguided, and there are some Democrats who oppose it. So we’re going to fight very hard in the House,” Phillips vowed.

He added, “If you’re a consumer listening to this interview and you buy anything on theIinternet, think about it. It could cost you five, six, 10, 12 percent more to buy those products you’re buying online currently.”

Phillips also praised state plans to reduce or eliminate income taxes. He called Indiana Gov. Mike Pence “one of the best new governors in the country,” noting he is pushing for a 10 percent income tax. He also praised efforts in North Carolina, Louisiana and Kansas

“We’re seeing dynamic change at the state level and the movement — and we applaud this — is towards lowering income tax rates, basically taxes that penalize success at any level whether you’re making $40,000 or $140,000.”

And he accused President Barack Obama of deliberately attempting to make the cuts caused by the federal sequester as hard as possible on the public.

“It’s outrageous what President Obama’s doing. The sequester cuts are less than two cents on the dollar and yet, instead of trying to make the cuts painless for Americans, the president is systematically trying to make it hurt Americans.”

As for the next election, Phillips said Americans for Prosperity would not necessarily be backing just Republican candidates. “We want to make sure that there are candidates in both parties who are really standing up for economic freedom, less government spending, less taxation.

“And, look, Republicans need to be held accountable, too. We’ve seen that over and over and over during the Bush years. They got out of control on government spending and growing the size of government, and no one was there to hold them accountable and there are groups now that can do that.”


COMMENT:

Internet sales tax promotes not only higher consumer expense, but puts cash to states in which the seller has no "nexus" or vote. That is contrary to the Constitutional commerce clause. Worse, it forces perpetual and frequent reports to 9,600 different taxing districts with different rates for use or purchase and this makes a great opportunity for bureaucrats to make more jobs that produce nothing!

The idea is being touted as a call for a 'level playing field', but local sellers never have to deal with 9,600 different reports to show no sale this month! Tax internet sales and you just drive the sellers out of the U.S. They will bulk ship from Canada to U.S. and drop the boxes to U.S. delivery carriers direct to you sans sales tax! NAFTA requires this open, duty free privilege! That is why Reid stopped! Don't let him wiggle around!

Feds meddling in the businesses of online sellers is a economic disaster. Brick and mortar stores are dinosaurs. Face it. The expense of brick and mortar stores' operating cost compared to online stores enables online stores to offer the very best prices. Here is the salient point: If the bill passes, billions of dollars in commerce will immediately go to Canada and Mexico where Congress has no authority.
It will be the biggest single determent to the American economy in the history of the country. Many of us have already moved to foreign sources due to the possibility of Congress' actions. Just how stupid are these lawmakers? What the hell are they thinking? Even in good times it would be a disaster.

I agree with rtryon, below, in that it violates the commerce clause. It is unfair, and I think unlawful, to tax anyone out of state, with a state sales tax, when they are not a resident of that state, and allowed a vote. This would be the same as the US taxing everything sold to another country, and forcing the seller of that country to collect a US sales tax.

If it does pass, an individual or a group should bring suit in federal court as soon as its signed into law, and take it on to the supreme court, if necessary.

They are using the guise of "leveling the playing field" with the brick and mortar stores. What a bunch of BS! This is just another way for them to take more and more of our money through yet another tax. We used to joke about someday they will tax the air we breath and they did in fact figure a way to do that too! There will be no end until we are as broke as Europe. Just wait until Obamacare is fully implemented. Health care will be unaffordable with all the fees and taxes that are to come>

Just as a practical matter - Insane administrative
nightmare – Texas
alone has 2,000+ sales tax jurisdictions. In order to reduce the administrative
headaches, the State changed from ‘Shipped-To’ to ‘Shipped-From’ sales tax
collection several years ago – still just one permit, as is California with 100’s of separate
jurisdictions. However, most parishes in Louisiana,
and many cities/counties in Alabama,
Arizona etc. collect their portion of sales taxes directly, and many of them
still have paper-only filing systems. A city in Colorado can have three counties with
different tax rates. Having dealt with 150+ sales tax permits in the past – it is
not worth doing low volume business in some locations/states due permit registration/administration,
renewal fees, non-filing penalties etc

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