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The Senate's $100 Billion-Plus Deception

NEW YORK ( TheStreet) -- The impending and benignly labeled Senate bill, The Marketplace Fairness Act of 2013, is in reality a deceptive Trojan Horse. On May 6 it opens the gate for literally an entire army of barbarians to start looting you (assuming the house passes a parallel bill). The bill itself is fairly straightforward and readable, but the deception level used by its supporters is unprecedented.

It's extremely costly and unfair to you and terrible for America. It benefits only a select group of very large and tiny retailers (its supporters) and money-grubbing state legislators, at your expense.

Also see: Jobs Report Totally Disconnected From Markets


Using software, it turns your state into a form of tax collector for 9600 tax jurisdictions that'll soon tax you as they choose; taxation without representation. States can extend sales taxes to every U.S. industry, raise tax rates, and states like California, America's income tax vampire, will likely come after your income as well. It takes us one giant step towards Europe's problems and VAT.

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They're selling it as the "Internet sales tax bill", a deception itself. Nowhere does the bill mention the "Internet" or "ecommerce" ( read it). More of the initial $23 billion-plus it is estimated by its senate sponsor to cost you comes from mail order sales. Pretending to go after online retailers, the bill really goes after, and is bad for, U.S. manufacturing. But, it does so much more by changing the way states can tax. There will be a huge political cost to pay by supporters when consumers wake up to find 9600 U.S. tax jurisdictions looting them.


When you buy from a vendor in your state you typically pay sales tax (in all but a few states like Oregon, that don't charge it) but not when you buy from an out-of-state vendor. It's been this way as long as you can remember--maybe all your life. The bill allows states to make out-of-state businesses tax you for them, costing you materially over time.

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More importantly, it creates a kind of union among states to act as tax collectors for each other. California taxes for Nevada in reciprocity for Nevada taxing for California. Initially it only targets two small industries, but like every form of newly-introduced tax ever fashioned, the tools and legislation over time can be extended by the states to every U.S. industry and your business tax income.
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