Tuesday, May 07, 2013

the Marketplace Fairness Act is unfair

This is not mine.
The so-called Marketplace Fairness Act was designed to cure a problem that doesn’t exist. Currently, states and municipalities that levy a sales tax on their inhabitants can force those merchants residing within their borders to collect their taxes. However, they cannot touch merchants outside their jurisdictions. Naturally, locals avoid these levies by using the internet to buy their stuff sales tax free, leaving the tax collectors fuming and fussing. It should not be considered a problem when tax collectors are unhappy.

The Marketplace Fairness Act would require businesses grossing more than a million dollars a year to start collecting taxes for all these states and municipalities for free. In other words, it takes small businesses and forces them to spend their time and money doing the dirty work of hundreds of different state and municipal entities. How could that possibly go wrong? The high tax states and cities love the idea. It gets them a nationwide army of tax collectors working for free to rake in more money which these entities can then squander.

Who else wants it? Brick-and-mortar retailers in high tax localities want it too. Anything that makes internet shopping less attractive – like jacking up the price of web buying with sales taxes – is a-ok with them.

But why do the big companies love the idea? This law is just another exercise in manipulating the government to tilt the playing field toward the behemoths. Big corporations can easily hire the extra staff and pay the additional costs of doing the sales tax collecting – but it’s a huge deal to their competition. The little companies that the internet made possible can’t just hire a bunch of folks to do all the uncompensated work associated with processing the paperwork for the benefit of far-away localities.

Small businesses only have a handful of employees -- they don’t have economies of scale. They spend most of their time trying to ensure they have a profit at all.

Making small businesses do free collection work for faraway government entities makes them even smaller. The giant companies don’t want free enterprise. They want regulations, regulations they can easily comply with (by passing the costs on to us) but which kill their competition. And who is the competition? The victims of this Act will be the kind of small businesses that people boycott Walmart to "support."

And who else gets hurt? Well, ordinary American families who like to shop via their laptops. They get hit with a giant tax increase, which is all that the Marketplace Fairness Act is. The Senate passed it today. President Obama says he supports it. Hopefully, the House of Representatives says no and protects small business and the average American consumers.
A counterpoint:
For, they would be like any other company that gets to keep a percentage of the tax they collect.

Also, I pay use tax every year on my Michigan Tax Return for purchases my family makes on the Internet. Everyone should also. But they don't, instead they see it as a discount.

The current Michigan law states that use tax is do if you buy anything and have not pay sales tax somewhere. It's pretty simple, but people always try to find ways to skirt the law.

Buying stuff on the Internet and not paying sales or use tax of 6% is against Michigan law.

Again, as I stated before, it is not a new tax. It is a bill that closes a loop hole in the tax law and we should all be in favor of closing ALL loop holes and not just the ones that don't affect us.

I already pay my tax for Internet purchases, because I owe it. Now it is everybody else's turn. If people would be ethical and pay what they owe then we wouldn't need "An army of tax collectors working for "free"".

Taxes are never fair.
You have 3 options of remitting the sales tax collected on behalf of the State of Michigan. They are:

1) If you remit your sales tax by the 12th of the month you get a discount in the amount of:

Your sales tax collected × .6667 (the discount is only
on the original 4%) × .0075

2) If you remit your sales tax by the due date on the 20th you get a discount in the amount of:

Your sales tax collected ×.6667 × .005

This is to offset some of the cost of collecting the sales tax for the State of Michigan

3) If you pay late then no discount.

Here is a website.
I don't believe I like the "use tax" either.  I don't care for sales tax.  I don't like income tax.  I like taxes in general but our methods of taxation are far too invasive.

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