A stand for 'Fairness'

Americans are correct to question laws that are packaged in ways that seem too good to be true. For instance: "No Child Left Behind Act" or the "Affordable Care Act." My personal suggestion is: "Strengthening America through higher pay for Editorial Writers Act."

Who could be against those?

The Marketplace Fairness Act stands accused of carrying a deceptive title. Several arguments are being made across the blogosphere (and even the pages of the National Review) arguing against the act and on the grounds that it's blatantly unfair and unwise.

I am not moved by those arguments.

The National Lumber and Building Material Dealers Association (NLBMDA) recently emphasized online sales tax parity as a key lobbying point. And because of the growing importance of the Internet in home improvement retailing, I would like to respond to some of the major charges against the act here.

Here are some of the accusations hurled at the act, and an editor's counterpoint:

Charge: It's a new tax!

Response: The Marketplace Fairness Act is designed to create a level playing field for retailers, allowing states to require online retailers to collect sales tax when a consumer in one state buys something from an e-tailer in another. It also calls for a simplified system of cross-border taxation.

It's not a new tax. It's a tax-loophole remedy. Purchases are already subject to sales tax; they're just not collected. And that puts retailers who do collect them at a disadvantage.

Charge: It's taxation without representation. If state A raises a sales tax, a company in state B cannot turn to his elected representatives. Neither can it move out of state A in protest.

Response: This argument seems to embrace the Spirit of '76. But it's also the rationale behind every sports team magnate who demands taxpayers fund their new luxury stadium, or else the beloved home team is going to pack its bags for Scranton or Toledo. It seems to be an embrace of tyranny in my opinion.

Charge: Small Internet sellers will be at a disadvantage trying to comply with all the different tax codes.

Response: Is there any doubt that someone will invent a simple TurboTax-like solution to help retailers pay the right tax? Of course, not.

Charge: What about the off-shore Chinese retailers that aren't ever going to collect taxes on purchases?

Response: You've got me there. One has to admit that the act won't solve the Chinese piracy issue. It also won't solve the Mideast peace question. But that's a pretty high bar to set. The act does take a step toward fairness at home.

Charge: Yahoo, Ebay and other dot-coms don't like it. They're the retail innovators for the economy of the future.

Response: Amazon likes it. Here's what Amazon VP Paul Misener wrote in a supportive letter to the bill's sponsors:

"Amazon.com has long supported a simplified nationwide approach that is evenhandedly applied and applicable to all but the smallest volume sellers. With this in mind, I am writing to thank you for your bill, which will allow states with simplified rules to require sales tax collection by out-of-state sellers who choose to make sales to in-state buyers."

Charge: It's not fair.

Response: The Marketplace Fairness Act is fair. Let's move on.



- 3:30 PM
kclark says

A reader responds: "I feel your piece dismissed the complex issue with a toss-off answer. Would you feel as sure that a "simple TurboTax-like solution" would solve it all, if the Fairness Act required ALL retailers to charge/file sales taxes based on where the customer lives, instead of just Internet sales?"

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