- The triumph of politics over principles
Why do politicians say one thing then do the opposite? On Senator Enzi’s (R-Wyo) website it says:
I support pro-growth economic plans that provide welcome relief to taxpayers in every tax bracket, including small business owners, married filers and individuals who have capital gains or dividend income…. By reducing the federal tax burden on individuals and businesses, Wyoming citizens and employers will have more money to spend and invest and create jobs. Americans, not the federal government, know best how to spend their hard earned money.
If Senator Enzi really wanted to provide relief to taxpaying small business owners, the last thing he would do is increase their costs by forcing them to be tax collectors. If Senator Enzi really believed “Americans, not the federal government, know best how to spend their hard earned money,” instead of sponsoring legislation to collect more taxes from Wyoming citizens, he would leave money in the pockets of those who know “best how to spend their hard earned money.”
In November 2011, Sen. Enzi introduced The Marketplace Fairness Act, to allow states to collect sales taxes from out-of-state Internet retailers.
At the moment, a company without a presence in the state does not have to collect state sales taxes from people it sells to in the state. Most people don’t know it but if they pay for something over the Internet, they are supposed to send a check to the state government for the sales tax they owe. Few people bother.
If Sen. Enzi’s bill passes, he would be punishing small business owners on Main Streets in Wyoming who might want to innovate by using the Internet as a sales channel to reach out-of-state customers. Not only that, he would force families to fork over more of their hard earned cash to state governments. His actions belie his words.
But why would Sen. Enzi act in direct contradiction to his stated principles? Probably because, among other things, governments everywhere suffer from a severe spending disease. Instead of looking for a cure, politicians look high and low for new sources of revenue to feed their insatiable hunger for other people’s money.
Of course, politicians don’t explain it that way. The rationale we hear most often for the Internet sales tax grab is that government must level the playing field between Main Street retailers and Internet retailers. But why drag innovative retailers down into the high tax and regulatory regime now hurting Main Street? Why not free Main Street from onerous taxes and regulations so they too have the resources to innovate and create jobs?
Well, that’s because Main Street supports taxing Internet retail sales. Worse still, big online retailers like Amazon have jumped on board the high-tax bandwagon. Why? Because Amazon is planning same-day delivery and that means they will need to set up a physical presence in almost every state — and that means Amazon will be forced by current law to collect state sales taxes.
Voila! Amazon supports the Main Street Fairness Act.
Special interests use the political process to shut out competition and that’s bad for business owners and the pocketbooks of hard working Americans. Put that together with governments suffering from a spending disease, and in their search for ever more revenue, we end up with a job-destroying tax grab. Higher taxes create low-growth, not pro-growth economies. It is a good idea to eliminate the advantage online retailers have, but by eliminating the disadvantage Main Street retailers have, not by grasping for more cash to feed the beast.