Mike Crapo is a Republican Senator from Idaho. I sent him an email telling him to not support the Orwellian-named “Marketplace Fairness Act.” Here is the form letter sent back, along with my commentary.
Dear Tate:Thank you for contacting me regarding the Marketplace Fairness Act. I appreciate hearing from you and welcome the opportunity to respond.The Marketplace Fairness Act, S. 743, was introduced by Senator Mike Enzi (R-Wyoming) on April 16, 2013. In 2009, 18.6 percent of all retail and wholesale transactions were conducted over the Internet. S. 743 would give individual states, rather than the federal government, the discretion to collect sales and use taxes on all purchases, regardless of whether they are made over the Internet or at a local retail store. On April 22, 2013, the Senate voted 74-20 to proceed to debate and consideration of the bill. As a strong proponent of states’ rights, I voted in favor of proceeding to consideration of S. 743.
Crapo doesn’t seem to understand the concept of states’ rights. “States’ rights” is used to denote states retaining powers not delegated to the federal government under the US Constitution, not the federal government making it so that state governments can further rob people. What he’s doing is using the popular buzzword (or phrase) of “states’ rights” to endorse something that is anti-freedom.
It is important to note, despite some misrepresentations in the media, that this legislation would not create, or even encourage, any new taxes. In fact, the language in the legislation specifically states, “Nothing in this Act shall be construed as encouraging a State to impose sales and use taxes on any products or services not subject to taxation prior to the enactment of this Act.”
What’s the purpose of creating a new ability to tax? The idea that this wouldn’t encourage new taxes is silly. Yeah, Mike, let’s give power-hungry politicians a new power and count on them to not use it.
Instead, the true effect of this bill would be to remove the current federal barrier that prevents states from enacting pro-growth tax policies that focus on consumption. When states have such freedom to set their own tax policies, it will allow states to cut many of their current broad-based taxes on property and income.
“Pro-growth tax policies” is like “healthy junk food”: they just don’t go together. Surely, many economists would say consumption taxes are preferable to income taxes, but that doesn’t make them “pro-growth”. Donuts are preferable to poison, but that doesn’t mean they are healthy. And I don’t think even he believes that states would actually cut property and income taxes if only they were able to replace them with consumption taxes.
I agree that states should retain the authority to administer the tax laws governing the citizens of their state, and I have supported previous efforts to encourage the preservation of states’ rights regarding online commerce. I also agree that any proposal must be developed in a way to ensure that it does not impose new costly and burdensome requirements on small businesses, including online small businesses. As introduced, S. 743 would exempt any retailer with less than $1 million in online sales in the previous year from the collection requirements under the bill.
Wait! I thought the bill didn’t impose any taxes. Then why include an exemption for those making less than $1 million in online sales? And why are there collection requirements under this bill?
As many conservative economists have recently discussed, including the Chairman of the American Conservative Union, and Arthur Laffer, former economic policy advisor to President Reagan, by preserving the right of states, like Idaho, to collect sales and use taxes on all sales made by Idaho-based businesses, it would allow states to lower their income and property tax rates. It is consistent with pro-growth tax policy to focus taxation on consumption, whether that purchase is done online or in person at a small business on Main Street.
Now he’s just repeating himself.
Due to the distortion in current law, states are required to make up that lost revenue by increasing broad-based taxes on all state residents, regardless of how much shopping they may do online.
Crapo calls money you make or spend online “lost revenue.” Does that say anything about who he thinks is the proper owner of your money?
As the Farm Bureau notes, this is a particularly unfair burden in rural states, like Idaho, where many farmers and ranchers are land rich and cash poor, but are now forced to pay higher property taxes to make up for the fact that the federal government does not allow states to collect sales and use taxes on online sales in the same way they are if that same product is purchased at a main street small business. Based on comments made by many conservative governors, including Idaho Governor Butch Otter, I would expect that enactment of the Marketplace Fairness Act would result in many states being able to reduce their property taxes and state income taxes.
If state governments really wanted to reduce property or income taxes, they could do so. Crapo has the unspoken assumption that state governments are at the pinnacle of efficiency and that none of the “services” they currently provide could be done better or left to voluntary methods.
As S. 743 continues to move through the legislative process, please rest assured I will continue to support states’ rights and promote small business growth and job creation.Again, thank you for contacting me. Please feel free to contact me in the future on this or other matters of interest to you. For more information about the issues before the U.S. Senate as well as news releases, photos, and other items of interest, please visit my Senate website, http://crapo.senate.gov.Sincerely,Mike CrapoUnited States Senator
One last thing I would like to point out is how similar the underlying ideas of self-proclaimed “conservatives” and “liberals” in Congress are. While “liberals” have the reputation (and rightfully so) of wanting to increase and create new taxes, we here see a “conservative” wanting to do the same thing. The shared collectivist ideology is also apparent, since Crapo thinks the government has a right to your money; in fact, they must be the rightful owners if your keeping your own money is “lost revenue”.
He also disguises his support for bigger government at the state level by dressing it up with the phrase “states’ rights”. Don’t be fooled by the rhetoric; he wants to increase government control over your life.