After a sham vote during the debate over its budget resolution, Senate Majority Leader Harry Reid (D-NV) has apparently decided to engage ludicrous speed on the egregiously flawed legislation known as the “Marketplace Fairness Act.” The bill would allow states to tax businesses across their borders for online (and other remote) retail sales, potentially opening Pandora’s box on ever-expanding state tax collection authority. For this reason, the bill has generated significant opposition from a wide range of conservative organizations.
I wrote earlier this year that conservatives should “run, not walk, away from the Marketplace Fairness Act” because it runs counter to several important principles. That’s why the following groups sent notice to the Senate that votes on the matter would be included in their influential scorecards.
- Heritage Action for America, citing a “dangerous extension of state power into other states,” announced its opposition to the Marketplace Fairness Act and noted that it would be key-voting the aforementioned amendment.
- Americans for Prosperity, pointing to “logistical, economic, and constitutional problems,” reiterated its opposition to the bill in their own key vote alert.
- FreedomWorks, in its key vote alert, wrote that “the Marketplace Fairness Act violates [a] long-held taxpayer protection” and urged that it “be debated openly and at length in committee.”
- National Taxpayers Union, in its vote alert on the topic, stated that votes on it would be “heavily weighted” because the measure would “hinder tax competition among the states, heap heavy burdens upon small businesses, and expose taxpayers to potentially predatory state revenue administration tactics.
In addition to those groups, many others sent letters of opposition.
- Americans for Tax Reform and its President Grover Norquist oppose the bill and wrote in a letter to Congress that the Marketplace Fairness Act “can only be viewed as a tax increase” due to the fact that it allows imposition of new collection burdens on businesses.
- American Commitment signed on to a broad conservative coalition letter spearheaded by R Street against the bill.
- Campaign for Liberty has opposed the bill and worked to educate its activists, noting that it would “flip the original intent of the Commerce Clause on its head.”
- Center for Freedom and Prosperity signed the aforementioned coalition letter opposing the bill and, in its own writing, called it “a direct assault on tax competition, federalism and, indeed, basic fairness.”
- Center for Individual Freedom also signed the coalition letter, but has written on its own site that the legislation “undermines the concept of federalism.”
- Competitive Enterprise Institute, as part of its long campaign against the bill, wrote that the bill would be a “raw deal for taxpayers” because there’s “nothing fair about allowing brick-and-mortar stores to continue to tax at the point of sale while forcing online retailers to calculate and remit to more than 9,600 distinct taxing jurisdictions.”
- Heartland Institute analysts have long opposed the bill, noting that “consumers, who ultimately bear the burden of added costs, are the real losers in this scenario.”
- Institute for Policy Innovation has called the MFA a “mirage of false federalism,” decrying the fact that the bill would “mean the end of physical presence…as a limitation in the ability to levy tax on a person, organization, or corporation. In other words, such false federalism leads to the end of any limitation on government power.”
- Taxpayers Protection Alliance announced its opposition to the bill, saying that it “must be defeated.”
Beyond the world of conservative non-profits, many other prominent right-of-center voices have weighed in against the legislation as well.
- Jim DeMint, formerly a stalwart Republican Senator from South Carolina and new President of the Heritage Foundation, wrote that the MFA constituted “internet taxation without representation.”
- Erick Erickson, founder of RedState.com and FoxNews contributor, has opposed the bill and also written about the complex web of high-priced consultants working a multi-million dollar PR campaign to secure its passage.
The list goes on and on, but the takeaway point should be that most conservatives (and certainly those representing organizations with real expertise in tax policy) are firmly against the Marketplace Fairness Act.