The Marketplace Fairness Act; with that kind of title it must have been pulled word for word from one of those Ayn Rand novels. It is a little chilling to think that this is what we are coming to, but it looks like we are creating another new tax. I wonder what the Taxed Enough Already (TEA) Party thinks about the bill. The bill is calling for online retailers to collect and remit an internet sales tax to states that they have no physical presence in. The issue had previously immerged in Quill Corp. v. North Dakota in which the court ruled that states can’t force businesses to collect taxes where they don’t have a physical presence. Despite the court’s ruling, now Congress wants to give state governments the opportunity to grow a little bigger, in the name of fairness! Senator Jim Demint voiced his frustration in the Wall Street Journal today,

“Consider the absurdity of such a law. When a customer buys a product in a store, does the cashier ask for the customer’s home address? Of course not. The store simply charges the state and local sales taxes applicable for its physical location, no questions asked.”  

Internet sales tax laws today work the same way that retail stores are taxed. Where there is a physical presence in a state (origin), that store abides by that state’s tax code. Hopefully, some can see the hypocrisy of a fairness act when there already is equality. Yet, today a Senate committee will be hearing testimonies regarding the Marketplace Fairness Act. Groups such as the Tax Foundation, NetChoice, and the National Taxpayers Union will voice their concern about the burden the new tax will create. The Heartland Institute has also developed a tip sheet to clear things up about the myths surrounding the debate over internet taxes. However, it’s as easy as freshman year economics: taxes inhibit growth.

Since when did we, as a country, start believing in slow-growth economics?