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Wintroub addresses Congressman Phil Roe

Open letter to PhiI Roe:

I watched on CSPAN the double-talking, conniving, lying, smoke-blowing Senate supporters of S.743, the Marketplace “Fairness” Act. The majority had its way with the minority and now the matter is in the House. I urge, beseech, and beg you to vote against it and to do all in your power to see that your House colleagues vote it down. Ignore Haslam, Ramsey, Alexander and Corker. This proposal is illegitimate at its core.
But let’s start with the text itself. It’s ambiguous, loophole-ridden gobbledygook, like pretty much all of what circulates in Congress. Tell the sponsors to put it into English and close the loopholes if they even want it considered. In other words, make Congress comply with its own “Plain Writing Act of 2010” (PUBLIC LAW 111–274).
Moving on to its essence, this bill is about allowing Tennessee and other states that have a sales/use tax to enslave out-of-state retailers by making them work as Tennessee tax collectors without any compensation from Tennessee.
These out-of-state retailers get no government services from the states that will be enslaving them. They aren’t going to be paid to collect and remit these sales taxes. They aren’t going to be asked to voluntarily do this tax collecting. So what aspect of slavery is missing? They don’t even get to vote in the coercing states, so they can’t try to get rid of their slave-masters.
States with sales tax also have a Use Tax. For example, Tennessee residents, who buy from out of state, “owe” (at least current state law says they owe) the state of Tennessee the Tennessee Use Tax that the out-of-state vendor didn’t charge them. These sales tax states are too lazy, too incompetent, or too chicken to collect Use Tax from their tax-cheat residents. So they want to shanghai the out-of-state retailers into doing their dirty work of tax collecting.
There is nothing “fair” about the effects of this bill. It “levels” no playing field but rather tilts it in a new direction. If I’m visiting, say, Delaware, and buy something at a store there, that store doesn’t send Tennessee any sales tax. Why should that Delaware store have to do so just because I did my purchase online?
The bill contains a landmine. The $1,000,000 threshold for the “Small Seller Exception” is not indexed for inflation. It will, like the Alternative Minimum Tax, eventually consume the retailers it supposedly exempts. And the bill’s advocates at all levels of government know that!
How’s this for chicanery? “It’s not a new tax. Consumers have owed this Use Tax for the decades it’s been on the books,” claim the advocates. Baloney! Drafting out-of-state retailers to collect a tax that almost nobody pays AND that states don’t enforce IS A NEW TAX!
If state governments want to make an agreement that says “We will collect OUR state’s sales tax from OUR in-state vendors and, for buyers who reside in your state, we THE STATE will send YOUR state your cut,” fine. That’s voluntary, government-to-government cooperation, not cross-border enslavement.
Advocates of this cross-border enslavement like to claim that software provided FREEEEEE by the states will make collecting and remitting these sales taxes easy. Have you, your staff, your House colleagues, or their staffs tested any of this software? Or are they just taking the word of the purveyors of this FREEEEEE software? My bet is on the latter.
This scheme has no redeeming merit except that it allows sales tax states to boost their revenues without taking the heat from their constituents for enforcing their own sales/use tax laws.
Please kill it.

Terry Wintroub