The Marketplace Fairness Act is a Tax Increase and America hates it

Proponents of the Marketplace Fairness Act (MFA) say that it’s not a tax increase, but merely a change in who collects an existing tax.  That’s inaccurate.  It is both a change in who collects a tax as well as a tax increase.

A few questions for proponents of the MFA.

1. Will the MFA take more money out of people’s pockets and put more into government accounts?  That is, if the MFA becomes law, at the end of each year will consumers see more of their money go to government and less to themselves?

Answer:  Yes, state legislatures – the biggest proponents of the MFA – say it will increase the amount of taxes paid to them by citizens.

2. Are state and municipal governments planning on increasing government spending if the MFA passes?

Answer: Yes, governments are planning increases to government spending if the MFA passes.

3. If the MFA is not a tax increase, then why do states that do not want increased taxes say they will have to reduce other taxes to make it revenue neutral?

Answer: The MFA is not revenue neutral because it increases the amount of tax collected from people annually, so legislatures interested in keeping tax collections flat say they would have to lower other taxes to compensate for the increase the MFA brings.

Deciding to collect a tax that has never before been collected is a tax increase because it increases the amount of money that people pay to state governments and reduces the amount of money they get to keep in their own bank accounts.

Similarly, having a regulation in the law-books that is never enforced and largely unknown, then suddenly enforcing it en masse, is an increase in regulation because people’s lives are de facto more regulated.

It is disappointing to watch Congressmen who signed a pledge to not increase taxes argue that the MFA is not a tax increase while at the same time the state legislatures lobbying them are planning for increased tax receipts and spending on new government programs.

In the House of Representatives the MFA has 67 sponsors and cosponsors (42 Democrats, 25 Republicans).

Of the 25 Republicans, 24 of them signed the Americans for Tax Reform Taxpayer Protection Pledge, a document intended to commit politicians to not increase taxes.

Here are the Republican Representatives who signed a pledge to not increase your taxes but are sponsoring or co-sponsoring the MFA.

Aaron Schock
Ander Crenshaw
Austin Scott
Charles Dent
Christopher Gibson
Dennis Ross
Eric Crawford
Joe Barton
John Duncan
Kristi Noem
Lou Barletta
Mario Diaz-Balart
Mark Amodei
Michael Conaway
Michael Grimm
Morgan Griffith
Renee Ellmers
Scott Rigell
Spencer Bachus
Steve Stivers
Steve Womack (sponsor)
Ted Poe
Tim Griffin
Todd Young

Another disappointing aspect of the MFA is the number of Democrats that support it.  On the one hand, it’s understandable because the state governments that most live outside their means and are thus looking for more money are Democrat-controlled states.  These states legislatures are lobbying their Democratic reps fiercely.  On the other hand, sales taxes are generally unpopular with Democrats because they are regressive and burden the poor and lower-middle-classes disproportionately.  Sales taxes apply to consumption goods and the poor and middle class spend a greater percentage of their income on consumption goods than do the wealthy.

So on the one hand we have Republicans who have pledged to not raise taxes now pledging support to a tax increase, and on the other we have Democrats who have pledged to protect the poor and middle classes now pledging to levy a disproportionate burden on them by way of a tax that hits them hardest.

Now couple that with the fact that the Marketplace Fairness Act hurts small businesses, discouraging entrepreneurs and killing mom and pops at a time when our economy is fragile and in dire need of more independent businesses and the jobs that come with them.  Small business has traditionally provided the jobs that have led the emergence of every previous recession, but the MFA threatens their ability to do so.

Could you possibly write a worse law?

Who wrote this law anyway?  The sponsor of this bill, Steve Womack, represents the district where Walmart is headquartered.  He has been the champion of this bill and been working hand in hand with Walmart’s lobbyists to try and get it passed.  Walmart, the company responsible for putting more small businesses out of business than any in the history of the world, has a bought-and-paid-for Congressmen ready, willing, and able to do its bidding and try and put online small businesses out of business, just as it has done to physical mom and pops.

Ladies and gentlemen, your Big Government loving Small Business hating Congressmen at work.

The good news?  America sees this for what it is.  According to a recent Gallup poll, a large majority of American adults oppose the MFA, including 73 percent of adults between the ages of 18-29.  We and other Americans will see that politicians supporting the MFA are held accountable for their support of this law.

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- who has written 71 posts on Small Business Against Big Government.

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